In this article, we will take a look at the 12 best algae and biofuel stocks to buy. To see more such companies, go directly to 5 Best Algae and Biofuel Stocks To Buy.
The biofuel industry is one of the biggest beneficiaries of the global green energy revolution. The biofuels industry produces energy from renewable, plant-based sources like corn, soybeans, and algae. According to a report by Research and Markets, the global biofuel market value for 2020 was $102.162 billion. The market is expected to grow at a CAGR of 4.02% to reach $134.589 billion by the end of 2027.
A research report from Fortune Business Insights says that the global liquid biofuels market size was about $116 billion in 2019. This market is expected to grow at a CAGR of 8.4% through 2027. The report said that the biggest catalyst for this market was a huge increase in pollution generated from vehicles. The industry will grow since it gives a catalyst to clean fuels that curb carbon emissions.
A December 2022 report from the Australian government says that major countries around the world are working on the biofuels industry. The report said that the USA, Brazil, Europe and Indonesia were the biggest consumers of biofuels as of 2021 as these countries made up about 84% of global biofuel consumption. The report also said that over the next five years, the US and Brazil will continue to lead the global demand and production in the biofuels sector, while Asia will go through the biggest growth in demand. Some of the biggest algae and biofuel companies, as you will see in our article, have major operations in Brazil. The report quoted an estimate from OECD-FAO which says that from 2019 to 2021, about 21% of world sugar cane production, 15% of world maize production and 12% of oilseed production was used to make biofuels.
Photo by The Tampa Bay Estuary Program on Unsplash
Our Methodology
For this article, we scoured the biofuel and algae industry and listed some of the biggest players that are poised for further growth. These algae and biofuel stocks are also popular among the elite hedge funds tracked by Insider Monkey. Some of these companies have operations in emerging markets, which will account for a major chunk of industry growth. We also added non pure-play biofuel and algae companies in our list. These companies are either partnering with biofuel companies or are investing in the sector to boost their renewable energy footprint.
Best Algae and Biofuel Stocks To Buy
12. CanaQuest Medical Corp. (NYSE:CANQF)
Number of Hedge Fund Holders: N/A
CanadaQuest, formerly known as Algae Dynamics, is a Canadian company that makes treatments with its endocannabinoid system. In 2019, CanaQuest Medical Corp. (NYSE:CANQF) changed its named from Algae Dynamics to CanaQuest Medical. CanaQuest Medical Corp. (NYSE:CANQF) said at the time that it will focus on the development of products that combine the significant health benefits of Omega-3 essential fatty acids derived from algae oil and extracts of cannabis and botanical oils.
11. Comstock Inc. (NYSE:LODE)
Number of Hedge Fund Holders: 2
Comstock (NYSE:LODE) is one of the most innovative companies operating in the biofuels domain. The Texas-based Comstock (NYSE:LODE) converts wasted and unused biomass feedstock into cellulosic ethanol and drop-in fuels. In July last year, Comstock (NYSE:LODE) filed for a new patent covering breakthrough pathways to produce renewable diesel, marine, sustainable aviation fuel and gasoline from woody biomass. Separately, in September, Comstock (NYSE:LODE) filed another application with the DOE to build a system to produce renewable diesel, sustainable aviation fuel, gasoline, and marine fuel from forestry residues and other forms of lignocellulosic biomass at improved yields.
Comstock (NYSE:LODE) is also one of the notable dividend payers in the industry. It has a dividend yield of about 4% as of January 10.
10. REX American Resources Corporation (NYSE:REX)
Number of Hedge Fund Holders: 8
REX American Resources Corporation (NYSE:REX) is an important biofuel stock since the company is an important ethanol producer. Ethanol is a renewable fuel that can be made from various plant materials. Estimates suggest that REX American Resources Corporation (NYSE:REX) is involved in the production of 600 million gallons of ethanol per year. It is also investing in several projects related to carbon sequestration.
REX American Resources Corporation (NYSE:REX) operates several ethanol facilities in the Midwest. In the fiscal 2022, these facilities produced about 700 million gallons of ethanol. REX American Resources Corporation (NYSE:REX) uses recycled animal fats, used cooking oil and distiller’s corn oil to produce low carbon fuel. REX American Resources Corporation (NYSE:REX) has 12 plants that produce corn ethanol, which is a clean, high-octane renewable fuel.
As of the end of the third quarter, 47 hedge funds tracked by Insider Monkey reported having stakes in REX American Resources Corporation (NYSE:REX), compared to 43 funds in the previous quarter.
