OilStockReport
14 años hace
Looks like you were right about that one...
Here's how the stats break down:
Over the past five years, gross margin peaked at 24% and averaged 16.9%. Operating margin peaked at 11.8% and averaged 5.7%. Net margin peaked at 4% and averaged 1.2%.
TTM gross margin is 4.7%, 1,220 basis points worse than the five-year average. TTM operating margin is 0.7%, 500 basis points worse than the five-year average. TTM net margin is -5.6%, 680 basis points worse than the five-year average.
With recent TTM operating margins below historical averages, Massey Energy has some work to do.
OilStockReport
14 años hace
Looks like Massey might see some upside, thoughts?
Massey Energy Company (MEE) - Through its wholly owned subsidiary, A.T. Massey Coal Company, Inc., produces, processes, and sells bituminous coal primarily in the United States. MEE has outstripped the S&P’s 52-week return by 212.63%. The company is trading below analyst’s estimates. MMR has a median price target of $63 by 13 brokers and a high target of $70. On Jan 31, 2011 Brean Murray downgraded the company from Buy to Hold.
fung_derf
14 años hace
Don Blankenship, the outspoken and controversial chief executive of Massey Energy Co. (MEE), said he would retire from the company Dec. 31. The move was unexpected. It ends a three-decade career and sets the stage for a sale of the company.
Company President Baxter Phillips Jr. will succeed Mr. Blankenship as CEO, and Adm. Bobby Inman, lead independent director on the board, will become nonexecutive chairman, the company said. (This story and related background material will be available on The Wall Street Journal website, WSJ.com.)
"After almost three decades at Massey it is time for me to move on," Mr. Blankenship said in a statement. He has led Massey as chairman and CEO since 2000 and been with the company since 1982. But he has come under increased criticism since the April explosion at Massey's West Virginia mine that killed 29 miners.
A person familiar with the matter said Mr. Blankenship's retirement allows for smoother sailing on various fronts, including the company's dealings with government regulators, the lawsuits Massey is facing and the possible sale of the company. The person added that there had been a growing consensus on the board that Mr. Blankenship's ability to be effective was increasingly compromised and that the company would be better served if he stepped down. A Massey spokesman said Mr. Blankenship was unavailable for comment.
Mr. Blankenship, 60 years old, built Richmond, Va.-based Massey into the nation's sixth-largest coal producer. He has pursued a strategy of acquiring reserves of steelmaking coal. During his career at Massey he has courted controversy by taking aggressive stands against government regulation of mining and carbon emissions. But more recently he has been under fire for the April explosion at Massey's Upper Big Branch mine in Montcoal, W.Va., the worst U.S. coal mining disaster in 40 years. He also faced a tough re-election as board chairman next spring, with some shareholders already indicating they would withhold votes for him over their disapproval of the company's safety practices.
Massey's board has been weighing a takeover offer from rival Alpha Natural Resources of Abingdon, Va., that Mr. Blankenship was widely viewed as opposing. His retirement means the sales process for Massey will likely gain speed, said the person familiar with the matter. One question for interested parties was the role Mr. Blankenship would have at the company if it was sold, this person added. His less than enthusiastic attitude toward a sale was seen as a possible complication to a deal.
Now that this question has been resolved, there is a greater likelihood that Massey will be sold or merged with another company, especially if there is a healthy level of competition for the company, the person familiar with the matter said. The person familiar with the matter said Mr. Blankenship's retirement was partly aimed at sending a message to all of Massey's stakeholders of how seriously the company and board take the challenges facing the firm and ensuring prospects for Massey's future.
OilStockReport
14 años hace
In the past month several companies in the coal market have become the subject of Merger and Acquisition speculation. As companies get larger and experience diminishing returns in their core business, they are showing their willingness to utilize their large resource pools to acquire smaller companies in a race to diversify themselves. Given the limited opportunities for meaningful acquisitions, the companies in stronger financial positions, and the willingness to act, stand to gain the most from such activities.
Recently the board of directors of Massey Energy formed a committee to consider options for the company, which could include sale of the firm or remaining independent. Stifel Nicolaus & Co. analyst Paul Massoud noted that the coal miner could draw a price of $62 a share in a hypothetical offer by Cliffs Natural Resources Inc. Massoud thinks Cliffs would be interested to expand in central Appalachian coal development, and has said it would "consider opportunities."
MinnieM
15 años hace
Massey Hires Politically Connected PR Firm
http://blogs.wsj.com/washwire/2010/04/21/massey-hires-politically-connected-pr-firm/tab/print/
April 21, 2010, 5:15 PM ET
The board of Massey Energy Co. – under fire from regulators and shareholders following a deadly accident at one its mines – is getting advice from a politically connected public-relations firm.
