Coal Junior Exploration Companies

[good news]

MacArthur Coal and Gloucester Coal both up 5% today ..looks like coal price heading north now with China stopping exports as they need the stuff to fil their on power stations.. coal price likely to follow the oil price north ... dont be short.. GCL especially cheap on forward p/e of 3x and potential div yield of 12% on current price..

[clearasmud]

Glocester coal has had an Astron-omical performance since Mar up fm 42c to $1.24. Why?

[Capitalist]

I got a tip this week from the Corporate Banking fraternity to buy coal stock. They are very bullish about it and believe that coal will be the next to run.

I don't know anything about coal. Just food for thought. You do the dishes ;)

[SEC]

Omigod I actually agree with Capitalist arrrrrrrrrrrrgh!!!!!

Cap, FYI coal is black and you burn it.:D

Good News, don't forget about the coal seniors, more liquidity and leverage. Otherwise fully agree.

SEC

Disc: loads of CEY

[The P.O.D.]

Sec,

What other coal companies around? And what is the difference between them?

Doing a quick search on coal I get EXL,MCC,GCL,CNA,CMK,CEY,AUO. These are split between juniors and rather large players.

EXL, GCL, and CMK look interesting as juniors.

Revhead, if you are out there, what's your take on the matter?

[good news]

UK coal sold their 97% stake in GCL about the beginning of may by way of placement to the market.. before that the stock traded about 100k a year.. the new management are implementing better hedge policy and coming of fixed contracts at the end of this year.. no div policy yet but one should be announced ..

[SEC]

POD, I think you've covered most of the coal co's in your list. Main differences apart from size is the % exports, % of long term contracts and hedging policy. CEY and MCC appeal to me because of their size, liquidity and exposure.

SEC

[good news]

MCC on fire.. up 12%!!

[good news]

japanese power co.s are paying AU52/t for thermal coal 04/05 year as contract prices converge on spot prices.. Chinese and Jap power co. being downgraded as higher energy costs start to bite.. very positive for Newcastle producers..

[thekiwi]

http://www.theaustralian.news.com.au/common/story_page/0,5744,10081826%255E643,00.html

Brokers are hot for coal
By Robin Bromby
July 09, 2004

COAL producers are going to turn their piles of black mineral into piles of cash, according to brokers.

This means that coal company stocks, which have been firing in recent weeks, are likely to stay that way.

Producers New Hope and Gloucester Coal were at 52-week highs yesterday, with New Hope at $1.12 from a low of 40c, and Gloucester at $1.40 against a low of 42c.

ABN Amro has upgraded its coal price forecasts on the basis of expectations that demand from Asia - and not just China - will continue to grow.

This follows a Smith Barney note predicting coking and thermal coal contract prices would lift by $US10 a tonne in the next round of negotiations, taking them to their highest levels in at least 20 years.






ABN Amro has ticked BHP Billiton, Gloucester Coal, New Hope and Rio Tinto as stocks to buy because of their coal revenues.

Centennial Coal, Felix Resources and Macarthur Coal are rated "hold" while only one stock, Austral Coal, is recommended as "reduce".

Analyst Roger Leaning told clients that projections for prices in fiscal 2006 were $US69.50/tonne for coking coal and $US50.75/tonne for thermal coal. In February BHP settled coking coal contracts with Japanese steel mills at $US59.20/tonne.

This meant coal buyers in Asia and elsewhere looked set to pay for a period of under-investment in the coal industry. The penalty would be higher contract prices and the inability to try to get cheaper coal through the spot market.

ABN Amro said the problem over the next two years would be not so much China but broader Asian demand for coal.

For Australian producers, the result would be substantial cash-flow increases.

By 2006, many of the local companies would have either no debt or minimal leveraging, it said.

"This would allow directors to increase dividends, offer capital returns or buy back stock," Mr Leaning said.

"We believe it is also likely that merger and takeover activity will occur at the smaller end of the market and we will see a rationalisation of the NSW coal industry."

Smith Barney's analysts see China turning from a net exporter of coking coal last year to importing a net 5million tonnes this year and 10million tonnes in 2005.

Australian and Canadian producers could lift production by 2006 by only 20million tonnes between them.

Chinese steel production, ending 2003 at 220million tonnes, is projected to reach 360million tonnes a year by 2006.

On the thermal coal front, China's demand is expected to grow 15per cent a year as the country is bringing on new coal-fired generation to solve the acute power shortage.

Twenty-four of the country's provinces are experiencing regular brown-outs.

China is the largest thermal coal market in the world, with 80per cent of its electricity generated by coal-fired station - compared with the US where 25per cent of power comes from coal-fired plants.

[good news]

significant re rating going on in these stocks.. saw ABNs report ..they have p/e 05/06 of 2 and forecast div yield of 26% on GCL .. it is v cheap vs the likes of MCC... New Hope up 10% today .. obviously reacting to the above..

[clearasmud]

SRL Strait Resources appears to be an undervalued coal producer
Disc hold and a little bit excited

[robbo]

New Hope(NHC) is definitely the pick of the Black Bricks IMO KIWI..Return on capital of greater than 25 % and price earnings very low to any other Coal Producer--still very low single digit p/e of under 4 on my calcs...!! something about needing safe proven reliable proven Energy source, even if a tad dirty and sooty--that fundamentally attracts me on the Economics of supply and Demand---also their Labour costs on where they operate--ensure their Profit margins are quite a bit higher than some of the Australs,Macarthurs and Rios and the Centennials(who are fully priced or near that IMO..)...

Naturally the market is still trying to properly Value this stock; having being on the 'bourse for less than a year--but still manges to be ASX 200--market cap Plus Aus $700 million.

Anyway--my only reason I have a relatively small amount in this stock--bought in at 73 cents and 77 cents....is that my criteria of 3 years of consistent reportable earnings is missing--otherwise I would be currently doubling or tripling up on NHC

Robbo

[quote]quote:Originally posted by thekiwi

http://www.theaustralian.news.com.au/common/story_page/0,5744,10081826%255E643,00.html

Brokers are hot for coal
By Robin Bromby
July 09, 2004

COAL producers are going to turn their piles of black mineral into piles of cash, according to brokers.

This means that coal company stocks, which have been firing in recent weeks, are likely to stay that way.

Producers New Hope and Gloucester Coal were at 52-week highs yesterday, with New Hope at $1.12 from a low of 40c, and Gloucester at $1.40 against a low of 42c.

ABN Amro has upgraded its coal price forecasts on the basis of expectations that demand from Asia - and not just China - will continue to grow.

This follows a Smith Barney note predicting coking and thermal coal contract prices would lift by $US10 a tonne in the next round of negotiations, taking them to their highest levels in at least 20 years.






ABN Amro has ticked BHP Billiton, Gloucester Coal, New Hope and Rio Tinto as stocks to buy because of their coal revenues.

Centennial Coal, Felix Resources and Macarthur Coal are rated "hold" while only one stock, Austral Coal, is recommended as "reduce".

Analyst Roger Leaning told clients that projections for prices in fiscal 2006 were $US69.50/tonne for coking coal and $US50.75/tonne for thermal coal. In February BHP settled coking coal contracts with Japanese steel mills at $US59.20/tonne.

This meant coal buyers in Asia and elsewhere looked set to pay for a period of under-investment in the coal industry. The penalty would be higher contract prices and the inability to try to get cheaper coal through the spot market.

ABN Amro said the problem over the next two years would be not so much China but broader Asian demand for coal.

For Australian producers, the result would be substantial cash-flow increases.

By 2006, many of the local companies would have either no debt or minimal leveraging, it said.

"This would allow directors to increase dividends, offer capital returns or buy back stock," Mr Leaning said.

"We believe it is also likely that merger and takeover activity will occur at the smaller end of the market and we will see a rationalisation of the NSW coal industry."

Smith Barney's analysts see China turning from a net exporter of coking coal last year to importing a net 5million tonnes this year and 10million tonnes in 2005.

Australian and Canadian producers could lift production by 2006 by only 20million tonnes between them.

Chinese steel production, ending 2003 at 220million tonnes, is projected to reach 360million tonnes a year by 2006.

On the thermal coal front, China's demand is expected to grow 15per cent a year as the country is bringing on new coal-fired generation to solve the acute power shortage.

Twenty-four of the country's provinces are experiencing regular brown-outs.

China is the large

[SEC]

I think that the junior coal stocks have run a bit too hard in the past 3 weeks. Wait for the inevitable retracements and then buy. I like the coal story but I'm not buying any (more) at these prices.

SEC

[good news]

GCL production report released today and looks inline.. stock up 4.6%.. set up for a great second half with contract prices in the mid us40 tonn being achieved... still v cheap on P/E of 2 and forecast div yield of 25%

[good news]

i follow ABN research and they upgraded their coal price forecasts and forecasts for this company quite considerably b/w these two posts i think .. i should have said that the p/e ratios and div yields are forecast for FY05/06 years . they are expected to report a loss in 1H of 3.9m i think.. can send you the research if you want to see it ..

[OutToLunch]

Good News, can you please send me the ABN research? I would be interested to see the numbers behind the GCL story with a view to picking up a few. If it's emailable, try my old throwaway address: cloud9photo-AT-hotmail.com (replace -AT- with @). Thanks muchly in advance. :-)

[OutToLunch]

Received LS -- thanks for taking the time to send it, much appreciated. :)

[OutToLunch]

Am now on board at 1.47 -- thanks LS for the info, that was enough for me to hit the 'buy' button. Will sit on this one for maybe a year or so and see where it's at after then.

Cheers

[OutToLunch]

Hi LS -- yes, I think so too, even if it pulls back a bit from here in the short term. Medium term outlook is very bright indeed. Wish I had thought about GCL just a couple of months ago -- hate to think I have just bought at the top of a rally otherwise. ;)

Cheers

[good news]

out to lunch... this has $2 written all over it.. big article in AFR yesterday on Oil and Coal.. alos hearing MAcq analyst (who is rated ) has gone bullish on this one too.. once average joe gets a whiff we will all be laughing..buying a stock on such undemanding multiples means sleeping at night very easy!

[Nimble]

Any chance of someone sending me the latest research on GCL as well? Would be most appreciated!!! Current exposure to coal is via AUO, which has been rewarding but GCL sounding more attractive.
nznimble@yahoo.com.au
Thanks! [:P]

[OutToLunch]

Watch your mailbox nimble, I've sent you the 2 reports LS sent me a couple of days ago.

cheers

[Nimble]

Many thanks Outtolunch, I'll have a good read over lunch. Thanks also to LS for passing them on in the first place.

[stolwyk]

Thanks LS! Good finish of ...

