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Walter Energy, Inc. Message Board

  • iq180plus iq180plus Dec 25, 2008 11:50 AM Flag

    Amazing NAV even at $120 tonne coal

    Crunch the numbers on 8 mill production for 14 years with 70 dollar cash costs, even allowing for a 32% tax rate.
    Anyone know what their SG&A is once their spin offs are done with. It seem very high. Just ballparking it, I've been using 40 million. I figure 10 mill a quarter for a coal operation should be plenty, but who knows.
    -Any input appreciated.

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    • I also will add this observation... every coal company I follow is extremely undervalued now. IMO.. there is little reason to invest in just one... I have simply bought KOL. The greatest risk in the coal segtor for 2009 2nd half and beyond is in the met coal segment. companies like JRCC, ARLP,ACI, CNX and BTU now have over 90% of 2009 coal under contract and over 70% of 2010 coal under contract all at very favorable prices. For example, I est, JRCC EPS for 2009 to be ... at a minimum... $6.25/share and at a max $9.00 share depending on how costs work out.

    • I think $40M for SGA is way to low. I estimate $80M, but we can not know with any certainty until the spinoff has been completed. Even using $80M for SGA and $120 Met coal for the unpriced 2009 coal, I still estimate 2009 EPS at about $7/share. That does not include about $50M in income from the finance division which is being split off.

 
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