How do you feel about adding a broader range of stocks to our energy investment portfolio watchlist? Let’s see what we can do!

First, let’s quickly define what biofuels are:

A biofuel is a liquid or gaseous fuel derived from the transformation of non-fossil organic matter from biomass, for example, plant materials produced by agriculture (beets, wheat, corn, rapeseed, sunflowers, potatoes, etc.). So, it is considered a source of renewable energy. The combustion of biofuels produces only carbon dioxide (CO2) and steam (H2O) and little or no nitrogen and sulfur oxides. Therefore, biofuels – as being at the crossroads between energy and agricultural commodities – respond to economic drivers (crops/supply, demand, dollar strength, reserves, etc.) and geopolitics of both industrial sectors. Furthermore, they allow their producing countries to reduce their energy dependence on fossil fuels.

Key reasons to invest in these alternative energy sources:

Given the recent surge of oil and gas prices, biofuels have become somehow more attractive, and consequently one could witness a slight shift in demand from fossil to non-fossil fuels. This was also a central topic of talks during the recent United Nations Conference of the Parties (COP26), which recently took place in Glasgow (Scotland), and where world leaders finally agreed to preliminary rules for trading carbon emissions credits. In addition, as we all know, the combustion of fossil fuels contributes to greenhouse gas (GHG) emissions. Regarding biofuels - the carbon emitted to the atmosphere during their combustion has been previously fixed by plants during photosynthesis. Thus, the carbon footprint seems to be a priori neutral.

Stock Watchlist (Continued)

In the first article, we started a watchlist with some major energy stocks. In the second article, we added some more spicy assets (MLPs). Today, let’s update it with some biofuel-based stocks!

As usual, our stock picks will be shared through that link to our dynamic watchlist which will be updated from time to time, as we progress through this portfolio construction process...

Below is an example of some indicative metrics:

Daily Technical Charts

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Figure 1 – Green Plains, Inc. (GPRE) Stock (daily chart)

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Figure 2 – Aemetis, Inc. (AMTX) Stock (daily chart)

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Figure 3 – Tantech Holdings Ltd. (TANH) Stock (daily chart)

Figure 4 – Darling Ingredients Inc. (DAR) Stock (daily chart)

In summary, those biofuel-related stocks may present some benefits to diversifying your energy portfolio while covering some alternative fuels as well.