CORONADO GLOBAL RESOURCES INC. - ASX: CRN

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ASX investor profile picture
ShareShack user name hidden until logged in December 02
I am very bullish on a lot of the mid and large cap mining stocks at present simply due to the good health of their balance sheets and low forward earnings multiples. RIO, FMG, S32, WHC, RRL and CRN are all trading on modest PE’s with modest to no net debt levels and generating very strong cashflows. The whole trade war debate is potentially negative for commodities but despite all that concern, prices have held up reasonable well. We are also in a significantly weaker AUD/USD environment which adds further value to these mining companies and the dividends they are likely to payout. Most of these companies are also diverting capital to share buybacks at present which is a smart move in my opinion and a better move than overcapitalising on acquisitions and development with so much political instability happening around the world right now....Show more
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ShareShack user name hidden until logged in December 02
I’ve been keeping an eye on a couple of coal stocks lately and one that really appeals to me at the moment is Whitehave Coal (WHC). The company operates a number of coal mines around Narrabri & Gunnedah and has recently acquired a project from RIO in the Bowen basin. WHC currently produces 20Mtpa of a mixture of thermal and metallurgical coal and is aiming to double that production number over the next 10 years.
Fundamentally, they are very sound with net profits of $525M in FY18 (current PE of 8) which was up from $405M the previous year. Gearing is low at 7% with net debt currently at $270M which is down from over $1B a few years ago. Free cashflow was very strong last year with $593M available after providing for capex of $153M. Total dividends of $0.40/share were paid out in FY18 and this is forecast to increase another 20% in FY19 putting them on a current dividend yield ~10%.
Coal prices have been very strong this year which provides for strong profit margins from established producers like WHC. Their avg realised coal price for the most recent Sept quarter was A$161/t and the avg unit cost of production for FY18 was only A$62/t which provides WHC a nice buffer against any pullback in coal prices going forward.
Technically, WHC have had a good run after bottoming out around $0.50 back in early 2016 and then rising to a high of around $6 at the start of July this year. They have recently pulled back near $4 which should act as a decent support level as indicated on the weekly chart below. Even though the recent decline has been significant, WHC remains in a positive longer term trend. I don’t currently hold WHC shares but did trade it for a nice bounce early last week. I am overweight in CRN though which is a newly listed coal producer with similar fundamental value to WHC.
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