Nova Biosource Fuels, Inc. (NASDAQOTH:NBFAQ.PK)
CAPS Rating:
Nova Biosource Fuels, Inc. is an energy company that refines and markets ASTM standard biodiesel and related co-products.
For investors, by investors
Nova Biosource Fuels, Inc. is an energy company that refines and markets ASTM standard biodiesel and related co-products.
BATS data provided in real-time. NYSE, NASDAQ and AMEX data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates and Analyst Ratings provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions
RSS Headlines
Fool UK
Recs
This stock has been dropping like a Chevy Nova dropping off a cliff in Nova Scotia, but now its going to explode like a supernova.
You are betting against Bent on an underperform.
The only question you have to ask yourself is "Am I feeling lucky?"
Underperform, not likely if you take this stock for a long term ride (2-5 years).
This is what I see:
1. The company has proven it can build successful plants for other companies Clinton County plant, in construction process for other two as planned. Most likely they will continue to build plants for other corps as they build their own plants. This is part of their management plan, which makes sense to use another companies dime to prove your technology works.
Corp has partnerships with other corps for future profits: “HOUSTON, TX – March 13, 2007 -- Nova Biosource Fuels, Inc. (OTC: NVBF) announced today it has completed a biodiesel tolling and off-take agreement with Scott Petroleum, Inc. for rights to 50 percent of the biodiesel and glycerin production at Scott Petroleum's 20 million gallon per year refinery being built by a subsidiary of Nova in Greenville, Mississippi. Construction of the facility began in July 2006 and the project is scheduled to be producing biodiesel in the summer of 2007. The refinery will be supplied with catfish oil, poultry fat and other rendered products from the Delta region as feedstock for the production of biodiesel and glycerin.” http://www.novaenergyholding.com/partners/partners.aspx
2. Has deals to ship its B20/B100 thru Conagra in IL, a well experienced / proven logistics / reputable corp. to work with, it takes time to work these deals and set up the infrastructure and NBF is setting the foundation. In addition, the location for this plant is ideal, Midwest, grain/cattle/near Detroit/outside Chicago.
“HOUSTON, TX – September 19, 2006 -- Nova Biosource Fuels, Inc. (OTC: NVAO) announced today that it has signed a biodiesel sales agreement with ConAgra Trade Group, Inc. for Nova's 60 million gallon per year biodiesel facility to be located in Seneca, Illinois. GREAT LOCATION (Midwest farmland / near Chicago) ConAgra Trade Group “
3. Not an ethanol stock (uses feedstock, fryer oil / grease, ect) Has their own process to convert, and it is more efficient than ethanol/other bio-d and its cheaper to produce. See the evidence. Corp plans to be profitable with or without the government incentives.
http://www.novaenergyholding.com/upload/multifeedstock.pdf
4. The management team have energy/big oil experience, and paid in stock, something tells me making it back to $5 or $6 is not what they in vision (it’s a reach, but seriously I feel they have something to prove).
5. Profitable in FY08 according to analysts (although there are only two at this point, it is highly probable) FY08 earnings estimates:
a. Q1 .07
b. Q2 .18
c. Q3 .29
d. Q4 .33
6. Democratic control of Gov (Pres possibly in FY08) Green energy will be pushed, more incentives (probable) and an increase attention in the sector, esp as this stock nears above $5.
7. Construction of joint plant scheduled for completion this summer. “
Corp has partnerships with other corps for future profits: HOUSTON, TX – March 13, 2007 -- Nova Biosource Fuels, Inc. (OTC: NVBF) announced today it has completed a biodiesel tolling and off-take agreement with Scott Petroleum, Inc. for rights to 50 percent of the biodiesel and glycerin production at Scott Petroleum's 20 million gallon per year refinery being built by a subsidiary of Nova in Greenville, Mississippi. Construction of the facility began in July 2006 and the project is scheduled to be producing biodiesel in the summer of 2007. The refinery will be supplied with catfish oil, poultry fat and other rendered products from the Delta region as feedstock for the production of biodiesel and glycerin.
My only concern is according to the 10QSB the company needs cash injection $25M-35$M for continued ops this year (Frankly that is not unexpected, building these plants are not cheap at 40-60M a pop for a 60MG a year plant). I believe they will easily locate VCs/private equity firm, partner for the funds but this will hinder us stock holders as our slice decreased in size.
This is a long haul stock, checking it daily, weekly is not how to play it.
Actually I was first, so Bent is betting against me. And how lucky am I feeling? Lucky enough to get a 7% bump in a few days, that's how lucky! Just be glad you're not shorting this in real life, otherwise you'd be in for a world of pain! My 3 month price target is $27.50!
OSH,
chances this stock goes above 6, let alone to 27 in the next three months is highly unlikely, it is about as likely as the presidential election occuring next week.
After looking at the income statement, balance sheet and cash flow statement it looks like they lose
money on operations and gain it by selling stock. If you subtract out the cash they got by selling stock,
the company is pretty close to having a negative net worth. You can't sell stock forever.
As for the price change, this is a small cap and a volatile one at that. It can go down by 4% as easily as it goes up.
I think we are more likely to see a $1 a share price in a year than a $27 a share price.
Agreed, but they are in the development phase and currently using capital to build plants / land / materials. They have a few projects under construction, check out there website.
I need to review the financials again, but that fact would not surprise me as they have a high level of funding that is being consumed. To achieve profitability the corp has to devote the majority of its financial income, whether through selling of stock or through private equity partnerships/loan/etc to this endeavor. Rough roads may be ahead as NBF has stated in their 10QSB that they require additional funding for FY07 ops, I believe they will acquire the necessary funding but at what cost to stockholders. These plants are not cheap, and they are a massive investment in resources/capital, so with the construction comes significant capital requirements. Let me know if you think I am off base but in a simplistic view/look this makes sense to me. If they had plants online and this was occurring, then I would be concerned.
The leaders in this game are not gods. biofuels are, for the most part, stupid because of the poor energy returns, therefore in the long term guaranteed losers. As someone who drives around on used fryer oil myself, however, I like the economics behind this company (I pay nothing for my fuel (or if I'm lazy I can buy it filtered and dewatered for 1/3 of what I pay for diesel)). I think shorting this stock may pay off for a while, but you'd better be careful about when you get out of it. I'm betting outperform within a year, but of course I could be wrong.
OneStar, your well-thought-out analysis makes me know that you are for real. My broker allows parlay trades and based on your recommendations I am going to parlay NBF to 27 in 3 months then Blackstone up to 62 for March of 08. I am very bullish as the numerology supports us and also the chart for NBF is forming a "twig and berries" pattern. Very promising. I look forward to rubbing all the NBF bears noses in this one when it "breaks out".
"Twig and berry " formation - they either use that in IBD or Mad Money, can't remember which. Good call, I am going to double down on this bad boy. I think this a two ball bagger for sure.
Congratulations on this stock pick One Star Hero, 27$ here we come, I'm with you all the way. Presumably when your Nigerian money comes in you will invest it all in this stock.
TBENT left, he no longer has this stock as a underperform pick, ha ha ha, I posted a reply (similar to the points I raised in favor of this corp on this board) to his weak analysis and he took NBF off his fool list. Another reason why rankings mean zip. Anyone can picks stocks in an unrealistic setting, its when you lose YOUR money or the clients that makes this real and wothwhile......