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gnrlowners 7 posts  |  Last Activity: Dec 17, 2015 9:43 AM Member since: Apr 1, 2005
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  • gnrlowners gnrlowners Nov 12, 2015 3:40 PM Flag

    Jeffry, there is an excellent analysis of SXCP's situation on Seeking Alpha. I tried to post it but Yahoo won't allow it. So search for Suncoke LP and Seeking Alpha and you'll find it. The author discusses the possibility of bankruptcies in the steel industry (for SXCP's customers, it's unlikely). The biggest thing he raises is about the MLP situation, but I believe that will not be an issue for 10 years at the worst.

    As far as yield. Consider that SXCP's yield is double that of 5 year Puerto Rico bonds, and you *know* they are going to take a huge haircut. Certainly I've never even heard of a stock getting beaten down like this while they are *raising* dividends. The market is flat out saying the dividend is going to be cut by 50% or more. Yet analysts estimates are rising for next year. It's fear of how bad things could get, versus how bad they actually are that has the market spooked.

    Frankly I think there is a fair chance that Tesla will be in bankruptcy within 5 years, but the market cannot get enough of that money losing stock.

    Sentiment: Strong Buy

  • The new credit facility that SXCP just got is essentially at Prime for 4 years. Bank of America has little fear that they can pay that loan back, or the rate would have been much higher. Again, Wall Street professionals think that SXCP is fine, but the general public is terrified. Fascinating.

  • Here is the crazy, crazy thing. Over the last month or so, the analysts covering SXCP have *increased" their earnings estimates. Yet the stock continues to collapse. I've never seen anything like this where Wall Street and the company say one thing, but investors are saying 100% the opposite.

    I think we'll have more clarity next month when SXCP provides their outlook and guidance for next year.

  • The stock is off a cliff on no news.

  • Reply to

    New credit facility at low rate

    by gnrlowners Nov 12, 2015 10:11 AM
    gnrlowners gnrlowners Nov 13, 2015 12:11 PM Flag

    Yes but even at that time, Wall Street was skittish about investing. There were some table pounding bulls like Warren, but many on Wall Street were saying "It will get much worse before it gets better". But here we have a complete divergence of opinion.

  • Reply to

    Someone thinks they know something

    by gnrlowners Nov 13, 2015 9:46 AM
    gnrlowners gnrlowners Nov 19, 2015 10:08 AM Flag

    Turns out, they were right they knew something alright.

  • gnrlowners by gnrlowners Dec 17, 2015 9:43 AM Flag

    Though earlier they said there were going to increase the dividend this quarter, there is no point. The dividend certainly is providing no protection for the stock price. 45% dividend? I've been investing for 30 years and I've never seen anything like this. I kind of wish they had cut the dividend by maybe 10%. To make sure it's a little more sustainable if there are more problems for the steel industry next year. Overall their projections for next year are very bullish, with an expected increase in EBITDA. If that takes place, they should be able to cut the debt somewhat while still maintaining this crazy dividend.

    Hopefully a year from now we'll be saying "Why didn't I mortgage the house and put every penny in SXCP".

    Sentiment: Strong Buy