The Glamorous World Of Ethanol

The Little-Loved Energy Source Produced Solid Stock/Bond Returns

This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.

For the remainder of the year – in place of our regular research and insights – we will serve up our version of the “12 Days Of Christmas.” 

Better than eight maids a-milking or 11 pipers piping, Porter & Co.’s version of the “12 Days Of Christmas” brings you something actually useful: hard-earned investment lessons to guide you through 2026. For the remainder of the year – in place of our regular research and insights – we will dish out key lessons from 2025… some earned from pain and others from gain. 

Over the past year, the editors across all of our publications have recommended stocks, bonds, or other trades that have resulted in a mix of outsized performances and humbling underachievements. Starting today and extending through January 2, we will reveal a pivotal lesson – about why a stock soared to double-digit returns, or why one languished. We will also explore the ones that got away – that we sold too soon or that we didn’t recommend at all. 

We wish you a warm and happy holiday season, from all of us here at Porter & Co… and we’ll be back with our usual program on January 5.

Below, Distressed Investing senior analyst Marty Fridson explains his “topping off” strategy that resulted in a double-digit bond win and a triple-digit stock gain.

Marty has a long background in trading, investing, and finance… Over a 25-year span with Wall Street firms including Salomon Brothers, Morgan Stanley, and Merrill Lynch, he became known for his innovative work in credit analysis. He is also author of The Little Book Of Picking Top Stocks – and as readers of his Distressed Investing advisory know, he’s also great at finding underpriced stocks. 

Marty explains his strategy and his big wins below.

Our “topping off” strategy resulted in two wins… with one company.

One of the ways Distressed Investing has helped our readers capture some pretty solid returns is via a strategy we call “topping off” – that is, buying a position in a distressed company’s shares after its bonds have begun to improve, like when a waitress tops off your coffee for no charge at the local diner.

You see, when a distressed company begins to right itself, the prices of its bonds typically follow suit and move up in price. However, it often takes the stock market far longer to take notice of these improvements, creating a window of opportunity for savvy investors.

Distressed Investing’s May 6, 2025, recommendation combined a Green Plains (Nasdaq: GPRE) convertible bond with the company’s common stock – reinforcing the strategy that in some situations, it’s highly attractive to buy a fixed income security with an equity chaser.

Green Plains is the number-four U.S. producer of ethanol, which is derived from corn and is often used as a key ingredient of alcohol. Seven months ago, we recommended, for each $1,000 invested, one Green Plains 2.25% convertible bond due March 15, 2027, plus 61.7 shares of Green Plains common stock. The bond was at $774, a 23% discount to its $1,000 face value, for a yield of around 17%. The stock stood at $3.66, down more than 80% from its trading price $19.90 one year earlier. Green Plains’ share price had been declining steadily over three years. The stock purchase totaled $225.