Gerry

[OutToLunch]

Thanks LS for the report, much appreciated. Hmmm.... even if the brokers are twice as optimistic as what eventuates, GCL still looks ridiculously cheap. I'd be backing up the truck if I had any more spare pingers! [8D]

[good news]

kodak3athotmaildotcom

[OutToLunch]

Yep, she's on the move again LS -- looks like you topped up in time. I'm cleaned out now and can only watch from here, not buy more... but if I could, I probably would. Thanks again for the reports, they were of great help. :)

[Capitalist]

That's their loss, and merchant bankers don't want a lot of publicity yet ;). There is often a reciprocal relationship between thread activity and general crappiness of paper here.

The sheeple will whirl and turn in due course ;).

[good news]

LS .. it is only GOOD NEWS that not everyone is in yet ... gives the stock plenty of demand to drive it from 2bucks to 2.50 !!

[Nimble]

LS, Count me in, picked up some recently as well. Thanks for other research report.

Trying not to get too excited here but ABN's 12 month target dated 7/7/04 of $1.50 looks light. Wilson's 12 month target of $2 looks better but still puts GCL on 05 PE of only 3.1 ($2/0.645) and yield of 16%. Appreciate these new coal prices may not last for ever e.g. past 2007 but what sort of PE multiple or price can we reasonably expect to see once 05 result out i.e. Feb 06? Reports suggest EPS of 0.64. Is a PE of 5 way over the top? Would suggest a price of 5*0.64=$3.20. Current plan to hold till Feb 06 for 05 result.

[good news]

who cares about FY07 anyway ...its too far away and stock will be well north of here before anyone cares about it .. everyone will be still getting drunk on FYO5/06 fantastic cashflows and div payments.. also LS is right.. there is fundamental change in coal contracts, very similar to electrcity prices in NZ, where long run contract prices are rising and becoming the norm

[good news]

GCL up another 4.6% today .. this is getting boring.. should start going up 10% a day

[SEC]

EXL up 6.4% today, something to do with acquiring Wambo minority.

Long Strangle, what does the GCL report say about eps estimates after 2004/05? I've noticed the instos are selling out of GCL - why?

SEC

Disc: CEY, EXL

[stolwyk]

LS,

Sorry but didn't receive that report. The ESP struck problems with some clients' websites including mine and it may have had to do with that.

Could you have another try please?

stolwyk@hotmail.com

Thanks,

Gerry

[clearasmud]

LS, don't want you talking to yerself lol

LS have you considered SRL & FLX against GSL

Cheers

[good news]

result due out today .. prob 1h loss of 4m .. mkt wil look for confirmation everything is on track before pushing it to the $2 level

[clearasmud]

LS

I hold SRL and am thinking of topping up

[Nimble]

ABN Report on 30/7 suggests the 19.08

[Halebop]

or maybe down 10% instead! A drop on the loss anouncement and a volatile few gyrations in the $1.50's. Perhaps a chance to pick some up? Seems plenty of support around $1.53.

My knowledge of coal and mining with difficulty might fill a thimble so I'll sit this one out. The announcement seemed pretty neutral. Was the market upset with the coal price they secured? Seems like business as usual with nothing to be really worried about.

[OutToLunch]

I think some might have panicked at the comment about the 'higher demurrage charges' (old news, from 1st qtr), or perhaps the higher than expected loss (5.9 mill cf. expected 3-4 mill). Either way, I think the sellers were too quick to hit the button before they realised that this announcement was broadly in line with expectations. The overall outlook is still positive, though I'd like to see some long-term contracts at healthy prices rather than too much exposure to the volatile spot market. See how quickly the price is climbing back up again right now -- sanity is prevailing! I'd expect perhaps another drop tomorrow as a new batch of panicky-types read their daily rag in the morning and bail out, after that it's probably all up from there.

Bottom feeders will be doing well at this point, I'd imagine. :D

[good news]

yeah demurrage costs were higher than expected and a few chumps panicked.. this is an 05/06 story so past 6 mths is not really important .. co did say that they made profit in June and expect profit for the rest of the year.. so really an overreaction

[primo]

Yes that down run was amazing & back up to levels, I also tried to pick up some $1.50ish more but missed also. Still having a nice run with this one.

[good news]

up 7% today ... what can i say ! must be some more bullish brokers out there today..

[SEC]

Yeah well I'm still happy with CEY and EXL's performance, CEY up about 40% in 3 months and EXL up 20% in one month. All I can say is as far as I'm concerned what a fantastic reporting season it's been.

SEC

[SEC]

EXL up another 6% today prior to its imminent inclusion in the ASX200.

In the two months since Good News started this thread, GCL has gone up 45%, EXL 36%, MCC 33% and CEY 16%. Only AUO has disappointed, down 19%.

This has been a great sector to be in of late, juniors and seniors alike. Coal is on fire indeed!

SEC (hold CEY, EXL)

[soulman]

Where do you get the information on GCL prospective dividend yield of such big percentage?
They have never paid dividend before.

[OutToLunch]

Several of the coalies took a sudden (though brief) hit this morning (GCL, CEY, EXL, etc) -- did someone say something bad about coal prospects? Haven't seen anything in the news...

[Capitalist]

quote:Originally posted by SEC

In the two months since Good News started this thread, GCL has gone up 45%, EXL 36%, MCC 33% and CEY 16%. Only AUO has disappointed, down 19%.

This has been a great sector to be in of late, juniors and seniors alike. Coal is on fire indeed!

SEC (hold CEY, EXL)


It was my friend SEC spooking the sheeple with the above post :D

It sure is a great sector, and will remain so for some time yet. Especially gratifiying since we are not talking about super high risk penny dreadfuls here.

Disc. MYOB

[SEC]

Aaaaaagggggggghhhhhhh! Coal at 4-day lows! Sell everything and run for the hills!!!!!

Probably some young spotty research analyst trying to douse the coal-stoked fire stating something bleeding obvious like the current price rises are unsustainable.

But he might as well be putting out the fire with gasoline. I'll be buying more coal on any further dips in price. Burn, Mother****er, burn.

SEC (apologies to David Bowie and Bloodhound Gang)

[SEC]

quote:Originally posted by SEC

Probably some young spotty research analyst trying to douse the coal-stoked fire stating something bleeding obvious like the current price rises are unsustainable.


Looks like I was partly right, the recent falls in CEY, EXL, GCL and MCC has been caused by some spotty commodities research analyst from GS Just Bewere who happened to read a TRADE JOURNAL STORY stating that China could POTENTIALLY expand its thermal coal exports. So based on information that has probably already been available to the market for ages (trade journal articles are written weeks if not months in advance), our analyst is inspired to tell its clients to 'lighten positions in the small coal producers'.

Brilliant. Absolutely brilliant.[xx(]

I also believe that GSJBW themselves are short on pure coal stocks so I wouldn't put it past them to scare the market so they can buy them on the cheap. Chinese walls my ass.

From Aireview:

STRANGE TWIST IN CHINESE COAL SCENARIO

GSJB Were’s commodities experts picked up a trade journal story that China could potentially expand its thermal coal exports.
Though the story certainly surprised the experts with even recent anecdotal evidence pointing to exactly the opposite, the broker nevertheless warned its clientele and contacts in the Australian
market this week that the source is one of the leading ones in the market with offices on the ground in China, adding “we believe it would be foolish to ignore this information”.
If the story turns out to be true, this will be a significant negative for sentiment towards the resources/coal sectors, the broker states. Spot prices are still well above GSJBW’s long term $30/tonne forecast with the analysts pointing out the next newsflow will be the trade data in around two weeks time. The analysts would be comfortable to lighten positions in the small coal producers (Wesfarmers, Macarthur, Excel and Centennial), but maintain a positive outlook for the major diversified resource companies.

Also the Chinese government is currently debating whether to remove the current export rebate. If removed it would be a deterrent to the volume of exports we’re seeing at the moment, according to GSJBW.

SEC

[nelehdine]

I wonder if we might get a positive days trading in GCL ... it seems the stock has been going down for day after day after day recently !!

[OutToLunch]

Jeez I hope so nele, it's a bit disheartening to watch it drop so quickly.

I have read the report that spooked the instos, and reviewed a recent broker's forecast on GCL with some very slight revisions of thermal coal prices in mind, and GCL to me still look like a very good prospect -- current (or higher) prices would surely be supported even if the results for the coming year were much less than forecast. No need to panic; broker forecasts were already rather conservative anyway.

[good news]

up 3.6% so far today so looking good.. GCL just need to lock in to 3 yr contract with the japanese in the up coming round of negotiations (oct) and this stock will be $3.00... doesnt have to be top price just lock it in !!!! .. Japs have been trying to talk coal price down hence recent weakness but it wont work!! ..have a read of the this -
its a week old but goes against rumors that the chinese will increase exports....
China, the world's biggest coal user
and producer, may consume 12.5 percent more of the fuel this
year, a Chinese government think-tank on energy issues said.
Coal consumption may rise to more than 1.8 billion metric
tons this year, after surging a fifth to 1.66 billion tons in
2003, said Zhou Dadi, director-general of the Energy Research
Institute, an adviser to the National Development and Reform
Commission, the country's top planning ministry. By 2020, demand
may rise to 3.1 billion tons.
``We're at a time of the quickest growth in coal
consumption in recent years,'' said Zhou, who expects China to
become a net importer of coal before 2020. ``Coal will remain the
dominant source of energy.''
Coal fuels about 67 percent of the power output in the
world's fastest growing major economy. Consumption of fuels is
rising by the equivalent of 100 million tons of coal a year, Zhou
said. By 2020, China will need 3.6 billion tons of coal
equivalent, including 650 million tons of oil and 170 million
cubic meters of natural gas, he said.
``Our domestic prices are at a high level and I believe
they will remain at such levels for some time'' because of high
oil prices and transport bottlenecks, Zhou said.
Coal takes up 44 percent of the delivery capacity on
China's rail network, Zhou said.
China has discouraged coal exports in recent years, reducing
rebates it pays to companies selling the fuel overseas because of
``a policy not to give tax exemption to exports of high-energy-
intensive products,'' Zhou said.
China's greenhouse gas emissions may be the world's
highest by 2020, underlining the need to reduce the country's
reliance on coal and increase use of alternative energy
resources, Zhou said.
Natural gas and hydropower have ``great potential'' to help
meet China's energy needs during the next two decades, while
nuclear energy should become increasingly important after 2020,
Zhou said.

[soulman]

Yeah Long S.....send them to me.
soultrain55@hotmail.com

[SEC]

Ironic that the only coal stock GS Just Bewere owned a sustantial holding in was AUO! And they're selling down. As expected, the coal stocks have recovered this week, but not before I was able to buy MCC and top up on EXL.

Sorry GCL fans but I'm not buying as ASB don't offer margin lending in them:(.

