Syntroleum Corp (NASDAQ:SYNM)
The Company is engaged in developing and employing innovative technology to produce synthetic liquid hydrocarbons that are free of contaminants normally found in conventional products made from crude oil.
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Recs
Yes the bloom is off the rose. Alternative fuel stocks are dead. ( And most rightly so. ) This one however may have a little upside to it. It has dropped precipitously and now seemed to have reached a footing at the 2.60 mark. It is still bleeding money and revisiting the capital markets to stay liquid. Its product still cannot compete on a cost/sales price basis against what it is trying to replace, but I see some possible reasons for a rebound that justify investing in it.
A.) Recent headlines and exposure as the companies products successfully finish testing while being used in a B-52 bomber. (US Military is number one purchaser of fuel on the planet I believe)
B.) Major stockholder Robert Addison Day Jr. (Billionaire money manager) holds huge stake and would like to see a return on his investment. He has the political connections to make that happen. Do a Google search on him for more info.
C.) A confrontation such as blockage of the Strait of Hormuz which could occur during Iran/US dispute (which I see as highly likely in the next 24 months) would instantly send this stock flying. I would at that time be an immediate seller, in an attempt to capture value.
Recs
For a synthetic alternative this appears to be a good oil alternative but is it?
Recs
When the next spike in oil prices comes, this stock will shine. At $2.95, not much downside.
Recs
Broke support
Recs
CTL is a play not just on economics vs. oil, but also on increased attention on US energy security. In other words, this will not just be a play on high oil prices. For evidence, see recent news about the Air Force's test of CTL/GTL with a B-52 bomber (using Syntroleum fuel) and plans to buy up to 200 million gallons by 2008. Subsidies are also a part of a bill in Congress right now, supported by Barrack Obama. JetBlue's CEO has also been quoted as being in favor of the technology as a means for price stability. Catalysts include additional announcements about CTL partnerships or licensing agreements, further announcements from the DoD, and passage of the subsidy bill. Syntroleum also created a partnership with Great Northern, the largest non-government holder of coal reserves, to create a CTL plant in Montana -- though it has been discussed in company presentations on the website, it has not been formally announced yet, and this could be another specific catalyst.
Recs
Great product and DOD contract but until they start turning a profit a loser.
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