Member Info for Unglove

CBM rising and falling according to general changes in coal companies. Very volatile still according to wider market concerns. We need some news from CBM - contracts for CLN and what is happening with strategic review.

Impossible to put a realistic valuation on CBM in this market. WTN alone & just for this year's profit gives CBM about 75p per share...

Crashed to 33p! 340 to 33p in a matter of months. WTN is earning C$1m profit per day and CBM owns 46%. CBM owns 100% of CLN which should be bringing in some profits too plus it owns a producing gold mine. The distressed selling and panic is relentless - there is even some talk of US stock market being suspended for a few weeks!

Very jealous - think that should be a good buy - hopefully you will know b4 xmas.

43p for 87million WTN shares, CLN (with 2.5mt pa), part of EBG, AGD etc - not a bad price! WTN has money too. Some rumours that WTN may buy CBM before year is out.

Trough today.

DJI up by >4%, WTN up, so CBM may well go back above 60 tomorrow. However, WTN underperforming relative to other coal stocks - probably concerns remain about high labour costs impeding profit margins.

DJI = Dow Jones Index. Suspect this will be another volatile week. I wonder how many will follow Warren Buffett's recommendation of buying back into equities....

Recent broker recommendation is still a buy for CBM and revised expectation of more than £2 which is not bad considering global events. DJI shooting up atmo...

Looks like this week might not be so grim after all - if Dow Jones index futures look good or opens up this afternoon then might be a good week for CBM.

Investors who bought protection against a Lehman Brothers default in the credit default swaps market have little to worry about getting paid on Tuesday, when an estimated $8 billion in cash payments on Lehman CDS come due. Analysts at Citigroup and Barclays Capital said market fears about the Oct. 21 date have been overstated. “This is more of a slow process, and people will have had to come up with the money long before the settlement date,” said Michael Hampden-Turner, a Citigroup credit strategist. The standard practice in the CDS market is that hedge funds and other counterparties must adjust collateral on a daily basis as the value of a contract changes. As Lehman CDS fell in value, before and after it filed for bankruptcy, protection sellers would have had to provide increasing amounts of Treasury bonds or other cash-like investments as collateral for those contracts. “The mark-to-market on the CDS is margined daily as a credit event draws near, and that mitigates a large, lumpy payment at the end,” said Peter Goves, another Citigroup strategist. In the Lehman case, the largest collateral payments would have been required in the four or five days following the bankruptcy filing in mid-September, when spreads on senior debt widened from around 700 basis points on the five-year contract to around 7,000 basis points, based on the then market view of an estimated 30 percent recovery, Hampden-Turner said.

Good luck - the timing is a guess! So it is up to you...

Best place for live prices is on the ADVFN thread - go to the free bulletin board - WTN and it has a live graph although you may need to refresh page periodically. WTN results aren't out until mid-November - but they have posted today that they expect to sell around 3mt at an average of around US$275 and I would expect labour costs of around US$100 per ton - so expect big profits even after tax. They are expecting nice contracts for next year too and a bigger production - so the current PE of 1 is bizarre but must relate to distressed selling and panic IMHO. The Lehman event is a wider market event - if WTN starts picking up on Tuesday evening then maybe a good day for CBM on Wednesday. There needs to be some event to signal investors to come back into the market. The US coal market prices seem to be holding so could be good for CLN part of CBM in its contract negotiations for next year. We need some news from CBM soon.

My guess is that the bottom has been reached but there is distressed selling from hedgefunds and I'm not sure how long that will continue. I wish I hadn't bought back in earlier this week and if I had the opportunity again I might wait until Wednesday next week and then buy quickly depending on what happens with WTN the previous evening on the TSE - all to do with Lehman... http://seekingalpha.com/article/99619-lehman-s-cds-mess-who-s-on-the-hook Alternatively you could consider the market is stuffed and will take years to recover and stay away from investing except in the bankruptcy industry and in shorting businesses going to the dogs.

Wider market has crucified mining stocks. There has not been much drop in coal prices yet but the bailout for the credit crunch seems to have been too little too late. I would think that there is a massive amount of shorting going on as well as financial funds/ PIs selling due to loss of liquidity or sheer panic. Economic picture looks increasingly dire so the expectation is that coal price will plummet rapidly. I fear that we have still not seen the bottom. WTN will have a lot of profit this year which is the only reason we are still in double figures. The worst scenario is probably 45p - based on WTNs profit this financial year and that subsequently WTN, CLN, EBG etc are worthless! I bought back in with sp in 50s but am already feeling very worried. If you stayed in all this time then probably not much point in selling.

This is the lowest for the sp so far this year - but it could still drop further. Some news on Bloomberg about coal shipments not happening due to credit crunch and WTN is dropping further. This may go under 60p and possibly lower if there is any more bad news on its way. Exceedingly good price for these shares but would you want to buy in this market?

WTN next quarter results should be due around mid-November. With its (WTN) current sp of £1 then PE after tax should be around 1 so seems unlikely that it could go much lower. CBM own 87m WTN shares - so if discount that by 40% (!) then value per CBM share is about 50p. Then add in for CLN etc etc - so it must be near to bottom now.

sp is 76.5 as I posted previous comment - LSE sp seems to have got stuck at 83.25

My guess is that this is at or very close to bottom - as long as we don't get complete market meltdown.

Error in that last post: WTN PE ratio should be around 1 based on 2008-9 earnings.