Jayant Bhandari, Private Investor, joins us to focus on the macro picture in both thermal coal and metallurgical coal, as well as a few companies he is reviewing that are offering compelling value propositions. We start off discussing some of the misconceptions about where the energy generation for EVs and the electrification narratives from policy makers is actually coming from, and going to continue to come from. For the foreseeable future that will still involve thermal coal. Then we review that despite one’s preference for power generation, that the demonization of met coal makes no sense as it is crucial for steel manufacturers, and this will come even more into focus as the Chinese economy reopens
Then we have Jayant share some of the coal companies he is reviewing as investable ideas where he is drawn to the low P/E ratios, high cash balances, and solid underpinning of pricing and production.
> The companies he mentions for investors to research are:
- Peabody Energy (NYSE.BTU; US$26): 25% metallurgical coal and 75% thermal coal; P/E of 2; dividend yield ~0%
- Coronado Global (ASX.CRN; A$1.92): Metallurgical coal; P/E of 5; dividend yield 12%
- Whitehaven Coal (ASX.WHC; A$7.30): 5% metallurgical coal and 95% thermal coal; P/E of 2; dividend yield 10%
- Warrior Met Coal (NYSE.HCC; US$38): Metallurgical coal; P/E of 5; dividend yield ~0%
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