Posted it here:
78543242That was from a broker report, but I have the same result if I use their price assumptions (0.62 AUD, Met price of $240USD, thermal of $120USD).
To show just how sensitive WHC is to coal prices, using current spot (0.64AUD, 184USD Met, 97USD thermal) the EPS collapses to 0.06.
WHC is a punt on Coal prices at what I hope is the bottom of the cycle. The $750M depreciation really masks how much the company is making IMO. I like FCF.
If coal prices stay subdued or around these levels WHC isn't going to be going up, but will bounce around the $4-6 range IMO, if coal falls well $3 isn't off the cards.
I see the demand outlook for coal being robust, with a lot of miners (particularly US) losing money here. I believe WHC has tier 1 assets and will not only survive, but be the first to turn. This is a 3 plus year hold for me, not here for a quick bounce.
(20min delay)