Clear Channel Takes Advantage of Junk Bond Liquidity [View article]
This post in my opinion totally misreads the bond issuance. CCO has become a stronger company due to the new bonds as a result of its ability to push out its debt payment to 2017. The bond issuance in fact takes some risk out of the name by showing the confidence of bond investors in the business model and the current leverage at CCO. Yes, its true that CCU, the parent of CCO, benefits from this bond issuance but that does not mean that the current picture of CCO has not improved. CCO has taken big asset write downs but the core of the business has real value that has not gone away. CCO 's billboards have the #1 or #2 share in the US' top 50 cities. The billboard business has large barriers to entry and many billboards are grandfathered in, meaning new entrants don't have the ability to compete in many cities. CCO is also directly leveraged to the improving economy with strong core assets that are not repeatable. And in my opinion if the private equity firms were to start selling their shares to the public it would improve the price of the stock over the long run dramatically, as a big concern is that the private equity firms don't have the shareholders best interest at hand.
Walter Energy: Overvalued and Overbought [View article]
I did not say that all of their tons were going to be signed at 300 a ton...What I meant was that they have tonnage signed at 300 on contracts which have yet to be delivered on, and these contracts will cash flow in the next couple of years.
On Jul 22 03:04 PM 1shilah wrote:
> cash flow based on $300/t ??? > > per WLT Q1 report, sales were based on $133/t. w/ gross margin of > $54.55/t. > > Q2 they have they guided only $8-10 gross margin on sales of 1Mt. > at Q1 prices that's sales of $133M plus coke and NG. Gross Margin > of $8-10M. that starts to look a lot like Q1-2008. net of .01/share. > > > we'll see today where the truth is. > >
Walter Energy: Overvalued and Overbought [View article]
I think that you make a very interesting argument for why WLT looks like it should be a short but you are missing some details that would make WLT a dangerous short. First off WLT has sizable cash flow's that are lined up from contracts that were signed during the peak of Met Coal prices ($300). WLT is also unlike any other coal producer based on its low cost of production due to its longwall mines, and its low cost of shipping to ports which is 50% less than its competitors. It also should be pointed out that WLT's coal isn't just good Met Coal, its the best Met Coal we have in this country next to Cliffs Pinnacle Mine and Consol's Buchannan Mine. WLT is a takeout candidate, and would be a jewel for any major mining co that wanted to enter the international Met Coal market.
Clear Channel Takes Advantage of Junk Bond Liquidity [View article]
Disclosure: Long CCO
Walter Energy: Overvalued and Overbought [View article]
On Jul 22 03:04 PM 1shilah wrote:
> cash flow based on $300/t ???
>
> per WLT Q1 report, sales were based on $133/t. w/ gross margin of
> $54.55/t.
>
> Q2 they have they guided only $8-10 gross margin on sales of 1Mt.
> at Q1 prices that's sales of $133M plus coke and NG. Gross Margin
> of $8-10M. that starts to look a lot like Q1-2008. net of .01/share.
>
>
> we'll see today where the truth is.
>
>
Walter Energy: Overvalued and Overbought [View article]