Shares of Gevo (NASDAQ:GEVO) are trending on Tuesday, the first trading day of the holiday-shortened week. While we’ve had a lot of headlines hitting on the day, many investors have likely overlooked GEVO stock.
Is that because the firm commands a market capitalization of just $315 million? It could be. It may just be that investors are focused on AI stocks like Nvidia (NASDAQ:NVDA) hitting a $1 trillion market cap or focusing on the debt-ceiling deal in Washington.
Yet, despite all the headlines, Gevo stock is quietly up about 20% so far in the session. At today’s high, shares were up just over 22%, so the stock has done well to maintain a bulk of its gains.
The rally comes after the firm announced a $25 million stock repurchase program. This is an obvious positive for longs. Before today’s gains materialized, that buyback would have represented almost 20% of the company’s market cap.
Breaking Down GEVO Stock
Shares of GEVO stock are rallying on the news and the stock is hitting a six-week high as a result. That said, Gevo shares have not performed all that well this year.
Even with today’s rally though, the stock is still down about 30% in 2023. Over the last 12 months, shares are still down almost 70%.
According to the company website, “Gevo addresses the market need of reducing greenhouse gas emissions with sustainable alternatives.” Further:
“We are commercializing the next generation of advanced, bio-based renewable fuels with sustainable aviation fuel, renewable premium gasoline, renewable natural gas, and chemicals and plastics that have the potential to achieve zero carbon emissions over the lifecycle of the fuel or product.”
So far, earnings have not been able to give the stock a boost this year. The company reported in-line earnings results earlier this month and missed consensus expectations in March.
Despite the disappointments, it’s clear that management believes the stock is undervalued. As a result, they want to use the repurchase plan opportunistically and “from time to time.” In other words, when they believe there is value.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.