Jason DonvilleWestern Canadian Coal Corp.WTN.TOBUYAug 06, 2010
Great company but surprised that it is languishing in the low $4's. Key attraction to this coal company is that they are going to ramp up production faster than anyone else going into 2011-2013. Nice geographical diversification.
He would have taken some off but would have been wrong. Is moving because of the company that is taking it out. Flooding in Australia is going to make things better for Canadian mines.
Possible takeover by Walter Energy (WLT-N). Doubts there will be another offer. If you own, he would suggest you hold on until the deal happens as it could improve.
Has done well because of the general view on metallurgical coal, the outlook from a commodity point of view and its operations. Could use it as a trading stock. Currently not in it but looking for an opportunity.
It has pulled back but is starting to show strength again. If it can break above $6.80 then it is worth buying. Wait until it hits $7. Chance it could drop to $5 otherwise.
Coal market is centred on what is happening in China. Any threat of China slowing down worries him that coal is going to suffer. If you believe in the long-term outlook for steel, demand for coal is going to remain robust. Little too volatile for him.
When playing any of the coal stocks, you are really looking at what the macro environment is going to be. If China and economy does well, coal will do well. He would treat as a trading vehicle because of its volatility.
Chart would indicate it has had an ABC correction so he thinks it has already had its correction. Also, the July low is a little bit above the February low. Thinks the worst is over.