Stockchase Opinions

Dan Rice Arch Coal Inc. ACI-N TOP PICK Apr 23, 2004

Cash flow per ton margin is currently about $6 per ton. Last year they were $3. Thinks the ultimate margin will be $12/15. Cheap.
$33.060

Stock price when the opinion was issued

other mines
It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.

You might be interested:

PAST TOP PICK
(A Top Pick Sept 21/05. Up 8%.) Their coal is up from $10 to $20 a ton. Because they have long term contracts, they don't get the full price.
BUY
Has been performing tremendously and is trading at all-time highs. Likes the energy sector.
BUY
(Market Call Minute.) Would be a buyer, especially in this weakness.
SELL
Has pulled back to much for his liking.
HOLD
Coal is a sector that has been absolutely hot. Any coal stocks should be a Hold. The issue with the big winners is that they are quite extended from the start of their run. Long-term fundamentals for coal continue to look very good. A significant pullback of 15% or 20% would be your opportunity to buy. Sentiment will be negative at that point but it is a much better risk/reward ratio for a longer-term play.
HOLD
In general, he likes coke and coal. Probably the best way to play this is through Teck Resources (TCK.B-T) in Canada. But if you are looking at thermal coal, which this company principally produces, with natural gas prices so cheap, there is incentive to switch out of coal. Wouldn't add to this name.
BUY ON WEAKNESS

Coal space is going to be challenged for a while. No bullish catalyst coming any time soon. The Gas / Coal debate will rage for years. It is making a bottom and you would want to take advantage of pullbacks to accumulate but there is no rush.

COMMENT

He is looking at the coal sector. The major problem with these companies is that they have awful balance sheets. It is hard to predict which will survive. It could also end up having tremendous returns.

COMMENT

A very contrarian stock. A lot of coal companies are on his Watch list. Unfortunately, most of them are in very, very scary positions. The regulatory environment has changed and the attitude towards coal has gotten far more against it. They had a $1.8 billion debt load in 2010 and it is now over $5 billion. Tried to do a deal with note holders but they said No. He sees Chapter 11 for this company, so anybody investing in it is taking a tremendous chance.

BUY
Allan Tong’s Discover Picks Albertsons has been reducing its debt as it pays a 2.67% dividend. Another tailwind are the 1,726 pharmacies that operate within those supermarkets and will adminster the Covid vaccine. This should help drive traffic. However, Albertsons' PE has risen from 6.61x in late-August to the current 9.49x. Currently, ACI trades five dollars below its price target of $20.47 as there are four strong buys,10 buys and four holds. Looks like there's still room to run. Read 4 Reliable Covid Stocks and Recovery Stocks for our full analysis.