Natural Resource Partners Delivers What Investors Asked For [View article]
Peter,
Another great article! NRP has been my largest holdings in my coal portfolio for more than one year. While I would have preferred the units to have remained higher, the nice distributions and the now higher yield reduces the hurt a bit! You are spot on that NRP's mgmt has done an effective job at diversifying coal-related revenues while maintaining the quarterly distributions. Keep up the good work! - Steve Doyle
By Far The Strongest Coal Producer, 31% - 42% Upside Potential [View article]
Peter,
Joe Craft & company epitomizes what makes our economy strong: companies focusing on what they do best. ARLP has one of the best track records in the industry - from a financial, safety and reclamation standpoint. The slogan around Alliance Resource Partners is "It's who your with." They have assembled a workforce of winners, and when you surround with winners, you tend to win! I know the White Oak executives and they are of the same caliber. I am a happy unit holder. - Steve
What Does Friday's Surge For Arch Coal And Alpha Natural Resources Tell Us? [View article]
Peter,
Another good article! I can attest that the coal prices for Q4 delivery are higher: PRB up 6.35% in Jul; Capp rail up 12.90% in Jul; Capp rail up 8.86% in Jul; Napp up13.04% in Jul; ILB down 0.61%. These are from low bases (like the equities) and it is too soon to pop the champagne corks, but it is promising.
One question: To what degree, in any, does the high freqency trading magnify the price impact of short covering?
Natural Resource Partners, L.P. Revisited, 9.65% Yield Hard To Beat [View article]
Peter,
(Disclosure: long NRP)
Nice summary. Frankly, I would be happy with NRP at $27.50 and it yielding 8%, but I agree that it has been unfairly caught up in the coal sector pummeling. I own NRP for the 1.034 billion tons that will be mined and consumed or exported in 2012 and not for the 0.078 billion drop versus 2011. I often forget about NRP's non-coal revenue initiatives, which are material to their results, so thanks for pointing that out! - Steve Doyle
Are Conditions In Place For A Coal Stock Rally? [View article]
Nice summary! I concur with your take aways. I wrote last week that the risk/reward pay-out in the sector would reward those who are willing to hold for as long as 12 months and could endure 10 - 20% swings along the way. I think we are witnessing the final 'puking' and whole I am not certain all coalcos will survive (possible bankrupticies and/or 'virtually forced' consolidation), most will rebound significantly with the magnitude directly correlated to low minng costs & percent of coking coal in the sales mix. I agree with you that WLT shines (especially if the BHP situation continues to deteriorate). - Steve Doyle (Disclaimer: I am long ANR, ARLP, NRP, CMK.TO, WLT and recently added to my WLT position)
Natural Resources Partners: 9% Yield And A 22% Total Return Opportunity [View article]
Peter,
Another great article! Keep it up and I will be out of a job! :) NRP is my biggest position for a good reason. I am fond of cash and they seem to be good at generating cash and they like to make fat distributions. This is a match made in heaven! More importantly, they know what they are doing and are true professionals.
Walter Energy: Playing For A Takeout Is The Only Reason To Own [View article]
Peter,
Nice article! I have been following WLT well before the company designated its coking coal operations as a 'non-performing asset' in the mid 90's. I went underground in the early 90's and upon visiting the company in 2010, many of the same miners were still there - and experienced miners are extremely valuable. The Blue Creek seam is probably the toughest underground seam to mine in the Americas. WLT has been a cyclical company (due to its unique production challenges), which operates in a cyclical steel market. Sometimes WLT's upcycle is offset by steel's downcycle. Sometimes the cycles coincide, causing great joy in the upcycles and major misery in the downcycles (like now).
I have a small long position in WLT and, personally, I would have preferred to have seen other decisions when it came to buying Western Canadian and when it came to entertaining offers to sell (pre and post WTN). Such is life.
I believe there is more reason to own the company than just the take-out prospects. I believe the medium-term coking coal prices will limit the downside and the potential for coinciding upcycles provides upside in addition to take-out premiums.
As far as selling put options is concerned (even at a $45 strike), you are a braver man than I! :) - Steve
Talking Coal With SouthGobi Resources' CEO [View article]
After snorkeling for the past eleven days, my first jump at my 'coal reading' was reading your interview with Alex/SouthGobi. For disclosure, I started accumulating my position in SouthGobi in May 2010 and have yet to part with one share. Back in 2010, all I could say about Alex was that I had never met a more knowledgeable and articulate CEO of a coal company. As we all know, talk is cheap. However, after two years of observing Alex and the SouthGobi team execute on strategy, I am equally impressed - and from the middle of the South Gobi Desert no less!
Your interview was concise and did a great job at summarizing the progress made during 2011. As far as whether or not the market is giving SouthGobi enough 'love', I remain perplexed, yet very happy to periodically add to my position. I 'get it' and, in my opinion, it will only be a matter of time before 'it' becomes obvious to other investors.
SouthGobi Makes A Logical Target For Teck Resources [View article]
Peter,
Great analysis of the company! SouthGobi shipped at an 6 mm MT annualized rate in August. I have visited SouthGobi's operations and have to give them props for execution. The arm chair investor has no clue of what it takes to bring a greenfield project to fruition - let alone one in Mongolia and in the South Gobi Desert!
