BP’s $90 Million Investment in Verenium (Nasdaq:VRNM) Bodes Well! 
Posted: 06 August 2008 09:08 AM   [ Ignore ]  
Total Posts:  49
Joined  2008-05-06

August 6, 2008 – Verenium (Nasdaq:VRNM) announced this morning it is getting an investment from BP PLC, which will help to shore up its balance sheet as well as provide a key value-added partner for its future development efforts. This should provide the Street with a much stronger level of confidence that the company is going to have the staying power to bring next-generation cellulosic biofuels to the markets.

The stock was pounded last month as concerns mounted about the impact of biofuels on agriculture, the relative uncertainty about the success of next generation biofuels, as well as whether support will still be in place for them by the time they are fully market-ready, and in particular, due to the fact that Verenium has been looking for strategic investment for some time now and hadn’t been able to produce much in the way of results.
This morning’s news is a major development. At yesterday’s close of $2.02, the stock is trading about 2.5x sales (ttm), and about 2.11x our forecasted 2008 sales of $75 million. We think with the BP relationship in place, the stock could trade up to a 3x 2008 multiple, which would put the stock closer to $3.17. This would be the high end of our target range, but we think the news should provide a catalyst for the stock to begin trading in this $2 to $3 range in the second half of the year.

We commented a few weeks ago, July 7, when the stock was hitting $1.60 that accumulation was a good strategy for investors that are able to stand the volatility, and the stock bounced off a low a week later of $1.05, but has managed to climb back over $2 leading into this morning’s news on several positive developments, including a Department of Energy grant, a joint development agreement with an Asian partner, and a grant from New Zealand’s Foundation for Research.

We are still accumulating on any market weakness under $2 and are more bullish than ever on Verenium’s ability to withstand the storm and lead the next generation of biofuel companies.

Disclosure Note: SCPEditor is LONG VRNM.

Posted: 06 August 2008 03:19 PM   [ Ignore ]   [ # 1 ]  
Jr. Member
Total Posts:  34
Joined  2008-06-24

Wow! The stock is at 3.35! Amazing, I hope you all got in at 2.00 or under. So tempting to sell and reinvest assuming it will go back down.

Posted: 20 August 2008 11:36 AM   [ Ignore ]   [ # 2 ]  
Jr. Member
Total Posts:  33
Joined  2008-06-16

Seems like it’s floating around $2.50 now. That’s still up 25% or more on any stock purchases at $2 or under.