Seeking Alpha

Walter Energy credit rating cut another notch at S&P

  • Walter Energy (WLT +7.5%) is downgraded further into junk territory, to B- from B, with a negative outlook, by Standard & Poor's, which believes the met coal producer's leverage will remain high as it continues to face low coal prices.
  • S&P says market conditions will remaining challenging for WLT over the next year, noting coal prices likely will remain weak amid lower demand in Europe, slowing economic activity in China and a lack of operating disruptions among competitors.
  • Meanwhile, Cowen reiterates its Outperform rating on WLT after meeting with top management; the firm comes away positive on cost control at WLT's mines and expects a successful conclusion to the planned asset sale/JV process (Briefing.com).
Comments (13)
  • SharkDude
    , contributor
    Comments (638) | Send Message
     
    just more proof why moodys and s&p are completely useless. biggest rally in 6 months and this is what they have to say. they did not downgrade subprime loans until they lost half their value. way to go moodys and s&p. S&P downgrade at this point makes me bullish.
    5 Sep 2013, 03:01 PM Reply Like
  • wil3714
    , contributor
    Comments (1905) | Send Message
     
    dont forget Fitch
    5 Sep 2013, 03:58 PM Reply Like
  • bajadoc
    , contributor
    Comments (65) | Send Message
     
    Ooops, they missed the rally from 10 to 14!
    Need to knock it down to get in! LOL
    5 Sep 2013, 03:06 PM Reply Like
  • nemonemo
    , contributor
    Comments (322) | Send Message
     
    Haha. Some shorts a** under fire. Update mid-day. Just too desperate.
    5 Sep 2013, 03:24 PM Reply Like
  • nemonemo
    , contributor
    Comments (322) | Send Message
     
    Funny how SeekingAlpha aka SeekingFraud always presents the negative stories. Couple of their editors have short positions and they abuse their rights. Shame on SA.
    5 Sep 2013, 03:47 PM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    Credit ratings are a joke and yet I don't know about WLT covenants on debt ratings. Bogus ratings could making things worse.
    5 Sep 2013, 04:22 PM Reply Like
  • wil3714
    , contributor
    Comments (1905) | Send Message
     
    recent debt covenant amendment shows creditors are willing to work with them than against. Met coal market is improving this things going to $20.
    5 Sep 2013, 04:28 PM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    Where do you see material improvement in met market?

     

    I saw this article http://bit.ly/13kCyQw but it's still not too good at $160 /tonne.

     

    I do agree if significant short covering ensues WLT, then $20 is possible in the near term yet still $14.70 / $17 resistance levels will need to be cleared. Anyhow, WLT has always been volatile and it will continue to be.
    5 Sep 2013, 04:37 PM Reply Like
  • wil3714
    , contributor
    Comments (1905) | Send Message
     
    I dont look at technicals much nor just the dollar amount of met coal as they can fluctuate month to month & also most HCC is contract based anyways. You shouldnt look at one article from some guy. This is a lagging indicator you have to look forward.

     

    I look @ the macro & china up 15% from lows & Europe is improving based on UK & Germany strength

     

    Look at the shippers as well. You cant ignore multiple indicators from BHP, RTP, CLF, Industrial like HON, GE, IP, PPG

     

    Resistance and all that are people just following while you look at the facts you see this is underpriced since short started covering recently.
    5 Sep 2013, 08:51 PM Reply Like
  • slash32is4
    , contributor
    Comments (131) | Send Message
     
    can't keep a cheap stock down forever...
    5 Sep 2013, 04:32 PM Reply Like
  • WPSPIKER
    , contributor
    Comments (1156) | Send Message
     
    Just more proof these Credit Rating Agencies (S&P, Moodys Fitch et all) are just lagging indicators.

     

    Had any of them been real leading indicators this would have been 18 months ago prior to the moves down. Otherwise 90% of what comes out of them are mostly indicators as to what companies to do more DD on and buy for long term turn around plays.
    5 Sep 2013, 04:43 PM Reply Like
  • Bill Herbert
    , contributor
    Comments (211) | Send Message
     
    S & P in particular is truly laughable.

     

    I still remember the 60 Minutes piece from four years ago that featured a woman who was hired by (I think it was) Moody's to be an "analyst" for the mortgage-backed securities that crashed the entire global financial system.

     

    This one woman was very popular with the banks, because they knew she was both clueless and very willing to crank out high volumes of positive ratings on ludicrous mortgage securities that were almost certain to be worthless in a very short time.

     

    She was probably paid $250,000 a year and got lots of free dinners and cab rides home. Her professional background was completely different from this job - she was basically a glorified data entry clerk with a minor management title in a previous job - and the billions of $$ worth of daily global sales on the trash she approved was just one among many great frauds cooked up by the perps on WS.

     

    It is a national disgrace that hundreds of criminals got to keep their loot and (many) their jobs, houses and pensions, etc.

     

    Wall Street back then was a bubbling cesspool of blatant corruption and SEC indulgence.

     

    Sadly, it hasn't really changed much, has it?
    5 Sep 2013, 10:10 PM Reply Like
  • tloeb
    , contributor
    Comment (1) | Send Message
     
    Nationalize credit ratings agencies.
    6 Sep 2013, 09:27 AM Reply Like
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