Your are correct that no railroad is needed. The distance to the Chinese border is only 45 KM and the on-road trucks haul about 100 MT per trip. A rail line would probably bring some efficiencies, but it certainly is not a deal-breaker. When you see hundreds of trucks waiting to load, it is not unlike seeing unit trains at a coal tipple. On the other side of the border is a brand-spanking new rail line whose only reason for being is to bring Mongolian coal to end-users within China.
I agree there is a big difference between SGQ and the developers of Tavan Tolgoi. I'd rather have 6 mm MT/yr in the hand, than 15 mm MT in the bush! If I am not mistaken, Tavan Tolgoi is about 250 KM from the border and is not feasible without a rail line. - Steve Doyle [Disclosure: I am long Southgobi]
Natural Resource Partners Delivers What Investors Asked For [View article]
Another great article! NRP has been my largest holdings in my coal portfolio for more than one year. While I would have preferred the units to have remained higher, the nice distributions and the now higher yield reduces the hurt a bit! You are spot on that NRP's mgmt has done an effective job at diversifying coal-related revenues while maintaining the quarterly distributions. Keep up the good work! - Steve Doyle
By Far The Strongest Coal Producer, 31% - 42% Upside Potential [View article]
Joe Craft & company epitomizes what makes our economy strong: companies focusing on what they do best. ARLP has one of the best track records in the industry - from a financial, safety and reclamation standpoint. The slogan around Alliance Resource Partners is "It's who your with." They have assembled a workforce of winners, and when you surround with winners, you tend to win! I know the White Oak executives and they are of the same caliber. I am a happy unit holder. - Steve
What Does Friday's Surge For Arch Coal And Alpha Natural Resources Tell Us? [View article]
Another good article! I can attest that the coal prices for Q4 delivery are higher: PRB up 6.35% in Jul; Capp rail up 12.90% in Jul; Capp rail up 8.86% in Jul; Napp up13.04% in Jul; ILB down 0.61%. These are from low bases (like the equities) and it is too soon to pop the champagne corks, but it is promising.
One question: To what degree, in any, does the high freqency trading magnify the price impact of short covering?
Thanks!
Steve
Natural Resource Partners, L.P. Revisited, 9.65% Yield Hard To Beat [View article]
(Disclosure: long NRP)
Nice summary. Frankly, I would be happy with NRP at $27.50 and it yielding 8%, but I agree that it has been unfairly caught up in the coal sector pummeling. I own NRP for the 1.034 billion tons that will be mined and consumed or exported in 2012 and not for the 0.078 billion drop versus 2011. I often forget about NRP's non-coal revenue initiatives, which are material to their results, so thanks for pointing that out! - Steve Doyle
Are Conditions In Place For A Coal Stock Rally? [View article]
Natural Resources Partners: 9% Yield And A 22% Total Return Opportunity [View article]
Another great article! Keep it up and I will be out of a job! :) NRP is my biggest position for a good reason. I am fond of cash and they seem to be good at generating cash and they like to make fat distributions. This is a match made in heaven! More importantly, they know what they are doing and are true professionals.
Walter Energy: Playing For A Takeout Is The Only Reason To Own [View article]
Nice article! I have been following WLT well before the company designated its coking coal operations as a 'non-performing asset' in the mid 90's. I went underground in the early 90's and upon visiting the company in 2010, many of the same miners were still there - and experienced miners are extremely valuable. The Blue Creek seam is probably the toughest underground seam to mine in the Americas. WLT has been a cyclical company (due to its unique production challenges), which operates in a cyclical steel market. Sometimes WLT's upcycle is offset by steel's downcycle. Sometimes the cycles coincide, causing great joy in the upcycles and major misery in the downcycles (like now).
I have a small long position in WLT and, personally, I would have preferred to have seen other decisions when it came to buying Western Canadian and when it came to entertaining offers to sell (pre and post WTN). Such is life.
I believe there is more reason to own the company than just the take-out prospects. I believe the medium-term coking coal prices will limit the downside and the potential for coinciding upcycles provides upside in addition to take-out premiums.
As far as selling put options is concerned (even at a $45 strike), you are a braver man than I! :) - Steve
Talking Coal With SouthGobi Resources' CEO [View article]
Your interview was concise and did a great job at summarizing the progress made during 2011. As far as whether or not the market is giving SouthGobi enough 'love', I remain perplexed, yet very happy to periodically add to my position. I 'get it' and, in my opinion, it will only be a matter of time before 'it' becomes obvious to other investors.
SouthGobi Makes A Logical Target For Teck Resources [View article]
Great analysis of the company! SouthGobi shipped at an 6 mm MT annualized rate in August. I have visited SouthGobi's operations and have to give them props for execution. The arm chair investor has no clue of what it takes to bring a greenfield project to fruition - let alone one in Mongolia and in the South Gobi Desert!
Your are correct that no railroad is needed. The distance to the Chinese border is only 45 KM and the on-road trucks haul about 100 MT per trip. A rail line would probably bring some efficiencies, but it certainly is not a deal-breaker. When you see hundreds of trucks waiting to load, it is not unlike seeing unit trains at a coal tipple. On the other side of the border is a brand-spanking new rail line whose only reason for being is to bring Mongolian coal to end-users within China.
I agree there is a big difference between SGQ and the developers of Tavan Tolgoi. I'd rather have 6 mm MT/yr in the hand, than 15 mm MT in the bush! If I am not mistaken, Tavan Tolgoi is about 250 KM from the border and is not feasible without a rail line. - Steve Doyle [Disclosure: I am long Southgobi]