NewGen Technologies, Inc. (NWGN)

[elsakker]

Company: NewGen Technologies, Inc.
Ticker: NWGN
Profile Price: $0.39 September 5, 2006
Sold Price: Open profile
Gain (loss): n/a
Valuation: $15.21 million
Website: http://www.NWGNtech.com
Disclosure: Former client. We own shares.
Hot Points of Research and Analysis:

NewGen is an alternative fuel company that is focused on manufacturing, processing and distribution of advanced biofuels. Last year, they acquired three fuel terminals with total storage capacity of 10 million gallons and annual throughput capacity of over 500 million gallons. The three terminals are located in NC, SC and GA and are all scheduled to open during the first quarter of 2007. In addition, the company expects to begin construction on a new 60 million gallon biodiesel production facility in Georgia later this year.

Alternative fuels have been in the spotlight with various state and federal agencies passing various laws and acts to move America away from reliance on foreign oil and to reduce the pollution/emissions created by existing fuels.

What intrigues us about this stock now is the announcement they just made after the market closed on September 5, 2006. One of their subsidiaries (60% owned) acquired IPF Group based in Germany, which has 45 full-time employees and more than $30 million in annual revenue. Given that NewGen itself doesn't expect to generate revenue until next year, we think that this acquisition should have a material impact on the company and its stock price.

With 39 million shares currently outstanding and a closing stock price of $0.39, the company has a $15 million market value. Pre-revenue, that might make sense. Post-acquisition of the IPF Group...we think the stock has room to run.