Walter Energy leads bounce in coal names


Walter Energy (WLT +6.2%) bounces from yesterday's plunge, with Morgan Stanley's Evan Kurtz saying Wednesday's debt offering gives the company sufficient liquidity to make it into 2017 even if the price of met coal doesn't recover.

The met coal weakness - with spot prices below cash costs of 89% of global seaborne producers - is unsustainable in the view of his team, but nevertheless, it's altered its bear case to a world where prices never again rise above  $160 per ton. In this instance, the PT on WLT would be $2.

Others bouncing today: Arch Coal (ACI +2.6%), Alpha Natural Resources (ANR +2.4%), Peabody Energy (BTU +1.1%), Consol Energy (CNX +0.9%).

KOL +2.5%

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Comments (7)
  • chipster71
    , contributor
    Comments (25) | Send Message
     
    Morgan Stanley on the other side of the conversation now that B of A trumped their short, value buys aren't so valuable if it goes lower huh MS?
    21 Mar 2014, 10:58 AM Reply Like
  • Bailout2009
    , contributor
    Comments (254) | Send Message
     
    So I guess they keep issuing more expensive debt for cheaper debt to buy time....eventually time runs out and WLT goes KAMBOOOB to zero...
    21 Mar 2014, 12:32 PM Reply Like
  • cfb5006
    , contributor
    Comments (85) | Send Message
     
    Or there are supply disruptions (or rationalization) and it goes ZOOMMMM to $40.
    21 Mar 2014, 02:40 PM Reply Like
  • papayamon
    , contributor
    Comments (1310) | Send Message
     
    That's my prediction. I'm only thinking 14 or so, but all these numbers (mine, yours and the analysts) .. all just guesses.
    21 Mar 2014, 04:04 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    lol funny
    22 Mar 2014, 02:04 AM Reply Like
  • tiger8896
    , contributor
    Comments (720) | Send Message
     
    About a year ago I said to sell any rally in ANR when it was 5 bucks or so and someone cracked "Did I think I could buy it for 3 bucks", a year later we're near 3 bucks. WLT is too dependent on met coal for me and will probably trade at these lower levels for the forseeable future until there is better met coal pricing an event I don't forsee for quite a while.
    21 Mar 2014, 05:15 PM Reply Like
  • Sirvasq
    , contributor
    Comments (331) | Send Message
     
    Kurt's PT is 27, fellas. Read the report. If you follow him, you buy, buy, buy. Hence today's action.
    21 Mar 2014, 08:43 PM Reply Like
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