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Re: VET hit job (Coal)FWIW - most met and thermal coal names offer higher FCF. Examples include ARCH, METC, AMR, BTU, YAL, CSO. Not a big fan of AMR at this price, but its FCF yield is likely 30%+ given met prices. I prefer METC and ARCH. Still have Corsa as an upside play on met. Still think it will come close to tripling this year. BTU will have strong FCF for years even if coal prices stay at these levels or drop further. Old contracts at VERY low prices will roll off. We'll never see some of those prices again, e.g. AUS domestic API5 at $20/ton, US domestic thermal at <$40/ton, Wambo hedges at $84/ton. Sureties will be renegotiated in Q1. BTU will hold cash collateral to defease ARO liabilities. All debt will be gone other than the convertible. Working capital prior to Q4 was already ~$10 per diluted share. TGA doesn't have that high of FCF yield right now, but working capital/long-term rehab cash plus 2H free cash flow likely around US$8+/share. Add 2023 estimated FCF of $2+/share against a share price of US$12.50. Very clean balance sheet. Only ~US$2/share in LT liabilities. Thus, you aren't paying much for the business at this point. I'm hoping it drops further. I'd love to get it for essentially free. YAL final 2023 dividend may be in the neighborhood of ~A$1.80 per share. That's what the numbers show, but maybe it ends up lower. Seaborne thermal prices down a lot in January, but YAL would still generate FCF of ~US$1.60/share in 2023 at the NEWC/AUS Met futures strips and API5 at $135. Not bad for a company trading just over US$4. METC only has $95 million in growth capital remaining to reach 6.5 million tons of producing capacity. They consistently have low costs and strong realized prices. Current margin is $100+/ton. Given all the opportunities in coal, I own no producing oil/gas E&Ps. That is a first for me in approximately 20 years. Oh, and then there is VTNR. If they get RD going as promised, that should generate some nice FCF. |
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Msg # | Subject | Author | Recs | Date Posted |
479294 | Re: VET hit job (Coal) | Boxout | 1 | 1/30/2023 9:15:23 PM |