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From a fundamentals point of view, PER, divi etc this looks a bargain. This is, it looked a bargain at 60p, 50p, 40p and now, unbelievably, it’s dropped into the 30’s. The divi money money still hasn’t shown itself either. What is going on here?
This share kind of reminds me of when, in April 2000 I bought shares in BAT. The price had dropped to £2.54 and they were paying out 24p/share divi, so getting on for 10%. Labour had just banned smoking inside pubs, tech / telecoms were all the rage (but were now starting to crash) and people were saying that the *** companies were finished. It never happened and sales kept increasing. BAT has been one of the FTSE best performers over the last 20 years. The debate about coal being finished is similar to what many journalists were saying about tobacco all those years ago.
What about a manager buyout either here or at LAS? After all, the company will be (potentially) sitting on a huge cash pile after a bumper year and M Heller is no longer around having passed away at the start of the year.
With the prospect of a slowing of U.K. interest rate rises as a result of concerns about the banking system, strong demand for London rental properties (see Foxtons recent results) and the possibility of a little cash windfall if Bisi announce a one off additional divi, which has not been priced in yet, LAS looks like an interesting punt…
Did Europe over buy coal in a panic last year? There was a comment somewhere that the U.K. government bought a “strategic” supply of coal which has been sat at Immingham. It’s now being sold at a loss as they no longer believe that they will be needing it.
Unfortunately we have a long 2 month wait before we find out. These guys are not known for endless PR so I don’t expect that we’ll hear anything until results. I seem to recall that the board have options that can be exercised if the share price is above £3.52…
Edward, I guess that both here and at Bisichi there is no dispute that the upcoming figures are going to be huge because of where the coal price has been over the last year. The recent price weakness can only be due to looking ahead to where the coal price is now and how much it’ll reduce the profits.