Gevo Inc (NASDAQ: GEVO) has gained 10.87% in the past 5 trading sessions. Even as the company came across with a $0.05 per share quarterly loss against the consensus estimate of $0.04, the upside is its announcement of joining the Russell 3000 Index. A year prior, the company had registered a loss of $0.04 per share. The market capitalization of the company is $1.78 billion.
In the previous month, this stock finished up 12%, as per the data of S&P Global Intelligence. There was some movement with the stock as investors looked forward to the earnings call with its first-quarter data.
What happened next?
But, and there’s a big but here, over a period of two days after its Q1-2021 earnings report, the stock ripped 43% higher. There was a lesser focus on the number of net loss, but more inclination towards the company’s progress towards its new project called Net-Zero 1, which is under development stage in South Dakota. This project is expected to create 45 million gallons of fuel annually, along with corn oil and animal feed.
Indexing in Russell 3000
This index is used extensively by investors as well as investment manager specifically for the purpose of index funds. Russell has been used as a benchmark for some of the active investment models. There are around $10.6 trillion assets that are benchmarked in the index. By joining the index, the company puts itself inconvenient position for the investors.
The road that lies ahead
The company’s mission is to go a step ahead in clean energy sources. Transforming renewable energy along with carbon into energy-dense liquid hydrocarbons is what Gevo believes in. With a global inclination towards cleaner energy sources, Gevo’s future with liquid hydrocarbons seems plausibly profitable.
As for its Iowa-based renewable natural gas project, the company mentioned the broken ground and how it is expecting to kick off the project in early 2022. The annual cash generation is estimated at $9 million to $16 million.