Why Renewable Energy Group's Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biodiesel maker Renewable Energy Group jumped 15% today after the company reported earnings.

So what: The company sold 39 million gallons of biodiesel during the quarter, up 14% from a year ago, and net income rose from $14 million, to $46 million. On a per share basis earnings were $1.25 versus an expectation of $0.51 from Wall Street.

Now what: The government retroactively reinstated the Biodiesel Mixture Excise Tax Credit, which accounted for the big jump in profit. Still, the strong increase in revenue is a positive sign, and the tax credit will give the company some stability this year. My biggest problem is the dependence on a tax credit, which will keep me from buying shares, because it's at the whim of Congress, not a position I want to be in with a big budget deficit in Washington.

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The article Why Renewable Energy Group's Shares Jumped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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