You're assessment is pretty much correct. TER has struggled price-wise compared to peers such as NHC and WHC because of various factors that mostly boils down to management. If you actually just look at the raw numbers, ie tonnes that its mine/s produce, cost per tonne to produce, it seems like an absolute steal compared to the others. However, if you factor in the management troubles it has had over the years:
- fiddling with quality samples and getting caught, embroiled in whistleblower case with asic
- major accounting error miscalculating tax liability, paying huge dividend and then not having enough cash to pay
- last couple of years basically committing to just pay as big a dividend as possible without any consideration for long-term (not saying this was a bad strategy)
- just good search news articles on terracom and it wont be hard to get a good picture
then it becomes evident that it should be trading at a discount to it peers. question is how much of a discount. that probably depends on your outlook for coal. if you think price is going to rebound quickly then TER can easily multiple x from here as at end of the day blackwater produces up to 2Mtpa so if it can make a profit of $25 per ton, then it pays its market cap of $50m in a single year. If you think coal price is going to sit around here for longer (but you are still bullish long term) then you are probably better off in WHC as TER is literally living paycheck to paycheck and will get eaten up by the big boys if the bear market continues another year or two.
anyway, good luck. I'm buying here and if you scroll back through the announcements you can see lochtenberg is also buying a decent chunk more at 6c.
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