9. FutureFuel Corp. (NYSE:FF)
Number of Hedge Fund Holders: 10
Founded in 2005, FutureFuel Corp. (NYSE:FF) has now become a major player in the biofuel industry in the US. Its biodiesel division has a production capacity of 59 million gallons per year. FutureFuel Corp. (NYSE:FF) is trading below $10 as of January 10. However, it still pays a dividend. Earlier this month, FutureFuel Corp. (NYSE:FF) declared a quarterly dividend of $0.06/share, in-line with the previous dividend. Forward dividend yield came in at 28%. The dividend is payable March 15.
FutureFuel Corp. (NYSE:FF) also posted excellent results for the third quarter, according to which its revenue jumped 20%. All segments of FutureFuel Corp. (NYSE:FF)’s business posted strong growth. FutureFuel Corp. (NYSE:FF)’s Biodiesel operated at full capacity and experienced a sharp increase in margins.
Of the 920 hedge funds tracked by Insider Monkey, 10 funds had stakes in FutureFuel Corp. (NYSE:FF), compared to 11 funds in the previous quarter.
8. Amyris, Inc. (NASDAQ:AMRS)
Number of Hedge Fund Holders: 11
California-based Amyris, Inc. (NASDAQ:AMRS) was once a pure-play biofuels company. But Amyris, Inc. (NASDAQ:AMRS) changed its business model and moved into the skincare industry several years ago. Amyris, Inc. (NASDAQ:AMRS) uses biosynthesis to create an oil that is used in moisturizers and other personal-care products. While it’s not a pure-play biofuel stock, Amyris, Inc. (NASDAQ:AMRS) is still operating in the area of biology as it sells important sustainable skincare solutions to major brands including DSM, Ingredion, Firmenich, Givaudan, L’Oreal, Shiseido, Natura, Estee Lauder, Sumitomo and many others.
A total of 11 hedge funds tracked by Insider Monkey reported to have stakes in Amyris, Inc. (NASDAQ:AMRS). The total value of these stakes was about $48 million. The biggest stakeholders of Amyris, Inc. (NASDAQ:AMRS) are Albert Cha and Frank Kung’s Vivo Capital and Thomas Steyer’s Farallon Capital.
7. Aemetis, Inc. (NASDAQ:AMTX)
Number of Hedge Fund Holders: 11
Aemetis, Inc. (NASDAQ:AMTX) is a California-based biofuels company that sells advanced biochemical and renewable energy solutions. Aemetis, Inc. (NASDAQ:AMTX) also collects agricultural waste to develop low-carbon fossil fuel replacements. Aemetis, Inc. (NASDAQ:AMTX) is also making solutions to capture and sequester polluting carbon dioxide (CO2) more than a mile below its Northern California facilities. As of the end of the third quarter, 11 hedge funds tracked by Insider Monkey reported having stakes in Aemetis, Inc. (NASDAQ:AMTX). The total value of these stakes was about $20 million. Among the most notable of these funds were Todd J. Kantor’s Encompass Capital Advisors ($11 million stake) and Israel Englander’s Millennium Management ($5.4 million stake).
Aemetis, Inc. (NASDAQ:AMTX) was one of the stocks that move up in November after it was reported that the Biden administration was preparing to increase the amount of renewable fuel that oil refiners must blend into their gasoline and diesel for 2023 and beyond.
6. Adecoagro S.A. (NYSE:AGRO)
Number of Hedge Fund Holders: 11
Adecoagro S.A. (NYSE:AGRO) is a Luxembourg-based company that is operating in the biofuels market. Most of Adecoagro S.A. (NYSE:AGRO)’s operations are based in Brazil, where it plants sugarcane for the production of ethanol. Adecoagro S.A. (NYSE:AGRO) also produces bioelectricity from bagasse, a byproduct of the crushing process. Over the past few years Adecoagro S.A. (NYSE:AGRO) has invested heavily to expand its operations. Adecoagro S.A. (NYSE:AGRO) owns about 220,000 acres of property outside of South American. It owns 18 farms in Argentina, 8 farms in Brazil and one farm in Uruguay. Adecoagro S.A. (NYSE:AGRO) is also working to diversify its income streams. Its revenue comes from dairy products, electricity, sugarcane, cereals, among other arms.
As of the end of the third quarter, 11 hedge funds tracked by Insider Monkey reported owning stakes in Adecoagro S.A. (NYSE:AGRO).
