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hope people are lazy and dont read this
http://billingsgazette.com/news/state-and-regional/montana/crow-tribe-signs-b-ton-coal-deal-with-cloud-peak/article_34b57cc8-7257-5082-a331-3660df78ddcd.html
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it just is
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Doubled down on cost control measures made their balance sheet bullet proof cloud is sitting pretty with the strongest liquidity of them all
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oh yea 1.4 billion tons
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I see much value here
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This was an opportunistic spinoff from Rio Tinto that had other fish to fry. It is a pure coal play on the Powder River Basin meaning that its coal is freer of sulfur albeit at the cost of somewhat lower thermal energy content per ton. It also has only open-pit mines meaning that its safety profile is excellent and its costs are low. It will increasingly target the Asian ( especially China ) market by shipping via ports in Oregon and Canada and so will be insensitive to environmental and other idiotic policies of the present administration.
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coal keeping moving to china
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China needs coal. CLD participating in building infrastructure to export from west coast. Japanese nuke problems help coal.
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coal will be in demand for years to come. looking under couch for all the loose change i can scrounge up. at under $20, CLD is a beauty.
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Cheap powder river basin coal, soon to be connected to port on Pacific ocean. China, here we come.
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magic screen result
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Cloud Peak Energy (CLD) operates 3 coal surface mines in the Powder River Basin of Wyoming. It is a 2009 spin-off from Rio Tinto.
CLD's 3 coal mines are some of the lowest cost mines in the industry. In Q3 CLD produced coal at $8.50 per ton, grossing $4 per ton.
CLD is trading at 10.7x 2010 EPS and 9.6x 2011 estimated EPS. It has a FCF Yield of over 30% and an ROIC of 17%. Target = $31.
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Strong cash per share position
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Low-sulfur, open-pit makes environmental issues LESS ( but not zero!) Possible proximity to export market in China.Needs to accumulate more reserves.
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Chinese energy demand continues to increase
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Solid Energy Play. Low PE, good Dividend should
cover for market uncertainties. Any CO2 law will be passed on to comsumer. Coal to stay - as renewables are unreliable and way more expensive.
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coal is not going away and CLD has a great pedigree.
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* Favorable earnings multiples compared to competition (7 vs around 20 for Arch & Peabody)
*Arch paid Rio Tinto almost 3x as much for equivalent assets in 2009 (albeit with significant synergy opportunities due to adjacent property locations)
*Strong and experienced management inherited from former parent Rio Tinto
* Low sulphur (and therefore less environmentally unfriendly) coal
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