Big Oil Looks for Ethanol Alternatives, and Travails of a Gun Maker

yonderThe tech-laden NASDAQ has exploded in the last few weeks, leaving the Yonder 40 — and everyone else — in the financial dust.

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40So you think you had a bad week? Compared to gun maker Sturm Ruger, your week was a lark.

The Connecticut gun maker — and member of the Yonder 40 rural stock index — lost 20 percent of its value last week. What’s going on? First, Sturm reported lowered earnings last week. This week, the Indiana Court of Appeals ruled that a suit filed by the city of Gary could continue against Gary and 15 other gun manufacturers. (The city is charging the gun makers provided weapons to criminals.) Since July 1, Sturm Ruger has lost almost half its value.

Then, again, the Yonder 40, stocks that reflect the rural economy, had a bad week, too. Thirty-one of the 40 stocks lost value in the last five trading days. The Yonder 40 was down by 2.7 percent for the week. The Dow Industrials were down 1.5 percent.

The NASDAQ has shown steady movement upward in recent weeks, and now is more than 8 percent above its level on July 1.

Ethanol has been a growing part of the rural economy recently. Andersons reported higher earnings in the third quarter partially because of increases in its ethanol division. More important for rural communities, however, are moves by big oil into biofuels. Andersons, based in Ohio, has entered a joint venture with Marathon Oil of Houston. Marathon has refineries in the Midwest that can produce blended fuel.

The Wall Street Journal reported last week that “some of the world's biggest energy companies, including BP PLC, Chevron Corp., ConocoPhillips and Exxon Mobil Corp., have stepped up spending to find just that: a fuel derived from plant matter or waste material but without the complications of the current crop of biofuels, namely that they can't be transported or stored using existing infrastructure.”

All of these companies are funding university research into second-generation biofuels. BP, based in London, has set aside $500 million over 10 years for an energy lab at the University of California at Berkeley. They are looking for an alternative to corn-based ethanol.

A message from the Rural Assembly

In other Yonder 40 news:

•The mining firm Walters Industries reported lower revenues and earnings, but the company still was up over 13 percent for the week on much higher volume.

•Mine Safety Appliances reported higher net income in the third quarter. Sales of mining safety products increased 18 percent in the quarter.

• Cabella’s reported lower third quarter income. The company has had lower margins and two new stores opened with less than stellar results.

• Gaylord Entertainment, owner of the Grand Ole Opry, had a third quarter loss, due to discontinued operations. Revenues rose during the period.

Here are the results for the week ending November 2, 2007, for the full Yonder 40:

 

CompaniesTickerPrice November 2Price Change for WeekPercent Change for Week
Alico Inc.ALCO43.16-$5.69-11.6%
Andersons Inc.ANDE46.04-$3.93-7.9%
Burlington Northern Santa Fe Corp.BNI86.72$1.071.2%
Berkshire HathawayBRKB4,402.00$169.004.0%
Bassett FurnitureBSET10.42-$0.13-1.2%
Peabody Energy Corp.BTU51.36-$6.57-11.3%
Cabela's Inc.CAB18.8-$1.37-6.8%
ConAgra Foods Inc.CAG23.22-$0.60-2.5%
Cato Corp. Cl ACTR18.07-$1.93-9.7%
Citizens CommunicationsCZN12.91-$0.20-1.5%
Deere & Co.DE152.73$7.295.0%
Dean Foods Co.DF26.6$0.040.2%
DIRECTV GroupDTV25.62-$0.08-0.3%
Family Dollar Stores Inc.FDO23.61-$1.73-6.8%
Fleetwood Enterprises Inc.FLE8.35-$1.13-11.9%
FairPoint CommunicationsFRP18.09-$0.52-2.8%
Gaylord Entertainment Co.GET49.65-$3.89-7.3%
Hormel FoodsHRL35.37-$1.42-3.9%
International Speedway Corp.ISCA43.99-$0.63-1.4%
Lee EnterprisesLEE15.11-$0.67-4.2%
Mohawk Industries Inc.MHK83.42-$2.68-3.1%
Monsanto Co.MON94.43$0.150.2%
Mine Safety Appliances Co.MSA44.76-$0.76-1.7%
Southwest BancorpOKSB17.13-$2.38-12.2%
Plum Creek Timber REITPCL43.09-$0.29-0.7%
Penn Virginia Corp.PVA48.1$1.994.3%
Ralcorp HoldingsRAH55.19-$1.02-1.8%
Regions Financial Corp.RF25.24-$1.78-6.6%
Sturm Ruger & Co.RGR8.4-$2.18-20.6%
Smithfield FoodsSFD28.15-$0.35-1.2%
Skywest Inc.SKYW26.53-$0.63-2.3%
Southern Co.SO35.72-$0.48-1.3%
Stage Stores Inc.SSI17.54-$0.77-4.2%
Tractor Supply Co.TSCO40.74-$1.16-2.8%
Tyson FoodsTSN15.12-$0.68-4.3%
UST Inc.UST51.58-$1.60-3.0%
Waddell & Reed Financial Inc.WDR33.34$1.133.5%
Walter IndustriesWLT34.54$4.0313.2%
Wal-Mart StoresWMT44.19-$0.45-1.0%
Cimarex EnergyXEC40.15$0.882.2%

A message from the Rural Assembly

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