It's good to be cashed up when it gets thrown out with bath...

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Nightmarez3k

6,194 Posts.

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21/05/23

20:35

Post #: 67887053
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Originally posted by Psalty: ↑

Hi Noomxx
Well done on your switch in and out of coal.
I switched in similar to you and am sitting on good capital gains and dividend income (mainly NHC and WDS). I haven't switched out yet and agree commodities are cyclical and there will be a time to switch out, and the optimum time may already have passed. We'll only know in hindsight unfortunately.

To assist my thinking I will now list why I am holding and why I should be selling:

Why Sell?
- commodities are cyclical (after a boom comes a bust)
- thermal coal hit all time highs ~US$450/t and has retraced significantly to ~US$160/t, and shows no signs of being near support.
- taxes may go up.

Why Hold?
- US$160/t is still much higher than the historical trading range of 50-80 with spikes to 110.
- at FY2022 NHC has reported a significant chunk of forward sales contracts to July 2023 at ~400 and has often commented that they have a solid forward sales book (this is all from memory so don't nitpick on my terminology). Milner commented that they are surprised how long coal stayed up so high.
- New Acland expansion will soon boost the business.
- Bengalla expansion will also soon boost production.
- there is huge underinvestment in fossil fuels, particularly thermal coal because the media and greenies hate it and politicians dance to their tune.
- NHC coal is top quality whereas stories of China, Indonesia ramping up production is low quality coal. Russian coal was a threat to NHC but now bears a stigma.
- US Federal Reserve has inflated money supply causing inflation so the current price of coal is relatively low. (I.e. 50/t ten years ago is how much today?).
- the Milner's are smart and wealthy and still buying up here.
- I have raised portfolio cash levels significantly and can't find anything to buy, what would I buy if I sold NHC.
- dividend yield is very good and likely to be good for at least the next one, I.e. FY2023 final.
- the share buybacks will soon have an impact.
- Asia and other growing populations/economies are not following Europe and Australia who are strangling themselves with green and red tape. So fossil fuel usage will not
slump.
- in the event of EV's continuing to remain popular then gas and coal use will be required to charge them.
- ESG investing is being found out as just another financial product/scam being sold to the sheeple.

Am sure there are more Pro's and Cons, please feel free to add them (got errands to do).

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It's good to be cashed up when it gets thrown out with bath water.

I have been taking profits all the way up and receiving dividends. The rest can go back down and I wouldn't care.

NHC has been a good investment in last 2 years.

I've probably received more than $1 in dividends on $1.35 nvestment.

NHC still probably has $1B on balance sheet and 1 of the lowest cost producers in the world with no debt.

NHC Price at posting: $5.11 Sentiment: Buy Disclosure: Held
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(20min delay)
Last $5.07		Change 0.110(2.22%)		Mkt cap ! $4.298B

Open	High	Low	Value	Volume
$4.96	$5.10	$4.96	$15.99M	3.160M

Buyers (Bids)

No.	Vol.	Price($)
22	11327	$5.07

Sellers (Offers)

Price($)	Vol.	No.
$5.08	41474	42

View Market Depth

No.	Vol.	Price($)
12	1505	5.070
28	98470	5.060
21	96725	5.050
12	48193	5.040
9	18734	5.030

Price($)	Vol.	No.
5.080	40939	39
5.090	62327	25
5.100	169504	21
5.110	41616	9
5.120	106604	13

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