Gavin Graham
Pacific Ethanol
PEIX-Q
COMMENT
Aug 10, 2006
Doesn't know this company well, but ethanol will become more in demand as oil prices rise. One analyst has set a $17 target price on this stock, so it's probably fully valued.
His attitude on any ethanol stocks is “run for the hills”. The stocks went up on huge hype. Ethanol is not going to be the saviour that everyone thinks it is. It is too subsidised. Not economically viable.
Believes the ethanol business will grow in the future. Trading at about 75% of the replacement cost of their plant so it is trading at less than what it would cost them to build the plants. Thinks that the plants that forge through right now will prosper in the long run.