4 Reasons to Sell Solazyme Inc (SZYM)

What does this mean for Solazyme? Well, its renewable oils will still be eyed for their high sustainability. The company could even turn it into an advantage if it can keep costs down. But with companies around the globe switching palm oil out of their supply chains for synthetic feedstocks there is no doubt that Solazyme faces a new group of synthetic competition that is often overlooked.

4. Annual losses to continue
This drawback can be applied to most companies in the industry – even the mighty Solazyme. The company admitted that, although it expects to be cash flow positive by 2014, it foresees annual losses continuing for “several years.” The expensive build-outs of biorefineries, the ramp-ups to full capacity after commissioning production, and the commercialization of its product portfolio will all contribute to the losses.

Foolish bottom line
This is in no way a comprehensive list of the risks facing Solazyme, nor does it necessarily offset the growing number of reasons that support the case for continued growth. We Fools simply believe that investors need to consider both the risk and reward sides of each investment, while also knowing which information to look for when researching a potential investment. What do you think of the risks facing Solazyme’s renewable oils? Let me know in the comments section below.

The article 4 Reasons to Sell Solazyme originally appeared on Fool.com and is written by Maxxwell A.R. Chatsko.

Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio or follow him on Twitter @BlacknGoldFool to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool owns shares of Solazyme.

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