Thank you! It’s super helpful! Based on metrics you mentioned (type of coal, export, type of mining), what is the top 3 players in met coal in terms of upside for the next couple years!
We really need to marry these competitive advantages with market valuation for comprehensive view of risk/reward... and this is the goal of my writing. I'm trying to do a deep dive on one producer per week and compare them all in terms of their assets and also in terms of valuation. For valuation I've chosen to use FCF/Enterprise Value.
To answer your question directly though, my met favorite is HCC (assuming they resolve the strike by '22), followed by AMR (mainly due to price, it was sold off way too much), and #3 would probably be METC (for a growth narrative) or TECK (for a diversified miner).
And that's only the US listed names, I'll eventually cover the Australian based coal co's as well. Lots of work to do! Thanks for the feedback.
Thanks a lot! Appreciate it. Looks like METC at 9$ not that cheap already for 2,5 MT (even with plans for doubling production), don't you think? Why didn't you mention ARCH? Any thoughts about Leer South - with longwall - looks like it might be just cash printing machine. Strange that ARCH was the only one who didn't rally significantly yet.
You thought about Australian (especially Coronado) will be much appreciated!
ARCH will do fine, but it wasn't bombed out as much as AMR so it's probably not as cheap. I've owned it recently and will again but as you mentioned, it hasn't really had the momentum in the last week or so that the others have had. I think it's all do to its price and valuation - the others were more mispriced, whereas ARCH isn't surprising anyone. Leer South is an example of new N. American supply coming on in '22, I think HCC is another, maybe Itmann in '23/24... something we need to keep an eye on.
I'm long a few Australian names in small amounts, simply to encourage myself to do the research on them. In general Aussie names should be "easier" than the US ones but I need to do the work. Coronado has some US operations and I think they're interesting & probably a good investment at this stage in the cycle but again, I need to do the work.
Tks a lot CT, is part 2 already out?
No. I should probably write it! Lol
Thank you! It’s super helpful! Based on metrics you mentioned (type of coal, export, type of mining), what is the top 3 players in met coal in terms of upside for the next couple years!
We really need to marry these competitive advantages with market valuation for comprehensive view of risk/reward... and this is the goal of my writing. I'm trying to do a deep dive on one producer per week and compare them all in terms of their assets and also in terms of valuation. For valuation I've chosen to use FCF/Enterprise Value.
To answer your question directly though, my met favorite is HCC (assuming they resolve the strike by '22), followed by AMR (mainly due to price, it was sold off way too much), and #3 would probably be METC (for a growth narrative) or TECK (for a diversified miner).
And that's only the US listed names, I'll eventually cover the Australian based coal co's as well. Lots of work to do! Thanks for the feedback.
Thanks a lot! Appreciate it. Looks like METC at 9$ not that cheap already for 2,5 MT (even with plans for doubling production), don't you think? Why didn't you mention ARCH? Any thoughts about Leer South - with longwall - looks like it might be just cash printing machine. Strange that ARCH was the only one who didn't rally significantly yet.
You thought about Australian (especially Coronado) will be much appreciated!
Thank you! Great analysis!
METC has made a good run this week, but it's still cheap on a FCF/EV basis and they have a really clean balance sheet. I wrote a post on it:
https://thecoaltrader.substack.com/p/ramaco-post-q2-earnings-update?r=d61pz&utm_campaign=post&utm_medium=web&utm_source=copy
ARCH will do fine, but it wasn't bombed out as much as AMR so it's probably not as cheap. I've owned it recently and will again but as you mentioned, it hasn't really had the momentum in the last week or so that the others have had. I think it's all do to its price and valuation - the others were more mispriced, whereas ARCH isn't surprising anyone. Leer South is an example of new N. American supply coming on in '22, I think HCC is another, maybe Itmann in '23/24... something we need to keep an eye on.
I'm long a few Australian names in small amounts, simply to encourage myself to do the research on them. In general Aussie names should be "easier" than the US ones but I need to do the work. Coronado has some US operations and I think they're interesting & probably a good investment at this stage in the cycle but again, I need to do the work.
Thank you!