M&A Value For American Coal Players? (WLT, KOL, CNX, BTU, ANR)
What is interesting is that a Bloomberg report this morning quotes a fund manager saying that Anglo American is not a likely bidder. Go figure.
Elsewhere in more general coal movers, Market Vectors Coal ETF (NYSE: KOL) is up almost 4% at $41.29. CONSOL Energy Inc. (NYSE: CNX), valued at $10.3 billion, is up 4.6% at $45.62. Peabody Energy Corp. (NYSE: BTU), valued at $13 billion, is up 4.8% at $47.85. Alpha Natural Resources, Inc. (NYSE: ANR), valued at $7.3 billion, is up 7.2% at $32.42.
What is interesting is that Walter Energy’s earnings estimates are $10.47 EPS for 2011 and $12.45 EPS. Coal companies usually trade with a sub-market P/E multiple. Still, even if things flatten and the estimates in 2012 only match this year’s estimates then Walter trades at about 8.4-times expected earnings. It pays only 0.6% in dividend yields.
Even after an 18% pop to $88.69 after closing at $74.99 yesterday. The 52-week trading range is $69.33 to $143.76. As with all reports and rumors, none are gospel until a deal is formally announced.
JON C. OGG