RE: Dirt cheap in the Long Run!So mainly I just read everyone’s thoughts as I do not take time to share too much insight unless I feel something is important and worth saying.
I fully agree with Cooper90. Long run, this is the stock to be invested. They will almost have to try and not make money based on all circumstances of their operations and market conditions. Read my last and only post around the announcement of the equity offering if you want to find out what I am referring to here, as I do not want to take the time to state it all again.
Concerning the statement from Cooper90, it makes complete sense, whether you want to take anything from it. Based on the statements they had up, with costs to extract, prepare and ship one ton of coal was $150 a ton, while the price is currently close to $300 a ton. Do a break even analysis of this, throw in a fixed cost of $25M (which may be rather high concerning all operations, as I pull this number from GCE who has larger operations). Use these figures, and the break even point in 2011 is only 166,000 tons of coal, or sales of roughly or $50,000,000 revenue. Now if they do come close to their predictions of 350,000 tons, this will equate to profits of roughly $55,000,000.
Now this actually would equal an EPS of about $.25, and not $.50, but whats the difference, its still almost 10% of the stock price!
Take this how you wish, but I wouldn't do anything hasty if you do not currently need the cash.