SEC

[good news]

EXL going on london roadshow at the end of the week so should help shareprice for you SEC

[SEC]

Interesting comments LS. While most of the instos are long on coal, GSJBW find themselves embarrassingly short (except in AUO:D) based on their ludicrously low long term estimate for coal prices.

SEC

[SEC]

Ha - coal prices have regained almost all of their losses of the past week. Thank you GSJustBeWere for your 'research' note that spooked a few to sell, please send out more gems like that.

SEC

[SEC]

I would rather believe ABARE than a trade journal story. It goes to shows the commodoties 'experts' at GSJustBeWere are clowns.

SEC

ABARE tips jump in coal export earnings
Source: SYDNEY AAP
Date: 2004-Sep-20 12:44 PM

Tight supply and surging demand for coal will push Australian thermal and metallurgical coal export earnings up 43 per cent in 2004/05, the nation's chief commodities forecaster said.

Australian Bureau of Agricultural and Resource Economics (ABARE) said on Monday that after falling in 2003/04, Australian thermal coal export earnings were set to increase by 43 per cent in 2004/05 to almost $6.3 billion.

"This forecast increase in export earnings reflects in large part the effect of higher negotiated prices for Japanese financial year 2004," ABARE said.

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"With significant new capacity coming on line during 2004/05, Australian export volumes of metallurgical coal are forecast to rise by nine per cent to 122 million tonnes.

"Increased volumes and higher prices are forecast to result in Australian metallurgical coal export earnings rising by 43 per cent to over $9.2 billion 2004/05."

Strong global demand, particularly from Asia, and supply disruptions have boosted prices for both metallurgical and thermal coal.

Meanwhile, developments in resources hungry China will continue to have significant impact on global markets, with its exports expected to fall in 2004.

Thermal coal is used as a fuel to produce steam for generating electricity and in manufacturing processes requiring heating.

Metallurgical coal, otherwise known as coking coal, is heated to create coke - an essential ingredient in the steel making process.

ABARE said a decision by China, the world's largest producer of coal, to reduce coal exports to help satisfy domestic demand, has provided opportunities for other producers, particularly Australia and Indonesia.

China's thermal coal exports are forecast to fall by about eight per cent to 74 million tonnes in 2004 as world thermal coal consumption is tipped to rise, boosting global trade by three per cent to 487 million tonnes.

However easing of world economic growth is forecast to lead to a slowing in world thermal coal trade to 2.3 per cent in 2005, or about 498.5 million tonnes.

Infrastructure issues in South Africa and Australia mean that Indonesia is likely to get the biggest rise in thermal coal exports in 2004, jumping 14 per cent to more than 87 million tonnes, ABARE said.

Spot thermal prices were in the Asian market rose from $US35.69 a tonne in January to about $US56.95 a tonne in late August and tight supply and strong demand are expected to provide continued support for prices in the short term, the forecaster said.

Growth in steel production has driven metallurgical coal demand which is likely to jump six per cent in 2004 and two per cent in 2005.

[Capitalist]

Good research from you SEC [:X] Cheers my love [:X]

But you don't own GCL... sigh :D

[nelehdine]

189 traded this a.m ... looks like my post a few days ago was just about the bottom, should have followed my own advice and "doubled up" ... never mind at least I'm on board ... Choo Choo !!

Disc: Hold GCL

[SEC]

quote:Originally posted by Capitalist

Good research from you SEC [:X] Cheers my love [:X]

But you don't own GCL... sigh :D




No my sweetheart[:X] I don't own GCL, but a 25% gain for MCC in two weeks will do me juuuuuussssst fine:D:D:D.

That research done by GSJustBeWere has got to be some of the worst I've ever encountered. I bet there are some pissed off clients that acted on GSJBW's advice in good faith.

SEC

Disc CEY EXL MCC

[SEC]

Looked like a rollercoaster ride for coal stocks today, are there some new analyst 'research' notes doing the rounds[?]

SEC

[SEC]

Monday's volatility might have been only a blip in the scheme of things. Today CEY+3% EXL+3% MCC+5% AUO+6%. But GCL down 1% did it go up too quickly in August?

SEC

PS EXL almost certain to be included in the ASX200 for next week. $4 on the cards double the IPO price 4 months ago absolutely amazing. Go EXL and go coal!

[SEC]

quote:Originally posted by SEC

PS EXL almost certain to be included in the ASX200 for next week. $4 on the cards double the IPO price 4 months ago absolutely amazing. Go EXL and go coal!


Ho ho ho:D:D:D. 401 at close!!! +16 today as well as going ex-div 6 cents for the icing on the cake.

SEC

Disc: Sackloads[8D]

[soulman]

Man, I was looking to buy Excel Coal for their div. yesterday and it went up 10 cents and above. All of the sudden, near closing it fell to $3.85 and even for the day. I was going to get it, but instead I got Promina. Both are doing well today on their ex. but Excel went up 14 cents. Now that's a fast recovery on their div. (not really a recovery because it never went down) and would have been a fantastic short term trading.

Good to see you are doing well SEC. My feeling is that EXL and CEY have nearly the same capital structure. The only beauty and difference is that EXL pays F/F div. and CEY does not. Both have nearly the same market cap. but CEY has a better pros. PE. But for F/F div, EXL would be a better choice if anyone would have to pick one.

What's MCC story for their rally? I see the dirs are enjoying the ride and selling some of their own stock.

All I have to say is coal is king at the moment. Actually any commodities coy for that matter.

[SEC]

Bloody hell MCC up 35% in 3 weeks! Now I know how GCL holders felt in August.

I am thinking 'this is getting silly now'.

However the last time I said that was in March when I was sitting on 80+% profit on ALL. I foolishly sold the lot. Its price has since more than doubled[XX(]

So I'm not making the same mistake on MCC (or EXL CEY). I'll ride out the up and coming consolidation. I mean coal has to consolidate, surely it can't continue to go up 20+% per month, can it? Hope springs eternal.

SEC

[SEC]

CEY +10% in 3 days [8D]

The beauty of owning 3 coal stocks is that at least one of them is going ballistic at any one time.

SEC

[soulman]

Yep....CEY is on fire and there is nothing stopping them. Could be on it's way above $4.50 soon. Man, the coal stock is running hot!! and I'm not in there to enjoy the run. Dang...

[Halebop]

Nice open for GCL this morning. Looking like it might test the $2.00 mark...

[nelehdine]

Huge selling pressure on GCL this pm ... down to 192 ... 199 didn't las tvery long , maybe next week !!

Disc: Hold GCL

[SEC]

quote:Originally posted by SEC

CEY +10% in 3 days [8D]

The beauty of owning 3 coal stocks is that at least one of them is going ballistic at any one time.

SEC




EXL +7% today on news it has acquired a 51% stake in Millenium which produces primarily black gold (aka hard coking coal).

So my coal stocks are taking it in turns to 'excel':D.

SEC

Disc: sackloads

[OutToLunch]

Okay, which broker put out a dodgy report this time?

[Tomahawk]

Does anyone know why there was such a big pullback in CEY shareprices yesterday? 7.81% is largish drop with no news.

[good news]

resources across the board got savaged yesterday as copper down 10% (BHP said copper production will exceed demand in 2H05) and nickel down 17% in London the night before.. All resources got trashed and unfortunately coal stocks got caught up in it all.. resource story very much intact though... likes of CEY got hit after an extremely good run .. nothing to be alarmed about though

[Tomahawk]

Thanks good news. Was worried that it may have been bad news specific to CEY, which I only just bought into that morning.

[OutToLunch]

Hi good news, I did a bit of a search yesterday and arrived at the same conclusion. Most coalies back up today, but GCL noticeably not amongst them. Come to think of it, GCL has not looked as strong lately -- wonder why?

[nelehdine]

GCL has certainly been the dog of the coal stocks ever since I bgt into them. Paid 178 a month ago when EXL were 330 !!! What a mistake , it was a toss of a coin which one I bgt and unfortunately it has cost me a couple of grand !!!

GCL +1 today EXL +7 and CEY +24 !!!!

Never mind, you cant win 'em all !!!

[OutToLunch]

Don't worry nele, I sold my AUO at .55 to buy GCL! Since then, GCL up 7%, AUO up 45%. [xx(] Will be interested to see GCL's next quarterly at the end of this month -- some solace, maybe.

[nelehdine]

GCL -4 at 176 ... I'm now losing money , with all the good news in the market since I bgt this is pretty diappointing
EXL +11 at 444 .... just to rub my nose in it !!

Way too late to switch, but it is tempting !!

[srotherh]

Nele or anyone else
I also bought GCL @ 1.50 so still in the black.
But What is it with GCL that I am unaware of ?????????

[SEC]

quote:Originally posted by srotherh

Nele or anyone else
I also bought GCL @ 1.50 so still in the black.
But What is it with GCL that I am unaware of ?????????


The question has to be asked why the instos continue to sell out of GCL. Substantial holders JP Morgan, Challenger, Perpetual and LFG have all sold down in the past few months. The first three have dropped below 5% so now don't have to declare their sales. That's 15% of the GCL shares that they can dripfeed into the market without any declaration.

Contrast this with EXL. Six of the board members own over 60% of EXL shares between them (minimum holding 9000000 shares each!!! - how many shares to the GCL board hold?). They are buying up quality assets funded by internal cashflow - no cap in hand to shareholders for more cash. It has entered the ASX200 despite the relatively poor free float. The combination of factors has seen instos scrapping over the remaining shares and pushing the price go up 120% since listing only 5 months ago. And despite this incredible gain not one of the directors has been tempted to sell down!!!!

SEC

Disc: sackloads of CEY EXL MCC

[OutToLunch]

GCL is definitely lagging behind. I got in at 1.47 and 1.76 so haven't exactly made enormous gains despite the positive environment for coalies. Barring any leaks regarding trouble at GCL, I can only guess that:

1) Profit-takers are cashing in after GCL's phenomenal run since earlier this year;
2) People are getting concerned about coal prices peaking soon and then dropping in response to a slowdown in China (or globally).

However even if GCL came in at just half broker's forecast eps next year (say 33 cps cf. a recent forecast of 67 cps), then at a p/e of 6 (cheap) GCL would still be at about $2. So plenty of upside I think. We can only wait and see if there's anything else going on.

But beware -- the fact that I am present on GCL's register is probably to blame. I can singlehandedly claim responsibility for AUO's dismal performance up until I sold recently (and I can also therefore claim responsibility for their stellar performance immediately afterwards!) Maybe I should let the 'shorts' know which shares I want to buy in advance, and charge a small fee... [B)]

[SEC]

OTL, I would say Reason 1 is more likely. It accelerated too fast in July/August, and the coal majors have since caught up. Since Good News sent the first post on 2 July, overall performance has been AUO +14% CEY +36% GCL +43% EXL +71% MCC +75%. So all the coal stocks have caught fire really, even those with production problems like AUO.