Public Strategies, an Austin, Texas-based firm owned by advertising giant WPP, has been brought in by the mining company’s board in recent days to advise it on how to respond to questions about the company’s governance and the board’s general oversight of the company, people familiar with the matter said. An explosion at the company’s Upper Big Branch Mine in West Virginia killed 29 miners earlier this month.
Public Strategies’ principals include Dan Bartlett, a former White House counselor to then-President George W. Bush; Mark McKinnon, a media consultant who worked on Mr. Bush’s presidential campaigns on debates; and Jeff Eller, a former White House aide to then-President Bill Clinton.
Public Strategies also has ties to Massey’s lead outside director, retired Navy Admiral Bobby Inman, a longtime professor at the University of Texas’ Lyndon B. Johnson School of Public Affairs, which is supported by the LBJ Foundation; Public Strategies’ chairman Jack Martin – a longtime Democratic Party hand - is a foundation board member, and McKinnon is a lecturer at the LBJ School.
A Massey spokesman didn’t respond to a call seeking comment. The company’s board is facing calls from some public pension funds to dump Don Blankenship as chairman and take steps to possibly revamp the board’s overall makeup. The board has said Mr. Blankenship has the “full support and confidence” of its members. In a brief interview Tuesday, Inman said he would respond to the public pension funds “in due course.”
MinnieM
15 años hace
Coal disaster company Massey Energy denied time off for miners to attend their friends’ funerals.
http://thinkprogress.org/2010/04/22/blankenship-denies-funerals/
Coal baron Don Blankenship’s Massey Energy has prevented miners from attending funerals of the 29 victims of the killer explosion at Massey’s Upper Big Branch mine in Montcoal, WV. Massey has taken steps to keep up the mining in the grief-stricken community. The “threat of job loss” from Massey’s non-union mines, “be it spoken or simply understood — has created a culture of fear in some corners of Southern West Virginia, where coal is the only real industry, and Massey is king of the hill”:
Massey Energy, the Virginia-based coal giant that runs the Upper Big Branch Mine, has denied time off for miners to attend their friends’ funerals; has rejected makeshift memorials outside the mine site; and, in at least one case, required a worker to go on shift even though the fate of a relative — one of the victims of the April 5 disaster — remained unknown at the time, according to some family members and other sources familiar with those episodes. In short, the company might be taking heat for putting profits and efficiency above its workers, but it doesn’t appear to have changed its tune in the wake of the worst mining tragedy in 40 years.
“They told my husband, ‘You’ve got a job to do and you’re gonna do it,’” the wife of one Massey miner told the Washington Independent’s Mike Lillis, referring to the funerals he’s missed this month for friends who died in the blast. “What else are we gonna do?”
They sure aren't concerned about the workers welfare or even the appearance of common decency if it's true they didn't give time off for funerals.
frenchee
17 años hace
The Best Value in Coal Country
By NAUREEN S. MALIK
THE DARK CLOUD hanging over coal miner Massey Energy could be clearing up.
America's fourth-largest coal company has amassed a great deal of bearish sentiment in recent months due to soft coal prices -- mainly for thermal coal used by electric utilities -- and a pair of environmental lawsuits.
At $21.57, the stock is still down 6% year-to-date whereas the Dow Jones U.S. Coal Index is up 25%.
But concerns about Massey's prospects appear overdone and strong demand for metallurgical coal used to make steel could give some pep to the recovering stock. And right now, Massey is the cheapest stock in its industry based on several valuation metrics.
Massey is posting strong results this year as cost cutting boosts margins. While cold winter could ease the pricing pressure due to high inventories at utilities, depressed coal prices are expected to squeeze out competition and give Massey an opportunity to make acquisitions.
Massey's greatest upside, however, is its metallurgical coal, due to strong global demand for steel. Massey is the leading U.S. producer of this coal, generating nearly a third of its revenues from this source.
Massey is no longer trading at a double-digit premium to its peers or to the Standard & Poor's 500 index. Its shares are trading at a 44% discount to its own historical valuation at 14.6 times estimated earnings for the next four quarters.
At value investor Heartland Advisors, portfolio manager Bradford Evans and analyst Jason Schacht calculate that Massey is also trading at an attractive valuation of 5.5-6 times enterprise value-to-2007 estimated earnings before interest, taxes, depreciation and amortization.
