Fording Canadian Coal Trust (Inc Trust)…

Fording Canadian Coal Trust (Inc Trust) (FDG.UN.TO)

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2 watching

WATCH

Sold this a number of months ago. Has been some weakness in the underlying price of coal as well as problems with production, shipping, etc. Longer term, coal is an interesting play and looking to get back in.

HOLD

Pretty generous yield. Have cut their payouts. There are volume problems with the coal industry. Have some good orders on the books. Hoping they can hold their 11.7% payout where it is.

BUY

Stock is dropped 20% over the last few months and they cut distributions. It still gives a 9.5% yield. Caterpillar could not get enough truck tires which created a problem. Clean, low sulphur coal will be in demand in Asia.

WEAK BUY

Likes this company because there is some modest profit growth. Could see 20% appreciation in 12 months. Not the strongest name in the trust area. Have cut their distributions.

DON'T BUY

Will be announcing their distribution in the next day or two and expects it will guide a little bit lower because of lower coal volumes. This has been priced in. Prefers playing coal through Westshore Terminals (WTE.UN-T).

DON'T BUY

Contracts coming from the Chinese have been weakening. Earnings are going to look a little softer.

DON'T BUY

Thinks metallurgical coal prices will go down to $95/99. Have been hit by a lot of cost increases. Would be more interested if it fell to the $30 level.

SELL

Renegotiated contracts resulted in lower coal prices. To play this market, he would prefer Westshore Terminals (WTE.UN-T) which is a little more stable.

WAIT

Due to technical problems, shortage of tires, shipments would be down. Since then there has been some weakness in offshore markets. Australians may be back in. Yield is over 14%. If it weakens more, would consider buying.

WEAK BUY

Looking at energy consumption and pricing in China, coke is declining in price. This is an indication that the prospects for meteorological coal are weak rather than positive. He treats this as a trading vehicle and is getting interested when it is below $38.

BUY ON WEAKNESS

In the high $30's could be a good buying opportunity. A great company with good long-term prospects, but the valuation could be a little bit better.

DON'T BUY

Has been reducing his holdings in light of their rising costs. It looks like there is a surplus of coal right now. Their customers, especially the Chinese, are turning back orders.

DON'T BUY

There’s a real demand for metallurgical coal. Fairly fully priced at this level. From this point on, there’s going to be a real fight as to how the price can be maintained. Would take some profit.

DON'T BUY

Because it is in the index, some of his funds have to include this. Sold his active positions. Feels the high price of coal is behind us now. Expecting higher freight costs.

COMMENT

Ran into some problems when they couldn't get tires for their trucks. You really have to have a call on the long term price of coal. Volatile.

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Fording Canadian Coal Trust (Inc Trust) (FDG.UN.TO)