Mad Money
Recap of “Mad Money’:
I’m not recommending any of these stocks, but here is a quick analysis on Cramer’s take on today's ethanol play.
Today Cramer recommended MGPI as a strong buy.
Cramer’s reasoning
for choosing MGPI is its ability to convert cellulose to ethanol, a
futuristic way in producing Ethanol, far more productive then producing
it agriculturally(Xthn.ob specializes in the same
thing.) Also the fact that gas prices have sky rocketed and ethanol
demand has increased has boosted the demand of this company. This can
be said though for every and any company in the Ethanol sector, which
makes it a very broad reason for a specific company to succeed. Cramer
also said that ethanol is the king of pander power, meaning "they have so much political appeal that
politicians will keep plugging them no matter how economically unsound
the idea may be", which can also be associated to MGPI's high demand. Looking into MGPI's news, it hasn't released anything of recent,
so the reasoning this company has been going up is based on pure
speculation.
Today MGPI looked very impressive, whats the reason? especially having a high jump in after hours, possibly due to the pumping by Cramer. .
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As long as these companies are not backed
up with lucrative financial statements, as I said with the
fundamentals, their futures are unpredictable, the everlasting question
is how much longer can they ride on this speculation? Ethanol is a
great opportunity for
the future, but how can they make those disbelievers into believers if
word of mouth is what is driving these companies?
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