3. Green Plains Inc. (NASDAQ:GPRE)
Forward P/E: 7.74
Earnings Growth: 28.30%
Number of Hedge Fund Holders: 29
Green Plains Inc. (NASDAQ:GPRE) is a chemical and biorefining company that transforms renewable crops into low-carbon, sustainable ingredients through advanced fermentation and agricultural technologies. The company is one of the largest ethanol producers in the US. It produces ethanol and valuable byproducts like distillers grains, ultra-high protein, and renewable corn oil. Through partnerships and innovative technologies, Green Plains Inc. (NASDAQ:GPRE) is actively evolving into a comprehensive biorefinery platform, focusing on low-carbon biofuels, renewable feedstocks for advanced biofuels, and high-protein ingredients for animal and aquaculture diets.
In February 2024, the company initiated a strategic review process to explore various opportunities aimed at enhancing long-term shareholder value. This can include potential acquisitions and partnerships, divestitures, and mergers or sale.
Green Plains Inc. (NASDAQ:GPRE) is making significant strides with its world’s first commercial-scale Clean Sugar Technology facility, which began commissioning in the second quarter of 2024. This innovative technology promises to reduce carbon intensity by up to 40% compared to traditional methods, positioning the company at the forefront of sustainable processing.
In the second quarter of 2024, the company reported revenues of $618.8 million, down from $857.6 million in Q2 2023. However, Green Plains Inc. (NASDAQ:GPRE) achieved an EBITDA of $4.8 million, reflecting a $19.7 million improvement from the prior year due to stronger performance in its ethanol production segment.
In the Q2 2024 earnings call, management shared that Green Plains Inc. (NASDAQ:GPRE) is currently upgrading equipment at its Mount Vernon and Obion plants, which is expected to enhance production efficiency in the second half of 2024. These upgrades include replacing conveyors and installing a new thermal oxidizer at the Obion facility, which will improve both ethanol and ultra-high protein production. Once these enhancements are complete, the company anticipates unlocking an additional 40 million gallons of capacity, allowing for higher run rates and better overall performance. Despite facing challenges, the company remains focused on improving operational efficiency.
Green Plains Inc.’s (NASDAQ:GPRE) commitment to sustainability, innovative technologies, and strategic growth initiatives makes it an appealing investment opportunity. Analysts are also bullish on GPRE. Analysts currently hold a consensus buy rating on the stock and the 1-year median price target of $19.00 set by analysts indicates a potential upside of 65% from current levels.
According to Insider Monkey’s database, 29 hedge funds held stakes in Green Plains Inc. (NASDAQ:GPRE) in the second quarter of 2024. This brings GPRE to the 3rd spot on our list of the 10 undervalued chemical stocks to invest in.
