We recently published a list of 12 Best Ethanol Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where REX American Resources Corporation (NYSE:REX) stands against other best ethanol stocks to buy according to hedge funds.
Ethanol stocks are from companies that manufacture, sell, or distribute ethanol, a biofuel derived from crops such as corn and sugarcane. The ethanol industry is booming. As per Precedence Research, the global fuel ethanol market stood at $106.20 billion in 2024, climbed to $111.64 billion in 2025, and is anticipated to exceed $174.98 billion by 2034, representing a 5.12% CAGR between 2024 and 2034. The North American ethanol market is estimated to be worth $60.53 billion in 2024, growing at a CAGR of 5.20% over the forecast period.
Overall, the United States is the world’s leading producer and exporter of fuel ethanol, and prices in the country stayed relatively low in 2024. Moreover, Brazil is the second-largest producer and exporter. Growth Energy, the nation’s largest biofuel trade association, released data revealing that ethanol exports from the US set a new high in 2024. In total, the country exported 1.9 billion gallons of ethanol valued at $4.3 billion in 2024, breaking the previous record for volume set in 2018 and the prior record for value established in 2023.
Growth Energy CEO Emily Skor commented:
“The numbers don’t lie. The world is looking to the U.S. to meet its fuel needs and American producers are delivering in a way that supports economic growth abroad and at home in rural communities across the country,” “As the new Administration puts its new trade priorities into action, we look forward to working with President Trump and his team to ensure that we build on this momentum in a way that continues to grow the American farm economy through sales of American ethanol abroad.”
Recently, the U.S. Energy Information Administration reported on April 2 that the output of fuel ethanol in the US rose by 1% in the week ending March 28. Stocks of fuel ethanol were down 3%, whereas exports dropped 62%.
Most importantly, the export market remains the most attractive opportunity for driving US ethanol demand in 2025. Looking ahead, according to Jacqui Fatka, a farm supply and biofuels economist at CoBank, ethanol usage in higher-level blends is anticipated to surge annually in the US, but it accounts for just a tiny fraction of total ethanol demand due to the market’s size. Therefore, without large expenditures in infrastructure that allow retailers to adjust pumps or signage, nationwide E15 sales will not significantly increase in the time to come. Currently, the export market represents the best possibility to boost demand in 2025.
According to the United States Department of Agriculture’s most recent quarterly trade projection, announced on February 27, ethanol export volumes in the US would hit a record 1.85 billion gallons in the fiscal year 2025. The forecast is slightly higher than the previous quarter’s outlook.
Our Methodology
We sifted through online rankings to form an initial list of 20 Ethanol stocks. From the resultant dataset, we chose the top 12 stocks most favored by hedge funds, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s Market Cap as of April 3, 2025, as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Farmers harvesting corn in a field, reminding us of the importance of the company’s ethanol production.
REX American Resources Corporation (NYSE:REX)
Number of Hedge Fund Investors: 11
Market Cap as of April 3, 2025: $651.76 million
REX American Resources Corporation (NYSE:REX) works as a holding company that invests in alternative energy and ethanol production businesses. Its operating segments include ethanol and byproducts. The firm produces dried distillers grains, modified distillers grains, and non-food-grade corn oil. It is one of the best ethanol stocks to monitor.
REX American Resources Corporation (NYSE:REX) saw a surge in ethanol sales for the fiscal year 2024, hitting 289.7 million gallons from 285.9 million gallons in 2023. Fourth-quarter ethanol sales reached 74.7 million gallons from 72.1 million gallons. Its carbon capture project in Gibson City, Illinois, made significant strides in the capture and compression stages, pending the required sequestration licenses.
In addition to capacity growth, REX American Resources Corporation (NYSE:REX) is carrying out important progress on its carbon capture and compression (CCS) project at the One Earth Energy facility. The CCS project aims to reduce carbon emissions from the ethanol production process. The carbon capture and compression phase of the project is nearly finished, and the business is waiting for the final approval of Class 6 injection wells from the Environmental Protection Agency, which is expected in July 2025.
The firm actively pursued its share repurchase program, purchasing 373,000 shares in Q4 2024 and an additional 282,000 shares in Q1 2025, with the Board approving the purchase of 1.5 million further shares. REX American Resources Corporation (NYSE:REX) had a healthy cash position at the end of the year, with $359.1 million in cash, cash equivalents, and short-term investments, despite capital expenditures and share buybacks. Moreover, interest and other revenue jumped by 22%, rising to $19.2 million in 2024 from $15.7 million the previous year.
Overall, REX ranks 10th on our list of best ethanol stocks to buy according to hedge funds. While we acknowledge the potential of ethanol companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than REX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
