Issue #10: Betting on the future of fuel and the Amazon of Russia

Never buy a stock without considering the political risks that might come along with it.

News came out this week that the U.S. S.E.C is beginning the rollout of laws aimed at delisting Chinese companies.

This is a harsh reminder for all of us to always factor in the worst-case scenario when investing in international stocks.

Let's get into this week’s report. Here’s what we found:

  • A disruptive renewable fuel company on track to hit 1 billion in revenue.
  • A rapidly growing company that's following Amazon's playbook in the Russian market.

Aemetis Inc. ($AMTX)

$22.45 – Share price at time of writing



  • Aemetis operates as a renewable fuels and biochemicals company.
  • They focus on the acquisition, development, and commercialization of technologies that replace traditional petroleum-based products.
  • Aemetis plans to achieve 1 billion in annual revenue within five years, through selected projects.
  • Considering the risks and assumptions, Aemetis is appropriately valued and should grow further as milestones are achieved.

What they do:

Founded in 2006, Aemetis owns and operates a 60 million gallon per year capacity ethanol and animal feed production facility in Keyes, California.

Aemetis also owns and operates a 50 million gallon per year capacity renewable chemical and advanced fuel production facility on the East Coast of India producing distilled biodiesel and refined glycerin for customers in Europe and Asia.

The company also operates a research and development lab. They hold many granted patents on technology related to the production of renewable fuels and renewable chemicals.

Why they’re spiking in interest:

According to, Reddit mentions of AMTX increased by over 220% when comparing February 2021 to March 2021.

The growth in mentions happened around the same time Aemetis announced its new five-year expansion plan in March.

The plan stated that Aemetis will be able to produce more than $1 billion in revenue and $325 million in adjusted EBITDA by 2025.

Aemetis said the revenue gains will be driven by its renewable natural gas (RNG) operations, which use methane from California dairy farms, and its Carbon Zero renewable jet- and diesel-fuel plants.

According to the company, airplanes, trucks, and ships will be able to use the jet and diesel fuels Aemetis produce without “significant changes in fueling infrastructure or engines.”

???? Signal: Jim Simons, purchased over 630,000 AMTX shares in Q4 2020 and is currently still holding these shares. Source –

Why AMTX could be valuable:

Aemetis' board of directors includes experienced with strong track records in the industry, academia, as well as the US Department of Agriculture.

A significant part of Aemetis' revenue stream comes from the renewable fuel standard credits that are connected to the fuels they produce.

To comply with federal law, fuel refiners and blenders must report Renewable Identification Numbers (RINs) to show that a fraction (specified by law) of their sold fuel comes from renewable resources.

RINs have their own market price and are monitored by the EPA. California has a similar approach to monitor renewable fuels, the Low Carbon Fuel Standard (LCFS) credit system. California's renewable fuel credits are worth even more than RINs.

Aemetis' aim is to generate both RINs and LCFS credits by removing carbon from the atmosphere as they produce their renewable fuels.

They then sell those fuels and credits to other companies which can generate hundreds of millions of dollars in revenue.

Aemetis also runs a biodiesel plant in India. This plant is poised to benefit from India's National Biofuels Policy. In order to reduce particle emissions, India is targeting a nationwide production level of 1.25 billion gallons of biodiesel per year.

Aemetis' plant has an annual production capacity of 60 million gallons of biodiesel. When run at full capacity, the plant can generate about $168 million of cash flow per year.

What the risks are:

Aemetis faces competition with producers ranging from independent biofuels producers to integrated oil refiners. As more states implement renewable fuel credits, the competition may grow.

For example, New York is considering legislation to reduce carbon intensity for on-road transportation by 20% by 2030. They also face competition from ethanol producers who operate on a larger scale and transport products from the midwest to California.

Ozon Holdings ($OZON)

$52.90 – Share price at time of writing



  • Ozon Holdings is an e-commerce platform operating in Russia touted as the “Amazon of Russia”.
  • The company is scaling up very fast. In Q4 they posted over 140% year on year growth in sales (from 127% in Q3).
  • Ozon has also launched a loan and a credit service (Ozon.Invest and Ozon.Card) offered to their customers in an effort to support further adoption of its services and encourage repeat orders.

What they do:

Ozon Holdings (OZON) is one of the leaders in the Russian e-commerce market. The industry is growing rapidly and the company is taking advantage of it.

Ozon offers more than 9 million products across more than 20 product categories including clothing, groceries, home goods and electronics.

In early 2019, the company launched a service called Ozon.Invest that grants loans to small and medium-sized businesses that sell their products on the Ozon marketplace.

Ozon was also the first online retailer in Russia to launch consumer loans for multi-category online purchases, as well as its own debit card with a cashback feature.

Ozon also offers a marketplace platform for third-party sellers. In June 2020, the marketplace had more than 13,000 sellers who accounted for more than 85% of the products on the site.

Why they’re spiking in interest:

According to, Reddit mentions of OZON increased by over 1123% when comparing February 2021 to March 2021.

This was most likely due to an increase in coverage of Ozon from mainstream business publications such as Bloomberg, Barron's and Yahoo Finance.

Despite having more overall mentions their US equivalent (Amazon), was flat in Reddit mention growth over the same period.

Notable comment from Reddit:

“If anyone is buying shares to hold, do yourself a favor and buy Ozon before it takes off” – JRsmithThaGoat

???? Signal: Tiger Global, purchased over 750,000 OZON shares in Q4 2020 and are currently still holding these shares. Source –

Why OZON could be valuable:

The Russian e-commerce industry is still just getting started.

Russia is among the least penetrated nations in terms of e-commerce usage with just 6% of its population shopping online in 2019.

Interestingly, the low e-commerce penetration coincides with a relatively high internet penetration rate of 83%. This large gap offers evidence of a long growth runway for Russian e-commerce, and Ozon is well positioned to capture it.

Ozon is still a growing company and their metrics back that up. GMV (Gross Merchandise Value) increased from 41,888m rubles in 2018 to 80,815m rubles in 2019, to 121,566m rubles in 2020. That's roughly 565m USD, to 1.1B USD, to 1.64B USD all within 3 years.

To complement their strong expansion in 2020, Ozon's Net Promoter Score (NPS) improved from 67 to 79 in the third quarter. This strong gain offers evidence of high (and improving) levels of consumer satisfaction.

The comparison of Ozon and Amazon is a fair one. Similar to Amazon, Ozon has diversified their revenue streams outside of pure e-commerce.

In addition to their third-party seller marketplace, the company's biggest businesses are Ozon.Card, Ozon.Travel (web-service for booking travel tickets) and LitRes (an e-book and audiobook online store, Ozon holds 42.27%).

What the risks are:

Ozon operates in a highly competitive market and will likely experience significant fluctuations in its financial results over time.

This is worth mentioning since most e-commerce companies have seen a large spike in sales since the pandemic began. Although it can be risky to forecast sales figures based on what could be a temporary sales boost.

There’s also the fact that Ozon continues to report significant losses and has a long way to go towards achieving profitability.

It's important to remember that any time you invest in a company located outside of the U.S., there are geopolitical, foreign exchange, and economic risks that are unique to that specific country.

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