@keith200
Apologies for getting into the weeds of NHC first on a WHC board...hopefully I'm excused once.
I mention my rough numbers above, but For NHC I think your expenses are too low. $80 FOB cost is 900M, not 850. I've also only priced in midpoint of 11.3MT (I usually undercook figures to allow some fat), also omitted growth capital, and i do FCF based on the EV, not market cap which will influence things.
my fcf is also pre tax as well as another difference. Its money coming in the door they can allocate, i do look at profit, but also aware how much of that can be played around with after D&A, one off write downs etc and i wasnt getting too amongst the weeds when i made my original comment.
Everyone has their assumptions and roughies, i was just trying to share my rough thoughts and not get on a 'youre wrong' angle.
appreciate you sharing yours as well.
specifically for WHC, thought id share the monthly chart...
Coking coal chart:
Thermal coal chart
rt
NHC and WHC monthly charts.
I'm not a gun technician and keep things simple, but those levels for both companies look good technically, and with the FCF both are producing here at what are (hopefully) cycle lows in coal.. that near 20% FCF for WHC at $174USD a tonne.. see what happens to earnings if we get back to even $250USD a tonne. Every $10 increase in the coal price is $260M in profit for WHC
(Ive ignore royalties but also discounted $10USD is 16AUD).My bet on whc and nhc is largely due to their profitability and operation/execution, but I'm never going to invest in a commodity that I don't see upside for. If we see a $50/tonne increase in aud coal price from $230 to $280 even after royalties accounted for, WHC FCF will (by my napkin math) go from 950M to 2.2B. Throw a conservative
(everyone hates coal) multiple of 4 on it, and all else equal should be around $12.50, and *still* be at the near 20% FCF. And that's *before* any drop off of capex.
I should bookmark this post, cause sure as shit in a couple of years I'm going to kick myself I didn't buy more of it.
(20min delay)