G'day, I'm having a close look at EOC which seems to have found...

G'day, I'm having a close look at EOC which seems to have found a bottom.
Current holders might be interested in the following from RBS Morgans:

"Company Name: ENDOCOAL LIMITED
ASX Code: EOC
Headline: Update from management + JUNIOR COAL SECTOR
Note:
Long term (12 months): Speculative Buy (i.e high risk)
Current Price: A$0.42
Target price: A$0.83
I caught up with Endocoal's MD Rodney Austin late last week. Drilling at Orion Downs is progressing to plan, as per the prospectus schedule. We would expect an initial Resource up to 50Mt to be announced in the Sep-Q to a higher level of confidence than average for an early stage explorer. More encouragingly, EOC has reviewed more information on its Northern coking coal leases, with a decision to drill expected soon. - My market thoughts on the sector and EOC share price below.

Why is the EOC share price weak?

+ The risk trade was taken "off" with the onset of European macro risks. Small caps underperform in this type of market. The impact is sector wide.

+ Newsflow / excitement / heat in the coal space abated with the withdrawal of Peabody's offer for MCC

+ A harsher than expected RSPT also suggested there is no hurry to trade Resources stocks before the Federal Election or until RSPT uncertainly is resolved

+ Delays by the majors to large scale projects such as Wandoan - and by implication new infrastructure such as Wiggins Island, suggest that the juniors will suffer delays to their initial production targets

= Market much prefers existing producers over explorers or aspiring developers

What's happening in the real coal market?

+ Chinese buying from Australian has abated somewhat but they remain large net coal importers

+ Suspect Chinese buying has been replaced by a recovery in traditional demand from Brazil and Europe in particular which we hear is surprisingly robust

+ Coal pricing has been flat for the last few weeks and months - but are not falling

= Coal demand is still very robust, prices are still very strong, if not lacking a catalyst to keep climbing

Investment view - How do the junior explorers trade? When do I Buy?

The juniors trade partly on hitting exploration and development milestones and more generally on sector interest - the tide affects all boats

A hiatus in sector "heat" has seen the juniors drift back to offer good value - however this may take time to unfold while 1) RSPT uncertainty persists; 2) Risk money stays sidelined; 3) Bigger projects and possibly infrastructure remain delayed 4) Coal markets lack a catalyst

We tend to Buy coal names actively when we can see real evidence of an increase in pricing - we aren't getting that feedback at the moment - i.e. Maintain neutral sector stance

But remember that sentiment can turn quickly and select juniors have drifted back to offer good longer term value (See NEC, SMR and EOC in particular).
Endocoal are a Bowen Basin coal explorer which RBS Morgans floated in April.
Since listing the stock has been under the radar of the market, despite some good exploration results (attached)
RBS Morgans research has a "Speculative Buy" recommendation on Endocoal with an 83 cent price target. last sale was 43 cents (note attached)
Given the interest in coal this last year, this stock has real potential to wake up and catch up with the rest of the market.
Catalysts for the stock to move will be further drill results which are currently in progress."