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FutureFuel Corp. (FF), Renewable Energy Group Inc (REGI): Buy This ‘Gasoline Killer’ For A Shot At Triple-Digit Returns a stock with the potential to double is a tall order. The company needs to have a solid business model, promising growth prospects and strong fundamentals. Companies like LinkedIn Corp (NYSE:LNKD), Rite Aid Corporation (NYSE:RAD), and Winnebago Industries, Inc. (NYSE:WGO) have strong macroeconomic fundamentals and can boast stock gains of more than 100% and earnings growth of 30% or more this year.

But these stocks have made their move already. How do we find the next breakout stock? One way is to look for companies with a similar combination of solid fundamentals and strong earnings growth.

FutureFuel Corp. (NYSE:FF)

FutureFuel Corp. (NYSE:FF), a manufacturer of biofuel and premium chemicals that’s primed to take advantage of the developing alternative energy market, is one such company.

FutureFuel Corp. (NYSE:FF) has enjoyed tremendous earnings growth: 26% over the past five years and 110% growth in earnings per share (EPS) for the same quarter versus last year. In addition, the company beat expectations by 78% in this year’s first quarter and 55% in the second, which certainly qualifies as solid growth. It has enough cash on hand to meet current liabilities and pay a dividend of 2.7%.

FutureFuel Corp. (NYSE:FF)’s business model also looks solid. The company has two divisions: biofuels, which creates cellulosic ethanol that primarily serves the biodiesel market, and chemicals, which makes performance and custom chemicals for third-party clients. FutureFuel Corp. (NYSE:FF)’s annual biodiesel capacity of 59 million gallons represents a 70% increase since 2011, and the company has posted profit margins of more than 15% for the past three years — including an 80% increase in gross profits, to $49 million, in the first half of this year from the same period last year.

The current social and political climate has been a windfall for alternative energy. The Environmental Protection Agency has mandated that a higher cellulosic ethanol blend be used in gasoline mixes. Although Big Oil has had some success in fighting and influencing the new standard, it seems inevitable that more biofuel will be in increasing demand for the foreseeable future.

Competitors like Renewable Energy Group Inc (NASDAQ:REGI) and Archer Daniels Midland Company (NYSE:ADM) are poised to profit from the same macroeconomic factors as FutureFuel but haven’t had the same tremendous growth. FutureFuel also offers a higher dividend than either Archer Daniels Midland Company (NYSE:ADM), which pays 2%, or Renewable Energy Group Inc (NASDAQ:REGI), which doesn’t pay one at all.

FutureFuel Corp. (NYSE:FF) carries no long-term debt, giving it an appealing long-term debt-to-equity ratio of zero. The cash ratio (cash and equivalents divided by current liabilities), the most stringent of the liquidity ratios, comes out to 3.9, a staggering figure that tells us the company has enough cash and short-term investments to pay its current liabilities in full if needed.

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