Target $18.72, page-7477

Masami...WHC will generate a lot of cash....and pay good dividends...Most companies that move too far from their knitting end up loosing money ..."A small investment ..almost a call option so to speak" may or may not be successful...but it's not coal ..Investors in WHC are investing in a Coal company that will generate lots of cash and pay good dividends ...If management stick to their knitting they could perhaps add to coking coal by adding more quality mines ...I mean India will need a lot of steel over the next 50 years and China is still growing ..buying other companies operating in other areas of activity means you end up with a zoo...I'm not in favour of a Zoo..too much diversification often means lots of Sh...t is generated ,control is difficult and you often get too much admin. ,negative synergy and a falling return on capital ...it's much more sensible for management to control their expansionist egos and focus on Synergy, economies of scale and high returns on capital....I mean the biggest garden in the block is often the least productive but it may be very swanky owning a big block..and managements who get swanky with big egos more often than not "raise the risk profile and reduce the return on capital" I don't think Paul Flynn will fall into that trap..he is very well trained in the correct investment procedures from his accounting background .I just hope the Board continue to listen to him and not their egos!!!
In the worse cases with big Ego management and big ego boards ..bad economic decisions are taken on growth for growths sake ... often driven by Ego ..growing the holding company ..buying other companies often or not into reducing returns on capital ,diminishing the cash flow ,building up debt and having a Zoo that produces a lot of crap and a company that is soon jettisoned by shareholders.
I sincerely hope we don't have a conglomerate but have a stronger and stronger ...very well run Coal company...with a strong cash flow and plenty of cash in the Bank to handle any economic downturns ...which happen regularly in all economies.