Guys, As a shareholder very disappointed with the downgrade yesterday and obviously casts concerns about management quality. I relaise there are some supposedly cheap resource stocks around but FLX is still compelling
Capped at 342 million Forecast TP of 30 million - PE 11 (really should take out 3.5million as extraordinary on sale of Ashton so PE about 13. This achieved on sales of say 3m tonnes Forecast for 2010 is 15mt pa. What is a very conservative profit margin per tonne - say $10 (again very conservative esp given PCI/Coking)
If 15m tonnes pa - Op Margin of $150m pa If 10m tonnes pa - Op Margin of $100m pa
either way you get a company with diversified coal mines, mix of coal type (PCI/thermal/coking), long mine lives, significant deposits. Really at a forward PE of only 7 on 10m tonnes then FLX should be closer to $4. It will take some time 2 get there but the numbers and fundamentals are compelling
I bought some today at 1.85
FLX Price at posting:
0.0¢ Sentiment: None Disclosure: Held
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