However I have not seen anywhere what proven coal reserves GCL has, one reason for its low 05 PE could be beacuse it's going to run out of coal soon[?]

No need to hop off the coal wagon yet though. Solid uptrends are still intact and the hiccup on Thursday looks to be been quickly forgotten.

SEC

[good news]

mmm ...the grass is always greener.. a poxy 20% in a couple of months OTL looks pretty good to me..i think market not prepared to take GCL to the next level until they see some earnings come through as the co. has been making loss for a number of years.. gcl mgt just need to lock in contracts at half decent prices ( oct is Jap steel makers negotiation month) and then its all on ..the div yield on this puppy will bring punters from far and wide and it will crusie through $2... looking at SEC's table it has lagged recently but when we post on this in March next year .. GCL will be at the top!

[good news]

oh and they have a 10 yr seam life ( not much i know) but are currently searching fields which they own and are reasonably confident of further reserves .. ( this is possibly the reason it hasnt been taken out by one of the majors yet )

[nelehdine]

GCL ... traded at 195 on Wednesday and I was tempted to sell ... but didn't. 172 now trading !!!! BLAST !!! Is that 155 a misprint ???? I hope so !!

[slam]

nelehdine
Are you talking about the days low 155? if so,
it went to 155 at 10:14
Lucky you didn't see it then;)

Cheers
Slam

[SEC]

Coalies got hammered today after the Chinese Central Bank raised interest rates by 0.25%. The market overreacts as a result. Just like it did in April and 2 weeks ago.

If you like the EXL story it's been pretty consistent in retracing 10% after gaining 20%. Might retrace to the 420s next week. Then next upward trend should see it over 500, hopefully by the end of the year.

SEC

[SEC]

So did anyone buy EXL when it was in the 420s today? Plunged from 439 to 415 (gotta love those auto stop losses) before rebounding to 444. Great bullish buy signal formed. Next stop shouldn't be before 500 is reached. In the meantime you GCL holders still wait for 200;)

SEC

[OneUp]

SEC do you like AUO at all? It seems to have held up pretty well the last week.

[nelehdine]

Absolutely shocking last few days for GCL ... this will test the nerve of all the weak holders !! Grin and bare it !!

GCL last Thursday ... 195
Close today at 164 .... 16pct drop !!!!

Disc: Hold GCL

[SEC]

1up, AUO has charged up from the 50s so with the current volatility in coal stocks there may be retracement to around 80.

Re GCL, even I might get interested at around 150!

SEC

[nelehdine]

Join the queue at 150 SEC !!! ... that's another 10ct .. OUCH !!!

[nelehdine]

Oh well ... another 5c down to 159 .... we might be buying at 159 shortly SEC.

What a terrible last 4 days ... dn 36c or 19% !!

[SEC]

Today EXL made a NPAT forecast for 05 of $60-$70M, well above prospectus forecasts and confirming analysts' bullish and ever increasing NPAT forecasts on coal stocks in general (and EXL in particular). EXL +5% today as a result. The coal story hasn't finished yet. CEY is one to buy now, retraced recently and is a bargain under $4. I topped up today.

SEC

Disc: Sackloads

[45south]

Hi there folks. Have been reading these forums for a couple of months now and have decided to stick my beak in.Made a bit of a study of the coal Co. CEY CNA EXL FLX MCC NHC SRL AUO are there any others. Also I beleive thermal prices are about $50t. Coking I can not find a figure.Any one now. AUO produces coking do any of the other Co.

[bermuda]

PIKE RIVER COAL COMPANY West Coast New Zealand.
This company now has all the Government and Resource approvals neccessary to develop this large hard coking coal field which is located near Greymouth.The coal will be barged to a deep water port at Shakespeare Bay,Picton for export to Brazil and South East Asia.
The project was first kicked off years ago but environmental concerns have only just been cleared.The project was based on the then US35/tonne for hard coking coal.This price has risen spectacularly over the last two years and contract prices for 2005 are forecast to be $US90/tonne.Pike are now working to develop the infrastructure to begin exports(1 million tonnes per annum) in 2006.The majority owner of PRCC is New Zealand Oil and Gas and at their recent AGM announced plans to float the coal company.Click on to www.nzog.net to find out more.NZOG is rapidly changing from a exploration based company to a significant production company that has 3 proven projects(oil,gas,coal) that will earn in excess of $NZ180 million per annum starting 2007.The shareprice is currently $NZ0.93 but once these projects become known to the Brokers/Institutions,and NZOG becomes part of the NZ Top 50 then watch out for a powerful rerating of this stock.
In the meantime if you are looking for a really cheap entry into a world class hard coking coal field then buy NZOG.Thhey are traded on both Aussie and NZ markets.

[45south]

Thanks Bermuda. Had spotted NZOG Pyke River development. Will be monitering its progress. More interested in oz at the moment.

Coking coal seams as rear as hens teeth. I see EXL and CEY produce small quantities.
From where I look it appears the profit margin from coking coal would match the total rev. of thermal coal. Any comments?
Do hold CEY SRL FLX AUO
From the latest production figures of Auo they are on target for 3-3.5mt p/a 300m Rev. 270m shares. Dept 200m.
Auo had a rocky ride over the last six months but things do appear to be cranking up.
Auo appears to have been the poor cousin in the coal stocks. To me this ones got a lot of upward potential yet. Any one else agree ?

[SEC]

45°S, EXL is expecting to obtain 41% of sales from coking coal in 2005, hardly a small amount! The recent Millenium acquisition and Wambo developments should see coking coal continue to contribute approx 40 - 45% of sales as Excel ramps up annual total production from 4Mt in 2005 to 14Mt in 2008.

SEC

[OneUp]

@ 45 South: yep, I do agree on AUO. Not without risks, but the convertible notes have a margin of safety and also pay a reasonable dividend.

DISC: Hold AUO

[nelehdine]

Oh all mighty coal Guru SEC .... I'm tempted by CEY but I see on their web-site that they sell 70% of their production into long-term "index-linked" contracts to state-owned power generators ... only 30% into the lucrative export market. Does this make them a bit " boring " ( for want of a better word !! ????

Disc: Hold GCL.NOG and looking for more of the black stuff

[nelehdine]

Just pushing this thread to the top to see if I can get a reply out of SEC .... thanks

[SEC]

O unworthy Nelehdine, CEY is a good coal stock for me to hold as a hedge for the more 'volatile':D exporters like EXL and MCC. Yes the long-term contracts are 'predictable' but there are advantages:
1. Certainty of cashflow for expansions and acquisitions.
2. As ther 12 long-term domestic contracts slowly roll over (weighted average 12 years), contracts will be renegotiated with prevailing coal prices in mind.
3. The long-term contracts are at fixed tonnages. Over and above that will be at spot rate I presume. This point is prescient given NSW is predicted to be electricity deficient by 2008.

Today might have been the last day for bargain CEY stock - the seller's dumped 3million over the past week (I have no idea why, perhaps it's on advice from GSJBW [XX(]), with a steady stream of buyers keeping a good 390 support. Medium term uptrend since May still looks to be intact.

SEC

[nelehdine]

Thanks all might one ... I will retire to my meagre hovel and count my meage pennies to see how many CEY I wish I could buy but to add up the handful I can actually afford .... one hand should be plenty
Sleep well your superior highness !!!

[clearasmud]

Had a quick look at CEY and thought it was a little overpriced

But agree coal is a great sector

Hold heaps of SRL and NOG .
SRL up 36% for me in 3 mths

[SEC]

quote:Originally posted by clearasmud

Had a quick look at CEY and thought it was a little overpriced


On what basis?

[Cabby]

is anyone aware of coal juniors in USA, or coal producing companies?

[bermuda]

45South,
Good article on Pike River Coal in NZ Sunday Times.You can read it on page 178 of the NZX NOG thread.Cheers.

[45south]

Thanks again Ber. Have read.
Am an avid reader of Sunday Star Times
ch.ch press
ASB morning breif. Whish they would put it on this site. Used to be on access brokerage site as well.
Market Analysis. www.stockmarket.co.nz
NZ Daily Co.news
And of course ShareTrader
Not much nz bus. news gets past my snout.
Felix Res.FLX Do hold
This could be one to watch.Looks as thou it could be be amalgimating with a private Co. White Mining Ltd.
3.3mtons after amal.Plus 2.5mtons in Jan06
10 for 1 share consol. on 16Nov.
Possibility of a cash raising.Waite till then.
This one could be joining the big boys.
Any one else got thoughts on this one.
Arq Energy ARQ also anyone looking.Pick it up on this forum. Dont no whom.Do hold.

[OutToLunch]

Finally a day in the sun for we patient GCL holders. No doubt the news that XStrata have fixed a coking coal contract at $137/t with the South Americans has provided a lift. :)

[proudwestie]

Hi 45 South Keep an eye on Business Sunday 2.30pm Sundays on Prime,if you get it.Interesting news and interviews. Cheers

[45south]

Hi proud.
Whats prime. Is it canterbery lamb.
No we don,t receive prime down here. 45south is the area we live.Silver tussocks ,blue rivers and sparrow hawks,no jet stream,computer download 31bps.
Whats going to be on prime.
Great news on the Xtrata coking contracts.Maybe AUO will get cracking and start bouncing upwards ah Sec.
This ones not for for the weak hearted. Sure is a rough ride.

[bermuda]

Since my post last week New Zealand Oil and Gas has risen from 93 cents to $1.17 on the back of your magnificent 2005 hard coking coal contracts.And there is plenty more upside to come.

[OutToLunch]

B____y hell! What's happening? [:0]

[Tomahawk]

My guess is that the realization is now sinking in that coking coal prices could go to mid US150 per ton.

CEY won't bounce as much coz they want to keep their domestic/export ratio. EXL should benefit greatly. Don't know much about GCL though.

[soulman]

GCL don't say a lot in their reports but their SP are surely firing. At least MCC, CEY and EXL gives guidance to profits. These coal stock are still firing and I am not sure if the 2006 profit are already factoring in their SP. WES is another one.

[45south]

Yes soulman WES is another one a big one.
If I remember rightly 13-14m tons 4.5m tons of it coking coal.
They are also big into every thing else as well.They have done very well for there shareholders over time.
The shares are $37 plus at the moment, I might see if I can afford to buy a couple tomorow.
On a new thread I see Watson has mentioned Eastern corp.coal ECU. Well some more homework for tonight I guess.

[SEC]

quote:Originally posted by SEC

So did anyone buy EXL when it was in the 420s today? Plunged from 439 to 415 (gotta love those auto stop losses) before rebounding to 444. Great bullish buy signal formed. Next stop shouldn't be before 500 is reached. In the meantime you GCL holders still wait for 200;)

SEC


Ho ho ho:D:D:D EXL reached 550 this time round!!! And still you GCL holders wait and wait and wait....

