Category Archives: Materials
2021 Market Outlook – Part 2: S&P 500 Sector Analysis
2020 was of course dominated by the impact of the pandemic on the economy and specifically on the revenues and profits of each of the S&P 500 constituents. There was a sharp stock market sell-off in March-April, followed by a … Continue reading
Peabody Energy: Maintaining Guidance Despite Disappointing in Q1
Peabody reported a sharp decline in its 2019 first quarter revenues and profitability (even though its earnings per share rose). The declines were due to lower volumes, lower prices and higher costs in its seaborne metallurgical (SMC) and Powder River … Continue reading
Arch Coal (ARCH) 18Q1 Results
Arch reported 18Q1 diluted EPS of $3.91, up from $2.75 in 17Q1 and well ahead of the consensus estimate of $2.71. The gain in earnings came despite a 3.5% decline in revenues to $555.2 million, primarily because of lower expenses … Continue reading
Cloud Peak Energy: Valuable Assets But Little Income
On January 29, Cloud Peak Energy (“CPE”) announced that it had hired a team of professionals to help it review its capital structure and formulate restructuring alternatives. That followed its announcement last November that it was pursuing strategic alternatives, including … Continue reading
Back of the Envelope: The New Dow Chemical
DowDuPont, the chemical behemoth created in 2017 from the merger of The Dow Chemical Company and E.I. DuPont de Nemours and Company, is set to spin-off Dow Holdings (“New Dow” or DOW) on April 1. This is the first of … Continue reading
Barrick Gold: A More Speculative Bet on Gold
Barrick Gold is the second largest publicly-traded gold producer, with an equity market capitalization of $11.6 billion. Like its rival, Newmont Mining, Barrick is focused on reducing costs and improving operating efficiency to maximize free cash flow generation in this … Continue reading
Newmont Mining: A Safer Bet on Gold Mining
Based in the Denver, Newmont Mining Corporation (NEM) is the largest publicly-traded gold miner by equity market capitalization. Its geographic segments include North America (the U.S.), South America (Peru and Surinam), Australia and Africa (Ghana). Newmont’s share price rebounded sharply … Continue reading
A Quick Look at the Price of Gold
These are tough times for investors in gold and even tougher times for investors in gold mining companies. Since the beginning of 2011 (through Aug. 31, 2018), the price of gold, as measured by the continuous CME futures contract) has … Continue reading
An Update on Arch Coal (ARCH)
Arch Coal emerged from bankruptcy on October 5, 2016 and recently filed its 2016 10-K which included its fourth quarter performance (Oct. 2 to Dec. 31) as a reorganized (i.e. successor) company. With its quick emergence from Chapter 11, substantial … Continue reading
Peabody Puts Its Bankruptcy Plan to a Vote (Part 3)
Other Thoughts on the Plan. In a bankruptcy, a debtor-in-possession serves as a fiduciary for the creditors and interests. The court oversees the case to ensure that the debtor fulfills its obligations. Yet, both the debtor and the court cannot … Continue reading
Peabody Puts Its Bankruptcy Plan to a Vote (Part 2)
Under Peabody’s bankruptcy plan a simplified summary of the classes, amount and treatment of claims and interests is given in the table below:
Peabody Puts Its Bankruptcy Plan to a Vote (Part 1)
On January 27, 2017, the bankruptcy court approved Peabody’s bankruptcy plan and disclosure statement. By now, these documents have been distributed to creditors who are eligible to vote on the plan. The voting deadline is March 3. Objections to the … Continue reading
Arch Coal Post-Bankruptcy
On October 5, Arch Coal officially exited the bankruptcy process. The exit came just short of nine months after it had filed for bankruptcy on January 11, 2016. This was a remarkable achievement, given the company’s size, the large and … Continue reading
Coal Stocks Surge on Rebound in Overseas Prices
Many coal stocks have surged in price in October, primarily because of rising coal prices overseas and improving production volumes in the U.S. Shares of Peabody Energy (BTUUQ), which is still in bankruptcy, surged more than ten-fold in just ten … Continue reading
Cloud Peak’s Exchange Offer
On Sept. 12, Cloud Peak Energy (CLD) launched an exchange offer for its two series of outstanding bonds: the 8.5% Senior Notes due 2019 and the 6.75% Senior Notes due 2024. The company offered to exchange up to $400 million … Continue reading
Arch Coal Puts Its Bankruptcy Plan to a Vote
On July 6, the bankruptcy court approved Arch Coal’s Third Amended Bankruptcy Plan and Disclosure Statement. That set in motion the voting process which is scheduled to end on August 31. If there are no hitches and creditors vote in … Continue reading
The Coal Industry Goes Bust
Very few industries have suffered a decline as steep as coal’s. In just five years, the coal industry has gone from relatively healthy to almost entirely bankrupt. Major coal producers – including Peabody Energy, Arch Coal, and Alpha Natural Resources … Continue reading