Está descontando una quiebra, cayendo 70% en 5 meses.
Es la cabonera usana que tiene más comprometida su continuidad.
Ha caído en mano de la financiación usura y de ahí no se sale fácilmente.
En peores plazas se ha toreado. No hay que tener miedo en saltar a la arena cuando el toro esté medio tronchado.
The stock and bonds have taken a massive hit of both a decline in iron ore pricing and a UBS sell side piece, which states the obvious - WLT will have to restructure in a few years if met coal prices don't improve. That said, the core low cost US production (Canadian production was recently shuttered) of around 8mm tons is enormously sensitive to price. Every dollar of improved pricing drops to the bottom line. So while EBITDA is only about $75mm at $115 per ton (I am keeping met coal margins constant for this exercise as it doesn't really move the needle). At $125 per ton, EBITDA jacks up to $156mm. The Company has almost $700mm of cash and revolver availability and that is without selling non-core assets. After recent inventory and assets sales, along with a debt equity swap, I have net debt of around $2.3 billion. This is a moving target, but the key metric to watch is met pricing. As it moves back to the $130-140/ton levels, the cash burn drops dramatically to a range of $60-100mm and buys them 6-10 years with their current liquidity. So the way to look at the stock is as an option on met coal recoveries. From $115-140 a ton, you have about 2.5 to 4.75 years of runway, which is tight by still a fair amount of time by commodity standards. The $150-160 range is where the Company goes FCF positive and can bring on more tons in Canada (tons produced goes from 8-10mm). The value that accrues to common is dramatic as you can see below:
WLT: Sensitivity To Met Coal Pricing
Price Per Ton 160 165 170 175
EBITDA 565 616 666 715
EV @ 6x
3395 3694 3995 4295
7x
3961 4311 4661 5011
8x 4527 4927 5326 5727
9x 5092 5542 5992 6442
Net Debt (2343) (2343) (2343) (2343)
Per Share @ 6x 15.98 20.54 25.10 29.66
7x 24.58 29.90 35.22 40.54
8x 33.18 39.26 45.34 51.42
9x 41.78 48.62 55.46 62.29
Given the massive burn, I started looking at WLT as an obvious candidate for Chapter 11, which is clearly, how the equity and debt market currently sees it. However, even under current dire pricing, they have 2-3 years of liquidity for the markets to turn which can be a lifetime in the coal markets. That estimate doesn't take into account further capital spending cuts or using the PIK toggle antiestéticature of their recent debt deal. It is worth noting that the Company was able to refinance their debt with no incremental equity raised (though they did do a debt equity swap at a discount to par). I view this step as very equity friendly. Management owns a lot of stock bought at much higher prices.
They are fighting for equity.
Esta última frase, al margen de que lo consigan o no, no es gratuita.
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