SEC

[nelehdine]

Got bored SEC ... bailed at 194 a few days ago on the "Xstrata leap" ... decided my BHP,SOL and NOG gives me enough coal exposure, added to my WPL at 1890 ... $21 today .... YIPEE !!!

[SEC]

Nel, I thought you owned WES too?

Yep WPL is a great story, and I had my eye off the ball when it fell to 1850 a couple of weeks ago[XX(] Ditto STO @800.

SEC

[good news]

GCL testing their highs again .. looking quite comfortable now .. if they hold this level they will run to 2.50.. have been the laggard for too long now ...

[swirlyworld]

I might have bought your GCL shares Nele [^][^]

My very amateurish attempts at TA convinced me that if they broke $2 that might be the time for greater things to happen quite quickly. Here's hoping.

Anyone know much about the medium-long term outlook for this company?

[good news]

mine life on their current operations is 10yrs but have exploratory program in place (Duralie) which has been reasonably successful so far but too early to put any value on ... traditionally have been supplying domestic contracts but are in the process of rolling off them and locking in lucractive Japanese contracts.. cheap compared to peers mainly because new management have yet to prove themselves but any announcements on contract prices per ton US60plus will push this puppy closer to $3.00..currently trading on forecast FY05 pe 3.3x (assuming avg cont price US45-55)and div yield mid teens..

[good news]

up another 5c to 2.15...

[OutToLunch]

Hi good news,

Goods to see GCL finally starting to move up some more after stagnating for a while. A bit of good news with upcoming contracts should push GCL along nicely. The last time I saw a prediction for their 2005 eps (posted by paperclip on the ozestock site) it was 67c which makes a share price of 2.15 look like a bargain!

[good news]

gidday mate,, yeah thats what i got on EPS and the recent lift up has been spurred by market thinking that it will be more mid 70s and obv the XTrata news too.. this story is so easy .. they dig coal out of the side of a hill and put it on a ship.. maybe a bit of negotiating and currency hedging thrown in as well ..

[OutToLunch]

Wish it was that simple.... limitations I see from here are possible loading delays at Newcastle Port (though on checking the Newcastle website I see waiting times are currently around 4 days or less, very short compared to previous performance --> good for GCL in terms of continuing minimal demurrage charges); longer term I can see coal prices falling again as production ramps up and China's economy slows down. However for the time being GCL will definitely have its day in the sun, esp with such high eps forecasts. Wonder what kind of divy they might pay once they have covered their debt?? 40c? Seems very high, but not impossible. Would be nice to see a forecast from GCL themselves!

[good news]

well if you assume 50% payout ratio (which is conservative) that will give you 30-35cps..16% div yield on todays price.. not bad really. leaves them plenty to service debt , which will turn into cash in bank next year (ABN says they have net debt of 30m this year )..they are in negotiations at the moment so cant forecast till they know what they are going to get ...

[soulman]

Yep, I want confirmation from the company. Still waiting.

I have been looking at GCL for a while now when they were $1.50. The management don't give no update on their profit forecast or dividend policy. I have access to research paper that state high dividend unfranked yield but that is not good enough. We want to hear it from the management mouth.

[good news]

well when they do tell you the share price will be well north of here my friend .,.

[soulman]

True Good News but the approach from EXL (my prefer pick of all coal stock), CEY and MCC is better than the others. Even WES have been updating on their coking coal exports. I feel sorry for CEY because they have long term supply contract with government authority, hence this would limit their export capabilities.

Hope you are doing well. I am not sure whether coal stock can go further. I was thinking that when EXL was $3.80 before their ex div date and look what happen.

[nelehdine]

Still want my GCL at 194 Swirlyworld , this is the ugliest day for quite a while ... EXL down to the mid 4's !!

[OutToLunch]

Ow. [B)] Sure is a lumpy road this one.

[nelehdine]

Just dived back in to the coal arena ... WES at 3685 and EXL at 465. NZD above 93c ... Try and hold for the next 12 months .. at least !!

[swirlyworld]

Nele

So much for my attempts at TA! It's gone through my stop so I'll probably flog them today but I'm reluctant to do so. Can't understand why this stock is not performing well on the back of all the good news about coal, is there a fundamental problem that the market is aware of but some of us aren't?
I suppose yesterdays price action justified your sell decision Nele, I'd be interested to read posts from any TA folks with an analysis of GCL before the market closes today.

Learning learning learning [B)]

[nelehdine]

Big raps to Direct Broking ... I just received my contract note on my EXL and WES purchases. They converted the A$ amount to Kiwi at .9401 !!! WHAT A RESULT !!! Well done !!

[Kookaburra]

quote:Originally posted by nelehdine

Big raps to Direct Broking ... I just received my contract note on my EXL and WES purchases. They converted the A$ amount to Kiwi at .9401 !!! WHAT A RESULT !!! Well done !!

I hope you mean from Kiwi!

[nelehdine]

Now in the money on all three purchases ... EXL,WES ans A$ ... huge increase in coking coal price agreement between BHP and Japanese Steel makers announced late last night ... could be another move upwards today.

Disc: Hold BHP,EXL,WES,SOL and NOGOC

[Halebop]

Another big day for GCL on bigger than normal volumes.

With the benefit of hindsight I hope you didn't stop-loss out Swirlyworld!

[swirlyworld]

Thanks for caring Halebop!

At $1.79 I should have baled, according to my own rules. The way I looked at the chart on the day however, plus all the good news about coal prices, helped me decide to watch and hope for a bit longer. This time I got away with it; still got GCL.

Nice to see the positive action today; steady as she goes and lots more of it I say!

[SEC]

Goddam, I was wondering why EXL has retraced to 470 (despite all the bullish news on coking coal) and GCL has topped 200 (at looooong last). It's the Nelehdine jinx factor!!

SEC

[nelehdine]

Sorry SEC, I am indeed on board EXL at 4.65 ( and .9401 vs NZ$ ). Your jinx factor may have something to do with the average performance of EXL the last few days .... although my WES purchase is up almost $2 and I bought the those within 5 mins of my EXL purchase !!

[nelehdine]

The "curse of nelehdine" well in charge today ... EXL -12 to 458 ..... UGLY !!

[SEC]

Aye Nel, MCC is also well off its highs. It seems that recent coking coal contracts of USD 125 - 135 was not good enough for the market. Or perhaps it was that UBS report wänking on about impending oversupply of steel. Or just perhaps it's been profit taking pure and simple since both EXL and MCC have more than doubled in price over the past 6 months!!

SEC

[Halebop]

Another good day shaping up for GCL with a lot of volatility in the mid $2.20's as it tests new highs. With the 2nd half now all but complete the market must be wondering what they managed to earn? (I know I am!)

I'm not 100% confident at calculating mining cashflows but I'd pick pre tax operating profits around $15m for the 2nd half, with first half losses around -$5.6m then full year profits should be a tad over $9m. With some $80m in tax losses this should ensure they pay no income tax until at least next year. If they achieve contract coke prices in the order of US$120 then they may have to contend with the "problem" of paying tax again, as this could lift pre tax earnings to the late 70/early 80 millions.

The risks and imponderables are future demands and pricing of coal, the A$/US$ exchange rates and the outcome of any further exploration and development in view of their 8 years or so of remaining production. It seems prudent to consider that Coking coal prices in particular would fall back - the question is would this be a gentle easing or a sudden route (or dare I ask further rises)? Certainly I can't remember Coal being as "sexy" as it is now when looking back over the last 20 years or so - in itself a factor worthy of caution.

Disclosure: Hold GCL.

[nelehdine]

What a turnaround in EXL so far this year ... looked like the tortoise late last year but the transformation in the last three days to a sleek well fed hare has been quite amazing !! Stock just gone back thru the $5 barrier ... considering it was wallowing around 460 at Christmas this is very encouraging !!

Has "the curse of nele" been exorcised SEC ???

[SEC]

quote:Originally posted by nelehdine

Has "the curse of nele" been exorcised SEC ???


Definitely not. It remains until EXL's closing price exceeds 550[:p]

[nelehdine]

Cheers mate !! Turning into a real nice trade, especially now the A$ is showing a bit of strength vs the Kiwi

[soulman]

Good one Nele...Tempted at $4.50 but gutless. EXL seems to be the best coal stock out of the lot.

[nelehdine]

Thanks Soulman , what are we expecting with EXL this year SEC in terms of EPS growth, anticipated Divs, new agreements at these higher prices. Would love to hear your take on how you see thinks panning out. Thinking of adding a few more to the existing holding. On the few stocks that I've "averaged up" recently ( FBU,AIA,WPL ) I have come to the definite conclusion it is a more successful way of trading than averaging down !!

[SEC]

Consensus estimates for EXL's eps and dps for 2004/05 are 36cps and 13cps respectively, but that includes 6 months when they were getting only about $55/tonne for coking coal (now more like $125/tonne).

It gets a lot better from 2005 onwards, eps and dps estimates for 05/06 are 87cps and 44cps respectively.

More importantly:
1. There was a big eps upgrade by the insto analysts in Dec 04 that the markets completely ignored (until the first week of this year).
2. Many of the insto analysts are now predicting coking coal prices to remain high beyond 2007 (previous estimates were of only two years of high prices). This has yet to be factored into the price.
3. With Wambo and Wilpinjong developments soon kicking in (thermal and semi-coking coal), EXL's total coal production is predicted to increase from 6m tonnes for 05/06 to 13m tonnes in 07/08.

So EXL (and MCC for that matter) are still good buys and if there is any price retreat to the silly levels of a month ago I will be accumulating more of both.

SEC (CEY EXL MCC)

[nelehdine]

Wow , 87c eps in 05/06 , and then the expanded production starts to kick in ... mind boggling !! I WILL NOT SELL !!

[good news]

GCL up 5% yest ,, i will just let the share price do the talking !! SEC do you have any research on EXL you can fire through? kodak3athotmaildotcom

[good news]

up 4% today and heading higher .. i dont know why i come to work ,,

[SEC]

quote:Originally posted by good news

up 4% today and heading higher .. i dont know why i come to work ,,


MCC +4% today PMM >+20% tomorrow O happy days[8D][8D][8D]

Good news, I do not have any proprietary stuff on EXL, I have sourced my info from several sources:
1. CEO's presentation to Excel AGM (available on their website).
2. ASB/Commsec (need to register).
3. Ninemsn investor portal.

In fact, I do not believe in getting all my info from only one source: that source may be incompetent, biased or simply wrong. For example: GSJBWere's recommendations to 'lighten up' on coal a few months ago based on a Chinese trade journal - breathtakingly poor and sloppy research.

