Walter Energy, Inc. (WLT $58.75 -$3.19 (-5.15%) is a producer and exporter of metallurgical coal for the global steel industry and also produces steam coal, coal bed methane gas (natural gas), metallurgical coke and other related products. The Company operates in three business segments: Underground Mining, Surface Mining and Walter Coke. They currently have a Market Cap of 3.67B
Company related News:
Thursday, December 15, 8:38 AM Walter Energy (WLT) +3.5% pre-market following a Daily Mail story that the coal producer could be a takeover target by Rio Tinto (RIO) or BHP Billiton (BHP). Global miners are scrambling for coal assets, and analysts speculate Walter's takeout price could double its current ~$60/share.
** BHP Billiton Limited (BHP is a diversified natural resources company. The Company operates nine customer sector groups (CSGs): petroleum, aluminum, base metals (including uranium), diamonds and specialty products, stainless steel materials, iron ore, manganese, metallurgical coal and energy coal. They have a Market Cap of 199.46B
** Rio Tinto plc (Rio Tinto) is engaged in minerals exploration, development, production and processing. The Company’s product groups include aluminum, copper, diamonds and minerals, energy, and iron ore. Its major products are aluminum, copper, diamonds, coal, iron ore, uranium, molybdenum, gold, borates, titanium dioxide, salt and talc. They have a Market Cap of 28.28B
Wednesday, November 2, 6:06 PM Walter Industries (WLT): Q3 EPS of $1.21 beats by $0.09. Revenue of $690M (+49% Y/Y) misses by $32M. After posting Q3 revenues that fell less than expected. Profit still managed to dip 44% Y/Y, as production problems due to heavy rains significantly weakened output, but were mitigated somewhat by higher coal prices. Operating margin also imploded, down to 21.5% from 44.8%, as overall costs more than doubled.
Outside related News:
Friday 9:06 AM Patriot Coal (PCX) -6.6% pre-market after saying it will cut production of metallurgical coal used to make steel due to weakening demand. PCX will idle some mines at its southern West Virginia operations, but did not say if it would lay off any workers. More details will be provided when it releases Q4 results on Jan. 31.
Friday 10:13 AM Patriot Coal's (PCX -6.8%) warning triggers a broader sell-off in coal stocks. ANR -7.6%. BTU -3.3%. CNX -3.8%. JRCC -7.6%. ACI -6.9%. The fact the warning was related to the production of high-end coal used for steel making is likely to raise fears of slowing global industrial output.
Per GOOG Finance these two companies are not related companies, which I think it strange, but as with all data, its is a good as the input. Well this bring us to why I like this as a swing trade and we will be looking at the 5 min chart with 3 days of data for some answers.
Viewing the 5 min chart it appears that WLT has made a double bottom pattern (1/11/2012 and 1/13/2012); we want this to hold. Price was taken to the downside, on Friday's news compounded by the S&P Euro Downgrades games of other countries. If there is more games, that could bring us to a third attempt to the 58.17 area, maybe. This is a swing trade.
WLT (Price Target +$60.00) +$2.00 from Friday's close.
WLT (Stop Loss -$56.63) -$2.12 from Friday's close.
****There has been some addition news on this this company, which came in after hour.
WLT - Walter Energy (WLT $56.55 -$2.20) Updates Production Outlook and Announces Executive Appointments..
They provided guidance that 2012 met coal production will be between 11.5 million and 13 million metric tons. Also, Walter Energy, Inc. (Walter) commented on fourth quarter results and announced that it has made three executive appointments. Given this combination of factors, Walter estimates that fourth quarter 2011 financial results were below the low end of its prior guidance. As noted above, actual financial results will be disclosed at end of February 2012.
