WHC and YAL are my too largest holdings. For the past 6 months, i have held more WHC.
As of today, i will start moving funds from WHC to YAL. My reasoning is fairly simple:
* WHC ~ 10% more expensive (enterprise value inc. estimated cash on hand) after recent run up. Previously YAL was always more expensive.
* Current cash generation is fairly similar between the two - WHC higher prices / quality is offset by YAL having ~ double the volume
* Therefore, upside is similar if coal prices hold
* YAL has much better downside protection if prices fall. This is simply because YAL have a huge volume advantage and are able to generate much more cash if coal prices fall to anywhere around $100-200. This is best demonstrated by the fact that YAL had an enterprise value of circa $5 billion a couple of years ago (at cyclical lows) vs WHC at less than $2 billion.
One key disadvantage with YAL vs WHC that hasn't been mentioned on this thread: management keep saying they are considering acquisitions to diversify away from coal. This would be my nightmare scenario....please don't do it!!!
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Mkt cap ! $8.041B |
Open | High | Low | Value | Volume |
$6.05 | $6.12 | $5.90 | $12.70M | 2.099M |
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No. | Vol. | Price($) |
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1 | 8000 | 6.020 |
4 | 29987 | 6.000 |
1 | 19 | 5.990 |
1 | 1660 | 5.980 |
Price($) | Vol. | No. |
---|---|---|
6.130 | 667 | 1 |
6.150 | 2369 | 2 |
6.160 | 13050 | 2 |
6.170 | 1417 | 1 |
6.180 | 600 | 1 |
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