SEC

[nelehdine]

EXL having an amazing run ... started the year at 470 I think and closed tonight at 549 ... I know its a stupid Q. SEC but what share price range would you estimate at Xmas time ... I'll give you a 25c spread !! ( my off the cuff guess 625-650 )

[Halebop]

I think GCL could easily reach those levels LS but the company seems quite tight lipped about its prospects and performance. I imagine this has been a brake on share price performance to date. Hopefully they'll be a bit more forthcoming at the annual result.

[soulman]

Wow...what an overheated market in the resource sector.

Traders looking for stag plunging everything just for the anticipating for a quarterly report. CSM JBM GCL EXL MCC and many others lifting many a mile for their quarters due soon.

Even RIO get a rush B4 their quarterly.

Looking back....should have picked up EXL at $4.50 last month when they were hammered. Nede is laughing now I guess.

[Halebop]

GCL got knocked a bit at the same time and is now up 42% from then. EXL up 28%. Even the good-news-challenged AUO has enjoyed a 50% rise since its December low.

[good news]

2.65 up 5% after report.. i havent seen it yet but take its a goodie!!

[Halebop]

The reserves news is pretty good because it has a reasonably significant impact on DCF valuations based on the shortish mine life.

The data that will have the biggest impact now is:

Coking Coal Price (At least they've now started negotiating 2005 prices with customers)
Exploration & Development (It seems likely there is plenty of coal there but what are the yields and required capex?)
Earnings & Dividends (???)

[good news]

XTA apparently settled hard coking coal prices yest but watch for XTA agreement on semi soft coal prices.. these will set the benchmark for the hunter basin. GCL will get a premium to the XTA price as coal is of higher quality.. i heard exploration costs were only about 1m which will hopefully double mine life.

[soulman]

The GCL management give nothing away, don't they?

No div and profit forecast from them forever. I suppose no one ask them.

Even EXL, MCC and CEY give profit forecast.

[Halebop]

Upon reflection I think its logical GCL have not provided earnings guidance as yet for next year. As they have only just entered negotiations for 2005 coking coal prices they would not want to pre-empt the price outcomes by disclosing any numbers to the market.

[soulman]

I think the reporting by GCL in a couple of weeks time will provide more detail and guidance. I don't see dividend happening this year though. Maybe. It will also have to be unfranked.

[Halebop]

40 cents should be easy if they achieve the sorts of coal prices others are getting. They should get down to almost debt free while they're at it too. Although the dividend won't be franked I anticipate a gross return of 40 cents would go a long way towards supporting at least a high $3 and hopefully a $4+ share price.

[Halebop]

GCL copping a bit of a sell off this morning.

Still it was probably due a bit of a breather. Some of the technical charts were starting to look ambitious.

[good news]

on the back of HWE going into receivership .. HWE dig their coal out of the ground for them .. buying opportunity!! result due end of feb..

[SEC]

I don't usually have celebrations when I double my money on a stock, but tonight is a special occasion. Thanks to GSJBWere's 'lighten positions in the small coal producers' recommendation in September, I was able to buy MCC on the cheap....

Here's a toast.... to GSJBW and their great advice on coal.

SEC

[SEC]

quote:Originally posted by nelehdine

EXL having an amazing run ... started the year at 470 I think and closed tonight at 549 ... I know its a stupid Q. SEC but what share price range would you estimate at Xmas time ... I'll give you a 25c spread !! ( my off the cuff guess 625-650 )


What a hopelessly conservative estimate Nelehdine:D, at this rate it should hit 650 by the end of the month!

My prediction for Xmas - EXL @ 800+ as analysts start factoring in production increases and more buoyant coal prices beyond 2006.

SEC

[good news]

you will be a happy man SEC.. MCC up another 8.5% on takeover talk.. nice!

[good news]

RBC have a coal conference on today which MCC and GCL are presenting at.May explain the run in both.Rumour also that CEY will bid for GCL.No price mentioned..

[Halebop]

Nice to see GCL testing $3.00.

Will they have a "breather" here as they did at $2? As much as I'd love them to keep steam rolling through they must be due to have a pause. Can't see this stopping long before hitting $4 though.

[k1w1]

quote:Originally posted by Long Strangle

Not as happy as someone holding 5% of GCL :).


Congratulations LS.

[Bobco]

Nasty drop in sp of NHC today, from 175 down to 153, anyone got suggestion as to why?
They announced sale of "International Assets", being mainly interests in Indonesia, but presumably this is a positive rather than negative otherwise why sell.
Am tempted to be in at current level.

[homermcc]

take a look at who got hammered today and who held up - shows where the money is/isn't - motives[?]

[Papillon]

Bobco
I am wondering the same thing.

Selling their stake in Indonesian coal for $500M represents 71c/share which to me sounds like a very good price considering NHC share price is only $1.53. Without detailed information showing the proportion of profits generated from Indonesia it is not possible to assess if $500M is a good price. What does puzzle me is that the directors of NHC must consider it to be a good price or they would not sell. With not much debt NHC will have a lot of cash after the sale. Some investors must have a different view.
??

[Papillon]

Looking at annual reports NHC overseas operations contibute 63% of profits. Logically 63% of the shareprice should be represented by the $500M (71c/s) sale of overseas operations. Therefore SP = 71/.63 = $1.13. Based upon NHC pre-announcemnt price of $1.75, the overseas operation should be sold for $1.75 x 63% x 704M shares = $776M.

[soulman]

LS...I think profit taking exercise is the theme for these coal stocks ATM. Looking further, EXL MCC could rally even further due to their prospective earnings and div. in 2006 FY.

I have hold off GCL at $1.70 because I just want guidance from management regarding dividends (even though unfranked). No information so far but the stock has hit sky high.

[Halebop]

Certainly 2 or 3 big buyers sitting there. Almost got caught out range trading GCL on the dip with some of my shares. Made a measley few hundred for my troubles. Not worth the risk in the end.

Edit: Soulman I think GCL is one of the cheapest available on PE.

[Capitalist]

GCL is one of my 3 shares and I love it, but word is instos are concerned about when Kyoto is going to bite. I am worried about this too, in spite of PE.

[ynot]

I have been following CEY since SEC mentioned it last year.
Thought you guys may find this analysis on MCC verses CEY by Kahuna1 from H/C interesting.



Just a contrast between the two.

Some have suggested CEY may be looking in MCC direction.

It is ludicrous with MCC valued by the market at 1.2 times the value of CEY.

Here it is anyway ....

Hi Wolverine,

Agree they won't take them over.
MCC seems to have a bright future as well.
Yep I have maybe low balled the profit numbers for MCC in regards to their future.

MCC is expected to double production into 2008 and profit numbers are expected to increase dramatically.

CEY also is the same.
For some reason CEY never seems to get a fair break from the analyst who cover it.

Have had a financial interest off and on since 2000.
Back in 2000 you could buy CEY for 50 cents.
Since June 2000, CEY has paid 48.5 cents in dividends.
With the share price at $4.00, its a total return of 797%.
Now since 2000, CEY was rated as a reduce for a long time by analysts.
Some had it as a buy but only for short periods.
CEY in terms of profits has had virtually a one way march forward.
In terms of share price it has been a slow and steady rise.
CEY stands at around 30% up on last years price.

MCC on the other hand, well its up around 400% since last year.
So whilst I like coal companies in general, its not hard for me to be more enthused by CEY in terms of value.

One development coming on line in 2008 for CEY seems to have been ignored by most analysts. Nothing new for CEY. Anvil Hill which is massive in terms of resource with well
what appears to be one of the largest reserve/resource sizes of any mine in Australia.
Anvil hill also seems to have already a contract for 1.5 million tonnes per year and is planned for export at 3.5 million tons in 2008.

Just to shine a spot light and contrast the two companies.
CEY actually divested a coal mine in 2004 and stated they are going to concentrate on the new production from the Mandalong and Anvil Hill projects.
Both these projects are massive.
CEY in 2004 had production somewhere in the region of 14 million tons.
In 2005 Mandalong will add another 1.5 million tons to production.
In 2006 Mandalong will add yet another 1.8 million tons to production.
In 2008 Anvil hill will come on line with 1.5 million for domestic and 3.5 million for export.

Just in summary
Coal production for CEY
2004 ... 14 million
2005 ... 17 million
2006 ... 18 million
2008 ... 23 million

that's what we know just now.

Reserves and resource at
Mandaolong 497.1 million tons
Anvil Hill 680 million tons

So in 2008 I presume Mandalong will be producing around 4 million per year.
Anvil Hill will be producing around 5 million per year.
The life of the mines at this rate of production would appear to be well over 50 years.
As more is seen recoverable, possibly a lot longer.

Now the attraction of MCC to some is its ability to hit the PCI market and with the massive increases in coking coal shoved down consumers necks this year it seems to be in the driving seat. Coking coal prices are nearly 80% over the current thermal coal price.
CEY has most of its coal used by domestic power companies. However an increasing proportion has been freed up for export and notably some of the soft coal is suitable for coking purposes and attracts very similar prices. As usual every analyst seems to have overlooked this little fact. By 2008 CEY will have around 8 million tons also available for export into this market. Anvil Hill alone has been earmarked for 3.5 million in export all by itself. Suggest one has a look at CEY's 4/10/04 announcement regarding their proposed expansion of the semi soft coking coal business.

Now MCC contrast.
The 700 MT resource and reserve number I placed on them may have been somewhat generous. Have allowed for some of their exploration to actually find something.
I think Coppabella is their largest deposit .... reserves/resource at 198 million tons.
Bit of a contrast to CEY's Anvil Hill at 6

[soulman]

LS....Yes, that's why SP don't go up in straight line. Traders buying and selling stocks for short term profits. If the stock is still good, then it will recover straight away and head north again.

I have missed out on the coal histeria....Excel at $2, MCC at $2. That's all long gone. I do hold 2 steel stocks but they need coal and iron ore to produce steel. The smart money has certainly be in coal but buying at the top of the boom can be a costly mistake.

[Halebop]

I agree LS. I don't know if coal prices will rise much more but I'd certinaly lay odds they will be maintained for a while yet. In the worst case its almost a year before the new reality is known anyway. On that basis GCL's 40+ cent dividend potential is worth a bit more than $2.75 ish. I'm picking $4+ as well.

I dusted off the account last week and bought again. I'm being cautious in the ultra short term because I don't know if this dip has quite spent itself but I'll probably be buying some more this week too.

[soulman]

Agreed as well LS. You obviously saw the last two steel boom cycle and saw the timeframe they were in demand. From my point of view GCL is the worst coal stock out there to buy because the management is timid and don't say much. An investor presentation here and there would be most welcomed as MCC, EXL and CEY always keep shareholder up-to-date.

However GCL might be the one on the lowest P/E and the highest div yield. I just want the management to speak out. Baring in mind, I love fully franked dividend.

