Tuesday, October 16, 2012

Beach Boys Get an Update

Our Beach Boys “Index” of energy alternative companies has been updated.  More or less a set of lists, the Beach Boys Index includes companies, privately held and publicly traded alike, that are sun worshippers.  Their products and processes rely directly or indirectly on the photosynthetic processes of plants. 

Both conventional corn- and sugar-based ethanol producers as well as developers of cellulosic ethanol are included.  Mostly investors will note the ethanol lists are shorter as several have altered their business models or have gone out of business.  We added Ceres, Inc. (CERE:  Nasdaq) to the Cellulosic Ethanol Group.  Ceres is a developer of seeds for energy crops that are intended for ethanol production.    

Algae-based biofuel developers are in another group.  We added Algix, LLC, a privately held developer of bioplastics, and Cellana, LLC, which aspires to produce algae-based biofuel.  Investors may miss PetroAlgae (PALG:  OTC/BB) in the Algae Group.  The company has changed its name to Parabel.

One private company - Soy Energy -  and one public company – Renewable Energy Group (REGI:  Nasdaq) -  have been added to the Biodiesel Group.  A very similar group for biofuel producers was expanded by at least a half dozen new entrants even as several companies bowed out of the race.  One of the most interesting companies is California-based Byogy Renewables, LLC.  We also expect to hear more from SkyNRG in coming months as well.

EcoVentures was added to the Waste-to-Energy Group.  Fiberight is a cellulosic ethanol producer.  However, its principal feedstock is waste, so it is now a part of this group as well.

The challenges of technologies related to cellulosic ethanol and algae growth have sent a number of companies back to the drawing board.  Some are attempting to address new markets with their discoveries.  Coskata, Inc. and Gevo, Inc. (GEVO:  Nasdaq) are now included in the Alternative Chemicals Group.  Another very interesting addition to the chemicals group is LS9, Inc.

No doubt these lists will continue to change over the months ahead.  Renewable fuels have attained some legitimacy as some of the oil and gas majors have embraced the field as a means to address emissions standards and renewable fuel mandates.  The oil and gas companies are not listed in the Beach Boys Index.  However, some of their partners are included, such as Darling International (DAR:  NYSE), which has entered into a joint venture with Valero, Inc. (VLO:  NYSE).  It is the proverbial foot in the door.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.


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