HCC is a at the cusp of a major uplift in production, around 70% growth from what will be one of the lowest cost met coal mines on the planet. Sustaining capex will be minimal going forward and the company could be earning close to a billion at normalised earnings. And all on a 3.3bn stock. Not bad right, clearly I prefer it with a 40 handle, but even here its still nice. Especially if the industry forecasts of a major supply deficit looms in the years to come and these met coal producers produce gross margins like a SAAS company.
I was about to pull the trigger on this one for my the folks account when the stock was low 40s, I even sent the msg to send money in. But 2 hours later the Chinese news came out that they'd stop flooding the steel market. And HCC went on a ripper to a 60 handle. Damn thing. Oh well, life goes on. I still love the story here so watch carefully in case of an opening for myself when I have funds available.
Unsure what total upside could be here, but after production is on and we see higher prices one day again, this could be a 3-4x. Not bad at all, but a 2-3x seems more likely. Either way, this stock has a tidy balance sheet, very low on the cost curve, long reserves, good jurisidction, and management has proven capable operators. Alot to like indeed. As I say, I will watch closely and if opportunity beckons, I'll buy.