[Halebop]

Very positive announcement from GCL today. Price up sharply on the news but meeting resistence at the psychological $3.00 barrier.

Todays announcement will have a big impact on DCF valuations. Looking forward to seeing some numbers on costs. Very nice to see an extra 500,000 tonnes of Coking Coal per annum at a low capex value in the offing.

[Halebop]

Very solid volumes and finally looking like its making a serious crack at heading above $3.

[soulman]

How was EXL profits result? In line?

This stock has rise from $4.50 to $6.50 in less than 2 months. Is it still a great buy? I would imagine profits might double when production increase in 2006 and coking coal contract doubled. I am still hurting from not buying at the $4.50 mark when it got hammered down to that level.

[k1w1]

Very low volumes on AUOG at moment.

[soulman]

Nice rise for GCL......Coking Coal negotiation completed. I just thought that was already factored in the price. I would not be suprise if GCL get to $4.00 in the next couple of months.

[soulman]

Fair enough LS but I would rather kick myself for not getting in EXL than GCL. I like EXL experience coal management and their strong portfolio of tenement and the fact they pay FF dividends. I look forward to Wed or Thurs then.

[Halebop]

A dividend not being franked is not the issue. Tax still gets paid on it at some point. As LS says, to a "foreigner" unfranked dividends are actually better. To a local there is no advantage between a 40 cent unfranked dividend and a 28 cent franked one unless you are exchanging trading tax losses for franking credits.

While there is an argument from a capital management perspective to retain earnings until you are paying tax, GCL has marginal use for that cash at current earnings rates. They are likely to be low debt or debt free in short order barring a change of direction into new acquisitions. (Personally not something I'd favour - I think their energies would be better spent proving their qualities).

P.S. - Longstrangle: I thought you lived in Australia?

[soulman]

I am an Aussie so franking is tops for me. I would say that EXL, GCL and EXL are neck to neck ATM. All has gone up more than 3 fold in the last 10 months.

Lets just see who will win the one-dayer today.

[SEC]

quote:Originally posted by SEC

I don't usually have celebrations when I double my money on a stock, but tonight is a special occasion. Thanks to GSJBWere's 'lighten positions in the small coal producers' recommendation in September, I was able to buy MCC on the cheap....

Here's a toast.... to GSJBW and their great advice on coal.

SEC



And now I have doubled my investment on my September EXL top-up after GSJBW's great advice. There goes another bottle of bubbly...

Fellow coal bugs who bought up large in September, please charge your glasses and be upstanding.

A TOAST..... TO THE HOUSE OF WERE!

SEC

PS GCL only up 93% since early September, what a laggard:D:D:D!!!!

[SEC]

quote:Originally posted by SEC


quote:Originally posted by nelehdine

EXL having an amazing run ... started the year at 470 I think and closed tonight at 549 ... I know its a stupid Q. SEC but what share price range would you estimate at Xmas time ... I'll give you a 25c spread !! ( my off the cuff guess 625-650 )


What a hopelessly conservative estimate Nelehdine:D, at this rate it should hit 650 by the end of the month!

My prediction for Xmas - EXL @ 800+ as analysts start factoring in production increases and more buoyant coal prices beyond 2006.

SEC


And there we go[8D]. Share price still likely to go higher as analysts upgrade their future eps estimates based on a solid first half.

SEC

[SEC]

Oops didn't even notice EXL went div 8c today despite the 20c rise. Ha - underlines GCL's underperformance even more!!!!!

C'mon, where are the obligatory bites from all the GCL fans!!

SEC

[Halebop]

quote:Originally posted by SEC

Oops didn't even notice EXL went div 8c today despite the 20c rise. Ha - underlines GCL's underperformance even more!!!!!

C'mon, where are the obligatory bites from all the GCL fans!!

SEC


I think the average GCL holder probably has their mouth too full to reply - a 318% return since May versus EXL's sedate 232%. [:p]

8 cents did you say? Not bad for the new boy... [8D]

[good news]

GCL is only now just starting to run.. pe still 4 .. div announcement prob made on thurs and underground exploration will double mine life and rerate pe towards its peers.. maybe even takeover..$5 easily toot toot choo choo

[ynot]

Thanks SEC for your suggestion last year that CEY had potential.
I jumped in at $4.10 and to be honest have had reservations since. This is a nice suprise!!

[SEC]

quote:Originally posted by Halebop

[quote]I think the average GCL holder probably has their mouth too full to reply - a 318% return since May versus EXL's sedate 232%. [:p]

8 cents did you say? Not bad for the new boy... [8D]


If only you had actually HELD since May, Mr Halebopper!![:p]

Thanks ynot, CEY took its sweet time to start moving again but I was patient.

SEC

[skinny]

Heads up!

http://www.itsgottabevivid.com/HeadsUp.pdf

disc: hold Sennen

[airedale]

Hi Skinny, very interesting article. I presume that you are trading this one on the Toronto Exchange. I can't find Sennen or Ribfield or DJB or Elgin on the ASX.
Cheers...

[skinny]

Indeed I am, trades on the Toronto venture exchange.

Yahoo ticker is SN.V and website is http://www.sennenresources.com/s/Home.asp

Profiles on the blokes behind DJB available on the CH4 website, eg http://www.ch4.com.au/a_barlow.html

Personally I don't believe the 800% gain in the article above will be achieved, but could be a good par for the course 300% in it :D

[soulman]

Yes.......finally GCL CEO had a gander and said dividend payout will be 30%. EXL and MCC have a payout of 50% and they are FF div. I have a feeling that EXL will outperform all the coal stock in the next 6 months. However, I won't be riding them. When there is a boom, don't follow the material sector that needs these commodities like steel company. BHP, RIO and these mid cap coal stock will flourish. CSM and PMM will also prop up. A scrip bid from RIO for PMM might eventuate as well.

[Cooper]

quote:Originally posted by soulman

When there is a boom, don't follow the material sector that needs these commodities like steel company.

I couldn't agree more, soulman.

[soulman]

Yes Cooper.......I hold Smorgon and Bluescope. But I tell you what, I rather hold EXL and MCC. I had PMM twice last year at $1.50 to $1.60 and sold out at a very small profit compare to what I could have now. It was the Lee Ming Tee substantial holding that drawn me to PMM.

[skinny]

quote:Originally posted by skinny

Heads up!

http://www.itsgottabevivid.com/HeadsUp.pdf

disc: hold Sennen


Public service announcement!

Here is an email from Sennen PR rep. Barbara Dunfield 22/02/05 posted from another board regarding the next likely development for Sennen -

1. We will issue a news release on the Middlemount just as soon as we have a definitive.
2. We do not have any further news pertaining to DJB Coal and the other projects at this time and as soon as we do we will issue a news release.
3. We own the coal seam therefore we own the rights to the coal bed methane.
4. We will issue a news release with all the particulars just as soon as we receive them.

We understand shareholders (this includes me) are eager to know what will transpire with Middlemount and we appreciate your patience.

Regards
Barbara

Barbara E. Dunfield, MBA
#408 -837 W. Hastings St.
Vancouver, BC Canada
V6C 3N6
Tel: 604-685-6851

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> >>>

Lastest share price has come off a few cents as the rumour mill was that an annoucement would come this week (expectation is now in the next 2 weeks). I've picked up some more - their current market cap (~$20m) is just ridiculously low c/f the value of their in situ Qld coal resoruces, the sale of Middlemount alone could net at least $90m....

[Halebop]

That one looks interesting Skinny. Sennex appears to have handed over a big slice of their (potntial) coal though. I guess they are thinking better to have a small slice of something than a big slice of nothing. Will look into them some more.

Sold GCL several days ago on a hunch and the gappy look on the buy side of the ledger. The fates don't always reward me with this stuff (and the charts didn't really agree with me at the time). The broader uptrend still seems to be intact so now looking to time a re-entry but sell volumes are very light. Might get burned yet!

[skinny]

HB, Sennen up around 35% now on quite heavy volumes since the date of the 1st heads up all of one week ago. Crazy markets. News release pertaining to the Middlemount sale still not out yet so still time to hop aboard.

I'm not actually that bullish on coal for the longer run so this is just a short term event trade for me, best of luck to all whatever views held :)

edit: NR out clarifying status of reserves; some interpretations of it below. Could be a bit of a sell off today on the TSX but if the chatter is right Middlemount sale announcement imminent.

http://www.sennenresources.com/s/NewsReleases.asp?ReportID=101490&_Type=News-Releases&_Title=Clarification-Of-ReserveResource-Estimates-At-The-Middlemount-Ownaview-And-...

http://www.stockhouse.ca/bullboards/viewmessage.asp?stat_num=9246045&all=0&t=0&archived=False&link_symbol=SN&link_table=list&navmode=1&navd=fwd&

[SEC]

quote:Originally posted by Long Strangle

Given a payout ratio of 30% the yield will still be bigger than EXL or MCC. :)


Since EXL and MCC pay out a ratio of 50% fully franked that is likely to make their after-tax payout larger than GCL's unfranked dividend based on 30% ratio. I know this doesn't affect you LS but it affects most others. My calcs are based on GCL's estimated forward PE of 4 and EXL/MCC's forward PE of 6.5.

Strewth, MCC up 20c today, it might soon be time to toast the House of Were again for a 200% gain after their SELL call.

SEC

[skinny]

Sale announcement of MM put out by Sennen on Friday. 7 bids received, but none accepted *yet* and mgmt appears to have opened the bids to all properties. Bit of a curve ball for the market hence a sell off back to 58c or so. Rumour mill going overtime, e.g. suggestion that the "foreign central banks" mentioned in the news release is Chinese bidding interest. Key thing to note is that the main institutional holder of the stock (Salman) increased their stake following the market sell off.

Personally sold around 2/3's of my stake (was on margin, tant pis) but keeping the remaining 1/3 for the undoubted risk:reward promise of this one.

http://www.sennenresources.com/s/NewsReleases.asp?ReportID=101793&_Type=News-Releases&_Title=Update-on-Queensland-Coal-Projects

[SEC]

My ol' laggard CEY after hovering for a week around its all time high of 462 set in October smashed that today. It looks good for plenty more gains now and heading towards the May-Oct 2004 uptrend. My prediction is 600 within 6 weeks (AUO ~ 162) as it catches up with its peers.

As CEY/AUO march onward and upward the already remote likelihood of a rival bidder diminishes even further.

SEC (CEY EXL MCC)

[ynot]

GO CEY !!! :) :) :) SEC, what do you think about the next couple of years for CEY. personally i think its got a fair way to go yet.

[primo]

NHC has had a nice bounce off its lows today for a .17c gain, anyone know why.
Thanks

[Bobco]

Was tempted by recent NHC sp decline but was put off because my understanding is that they do not export high quality coal, more just domestic lower grades, so missed out on this rise.
Anyone else got knowledge of their product?

