Patriot Coal Corp. (NYSE:PCX)

lowpdop (< 20) Submitted: 12/24/2010 4:39:17 PM : Start Price: $18.15 PCX Score: -92.02

PCX 8 million ton met production, MEE ~10 million met coal production, ANR ~12 million met coal production.http://www.businessweek.com/news/2010-12-22/deluge-at-australian-coal-mines-to-drive-gains-in-global-prices.htmlhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/8331566and PCX 5 million tons unpriced met coal production for 2011 and 8+million met coal tons unpriced production for 2012, http://phx.corporate-ir.net/phoenix.zhtml?c=216060&p=irol-irhomehttp://seekingalpha.com/article/231598-patriot-beats-market-pessimism?source=qp_articlethat is a total of ~13 million tons  unpriced met coal production for PCX over the next 12-24 months...if PCX just receives 200 per ton that is ~2.6 billion in sales/revenue....PCX currently ~1.8 billion market cap, there is a ~800 million short fall or difference for just the value of PCX's expected production of 13 million met coal tons for 2011 and 2012. Theoretically a steel company that has to buy met coal, and is going to be giving roughly ~2.6 billion to PCX or another coal company anyway for the next two years for 13 million tons means that they can buy a PCX for the money they have to give them anyway, in essence get PCX for free and in reality get them for ~800million discount for 13 million tons met coal tons at 200 power ton......... after  a take over the steel company would get  ~8million tons of met coal going forward at cost ~100 per ton,huge resource, facilities/infrastructure and ~20 million ton high grade thermal yearly production for free. Whoever said the street is forward thinking did not have PCX in mind....This discrepancy can not last much longer IMO, lots of shorts that clearly have not realized the amount of PCX's met coal production and how much is unhedged and again what that will do for earnings or buyout in 2011....once the street realizes this simple math and scenario for PCX and steel company dynamic PCX should be 3-5x higher share price and quickly or they will get bought out for just there 12-24 month unpriced met coal which a steel company has to buy anyway. In sept PCX sold 1 million tons at 140 a ton, and met is higher now...even if averaged 140 per ton for rest of 2011 available met tons should equal 2-6eps.Also compared to recent buyout of WTN of 3.3B for ~3-4 million tons met coal production, would infer that buyout for PCX would be 3.3 billion at least or at least 32 per share, but this gives no value to all thermal resource/production or an extra 2-4 million met coal tonnage per year.  On another note MEE has a similar thermal and met coal production profile in the same region yet trades for over 4 billion more in market cap currently, and yet PCX does not have the lawsuit liabilities that MEE has.   The 3 year chart is also bullish, with recent double bottom and 12 month targets multiples higher from current share price.  ~16% of the float is short which is another factor that may add more fuel to the fire to reach realistic fair value and or buyout levels quickly.