Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Renewable Fuels industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Renewable Fuels Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

Click the button below to learn more about A+ Investor and subscribe today.

3 Undervalued Renewable Fuels Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Renewable Fuels industry for Friday, September 06, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Renewable Fuels industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Global Clean Energy Holdings, Inc.’s Value Grade

Value Grade:

Global Clean Energy Holdings, Inc. is a vertically integrated renewable fuels company. It specializes in the development and cultivation of camelina, a nonfood, regenerative, intermediate oilseed crop, which is used to produce advanced biofuels and biomaterials. Its farm-to-fuels value chain integration provides unrivaled access to reliable, ultra-low carbon feedstocks and is unparalleled in the sustainable fuel's industry. It has developed a portfolio of elite varieties of Camelina sativa to be used as a feedstock for its Renewable Fuels Facility. Its product includes Renewable Diesel, Biofuels Oil Feedstock and Biomass Feedstock. Renewable diesel is made from the same feedstocks as biodiesel. The feedstock oil is needed to produce renewable jet, biodiesel, renewable diesel and hydrotreated vegetable oil supplied from edible seed oils, including soy, canola, sunflower and palm. Camelina produces a co-product from the oil extraction process which is a non-transgenic high protein meal.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Global Clean Energy Holdings, Inc. has a Value Score of 69, which is considered to be undervalued.

When you look at Global Clean Energy Holdings, Inc.’s price-to-sales ratio at 2.41 compared to the industry median at 0.78, this company has a higher price relative to revenue compared to its peers. This could make Global Clean Energy Holdings, Inc.’s stock less attractive for value investors.

Global Clean Energy Holdings, Inc.’s price-earnings ratio is 0.25 compared to the industry median at 6.80. This means it has a lower share price relative to earnings compared to its peers. This could make Global Clean Energy Holdings, Inc. more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Global Clean Energy Holdings, Inc.’s shareholder yield is lower than its industry median ratio of (4.63%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Global Clean Energy Holdings, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.20. This could make Global Clean Energy Holdings, Inc. more attractive to investors looking for a new addition to their portfolio.

Highwater Ethanol, LLC’s Value Grade

Value Grade:

Highwater Ethanol, LLC is engaged in the production of ethanol and distillers’ grains at the plant. The Company operates through the manufacturing and marketing of fuel-grade ethanol and the co-products of the ethanol production process segment. The Company's products include Ethanol, Distillers Grains and Corn Oil. Its primary product is ethanol. Ethanol is ethyl alcohol, a fuel component made primarily from corn and various other grains. The ethanol it produces is manufactured from corn. The principal co-product of the ethanol production process is distillers’ grains, a high protein, high-energy animal feed supplement primarily marketed to the dairy, poultry, swine and beef industries. The corn oil that the Company produces is not food grade corn oil and therefore cannot be used for human consumption. Its corn oil can be used as the feedstock to produce biodiesel, as a feed ingredient and has other industrial uses.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Highwater Ethanol, LLC has a Value Score of 94, which is considered to be undervalued.

Highwater Ethanol, LLC’s price-earnings ratio is 6.8 compared to the industry median at 6.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Highwater Ethanol, LLC fairly attractive for value investors.

Highwater Ethanol, LLC’s price-to-book ratio is lower than its peers. This could make Highwater Ethanol, LLC more attractive for value investors when compared to the industry median at 1.20.

You can read more about Highwater Ethanol, LLC’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Imperial Petroleum Inc’s Value Grade

Value Grade:

Imperial Petroleum Inc is a Greece-based international shipping transportation company. The Company specialized in the transportation of various petroleum and petrochemical products in liquefied form. As of March 15, 2022, the Company's fleet consists of 4 vessels (oil product and crude oil tankers) with a total of more than 250 DWT.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Imperial Petroleum Inc has a Value Score of 89, which is considered to be undervalued.

Imperial Petroleum Inc’s price-earnings ratio is 2.4 compared to the industry median at 6.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Imperial Petroleum Inc more attractive for value investors.

Imperial Petroleum Inc’s price-to-book ratio is higher than its peers. This could make Imperial Petroleum Inc less attractive for value investors when compared to the industry median at 1.20.

You can read more about Imperial Petroleum Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Renewable Fuels Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Renewable Fuels stocks as well as other industrys.

Choosing Which of the 3 Best Renewable Fuels Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Global Clean Energy Holdings, Inc. stock has a Value Grade of B.
• Highwater Ethanol, LLC stock has a Value Grade of A.
• Imperial Petroleum Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Renewable Fuels industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Renewable Fuels Stocks

Want to learn more about Renewable Fuels stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Renewable Fuels Stocks for Friday, September 06
• Why Green Plains Inc’s (GPRE) Stock Is Down 5.23%
• 3 Undervalued Renewable Fuels Stocks for Wednesday, September 04
• Why Green Plains Inc’s (GPRE) Stock Is Up 9.96%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.