Oct. 28, 2014, 12:27 PM
- The anticipated short squeeze is on after Cliffs Natural Resources (CLF +16.9%) beat Q3 earnings expectations,
- Stifel analysts think CLF is making progres but worry about its Bloom Lake project; CLF was able to show better than expected cost controls across all reported segments in Q3, but a concern is the rail take-or-pay contract which would require even bigger cash payouts in 2015 if Phase 1 at Bloom Lake is shutdown.
- Other coal producers are posting sharp gains today: ANR +4.9%, BTU +3.2%, WLT +8.3%, ACI +8.4%, CNX +4.1%, CLD +5.3%, WLB +4.8%.
Oct. 23, 2014, 1:11 PM
Oct. 17, 2014, 9:20 AM
Oct. 15, 2014, 3:34 PM
- Peabody Energy (BTU +1.2%) has held up a bit better than most other coal stocks lately, but that does not stop Imperial Capital from assigning an Underperform rating and $5 price target to the stock.
- While BTU enjoys a stellar reputation and strong management team, the firm sees its shares and senior notes remaining under pressure from rising leverage and instability in global coal markets.
- Like more distressed coal producers, BTU's troubles stem from the debt-financed acquisition of coking coal assets in 2011 when it issued $4B of debt to purchase Macarthur Coal, Imperial adds.
- Most coal names are enjoying a nice bounce today: ANR +9.3%, ACI +8.3%, WLT +8%, CNX +3.8%, CLD +0.1%, YZC -0.8%, WLB -3%.
Oct. 13, 2014, 12:56 PM
- Arch Coal (ACI -2.6%) turns sharply negative, losing all earlier gains from this morning's report that Q3 adjusted EBITDA should come in at $70M-$74M, easily above the $67M consensus.
- Citigroup’s Brian Yu writes that ACI’s liquidity progress likely is due to improved working capital management, but that “the EBITDA improvement is still not enough to cover reported interest expense that averages $95M per quarter.”
- FBR Capital is more upbeat, reiterating its Outperform rating and saying the balance sheet update is a positive given investor concerns surrounding ACI’s liquidity in recent months.
- Coal stocks are now mixed: BTU +1.5%, ANR -0.6%, WLT -1.3%, CNX +0.3%, CLD -0.5%, WLB -2.9%.
Oct. 13, 2014, 9:41 AM
- Arch Coal (ACI +4%) pops higher at the open after saying it expects to record Q3 adjusted EBITDA of $70M-$74M vs. analyst consensus estimate of ~$67M.
- ACI says it held $1.05B in cash and short-term investments as of Sept. 30, vs. ~$990M at June 30; available liquidity as of Sept. 30 totaled $1.3B.
- ACI, which reports its full quarterly results on Oct. 28, says it published today’s preliminary earnings because of “recent unprecedented market conditions.”
- Other coal names also open higher: BTU +4.1%, ANR +4.1%, WLT +3.3%, CNX +1.3%, CLD +0.8%, WLB +0.7%.
Oct. 9, 2014, 12:19 PM
- Teck Resources (TCK -7.2%) tumbles to five-year lows after China, the world’s top coal importer, said it will levy tariffs of 3%-6% on imports of coal as of Oct. 15.
- The sudden move reintroduces taxes China had scrapped, and is seen by analysts as an attempt by the government to help its ailing domestic coal production sector.
- TCK's sales of commodities directly into China accounted for more than 26% of overall revenue in 2013, or nearly C$2.5B; it is unclear what portion of TCK’s revenues from China were generated by coal sales, but coal represented 44% of overall revenue in 2013.
- Among other top coal names: ACI -11.7%, CLF -11.5%, BTU -9.2%, WLT -7.2%, ANR -6.4%, CLD -5.5%, CNX -4.8%.
- ETF: KOL
Oct. 8, 2014, 12:24 PM
- Morgan Stanley analysts are the latest to dump on coal stocks (NYSEARCA:KOL), as it lowers its price forecast for hard coking coal to $125/ton next year and says 2015 appears likely to bring a more gradual price recovery than previously expected.
- The firm downgrades Walter Energy (WLT -10.3%) to Equal Weight from Overweight with a $4 price target, down from $16, noting that WLT likely has sufficient liquidity through 2015 but citing the uncertain timing and magnitude of a price recovery as leaving an insufficient margin of safety.
- Peabody Energy (BTU -1.2%) is the firm's preferred play in coal because it is less liquidity constrained than other coal producers; BTU "offers multiple ways to win, with diversified met, domestic thermal and seaborne thermal exposure."
- Also: ACI -6.4%, CLF -5.6%, CLD -5.2%, ANR -3.4%, OXF -2.3%.
Oct. 3, 2014, 12:45 PM
Oct. 2, 2014, 9:18 AM
Oct. 2, 2014, 8:25 AM
- 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.
- Clarkson Capital is out with a note saying the paper has passed along many rumors on U.S. coal activity over the years and none have proven true (Briefing.com).
Sep. 29, 2014, 5:36 PM
Sep. 25, 2014, 5:35 PM
Sep. 25, 2014, 3:40 PM
- Coal stocks take a pounding as the quarterly benchmark price for metallurgical coal drops to a six-year low, according to Doyle Trading, amid a global oversupply and a slowdown in Chinese demand (KOL -2%).
- Australian coal producers and Japanese steel mills agreed to a Q4 price of $119/metric ton, down $1 Q/Q, dashing hopes for a rebound in the steelmaking coal which has slumped 64% since reaching $330 in 2011.
- CLF -9.2%, WLB -6.6%, ANR -4.9%, ARLP -3.7%, WLT -3.5%, BTU -3%, ACI -2.9%, CLD -2%, YZC -1.9%, CNX -1.2%.
Sep. 24, 2014, 12:46 PM
Sep. 22, 2014, 3:47 PM
- Cliffs Natural Resources (CLF -8.5%) plunges to 52-week lows as worries grow over the potential for an economic slowdown in China.
- Chinese steel production grew a mere 1% Y/Y in August, well off 2.6% YTD and 9%-10% growth recognized over the past few years; Wells Fargo's Sam Dubinsky views the data as negative for iron ore pricing, and thinks it means trouble for CLF, whose results could disappoint as the value of assets likely will diminish as pricing continues to fall.
- Also, a Bloomberg weekend report says coal demand in China may peak as soon as this year, which could further hurt coal miners such as CLF.
- Iron ore giants are lower: BHP -3.2%, RIO -2.7%, VALE -4.8%.
- Coal producers: ANR -9.7%, WLT -9.2%, ACI -7.7%, CLD -4.6%, BTU -4.4%, WLB -2.7%.
WLT vs. ETF Alternatives
Walter Energy Inc is engaged in the business of mining and exporting of metallurgical coal for the steel industry from underground and surface mines with mineral reserves located in the United States, Canada and United Kingdom.
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