The Case For Verenium Corp

October 20 was a day to cheer for the investors of Verenium Corp (VRNM) as shares of the Cambridge, MA based biofuel and enzyme maker skyrocketed as high as 42% before settle back for a still pretty decent 35% in one day.  The reason drove the stock was the regulatory approval in China of Verenium Corp's novel enzyme called Purifine PLC that would be used for the edible oil industry in China.


Verenium Corp's enzyme product is a key component of an improved degumming process for refining soybean oil and vegetable oil.  Now that Verenium Corp has tapped into the Chinese edible oil industry which has been growing 5%-6% annually with domestic consumption of 24.5 million tons, we should see significant growth for the company in the future.  And high future growth is typically a key component in driving up the stock price which explains the 35% jump in stock price on October 20.   


The insider transactions were great indication that good things are coming for the company as in August Verenium Corp's officers were aggressively buying shares of the company.  If you bought the stock on August 31 following the insider purchases you would still enjoy a decent 22% gain at the moment, even after the two day straight pull back.  By the way if you are still holding and were regretting not selling the stock on that day, do no panic.  This kind of pull back is normal for a stock that ran up so high in a day.  With great future to come for the stock wait for the dust to settle down and smart buyers will eventually come back or maybe are already buying.