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

Posted in Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Housing, Industrials, Market Commentary, Materials, Real Estate, Sectors, Technology, Telecommunications, Utilities | Tagged | Comments Off on 2021 Market Outlook – Part 2: S&P 500 Sector Analysis

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

Posted in BTU, Materials | Tagged , | Comments Off on Peabody Energy: Maintaining Guidance Despite Disappointing in Q1

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

Posted in ARCH, Materials | Tagged | Comments Off on Arch Coal (ARCH) 18Q1 Results

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

Posted in CLD, Materials, Uncategorized | Tagged , | Comments Off on Cloud Peak Energy: Valuable Assets But Little Income

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

Posted in DOW, DWDP, Materials | Tagged , | Comments Off on Back of the Envelope: The New Dow Chemical

Barrick and Randgold Agree to Merge

On Monday, September 24, 2018, Barrick Gold Corp. and Randgold Resources Ltd. announced that they had agreed on a share-for-share merger that would create the largest publicly-traded gold company in the world.  Under the terms of the merger, each Randgold … Continue reading

Posted in ABX, Materials | Tagged , , | Comments Off on Barrick and Randgold Agree to Merge

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

Posted in ABX, Materials | Tagged , | 1 Comment

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

Posted in Materials, NEM | Tagged , | 1 Comment

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

Posted in Materials | Tagged , | Comments Off on A Quick Look at the Price of Gold

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

Posted in ARCH, Materials | Tagged , | Comments Off on An Update on Arch Coal (ARCH)

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

Posted in BTU, Materials | Tagged , , | Comments Off on Peabody Puts Its Bankruptcy Plan to a Vote (Part 3)

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:

Posted in BTU, Materials | Tagged , , | Comments Off on Peabody Puts Its Bankruptcy Plan to a Vote (Part 2)

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

Posted in BTU, Materials | Tagged , , | Comments Off on Peabody Puts Its Bankruptcy Plan to a Vote (Part 1)

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

Posted in ARCH, Materials | Tagged , | Comments Off on Arch Coal Post-Bankruptcy

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

Posted in BTU, Materials | Tagged , | 1 Comment

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

Posted in CLD, Materials | Tagged , | Comments Off on Cloud Peak’s Exchange Offer

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

Posted in ARCH, Materials | Tagged , , | Comments Off on Arch Coal Puts Its Bankruptcy Plan to a Vote

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

Posted in Materials, Utilities | Tagged | Comments Off on The Coal Industry Goes Bust