Today's NASDAQ Focus Is Gevo Inc (NASDAQ:GEVO)

Gevo Inc (NASDAQ:GEVO) has gotten investors excited again after a series of positive news announcements. The biggest of which was the news that the first two commercial flights using its renewable alcohol to jet fuel flew from Seattle to San Francisco and Washington, D.C. Then, just this week, Gevo announced that it signed a a supply agreement with fuel distributor Musket Corp. to supply isobutanol for blending with gasoline. Now investors are asking if Gevo has turned the corner and if much higher prices are ahead.Gevo describes itself as "a leading renewable technology, chemical products, and next generation biofuels company. Gevo has developed proprietary technology that uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production of isobutanol, as well as related products from renewable feedstocks. Gevo’s strategy is to commercialize bio-based alternatives to petroleum-based products to allow for the optimization of fermentation facilities’ assets, with the ultimate goal of maximizing cash flows from the operation of those assets. Gevo produces isobutanol, ethanol and high-value animal feed at its fermentation plant in Luverne, Minn. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols. Gevo currently operates a biorefinery in Silsbee, Texas, in collaboration with South Hampton Resources Inc., to produce renewable jet fuel, octane, and ingredients for plastics like polyester. Gevo has a marquee list of partners including The Coca-Cola Company, Toray Industries Inc. and Total SA, among others. Gevo is committed to a sustainable bio-based economy that meets society’s needs for plentiful food and clean air and water."The first two commercial flights by Alaska Airlines using Gevo fuel was a momentous occasion. The event marked a successful step toward new fuels that help airlines to reduce their greenhouse gas emissions (GHGs). Gevo’s alcohol to jet synthetic paraffinic kerosene (ATJ-SPK) process turns its bio-based isobutanol into jet fuel that meets the requirements of the recently revised ASTM D7566 (Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons) for up to a 30 percent fuel blend. The two Alaska Airlines flights utilized a 20 percent fuel blend. When compared to other fuel options, Gevo believes that its renewable ATJ has the potential to offer the most optimized operating cost, capital cost, feedstock availability, scalability, and translation across geographies. Gevo CEO Pat Gruber said:

“Flying a commercial flight with our jet fuel made from renewable resources has been a vision of ours for many years, and it has taken many years of work to get this far. We believe our technology has the potential to be the lowest-cost, renewable carbon-based jet fuel, given the efficacy of our technology. We look forward to moving forward with Alaska, and others in the airline industry, to make renewable jet fuel widely successful as a product that substitutes for fossil fuels, and ultimately helps to reduce carbon.”

This week's agreement with Musket is also a big deal for Gevo. Musket is a national fuel distributor under the umbrella of the Love’s Family of Companies. Initial target markets are expected to include the marine and off-road markets in Arizona, Nevada, and Utah. The supply program is expected to begin with railcar quantities of isobutanol (a railcar holds approximately 28-29 thousand gallons). As isobutanol production ramps at Gevo’s production facility in Luverne, Minn., and isobutanol-blended gasoline becomes more established at retail outlets, Musket expects to expand its purchase quantities. Musket is initially targeting retail pumps at Lake Havasu in Arizona, followed by other large marine markets such as Lake Powell, Lake Mead, as well as other large lakes in the western states. Later, Musket also anticipates expanding distribution into its core Oklahoma market.Currently trading with a market cap of $22 million, GEVO just issued 21 million shares at a price of $.45 per share. While we don't like the dilution, the company needs the capital to expand, reach commercialization, and then become cash flow positive. Overall, we certainly like the news coming out of the company and we think more is set to come. As we saw earlier this month, GEVO can turn into a microcap runner overnight and send the shorts scrambling. We believe the worst is behind GEVO and better days are ahead. We will be updating Insider Financial as soon as we know more. For continuing coverage on GEVO, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in GEVO and have not been compensated for this article.