Barron’s says ethanol stocks undervalued

Barron’s said that ethanol stocks are undervalued and are set to rise. VeraSun Energy, Aventine Renewable Energy, and Pacific Ethanol, according to a Barron’s report, are undervalued by as much as 50 percent based on replacement cost, and are trading at a discount of up to 50 percent of book value. However the report says that Aventine and VeraSun are trading at 4 times pretax cash flow, or at least 19 times earnings.

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