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Walter Energy, Inc. Message Board

rdi8000 13 posts  |  Last Activity: Jun 14, 2014 9:49 PM Member since: Jul 2, 2008
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  • Sold my shares at end of day as bonds did not move up with stock. Look to replace on weakness. Met prices are also in a mini slump this past week. Long term this will likely run much higher. Not sure this rally was not manipulated to take advantage of Friday's options.

  • rdi8000 rdi8000 Jun 1, 2014 12:21 PM Flag

    Hoping that this will be a classic sell the rumor buy the fact only in reverse. The Cap and trade program has nothing to do with Met coal. the continued weak spot prices is also going to bring out more production cuts in June before index is set at the end of June.

  • Reply to

    Updated Cash Flow Analysis

    by rdi8000 May 31, 2014 1:22 PM
    rdi8000 rdi8000 May 31, 2014 8:10 PM Flag

    Well, I guess all we need is a move up in Met prices and this nightmare will turn into a 10-15 bagger. Still holding a half position but will move to full allotment as soon as it breaks downtrend. Hoping the updated position summary comes out this week to see who is accumulating. Maybe GS added more. It also seems the negative article barrage is slowing and the stories are net positive lately.

  • I have been looking at the cash flow from operations for next qtr. I must be making a mistake somewhere. Please let me know if anybody can find a big problem with the calculations.

    Cash Flow Outlook:

    Last Qtr: $35.4 Million less $12.3 = $23.1 Million free cash flow

    Moving Forward: Met prices have been about flat qtr to qtr so starting at $35.4 Million from last qtr I get the following:

    Free Cash Flow: $35.4 Million
    Less Capital Spend: $(35) Million (Based on last earnings call estimate of $120 Million for year) Could be lower.
    Less cost of severace for 700 miners $(7 Million)
    Less $(5) Million (Cost of keeping Canadian ops in cold standby)
    Inventory Sale $41 Million ($125 Million / 3 qtrs)
    Plus Cash saved from 700 Miners (700 X 85k X 1.25 salary Multiplier)
    $18.6 Million.

    All this nets out at $48 Million. Assuming some mining problems it still is likely to be $30 Million. Please comment on where I am making a mistake in the calculations!

  • Reply to

    who's riding this to $2?

    by eternal_life_1 May 30, 2014 8:47 PM
    rdi8000 rdi8000 May 31, 2014 10:31 AM Flag

    If the September contract stays at 187/ton WLT goes up to 50/share by then. Thanks for the great post.

  • Reply to

    who's riding this to $2?

    by eternal_life_1 May 30, 2014 8:47 PM
    rdi8000 rdi8000 May 30, 2014 10:46 PM Flag

    Met coal settlement will be in the next few weeks. Met coal spots moving up since march. Should be a settlement in the 135-140 range. Things will improve.

  • rdi8000 by rdi8000 May 30, 2014 7:16 PM Flag

    I asked the author about his cash flow estimates going forward. Interested to see how deeply he has looked at the company. Seemed like a fair piece.

  • The Australian Spot price for Premium Coking coal was $117.50/ton up from a low of $108.20/ton on 3/27. Expect the quarterly settlement to be higher as the cuts are just starting to be felt by the market. Qtrly settlement was $12 higher than spot last qtr.
    My guess $135/ton 3Q $170/ton 4th Qtr.

  • Reply to

    Thoughts on WLT

    by rdi8000 May 28, 2014 10:27 PM
    rdi8000 rdi8000 May 28, 2014 11:40 PM Flag

    Yes. The definition of unsecured debt. Sometimes a debt issue will name the assets securing the debt issuance. I have seen buffet loan money to stressed companies with succeed debt. This is a way to lower the interest rates as the debt buyer can identify a asset they will get in default making the loan less risky. They are placed in priority to other debt. In a bankruptcy, Seniority is secured debt holders, general debt holders, preferred stock, common stock. So unsecured debt get what's left after the secured debt holders are fulfilled.

  • rdi8000 by rdi8000 May 28, 2014 10:27 PM Flag

    1 - what was the news to cause the move? Obama Co2? Well that is a steam coal issue.
    2 -The short interest report today makes me believe the debt deal was a short covering tactic. WLT is not doing anyone long any favors with that type of deal.
    3 - Gang tackled by the funds again today. The RSI was around 20 when I looked at it today. If you follow such things you will realize that that is unheard of. Even if we're going bankrupt there would be buyers at these levels.
    4 - 28.9 m shorts as of 7/2013. By 10/2013 that was down to 19.1 m short shares. Price increased from 10 to 18 during that time. Today the stand at 35.9 m plus whatever they added in the last few weeks.
    5 - I read a report about the debt. They made the point that the debt is mainly unsecured. They are unlikely to force WLT into bankruptcy unless no options exist. Remember the built 35 million cash this qtr before any financing. Lots of inventory to sell that has been marked down to very low levels last qtr. They will build cash for at least a few qtrs even with $120/ coal prices.
    6 - producers have cut 17 m mt in a market that was oversupplied by 13 m mt. Some of the cuts are on the future. Expect more cuts from Rio Mozambique production as well as Mongolian and Aus production. They are all bleeding cash badly at these price levels. Peabody - stop being a #$%$ and cut.
    7 - Today's move was big in percentage Terms but the dollars are not huge as the share price is low. Trying to remain un-emotional about the moves. The shorts are pushing hard now. I have seen this before. BACK, LVS, WMB, F. They push hard. If WLT burns cash in the next qtr I will start to worry. 1/2 position for now. If it breaks the downtrend line I will add a big chunk of shares. I really believe this is not reflective of WLT but a trading tthing with the shorts pushing it around after it broke resistance.

  • rdi8000 rdi8000 May 27, 2014 9:58 PM Flag

    Anyone who is paying attention knows the company is cash flow positive for at least a few qtrs as they sell out inventory produced but not sold in the last year. Not sure what the income statement will say but I will be surprised if they don't generate at least 25 million per qtr in free cash flow. No bankruptcy anytime soon. This market will turn by years end. Just shorts taking advantage of broken resistance. I have been buying the dips and selling the rallies and doing ok. Try to be in cash at end of the day. Playing with size to make 15-20 cents. Lost on Friday but won today. Will keep overnight once it breaks $6 again, good luck to all. Really hating the short tactics but it will burn them at some point.

  • Reply to

    Looks like WLT,

    by cautionnow May 26, 2014 9:26 AM
    rdi8000 rdi8000 May 26, 2014 11:52 AM Flag

    They were cash flow positive last qtr with the Canadian operations. I think they will be cash flow positive by around 30 million for the next qtr. if prices stay at current levels they will be generating around the same for next few qtrs until inventory. Is burned off. They took a big charge to write down the coal inventory last qtr. I think they were setting tup the next few qtrs earnings as they sell the coal they paid to produce but not sell the last few qtrs. the coal market is #$%$ but WLT has plenty of cash and is cash flow positive. They will be fine in long term. Just like all longs though tired of taking losses. Wait till the sector gets a bid and go all in. Just the street pushing hard now. Things will change.

  • rdi8000 rdi8000 May 21, 2014 9:52 PM Flag

    They will be fine. Just that the shorts have broke resistance points and are running the game for the moment. I have decided to get in after the opening beat down each day and hold for a rally but be out each day until the attacks stop. Thanks for the info.

WLT
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