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Our Rating

Newton Analytics rates Renewable Energy Group, Inc. (NASDAQ:REGI) a Bull because of its great financial standing while being undervalued in the market. The overall Newton Score is a 72.5 (of 100 being the most) and a Newton Value of 2.019 (multiple of current price).

Detailed Analysis

Our algorithms reviewed REGI's most recent financials and measured Liquidity, Balance Sheet Strength, and Management. This is what we found:

Liquidity of the company received a score of 27.5 (out of 40).

1. The amount of working capital is being poorly managed.

2. Operating capital is adequately liquid to respond to the daily demands of the operations.
3. Working capital is being used to fund the expansive revenue growth.
4. The company's business model produces high returns.

Balance Sheet Strength received a score of 27.5 (out of 30).

1. The company is overall underleveraged keeping future financing wide open to possibilities.
2. The company is growing assets in part by leveraging existing assets.
3. Asset growth is largely funded by the income the company is able to produce.

Management received a score of 17.5 (out of 30).

1. Management's net income figure is of good quality.
2. Management is investing some for the future growth of the company.
3. They are also giving a small portion of equity back to the shareholders.

Valuation is a 2.019, meaning the company is undervalued (anything above a 1.0625).

1. Net Tangible Book Value per Share = $12.83
2. EPS = $8.33
3. Total Value = $21.16
4. Market Price = $10.48
5. Newton Value = $21.16 / $10.48 = 2.019

Being undervalued and having an above average score puts this company in the Bull category.

Compared to Others in the Industry

We plotted the results of just over 30 companies from the Oil and Gas Refining and Marketing Industry that are listed in our database. REGI stands out as the only Bull rated stock in this industry. REGI receives large government subsidies which are renewed generally on a yearly basis which seems to have allowed them to create a great financial standing. Loss of those subsidies could harm that standing.

About the Company

Renewable Energy Group, Inc. is the largest biodiesel producer in the United States. They generate revenues through two segments: biodiesel and services. Through approximately eight facilities they produce biodiesel from lower cost feedstock such as corn oil, used cooking oil, animal fat, and a small portion from vegetable oils. Services they provide are biodiesel facility management and operations services for day-to-day operations of those facilities. Also within that segment they provide construction management services for biodiesel production facilities. They were founded in 1996 and headquartered in Ames, Iowa.

Source: Renewable Energy Group, Inc: Bull Rated