BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Independent Stock Specific Research

REGI: Widening Margin Fuels Outperformance

Founder, BWS Financial Inc

Hamed Khorsand

Founder

Equity Bottom-Up

Renewable Energy Group / Equity Bottom-Up

<ul type="disc"><li>
Renewable Energy Group (REGI) demonstrated its abilities to use multiple feedstocks in the second quarter to widen its gross margin. Like we had prognosticated in our earlier research updates, REGI reported a larger than expected gross margin in the second quarter easily exceeding our forecasts and consensus estimates.</li></ul> <ul type="disc"><li>REGI’s management has continuously asserted their ability to use multiple feedstocks in their production process to offset the rising price of soybean oil. REGI’s ability to quickly change feedstocks gives the Company an edge when there is price volatility.</li></ul> <ul type="disc"><li>REGI reported second quarter revenue of $816.2 million, which was a derivative of the increase in B100 prices. The highlight of the quarter was REGI’s gross margin of 15.1 percent leading to REGI reporting operating income of $87.6 million.</li></ul> <ul type="disc"><li>The second quarter results should create investor interest in the shares as REGI could now post adjusted EBITDA of more than $300 million in 2021. With underlying demand rising, and REGI putting greater attention downstream, REGI’s 2022 gross margin could expand even though gallons produced remains flat.</li></ul>


Renewable Energy Group (REGI) demonstrated its abilities to use multiple feedstocks in the second quarter to widen its gross margin. Like we had prognosticated in our earlier research updates, REGI reported a larger than expected gross margin in the second quarter easily exceeding our forecasts and consensus estimates. REGI’s management has continuously asserted their ability to use multiple feedstocks in their production process to offset the rising price of soybean oil. REGI’s ability to quickly change feedstocks gives the Company an edge when there is price volatility. REGI reported second quarter revenue of $816.2 million, which was a derivative of the increase in B100 prices. The highlight of the quarter was REGI’s gross margin of 15.1 percent leading to REGI reporting operating income of $87.6 million. The second quarter results should create investor interest in the shares as REGI could now post adjusted EBITDA of more than $300 million in 2021. With underlying demand rising, and REGI putting greater attention downstream, REGI’s 2022 gross margin could expand even though gallons produced remains flat.

Renewable Energy Group

REGI: Renewed Margin Expansion