[SEC]

quote:Originally posted by SEC

My prediction for Xmas - EXL @ 800+ as analysts start factoring in production increases and more buoyant coal prices beyond 2006.


I'll bring that prediction forward by 9 months!!!

EXL bought an extra 26% of Millenium today for $60M. In return it gets ownership of 780,000 tpa more coking coal. When production starts in 2006 this should earn revenue in excess of $100M so EXL purchased the extra stake pretty cheap.

Analysts will upgrade the earnings forecasts tomorrow. My guess is an extra 10 - 15% eps after 06, so there should be further upside in the EXL share price - $8 in the short term, $10 by Xmas[:0].

SEC (sackloads)

[SEC]

quote:Originally posted by Long Strangle

Check your figures as they are wrong. GCL does have a higher yield for the current financial year. As for the after-tax payout - the effects are negligible. Who cares if the company pays your tax or you do?


I assure you the figures are correct. Forward PEs based on FY when high coal prices kick in, ie 05 for GCL, 05-06 for EXL/MCC. The FYs are 6 months out.

After tax payout effects are NOT negligible, if a company pays an unfranked div then the individual has to pay tax on that div. Normally the co pays out a higher div to compensate.

I stand by my analysis that EXL and MCC will be paying out higher after-tax divs than GCL at current payout ratios and eps forecasts.

SEC

[soulman]

Yep....EXL is definitely outperforming the other coal stock.

Imagine making a four fold returns on the IPO price less than one year ago, along with dividends.

[SEC]

quote:Originally posted by Long Strangle

Still wrong - you must use current share prices and current payout ratios.

In that case I am still correct because GCL's current payout ratio is zero!

[soulman]

I am with you there SEC....I prefer a company that has paid dividends regularly than someone that has not and just starting to make profits because of a coal boom.

I mean CEY, MCC and maybe EXL always paid dividends consistently way before the coal boom and GCL is just starting to make a buck because of the coal extravaganza.

[SEC]

For what it's worth, one of the biggest <s>clowns</s> resource bears UBS has realised there's a coal boom on and raised its target value for MCC by 41% to 813. How generous of them. Problem is the party started nearly a year ago (as did this thread).

http://www.aireview.com/index.php?act=view&catid=8&id=1523

SEC

[SEC]

LS, you are splitting hairs over the difference between GCL's FY (Jan-Dec) and EXL/MCC's FY (Jul-Jun).

Any fair comparison will include the full effect of the increased coal prices, and GCL gets the benefit of 9 months worth for its "current" FY and EXL/MCC only get 3 months benefit. That is why I have based the analysis on the next FY for EXL/MCC.

You also don't seem to comprehend the benefits of franking credits to the individual.

Until GCL starts paying a fully-franked 30% payout or increases its ratio, EXL/MCC will continue to pay a higher "net yield" than GCL.

SEC

[green]

Hi LS, do you know when the dividend payout is expected for GCL and how much this will be?

[Halebop]

GCL have advised thay will pay around 30% of earnings as dividends. Keep in mind they will pay very little (if any) tax this year so this payment will most likely be unfranked.

I'd estimate earnings around 90 cents per share. So a gross dividend around 27 cents would be my expectation (Or about 63 and 18.9 cents respectively if they were paying 30% tax). Having said this, even with additional exploration expenditures and $10m in new capex mooted they could easily pay 40 or 50%, pay off all debts and still maintain a net cash position over the next 2 years. So I think any dividend surprises would likely be on the upside.

The biggest volatility risk at present will be where the US$/AU$ cross-rate heads. Given their unfortunate history with hedging I think they are now largely unhedged so currency changes flow to the bottom line.

[SEC]

quote:Originally posted by Long Strangle

Based on current share prices and proposed payout ratios, GCL has a higher dividend yield net of tax (higher tax status used) for the current financial year.


Your agrument is only valid until June 30. The markets look well beyond this date in valuing coal co's. After July 1, EXL and MCC are forecast to pay higher net div payouts than GCL. Halebop has alluded to what GCL is predicted to pay out, 19cps or a net yield of ~5.6%.

By way of comparison, MCC has consensus forecasts of 107cps for 05/06, or a fully franked (net) yield of ~7.9%. I'm not sure what EXL's would be now that it has purchased an extra 26% stake in Millenium, but it should still be similar to MCC's net yield.

SEC

[Halebop]

EXL are certainly a quality offering (I'm not so impressed with MCC though). Their size and visibility perhaps warrants a higher rating than GCL but on the argument that the market looks to the future I would still favour GCL.

They now have an additional 500,000 tonnes per annum of coking coal coming online in 2006. This is an 80% increase on current production and at current prices and production costs adds $47m to EBIT (or per share EBIT over 60 cents).

Additionally, if GCL did pay 50% of earnings like EXL their current dividend yield would be closer to 9% net, reflecting their lower price to earnings ratio.

EXLs expansion strategies add a sexy quotient to its valuation that in a bull market provides its shareprice with a higher multiple. However, their risk profile is fundamentally higher as a result and any downturn in coal prices will then be exaggerated in their performance as well. I prefer the steady and incremental approach of GCL, focusing on operational improvements and low cost/risk expansions. The share price was so cheap it was a no brainer. This gap has now closed to a large degree but not yet to the point where value is dubious.

I hasten to add whichever company anyone favours these are all cyclical plays and everyone will suffer to varying degrees when perception of the cycle changes.

[Tomahawk]

Latest Aspect Huntley research report has rerated EXL to accumulate till 8.50. Interesting turnaround considering their original recommendation was to go for CEY instead and this was when EXL was in the 4s.

[SEC]

quote:Originally posted by Long Strangle


- Inclusion in the ASX/S&P300 (18.03.05) resulting in passive fund buying of over 1.345 million shares.
- Possible inclusion in the ASX/S&P200.


LS, how did you arrive at the number passive funds have to buy?

Re ASX200, probably promoted at the same time CEY and EXL get promoted to the Top 100:D

SEC

[soulman]

EXL is poised for $10. All coal stock still showing strong price movement. Good luck to those that were lucky to get some at the $3 to $4 mark. Now the time to sell is a difficult one or just hold on for more gains.

[SEC]

Thanks LS, I wonder how the estimate was arrived at by SB Citigroup.


quote:Originally posted by Long Strangle

Funny isn't it - CEY & EXL may be included into the ASX/S&P100 at the same time GCL is included in the ASX/S&P200, when GCL is generating a FY05 profit greater than both CEY & EXL?


My hair-splitting friend, by the time these changes are made in the ASX100/200, CEY and EXL will be generating far more profit than GCL (ie after 1 July 2005). Besides, inclusion in the ASX indices has nothing to do with profits. Just look at VCR.

SEC

[airedale]

Could be time to rename this thread: Coal Seniors Firing Nicely:

[SEC]

quote:Originally posted by Long Strangle


I know - just annoying you and enjoying it.

Enjoy!
Your hair-splitting friend LS :).


You'll keep[|)].

Airedale, I like the title as is, a nice reminder for those who bought into coal co's before the market woke up to their potential.

SEC

[ASXIOU]

All the major coal plays took big hits this morning. Any definitive reasons why?

[soulman]

Here comes the correction. Three days in a row of savage and I just hope that it can recover from that. Otherwise I am scared as hell.

[Halebop]

Didn't take long to get there LS! Still sitting on the sidelines...

[Halebop]

I think you'll be proved right in due course LS but I'm happy to sit this out for the moment. I wouldn't be surprised if they tested $3.00 rather than $3.35. Sentiment looked pretty ugly in several places today.

[Halebop]

Everybody seems to be getting smacked about today. GCL looks to have crossed below the trend line. Come June or later I think this will have been a buying opportunity but I'm not feeling like catching a knife right now. Will wait for emphatic technicals.

[Halebop]

EXL and GCL both down 21-22% on their two week old highs! Ouch.

[SEC]

quote:Originally posted by Halebop

EXL and GCL both down 21-22% on their two week old highs! Ouch.


To put in context, EXL and GCL are basically unchanged for the month and still up 40 - 50% since the start of the year.

Recently I sold off an investment property and I've been waiting for a good old fashioned correction like this, a combination of panic selling and instos window dressing by selling off their most profitable holdings.

Today I topped up on all three coalies I already own. We'll see if I bought at the correct time or whether I sqandered the proceeds of my property.

SEC

Disc: MORE CEY EXL MCC

[soulman]

You people are a bad example of diversification. Don't tell me you bet your investment house on the black dirt or black gold, or whatever you want to call it. What other stocks are you all holding ATM?

[SEC]

Soulman for the record I am well diversified and currently hold 9 other ASX stocks (although it's somewhat resource heavy). Some I have mentioned on this site, others you can try and guess.

What you also don't know is how much I've actually got invested in the ASX. That's my little secret but the proceeds from one investment property was top-up money.

SEC

[soulman]

Hello

Just testing......

SEC, I think you got all the superb resource stock so you are probably very well ahead. I am sure you got PMM, SMS and maybe CSM with the coal stock.

LS, you are probably doing well with over 35 stocks. Do you have international exposure?

So you both see a recovery in the resource sector soon and the market in general. Both ASX and NSX took a 5 day bath, although yesterday was a winner in my book recovering from 40 down to 9 down. Good luck to you all.

[SEC]

quote:Originally posted by SEC


Today I topped up on all three coalies I already own. We'll see if I bought at the correct time or whether I sqandered the proceeds of my property.

SEC

Disc: MORE CEY EXL MCC


A calculated risk that has paid off in spades, 11% return in 2 days.

Soulman, I don't own CSM, more's the pity. I remember deciding to buy PMM over CSM in September. Both up over 100% since then. Should have bought both in retrospect. Shït happens.

Apart from the coalies and SMS PMM I also hold WOR MAP ZFX PRG plus a few others...

SEC

[ASXIOU]

GCL back up to $3.55 since two week low of $3 and looking to go higher today. Maybe people are realising just how grossly undervalued this stock is and how much of a bargain it was two weeks ago!
disc: hold GCL

[newbie]

Anybody know what is up with the Middlemount deposit owned by Sennen / Ribfield? DJB was looking at it a while back and GRAX was supposed to sell it.

[Halebop]

GCL just took a tumble through the $3.00 support. Its been testing $3.00 on and off for a while but has managed to fight off a fall below until now. Technicals have been weak for a while.

Was there any negative coal news/sentiment overnight?

[MataHari]

New Warrants with ultra high strikes and due this summer; have a look and which warrant will make it ??

http://www2.shawstockbroking.com.au/egoli/egoliWarrantspage.asp?PageID={977A2C3B-271A-410F-95FC-3FAFB5A00014}

[MataHari]

http://www2.shawstockbroking.com.au/clientservices/documents/images/macbank150405a.jpg