Thank you for another coal update! Keep ‘em coming!
> I never thought I'd find that again, where it's this kind of anomaly where the guaranteed cash flows are exceeding the market cap
I love Consol and AMR but I’m not sure I agree with him. That was certainly the case when Consol and AMR were trading at about $20 and $45 respectively in January 2022, or even when Consol was traded at $50 in March 2023, but at current share prices it might take many years before either company earns its market cap, and that will depend on coal prices.
Btw NRP has been heavily buying back warrants and preferred equity the past few months. They are even more aggressive in cleaning up the capital structure than I anticipated. I appreciate they’re buying back warrants before the stock price increases too much. By mid 2025 they could have completely repaid the debt, prefs, and warrants, and trade at 3-4x EPS and FCF.
I’m baffled that the partnership is so ignored (besides by you and the coal trader). On the last CC not a single analyst asked a question.
You could be right about AMR and CONSOL at present prices. Like we alluded to, we haven’t run those numbers. Also, we don’t know when exactly Pabrai made the observation he mentioned.
Completely right about NRP. Haha, we were also kinda surprised when NRP’s last call had no questions. But we are glad NRP continues under the radar for the time being.
Although those are impressive holding percentages that we see via 13F I do believe they are not telling us the whole story as I believe (if I’m not wrong) Mr Pabrai also has holdings outside of USA , which would make the whole portfolio % a lot different... correct me if I’m wrong
I really wish AMR/CEIX/NRP would fly under the radar for years, because then we can just retire on that free cashflow. Imagine being able to buy a good (great for NRP) business at 3-4x (or even 2x earlier in 2023) free cashflow!
This is the exact kind of places Buffett/Munger will put in money in their early years. In fact, Charlie did that with Belridge Oil, which netted 30x in a few years.
Another one I'm looking at is Mitsui Matsushima (Tokyo: 1518) in Japan. Definitely not a buyback monster like AMR/CEIX, but it's the only one I know trading at 0.5x book and 1.5x EV/EBIT. Only concern is their shifting from coal to consumer/industrial goods via M&A. I'll let you know if there's anything worth digging!
Thank you for another coal update! Keep ‘em coming!
> I never thought I'd find that again, where it's this kind of anomaly where the guaranteed cash flows are exceeding the market cap
I love Consol and AMR but I’m not sure I agree with him. That was certainly the case when Consol and AMR were trading at about $20 and $45 respectively in January 2022, or even when Consol was traded at $50 in March 2023, but at current share prices it might take many years before either company earns its market cap, and that will depend on coal prices.
Btw NRP has been heavily buying back warrants and preferred equity the past few months. They are even more aggressive in cleaning up the capital structure than I anticipated. I appreciate they’re buying back warrants before the stock price increases too much. By mid 2025 they could have completely repaid the debt, prefs, and warrants, and trade at 3-4x EPS and FCF.
I’m baffled that the partnership is so ignored (besides by you and the coal trader). On the last CC not a single analyst asked a question.
You could be right about AMR and CONSOL at present prices. Like we alluded to, we haven’t run those numbers. Also, we don’t know when exactly Pabrai made the observation he mentioned.
Completely right about NRP. Haha, we were also kinda surprised when NRP’s last call had no questions. But we are glad NRP continues under the radar for the time being.
Gotcha. I assumed he had made the observation recently.
Yeah the longer it flies under the radar the more they can buy warrants fairly cheaply!
I apologize for the spam, but just noticed that yesterday an NRP director bought 3,000 units for $222k: https://ezinsider.washingtonservice.com/ShowForm4.aspx?form4GID=08EA165CD26E40688A6E724F211EB400&ls=blmdb
Spam about NRP is never spam. Thanks!
Although those are impressive holding percentages that we see via 13F I do believe they are not telling us the whole story as I believe (if I’m not wrong) Mr Pabrai also has holdings outside of USA , which would make the whole portfolio % a lot different... correct me if I’m wrong
You are totally correct. The vast majority of his investments are outside the US right now. Turkey is one example.
Our point isn’t so much that he’s putting all his money in coal. It’s that, out of everything in the US, he only put money in coal.
Thanks for helping us clarify this, YZ! 👍
Totally that is why I didnt want to take away from your point, its a great point! Just wanted to clarify for other investors.
I really wish AMR/CEIX/NRP would fly under the radar for years, because then we can just retire on that free cashflow. Imagine being able to buy a good (great for NRP) business at 3-4x (or even 2x earlier in 2023) free cashflow!
This is the exact kind of places Buffett/Munger will put in money in their early years. In fact, Charlie did that with Belridge Oil, which netted 30x in a few years.
Another one I'm looking at is Mitsui Matsushima (Tokyo: 1518) in Japan. Definitely not a buyback monster like AMR/CEIX, but it's the only one I know trading at 0.5x book and 1.5x EV/EBIT. Only concern is their shifting from coal to consumer/industrial goods via M&A. I'll let you know if there's anything worth digging!
We also wish these companies would stay low for a while. But alas. We can only work with what we're given and stay alert for opportunities.
Yeah, let us know what you find in Mitsui Matsushima. Thanks!