Renewable Energy Group Inc (REGI) is a producer and refiner of biofuels in the oil and gas industry. The company’s operations include acquiring feedstock, operating biorefineries, and marketing and distributing renewable fuels.
REGI’s clean fuel products are benefiting from government incentives and a demand shift towards cleaner energy. These trends led to stronger-than-expected earnings last month and should enable the company to continue to grow. Keep a close on REGI next week, as the stock reports its latest quarterly results on November 5th.
The company only has $34 million of long-term debt on its books compared to a cash balance of $328 million as of the end of the last quarter. REGI also has a current ratio of 2.9, indicating its current assets are much higher than its current liabilities. Its net profit margin of 21.5% is also a positive sign.
REGI saw strong revenue growth last year with sales up 22.6% year over year. Sales are expected to grow 9.5% next year and earnings are expected to increase 69.1%. The company’s stock is very undervalued with a P/E of 4.4 and an EV/EBITDA of 3.4.
The stock has seen bullish momentum over the mid and near term leading to a “Buy” rating in our POWR Ratings system. It holds a grade of “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade. The stock is also ranked #2 in the Energy – Services industry.
Take a look at the 1-year chart of Renewable REGI below with my added notations…
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