Very interesting. So that should be righting itself this year as US Coal for power generation has picked back up relative to last year.
This is a non cash expense. So when the earnings estimates say negative $1/share for the year. You really have to add $5 more in earnings to this number pretax to get cash earnings. To be fair you could then subtract out $200 million of capital expenditures, or $3 share. So a net of $2. So if they can earn $1 in EPS for a year, its really closer to $3/share cash. Good to know.
did they just decide the high price was dumb and it collapsed? Did alot of new supply come online? I looked at the chart of global steel production , and it went to all time highs in 2012 and has been stable to slightly down since earlyl 2012. So what happend to met coal? Were the high prices just a bubble? If so, then this is very bad for WLT because they are worthless if steel prices can't go back up. Or maybe this is just a dumb phase of low pricing and on a whim the price will shoot back up again? I just don't understand what really happened? is it more phsychological than anything else. Europe slowed down a bit so they decided the market was well supplied and crashed the price? Not sure we can really hope for more global steel prododuction. The world produces alot already. So where is the upside surge going to come from?
I just pulled up their Q4 2010 numbers and they were rediculously not that much. They made like $25 million. So looking at about $100 million annual run rate in profits at the time. They paid 30 times earnings for coal? I can only assume that they thought coal prices were going to stay at nose bleed prices and that they could dramatically increase volumes??? I hope somebody can explain why Western Coal might be a valuaable asset, because on paper i don't see it. Maybe they have huge reserves or something? Or the ability to crank up production drastically to meet demand increase? But where is that demand ever going to come from? China steel production they say will probably be flat from now on?? Seriously, Western Coal on the numbers i see is worth $1-1.5 billion tops. So basically $1.5 billiion was thrown away. Or $25/share. If you figure WLT was would be $35-$45 right (maybe generous) now had they not done the deal. Subtract the $25 out, and you get $10-$20/share left. That about explains the situation. And arguement could be made for this only being worth $7-$15 on a enterprisevalue - total debt. But if met coal prices ever go to $250 again and there is demand to ramp up produciton, they can make $7-$10 in a single year. So you own a call option on higher coal prices. That is what WLT is now. Good news is they aren't really bleeding much cash. Cash earnings aren't as bad as reported EPS because you have to add back in depreciation/amortization of the takeover price ect. I pray for longs that there is more value here than meets the eye. But I wonder? Anybody else
Good thing for new investors is that a complete shut down of the project is priced in at $18. The stock just fell $7 billion in market cap. That more than enough to account for a complete loss of the $4.8 billion they have spent. They will probalby get the mine going again soon. Too many people were layed off and are likely complaining.
Given they maintained the dividend and gave good guidance on production and lower costs, there is little reason for it to stay under $20. I think if Gold falls to $1275 this is still a $18-20 stock. I am long a ton of ABX. But shorted some gold on yesterdays rip, as it had bounced much more than ABX. The stock had already fallen from $55 to $27 on concerns of higher costs, Pascuala mine cost overruns, and lower gold prices. It was incredibly oversold at $27 and a relatively ok value. This last $9 down was an overreaction big time. It will likely move toward the longer term downtrend line which is still way up at $26ish.
They have an investment grade credit rating. Even with the recent downgrade they are still a couple notches above non-invement grade. I just can't belive this stock stays in 18's. I'm not selling. They had a great earnings report, lower costs ect. They will probably get the mine on track in the future but stock will probalby be 25+ before we here about that. I'm trying to just lock box my shares. if i trade around position it will run without me.
We know how he did with his top pick USG. Now he is switching to PHM. Good luck longs. Was it just me, or was the PHM earnings report not so good. Orders werent up much. Not saying things aren't strong. But compared to the other reports this week, PHM was by far the worst from what i could tell.
No. Because they used all the profits they made during the bubble buying back stock at very high levels. Leaving them with almost nothing but a mountain of debt. That is why the chart is decieving. They are one of few builders to not return to profitablitiy. Book value is rather low.
Earnings weren't that great when you factor in they paid no income tax this quarter. Also Iron ore prices have slid $10 from Q1. If they slide $15 more that the forward curve is predicting, CLF doesn't make much money at all. And the $3 billion debt just sits there. Can't expect to get more than a 10 PE with that debt load. As long as low inflation is wall streets theme, these highly debt riden mining stocks are complete garbage. Even if in reality they might be ok. There is huge upside if iron ore can get back over 155 and stay there. I don't know if it can though. maybe some day. Good luck.
DHI may have to pay the price for being the last builder of the week to report. And that the YEN is trading lower. DHI will go down for no reason even though they will probalby beat estimates by 3 cents.
are we at $22.50 yet? If not, don't sell. This is a $26 stock with $1470 gold, no less.
I think it went up so much because it shouldn't have gone down to 36. Really its gone from $41 last earnings report to $45 this report. The way this mkt has been trading, it will hold up for 5-7 days and forge some higher highs, then it will fall from like 46.50 to 43 real fast for no good reason. I'm trying to figure out which one is the best to short. I don't think its RYL. I think maybe MTH at $50 or even PHM at $21 and KBH at $22.30. PHM has no land to bulld homes on right now. And KBH has a dumb balance sheet. It is hard to figure out which ones are out of line.
They have no communities in place for this year. $16-$22 all year long in think. If they can get some communities cranking and the market is still good going into next year, maybe then it could go higher. But why would you pay up now? They will likely keep the stock up here forawhile... then it will break down for no reason like always. Same thing over and over again. Strong when stock is high. weak when stock is low. This market is very tough and nonsensical. USG yesterday was a joke. No buyers at 24's. Bad numbers and it goes crazy. But then it was all fake and back down today? Thats what you are dealing with trading this market. Its the goofiest i've seen. Moves are all fake and can be reversed for no reason the next day or week.
I guess its cold winter. Maybe huge volueme now that it is spring?
Do not sell under $24.
So you ****'s stop wining. And start buying
I have them earnings about $.55-.85 before tax. Thats on 3mm tons NA and the usual for asia and canada. at a 35% tax rate that would be .36-.55. I think they have a good chance of beating if they don't throw in some extra expenses charges. I used an iron ore price $5-9 below their model.
Market hated MS earnings 3 days ago. It destroyed the stock for a day. Now its up 3 days in row for no reason and is higher than it was. ABX will be no different. Do not let Wall Street thieves get your shares for less than $24.