FutureFuel Corp. (FF), Amyris Inc (AMRS): Has Solazyme Inc (SZYM) Become the Perfect Stock?

Solazyme Inc (NASDAQ:SZYM) has always been a promising company, with its algae-based renewable biofuel offering an alternative to regular fossil fuels. Yet as unconventional drilling techniques have dramatically increased supplies of oil and natural gas, major energy producers are looking more at exploiting newly found reserves than at supporting the development of innovative renewable alternatives. That has left Solazyme Inc (NASDAQ:SZYM) and its peers with a big challenge to face.

But Solazyme Inc (NASDAQ:SZYM) has its sights set on more than just renewable energy applications. The company believes that its nutritional oils can replace more expensive and less healthy oils that currently dominate food production, opening the door to a potential revolution in nutrition. That two-pronged approach of attacking both energy and consumer applications has worked well for rival FutureFuel Corp. (NYSE:FF) , which has developed its biodiesel business while also producing custom chemicals for use in agricultural and personal-care products. Amyris Inc (NASDAQ:AMRS) has also switched its focus from sustainable diesel and jet fuel production toward high-value chemicals for use in tire production and certain plastics, as well as cosmetics and other consumer products, and by doing so, it hopes to shore up its finances with more profitable business lines.

Unfortunately, Solazyme sees itself remaining unprofitable for several years. Extensive upfront capital costs represent just the beginning of massive expenditures it will need to get to full production.

For Solazyme to improve, it needs to make the leap to profitability. Until that happens, Solazyme will have difficulty making any progress toward becoming a perfect stock.

The article Has Solazyme Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of Solazyme.

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