Elephant Analytics
Long/short equity

SouthGobi: High Country Risk And Unprofitable Operations; 35% Overvalued Compared To Other Coal Companies

It is our view that SouthGobi Resources (OTC:SGQRF), a coal mining, development and exploration company that operates in Mongolia, remains overvalued at current levels. Although its share price has declined 83% over the past two years, SouthGobi still maintains a market capitalization of over $200 million and an enterprise value of approximately $276 million despite idling its only producing mine for nearly one year and then having difficulty finding profitable contracts for its coal after resuming operations six months ago.

SouthGobi is currently trading at a premium to other primarily metallurgical coal companies such as Walter Energy despite:

    Having difficulty selling its full production at profitable prices with current market conditions Posting operational losses even when metallurgical coal ...
Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
PRO Top long ideas returned 21.7% in 2016**
"As a PRO member, we get uniquely valuable perspective that go beyond our quantiative analysis... We rely on PRO to get beyond the numbers quickly and add much needed perspective. It keeps me ahead of the next big thing. - Mark Choate, Malaga Cove Capital"
Mark Choate, Malaga Cove Capital
"Contributors (writers and commentators), often have a long history in the secuirities they opine on and some are clearly well positioned industry participants with detailed industry views that can help provide color on where the skeletons are buried in a particular secuirity and/or industry."
Jim Roumell, Roumell Asset Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details