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Walter Energy, Inc. Message Board

  • no_blinders no_blinders Jan 22, 2013 11:39 PM Flag

    4th Qtr. MET sales volume better than expected.

    WLT now a stronger acquisition candidate with increased cash on balance sheet per Morgan Stanley. Upgraded soon forthcomming as with Zacks yeterday.
    Expecting a sizable uptrend the next several days with above average volune to continue.
    Longs are in for pleasant surprise.
    Good Lucl!

    Sentiment: Strong Buy

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    • 1/22/13 Form 8-K
      “ProductionIn 2012, Walter Energy produced 11.7 million metric tons (MMTs) of met coal, up 34% percent from 8.7 million MMTs of met coal produced in 2011. In the fourth quarter of 2012, Walter Energy produced 2.5 MMTs of met coal which reflected implementation of a reduced operating schedule in response to lower global demand and pricing.

      Sales Volume and Price
      In 2012, Walter Energy sold 10.4 MMTs of met coal, up 20% from 8.7 MMTs of met coal sales in 2011. Fourth quarter 2012 met coal sales volume totaled 2.5 MMTs. However, approximately 200,000 metric tons of contracted shipments were delayed into 2013 due to issues with rail and port availability and are not included in 2012 sales. Reflecting current trends in global coal markets, Walter Energy’s met coal prices for the fourth quarter of 2012 averaged approximately $152 per metric ton (MT) for hard coking coal as compared with $198 per MT in the third quarter of 2012. The fourth quarter prices for low-vol PCI averaged approximately $129 per MT as compared with $160 per MT in the third quarter of 2012.”

      Not great but better than expected. With 21 analysts covering WLT, the EPS consensus estimate is -$0.75, and the high and low estimates are -$0.44 and -$1.31, respectively.

      IMO:
      a. Anything under is -$0.75 will aggressively move WLT back into $50 to $70.
      b. We already know 1st quarter 2013 will start with 200K of contracted shipments will be included.
      c. Last year’s downsizing and cost reductions applied and January’s new hire and new order rail equipment is a sign of a turn- around.
      d. 18 of the 21 have indicated they have added to their positions – 4 have moved from Hold to Buy.
      e. Now have a low cost Line of Credit in place (10% is very low, commercial LOC is still 36%)
      f. Recent accumulation, volume increases, BV may increase after 2/20.
      g. Some analyst’s report has indicated the possibility of a special savings divided.
      h. Agree with those that see a brighter 2013 and getting better.

      As always do your own Due Diligence. Have an exit or pain threshold plan … then you’ll never be disappointed and blame others and become an angry basher.

      My position is long and accumulating from day/momentum trading, plan to add more on any dips: accumulating to my core holdings.

      Have a great weekend?
      Good Luck!

      Sentiment: Strong Buy

      • 3 Replies to no_blinders
      • a. They will miss estimates. Costs have been increasing at their Alabama Operations, and are still way higher than the selling price of their PCI coal at their Canadian mines.
        b. 200k of shipments contracted at $152 a ton. Meaningless.
        c. Cost reductions where? US has been increasing. In Canada? They are still underwater up there. Also please cite where you get that they have ordered rail equipment. Why would they own rail equipment? Are you talking about a loadout somewhere?
        d. analysts don't know what they are talking about. If they did they would have put a sell rating on this junk company as soon as they purchased Western Coal.
        e. The debt at 10% is an increase over what they were paying. That's not good. Compare it to whatever you want. It is better than the 200% they could have got from a Vegas loan shark so to each their own I guess.
        f. Why would BV per share meaningfully increase? Their earnings are not going to impact that much. Do they been repurchasing share or something we don't know about or are not considering?
        h. We may see impovement in 2013 in coking coal consumption but Q1 benchmark prices are worse than Q4's were. So at this point it is pure speculation that prices will increase. If not.. WLT will have to sell any and all coal in excess of 2012 production to even get back to their less than impressive numbers year over year. They are not starting on good ground if you look at year over year. And let's not forget that they are producing primarily PCI from their Canada operations which they are most likely at this point losing money on every ton. So IMO what we are looking at is a situation in which they could possibly have to shut their Canada mines and/or continue with their "dam the torpedos" approach they are currently implementing. I dont' think they will ever get the costs down to $100 per ton up there, but that is just my opinion. So this whole company is riding on a couple longwalls in 2 mines in Alabama. Same as it was back in 2009 when it was a decent company, but I can't necessarily say better run. The same incompetent BOD was involved back then as well, just the run up in coal prices overshadowed any problems the company was having and/or any of a long list of incompetent decisions management has made throughout the years.

      • Thanks, good updates.
        Should be an interesting day today and tomorrow.

        Sentiment: Buy

      • Good call. Premarket up 39 cents on increased bids.
        Accumulation is a good thing. Options interest are all the way up to $60 for March,

        Sentiment: Strong Buy

    • WOW! MET coal prices +34% YoY and 2 more upgrades overnight: 1 from Hold to Buy and the other from Underperform to Outperform (me thinks that's 2 updgades just on that one).
      Time to hold WLT and ANR for a few more weeks. Could we looki at $50 to $60 early Feb?
      Looks like some managers are looking for a surprise in earnings.

      Sentiment: Strong Buy

      • 1 Reply to tempted101
      • Are you crazy or just plain stupid??
        "Walter Energy's met coal prices for the fourth quarter of 2012 averaged approximately $152 per metric ton (MT) for hard coking coal as compared with $198 per MT in the third quarter of 2012. The fourth quarter prices for low-vol PCI averaged approximately $129 per MT as compared with $160 per MT in the third quarter of 2012."
        34% represents the amount of MMT produced and not prices!!
        Prices are still down and sales also down from last quarter.
        It´s going to be a bad quarter...maybe a loss.

        Sentiment: Sell

    • you have to be kidding with those coal prices,,,,,,,,,

      • 1 Reply to getalife443
      • Hey portagues and getalife....you guys called it. They are called pumpers. They may even be paid by the MMs. Putting out false info. like that is legal and it apparantly works as there are some out there that do not do any DD. The stock is making a nice run and soon those MMs and insiders in this little pump will be selling....to the new bagholders. This week would be a great time to be selling. I like the comment about more cash on balance sheet....of course its from all that high interest debt they just issues...at almost 10%. That alone tells the investor of the chances of the company going under, hence the rating on that debt and very high interest rate they are paying.

 
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