George Bush of Texas and investment banker Jeffrey Langberg of New York have never met personally. But they’re both on the same wavelength. In a recent speech dealing with our energy needs, the president called for greater use of ethanol, a gasoline additive and alternative clean-burning fuel. That’s precisely what Mr. Langberg is trying to do. An investment banker since 1979, about four years ago he helped form Xethanol, a New York City-based ethanol producer with two manufacturing plants in Iowa. The newer one started operations a couple of weeks ago.

I’m writing about this company in response to a recent e-mail, my second, from April Sommers, who wrote: “Dear Dan, I have written you about this matter before. If there’s one criticism I have of your column, it’s your extremely narrow stock focus. You only seem to write about well-known companies, most of whose stocks are way too expensive for many investors. Not everyone, you should know, can afford to buy Google, IBM, and 3M. For a change of pace, why not write up a small, undiscovered, and lower priced stock in a growing business?”

Okay, April, will do, but I think you’ve got the wrong slant. You would be much smarter not to roll the dice and put your money instead in an exchange-traded fund or a mutual fund. In any case, let’s look at essentially an unknown energy play that I recently came across – Xethanol, which went public last February at $3.50 a share by merging into a shell. It has a float of about 3.5 million shares and will register another 10 million shares by September. Aside from two low plant mortgages, the company has no bank debt and cash reserves of $3.5 million.

Its stock is holding up pretty well in this year’s erratic market: It closed Friday at $4 after having jumped 11.1% in that session. With that kind of one-day gain in Friday’s sharply falling market, it may be some investors are beginning to take notice of the company.

Mr. Langberg, a director and an adviser to Xethanol’s chairman, Christopher Taylor, figures the ethanol business – dominated by such biggies as Cargill and Archer Daniels Midland – is surely on the rise, what with demand spiking in the face of a current ethanol shortage. He pegs annual ethanol demand in America at 3 billion gallons, versus a supply of 2.4 billion gallons.

In 1993, the government mandated a blend of 90% gas and 10% ethanol at the gas pump. Ethanol replaced MTBE, a known carcinogen that contaminates groundwater and has been banned in most states. Mr. Langberg feels it’s only a matter of time before the blend is changed to 85%-15%. Interestingly, in Brazil, a sizable ethanol producer, autos operate on more than 50% ethanol.

Based on expanded production facilities, Mr. Langberg figures the company should have an ethanol output this year of 4 million gallons, up from 300,000 in 2004. A further rise to 21 million gallons is projected next year, followed by 30 million in 2007.

Though still in its early stages, Xethanol has set some lofty goals that Mr. Langberg views as realistic, based on rising production and favorable supply-demand factors. Last year, Xethanol lost about $2.5 million on sales of $500,000. Its 2005 outlook: earnings of about 50 cents a share on $6 million in sales. Next year’s target: $1.12 in earnings on $34 million in sales, a projection, Mr. Langberg said that also includes expected results from the company’s production of Zylitol, a sugar substitute.

Meanwhile, looking to the future, aside from striving for a rosier bottom line, Xethanol is aiming to build 10 ethanol-manufacturing plants, with each producing an average of 10 million to 15 million gallons annually and total yearly sales of about $100 million.

Sounds ambitious, and there are obvious risks that have to be reckoned with, namely fierce, formidable, and sharply rising competition, unpredictable pricing, and the uncertain future of a relatively new and unproven business.

Clearly, Xethanol, given its goals, is looking to make a killing on ethanol. Will it succeed? The jury is still out, but given its limited history, the deliberation process could take an awfully long time.