5. Gevo, Inc. (NASDAQ:GEVO)
Number of Hedge Fund Holders: 15
Gevo, Inc. (NASDAQ:GEVO) ranks 5th in our list of the best algae and biofuel stocks to buy now. Gevo, Inc. (NASDAQ:GEVO) makes bio-based alternatives to traditional energy products. Gevo, Inc. (NASDAQ:GEVO)’s processes ensure to give high-protein animal feed the lowest carbon levels in its life-cycle inventory (LCI). Gevo, Inc. (NASDAQ:GEVO) also makes high-protein animal feed and a full range of energy-dense liquids. Analysts believe there have been some positive developments in Gevo, Inc. (NASDAQ:GEVO) which points to solid growth in 2023. Gevo, Inc. (NASDAQ:GEVO)’s renewable gas plant in northwest Iowa is now producing biogas. The project consists of three dairy farms with over 20,000 milking cows. In the summer of 2021, Gevo, Inc. (NASDAQ:GEVO) made headlines after it signed an agreement with American Airlines (AAL) to supply 100 million gallons of sustainable aviation fuel (or SAF) for five years.
Hedge funds are piling into Gevo, Inc. (NASDAQ:GEVO). As of the end of the third quarter, 15 hedge funds had stakes in Gevo, Inc. (NASDAQ:GEVO), compared to just 4 funds in the previous quarter. This shows a sharp increase in hedge fund sentiment for Gevo, Inc. (NASDAQ:GEVO).
4. Green Plains Inc. (NASDAQ:GPRE)
Number of Hedge Fund Holders: 21
Green Plains Inc. (NASDAQ:GPRE) is a Nebraska-based company that is among the biggest ethanol fuel producers in North America. Green Plains Inc. (NASDAQ:GPRE) calls itself a biorefining company that processes crops into low carbon, sustainable ingredients through fermentation and patented ag-technologies. It is also working in the algae domain. Green Plains Inc. (NASDAQ:GPRE) has an innovation center at York which features a pilot fermentation train used to develop algae and yeast fermentation processes.
A total of 21 hedge funds tracked by Insider Monkey reported having stakes in Green Plains Inc. (NASDAQ:GPRE), compared to 22 funds in the previous quarter. Among the biggest stakeholders of Green Plains Inc. (NASDAQ:GPRE) are Frederick Disanto’s Ancora Advisors ($120 million stake) and David Rosen’s Rubric Capital Management ($30 million stake).
3. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 25
One of the biggest energy companies in the world, BP p.l.c. (NYSE:BP) is invested heavily to position itself in the biofuel industry. Last year, BP p.l.c. (NYSE:BP) bought a 30% stake in Green Biofuels Ltd., which is the UK’s largest provider of hydrogenated vegetable oil (HVO). BP p.l.c. (NYSE:BP)’s website says that BP p.l.c. (NYSE:BP) in 2017 produced 776 million liters of ethanol equivalent from sugarcane in Brazil alone, which was enough to offset emissions of 260,000 European cars.
In 2019, BP p.l.c. (NYSE:BP) signed a partnership with Bunge to form biofuels plant in Brazil.
2. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 37
Archer-Daniels-Midland Company (NYSE:ADM) is one of the biggest food processing companies in the world. Archer-Daniels-Midland Company (NYSE:ADM) is also invested heavily in the biofuels space. Archer-Daniels-Midland Company (NYSE:ADM) produces biodiesel through a process called transesterification, in which vegetable oils are heated with alcohol in the presence of a catalyst to yield mono-alkyl esters (biodiesel) and glycerin. Archer-Daniels-Midland Company (NYSE:ADM) produces biodiesel from vegetable oil in EU, Brazil, Canada and in the U.S. Archer-Daniels-Midland Company (NYSE:ADM) is also operating in the ethanol segment of Archer-Daniels-Midland Company (NYSE:ADM).
Archer-Daniels-Midland Company (NYSE:ADM) produces ethanol from corn feedstock.
As of the end of the third quarter, 37 hedge funds tracked by Insider Monkey reported having stakes in Archer-Daniels-Midland Company (NYSE:ADM). The total value of these stakes was about $599 million.
1. Valero Energy Partners LP (NYSE:VLP)
Number of Hedge Fund Holders: 47
One of the biggest energy companies in the US, Valero Energy Partners LP (NYSE:VLP) is also investing heavily in the biofuels market. Valero Energy Partners LP (NYSE:VLP)’s Diamond Green Diesel joint venture is the world’s second-largest producer of sustainable renewable diesel. Valero Energy Partners LP (NYSE:VLP) uses recycled animal fats, used cooking oil and distiller’s corn oil to produce low carbon fuel. Valero Energy Partners LP (NYSE:VLP) has 12 plants that produce corn ethanol, which is a clean, high-octane renewable fuel.
As of the end of the third quarter, 47 hedge funds tracked by Insider Monkey reported having stakes in Valero Energy Partners LP (NYSE:VLP), compared to 43 funds in the previous quarter.
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Disclosure: None. 12 Best Algae and Biofuel Stocks To Buy is originally published on Insider Monkey.
