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Peabody Energy: Will China Blink?

Oct. 05, 2021 8:00 AM ETPeabody Energy Corporation (BTU)84 Comments


  • Last week, given by very tight global inventories, record LNG prices, and improving global demand, both seaborne thermal and seaborne met prices hit all-time highs.
  • Peabody owns excellent seaborne thermal assets and average seaborne met assets but has a lot of unhedged 2nd half FY 2021 and FY 2022 production.
  • I share my 2nd half FY 2021 and FY 2022 Adj. EBITDA pro forma Peabody Energy models and discuss the nuances of this dynamic situation.
  • This idea was discussed in more depth with members of my private investing community, Second Wind Capital . Learn More »
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(This idea was originally discussed on September 28th and 29th and then formally written up and published, at 1 am EST October 1, 2021, for Second Wind Capital members).

In case anyone is wondering why shares of Peabody Energy (

Second Wind Capital is a value oriented investment service with a strong recent track record of exceptional outperformance. The focus is mostly small cap value, but opportunistic and open minded towards special situations. In 2020, the total return of the portfolio was +93%. Through September 30, 2021, my portfolio is up +88%. 

This article was written by

Idea generation, value investing, small caps and under the radar stocks.
A career wanderer and journeyman, with a passion for deep value and contrarian investing. I spent five years on the buy side in investment grade bonds on a team that managed $50 billion of assets, 3.5 years as an energy credit analyst for an energy company, and had multiple stints in corporate finance, most recently as a strategic financial analyst. I have an undergraduate degree in Finance (UMass Amherst) and earned an MBA (Babson College).

I actively invest my own capital and for a few family members.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of BTU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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