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Walter Energy, Inc. Common Stoc Message Board

  • stockpicker670 stockpicker670 Apr 21, 2013 9:56 AM Flag

    the value and upside here

    Obviously this stock is under enormous pressure. Investors are throwing in the towel and there has also been the overhang of the proxy fight. However at the end of the day, WLT has high quality assets that will throw off enormous amounts of cash when the met pricing comes back. Yes, the company has made some mistakes along the way, but they are now doing the right things to allow the company to make it through this tough time in the met market. At some point (and we are probably closer to that than not), the shorts and naysayers will lose control. No one knows exactly when that will be, but I certainly think that at $17.50 per share, the risk reward is very compelling. I am long at higher prices and was obviously wrong about timing and price. But WLT is a good company with great assets and a management team that is finally serious about doing the right things in terms of financial management which will ultimately pay handsome rewards when the cycle turns. I would appreciate anyone's thoughts.

    Sentiment: Strong Buy

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    • They want retail to throw in the towel ya'll..this is the game..soon as you sell this jumps up!

      Sentiment: Buy

    • I'm trying to understand the value here too. They can make $7/share at high coal prices. If you put a 4 times multiple on peak earnings that is $28. I think that is probably what the company is worth. I think 3.00/share is reasonable mid cycle earnings run rate, they were doing that just 9-12 months ago. Put a 9 multiple on that and you get a $27/value. If it is ever believed that $225+ coal prices can be sustained, then its probably a $30-40 stock. But that will probably take a few years for market to believe that again. I don't think there is much downside to the current share price. Unless the world goes into a recession. I think it will settle back into a 20-23 trading range if i had to guess. Analysts mostly think its worth $30+. If the market stays bad and there is no good news on commodities, coal, or steel, then it could briefily touch $14's i guess. Risk reward seems ok. But who knows. i'm just pulling numbers out of a hat.

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