They compare that to pricier EV/EBITDA valuations of 13-14 times at Peabody Energy, 12-13 times at Arch Coal, 9-10 times at Consol Energy, 8 times at Alpha Natural Resources.
"The multiples for Massey Energy are very attractive and as value investors that's really what gets us excited about this stock," says Schacht. "If we can find an industry leader trading below market multiples, that's something buy."
Massey shares could gain 35% or double in the next 12 months, he estimates.
Despite weakened coal prices and higher costs to meet regulatory standards, Massey Chief Executive Officer Don Blankenship told Barron's Online that "you will see" double-digit earnings growth at Massey in each of the next several years. He expects to raise production 20%-35% over the next five years as other Central Appalachian miners cut capacity.
Massey is the region's leading coal miner, producing more than 42 million tons of coal a year out of West Virginia, Kentucky and Virginia. It has more than 2 billion in reserves. Thermal, or steam, coal makes up two-thirds of Massey's production, with metallurgical coal making up the rest. Massey exports 8% of its production to Canada and another 15% mainly to markets around the Atlantic.
Robust growth catapulted Massey shares from $5 in late 2003 to more than $55 two years later. It tumbled last year after a mine fire and high labor turnover slashed Massey's 2006 earnings to 31 cents a share, from 83 cents in 2005. Analysts surveyed by Thomson Financial expect Massey to earn $1.53 this year.
About 95% of U.S. coal is used to generate electricity and last year's warm winter has resulted in inventories that are 19% ahead of their five-year average at utilities, says Ann Kohler, managing director of energy at Caris & Co. Demand heightened by the 2005 hurricanes that raised high natural gas prices pushed Central Appalachian thermal to around $65 a ton in early 2006. It recently traded around $45.
At a Glance:
Massey Energy (MEE)
Stock Price: $21.62
52-Wk High: $30.73
52-Wk Low: $16.01
Market Cap: $1.75 billion
Est. 2007 EPS: $1.53
2007 P/E: 14.6x
Est. Long-Term EPS Growth: * 22%
Est. ('07/'06) EPS Growth: 493%
Revenue (trailing 12 months): $2.24 billion
Dividend Yield: 0.7%
Chief Executive Officer: Don L. Blankenship
Headquarters: Richmond, Va.
* Based on analyst estimates looking ahead three to five years.
Sources: Yahoo! Finance, Thomson First Call, Thomson Financial/BaselineBlankenship sees high inventories and low coal prices as a "tremendous opportunity" for growth in the next 12-18 months: these conditions will create opportunities for Massey to acquire distressed miners and reduce labor competition.
Labor turnover has declined to about 13%-15% compared to 30% at the beginning of 2006, says Kohler. This more stable, productive workforce, plus a "modest improvement" on coal pricing should boost Massey's earnings to $1.62 a share in 2008.
Massey's thermal coal production for 2008 and most of 2009 is locked in contracts. Michael Dudas, metals and mining analyst at Bear Stearns, expects these to help Massey "generate good margins" in 2008.
The company has ample cash on balance and additional credit available to fund acquisitions and its share buyback program.
Still, Kohler says, "I like Massey solely due to their metallurgical coal market."
The weak U.S. dollar, high freight costs, tight growth in supplies from Australia due to port congestion, and strong global demand for steel has made "U.S. metallurgical coal very attractive," Kohler says. "This is the first year that they have received inquiries from Asian consumers."
The real overhang on Massey's stock, Heartland portfolio manager Evans says, is the "fear and concern about the potential adverse effects of litigation" for violating the Clean Water Act in a suit by the Environmental protection agency.
Evans denounces the lofty estimates of $2 billion in fines for thousands of alleged violations and says, "I think the market is overreacting."
Massey CEO Blankenship says: "We feel that the government is being unreasonable" and that concerning this lawsuit he is "very comfortable it is immaterial."
Third-party consultants peg Massey's liabilities at $1.5 million to $7 million. Blankenship, whose estimates range from no fines to $1 million, says that Massey could have settled out of court but opted not to in order to set precedence for other cases.
Another lawsuit is trying to rescind permits allowing for mountain-top mining in West Virginia. Blankenship expects the issue to be resolved and says that Massey has the ability to shift to other reserves to shore up production.
Certainly, a further pullback in coal prices, high costs related to regulations and law suits or other economic pressures could derail Massey's growth picture.
However, Bear Stearns analyst Dudas says that so far it looks like that Massey's strong balance sheet, overall consumer demand for metallurgical coal, and the weak dollar offer "some positive catalysts that should help move the stock higher."
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EdF
15 años hace
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