Renewable fuel start-up Gevo (NASDAQ:GEVO) has had its ups and downs so far in 2021. As GEVO stock has drifted sideways in recent months, some folks might be tempted to abandon their investment and move on. However, patient shareholders could reap considerable rewards.
Gevo is one of the more interesting biofuel businesses, as it specializes in replacing petro-based fuels and chemicals with low-carbon renewables.
In the company’s investor presentation, Gevo emphasizes the transportation-based applications of its technologies. Additionally, the company also highlights the uses of renewable energy sources in agriculture.
If the shareholders haven’t seen much action lately, it’s not because Gevo is sitting still. Indeed, the company is moving forward with a potentially game-changing patent. Plus, there’s an agreement in the works with a famous name in the food processing industry.
GEVO Stock at a Glance
2021 started off quite well for the shareholders as GEVO stock soared from $4 and change to $15 on Feb 12.
After topping out in February, however, the stock fell quickly. By the summer, the share price was stuck at around $6.
Then there was a prolonged period of sideways price action, which persisted into late October. Evidently, the market still wanted to keep GEVO stock near $6 or $7.
The good news here is that you might be able to pick up some shares at a fair price. If your time horizon is long enough, you could even hold on until the stock returns to $15.
Alternatively, you can start to take profits at $10 and $12, just to be on the safe side. Even at those price targets, GEVO stock will still have brought you some pretty good returns.
A Powerful Approach
In late September, InvestorPlace contributor William White had some terrific news to report. As it turned out, Gevo was awarded a patent by the United States Patent and Trademark Office. White clarified that the patent covers a process that allows for the upgrading of “ethanol and bio-based alcohols into drop-in, bio-based diesel and jet-fuel products.”
With this patent, Gevo will be able to diversify ethanol production in order to help address the increasing demand for renewable diesel and jet fuel.
Really, there’s no need to dream about a future in which jets and other vehicles are powered by corn and other biofuels. Clearly, that future is already here.
It’s a potent patent, as Gevo Chief Carbon and Innovation Officer Paul Bloom explains:
“The combination of using decarbonized, plant-based alcohols, with our proprietary innovations to processing techniques known in the chemical industry can be a very powerful approach to dial-in the desired renewable hydrocarbon fuel product mix.”
As exciting as that patent is, there’s another development which might be even more bullish for Gevo. Reportedly, the company has signed a memorandum of understanding (MoU) with Archer-Daniels-Midland (NYSE:ADM).
The two companies will evidently work together to support the production of sustainable aviation fuel (SAF) and other low carbon-footprint hydrocarbon fuels.
Using Gevo’s processing technology and capabilities, about 900 million gallons of ethanol produced at Archer-Daniels-Midland’s dry mills at various locations is expected to be processed. The result should be approximately 500 million gallons of SAF and other renewable hydrocarbons.
Naturally, it’s a major coup for Gevo to team up with a massive company like Archer-Daniels-Midland. In the press release, Gevo CEO Patrick Gruber stated that his company’s potential customer contract pipeline has grown to over 1 billion gallons.
By working with Archer-Daniels-Midland, Gruber says that Gevo has “the opportunity to accelerate scale.” That’s probably an understatement.
Actually, this story might have a happy ending in the year’s final months. After all, Gevo is celebrating a crucial patent as well as a powerful partnership. Yet, the investing community hasn’t boosted the share price. This means that there’s still a window of opportunity here. And the company currently has a “B” grade in my Portfolio Grader.
So, don’t get bored with GEVO stock. There’s a lot going on with the company, so the share price should make a move soon enough.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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