Analyst says investing in key biofuels stocks requires “a big stomach for risk.”

In the world of finance, analyst John Udovich indicated concerns that the risk associated with small-cap stocks for Gevo, BioFuel Energy Corp. and Solazyme makes the stock undesirable. He indicated that while Gevo has been trending upwards lately, the company is still down about 50% over the past year.

BioFuel Energy Corp. has also been trending upwards, but its debt, coming in at $176.8 million, makes the stock risky. As for Solazyme, the analyst indicated that the company’s costs will rise over the next year as the drought in Brazil damages the sugar crop. Udovich warned that investors in these three companies would need “a big stomach for risk.”