RE: CMK-real picture
MARGINS MATTER
Healthy margins often separate
pretenders from the best stocks in the market.
https://www.fool.com/investing/general/2011/02/11/heres-how-patriot-coal-may-be-failing-you.aspx
Patriot Coal net margins (2.4%)
Peabody Energy (NYSE: BTU) 11.3%
CONSOL Energy (NYSE: CNX) 6.7%
International Coal Group (NYSE: ICO) 2.6%
ASSUME CMK is like the Coal King -BTU -(huge AUSTR met operations)
oooh geeeesuss hold my tummy ..
with 10% margins
and will sell as high as WTN is selling aver T = $ 140
(remember CMK will have at least 20% thermal- GCE has 17%)
So ,max OVER-OPTIMISTIC CMK rev @ 1 mt /2011 ( won't sell evn 800kt - you can bet on it )
is $ 160m
10% net margin = $16 m = 8 c/sh
At P/E 10 =80c target 2011
LOOOOOOLLLL
If will make just 800kt /2011= 6 c/sh =
60 c target
geeeeesus
To invest $ millions ( from where the $$ will come? ) in the conveyor and pad
at the port ,will take 2 months.
S
o, no sales till May.(unless cheap sale inland), means,
they have to sell in 2 H at annualized rate of 1.8 mt LOOOOL
to meet 1mt 2011 target.
BTW
WTN rev Q4 170m @ 1.5 mt sales = rev 136m @1mt
And I,am giving CMK from MY GOOD OPTIMISTIC HEART** $ 160 m rev@ 1mt
which they not gonna make
geeeesus. why I am such generous.optimistic person ?
WTN net income on 1.5 mt Q4 =$ 20m
Profit margin 11.5%.
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*
* Just in case the "smart"dudes here wonder what I am writing about :
"The heart is a myogenic muscular organ found in all animals with a circulatory system "
LOL
========================
T
HE AU FLOODS IS NO EVENT ON CONTRACT PRICES.
Usual media few weeks hysteria.
I wrote before ,the $ 350 ,$ 400/t couple of ships on a spot market
did not show up in TEC <GCE <WTN ,WLT pricing.
Yes ,they increased Q1.Q2 contracts to $ 225 /t vs $ 209 aver 2010.
Hardly 10% higher.
And that's all.
The inventories of met were high
Quote from WLT CC
ANAL Q:
" what the negotiations were like? Were buyers panicking?"
WLT answ:
"lot of the buyers learned a lot from 2008, a
nd were far more disciplined this year (vs 2008 panic)
as they looked at the market impacts with the flooding in Australia.
we did not see the panic that occurred in 2008.
Additionally,
inventory levels going into this flooding period, were up a bit over where they were in 2008 when the flooding occurred.
And there's been very little spot activity.
" really, basing much on what's happening on those very few tons ( $ 350 spot) is not particularly valuable."
end of quote
================
SO, DUDES ,POSTING ALL THOSE ARTICLES ABOUT AU FLOODS IS
FAILED PUMP >>>>sorry. LOL
$ 225 HCC benchmark FOR H1 IT IS
AND LOWER H2.
= $ 200 for CMK met portion and $ 160 CMK aver tone H1 (with little sales in H1 at that price )
and $ 140 aver CMK T in H2.
60 c / sh CMK target ...remember ?
I'm sorry ...you and only you are responsible of putting yourself in this FUNNY position
https://moroccanmetalheadsexposed.files.wordpress.com/2010/11/insane.jpg
There is no way out without SMALL LOSES NOW
and HUGE LOSES LATER.
Even WLT looks now as hold.and only 10-15% upside H2.
They are all doing OK and growing ( except CMK ) but so over / perfectly priced.
.
.