Wait until earnings.....see for yourself.
Report: Walter Energy may be acquisition target by BHP, Rio Tinto
Oct 2 2014, 08:25 ET | About: Walter Energy, Inc. (WLT) | By: Carl Surran, SA News Editor Contact this editor with comments or a news tip
Walter Energy (NYSE:WLT) +5.7% premarket after The Guardian says BHP Billiton (NYSE:BHP) or Rio Tinto (NYSE:RIO) may be interested in buying the coal company for $5/share.
“It’s really an obvious takeout candidate, especially after the CEO resigned,” said Eric Green, a Philadelphia-based fund manager at Penn Capital Management, which oversees $6.5 billion….
While J. Christopher Haberlin, an analyst at Davenport, estimates the company may fetch between $185 and $215 a share, David Beard, an analyst at Iberia Capital Partners LLC, pegs a takeover at about $160 a share.
(it) was also one of more than 40 companies that Bloomberg identified in March that met the acquisition criteria Warren Buffett listed in his annual letter to shareholders. Buffett typically prefers “simple” businesses with pretax profit exceeding $75 million, “consistent” earning power, and “good” returns on equity while employing little or no debt, according to his report to Berkshire Hathaway Inc. (BRK/A) shareholders.
“Now is a good time to sell the company because of the near-record prices for met coal, strong global demand and constricted global supply,” said Davenport’s Haberlin, who’s based in Richmond, Virginia. “The assets have more value now than ever.”
The company should sell because it “now lacks the strong leadership needed,” which is “weighing on the share price,” Audley Capital, which owns 900,000 shares, or about 1.5 percent of the company, said in a July 17 letter to the board.
Walter Energy could fetch $240 a share in a takeover, based on the 2012 earnings multiple that Peabody Energy Corp. ($BTU) and ArcelorMittal are offering for Macarthur Coal Ltd. ($MCC), the letter said. That would be double Walter Energy’s closing price of $119.64 yesterday.
Walter Energy Execs Dig Into Shares
CEO Walter J. Scheller bought $150,838 in shares of the coal producer.
By GRACE L. WILLIAMS
May 17, 2013
Coal producer Walter Energy is on the rise after hitting a multiyear low earlier this month, and insiders dug in and bought $2,035,031 in stock.
From May 6 through 13, 11 insiders including Walter's (ticker: WLT) chief executive and chief financial officer bought 113,120 shares of the coal producer.
CEO Walter J. Scheller bought 8,585 shares for $150,838, an average of $17.57 each. Scheller now directly holds 48,291 shares. His most recent previous transaction was on Aug. 9, 2011, when he bought 1,400 shares for $100,400, an average of $73 each.
CFO William G. Harvey made his first open-market transaction when he bought 5,000 shares for $87,800, an average of $17.56 each. Harvey now directly holds 13,377 shares.
Earl H. Doppelt, general counsel, secretary and a senior vice president, bought 5,000 shares for $87,000, an average of $17.40 each. Doppelt now directly holds 30,184 shares. His most recent previous transaction was on Feb. 24, 2012, when he bought 15,000 shares for $982,800, an average of $65.52 each.
Charles C. Stewart, senior VP of project development, bought 3,000 Walter shares for $50,430, an average of $16.81 each. Stewart now directly holds 37,378 shares. Stewart's most recent previous transaction was on Dec. 9, 2010, when he exercised options and sold 26,000 shares for $2.9 million, an average of $112.39 each.
Everyone triple down. Remember if you bought at $4.32 just three weeks ago, $1.80 is a BARGAIN!!!!! TRIPLE DOWN after DOUBLING DOWN. This sure technique is called averaging down.