http://finance.yahoo.com/news/Valero-Ene...

"Our ethanol business earned $49 million of operating income in the third quarter, more than double the second quarter results, as we increased run rates at all seven ethanol plants and captured very good margins. In October, ethanol margins have continued at strong levels.”


"Ethanol (1):

Ethanol Production (Thousand Gallons per Day) 2,116
Gross Margin per Gallon of Ethanol Production $0.59

Operating Costs per Gallon of Ethanol Production:
Ethanol Operating Expenses $0.31
Depreciation and Amortization $0.03

Total Operating Costs per Gallon of Ethanol Production $0.34"


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So...Valero reported operating profit of $0.25 per gallon on 190 million gallons for the quarter ended September 30th, 2009. RSC's quarter ends October 31st. October reportedly has seen the best ethanol crush in a while. I expect better numbers both because of higher gross margins and lower operating costs. Using the $0.25 though and assuming an %80 production rate (28 milion gal) gives an operating profit of $7 million pretax.

That's $0.76 per share for the quarter or $3.04 for a full year from Ethanol alone. Other revenues from leased property, ect... should push the number higher. Slap a PE of 10 on that and RSC should be at $30 a share.

Now all that has to happen is for the Ethanol markets to remain rational and for RSC to execute. I predict happy days ahead for investors in this company!