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Walter Energy, Inc. Common Stoc Message Board

  • listen_jockers listen_jockers May 1, 2013 4:36 PM Flag

    This is going to $9..ton of debt..no bet

    stay away.

    Sentiment: Strong Sell

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    • Ok jock, what have you been doing the last 6 quarters. The debt was on their balance sheet all along and is the one of the main reasons why the stock has been beaten up so badly. Of course, the other big one is the low demand for steel which in turn affect met coal. However, several positives can be gleaned from the call today ---

      1. Management has extended the maturity of most of their debt to late 2014/2015. That gives them plenty of room to manuevre without having to issues more debt to pay for the ones maturing
      2. They have taken the hacksaw to their cost of production. This will continue to drop every quarter
      3. Price of coal will be on a gradual uptrend rest of this year

      The net effect is that profits will start climbing,likely driving increased free cash flow i.e. dividend not at risk, although revenue recovery will take more time. They might use increased profit to pay off larger chunks of their debt as well. I think, from a rational standpoint, we have seen the bottom and should see a gradual risk in the stock price throughout the year. But the market is irrational and therefore anything can happen in the short run, with manipulators and thieves aplenty in this market. I hope to see them announce a major buyback in Q3.

      Sentiment: Buy

    • This will see SINGLE DIGIT.

      Sentiment: Strong Sell

 
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