Commodity Up 266%; Stock Up….24%!

Romano Sala Tenna

Katana Asset Management

Sometimes we don’t need to write long fancy articles to make a point. Sometimes, a simple graph is all that is required. This has rarely been more true than in the case of metallurgical coal and its only dedicated ASX-listed producer Coronado Global Resources Inc. (ASX: CRN).

There is literally only a handful of companies that mine and export met coal and of these, CRN is the only dedicated producer. This can mean that sometimes the sector flies under the radar. Yet on the latest Macquarie research, at the current spot price, CRN generates net profit after tax of nearly $2.1 billion, versus its current fully diluted market capitalisation of $2.5 billion. Clearly, current spot prices are unsustainable. But the price of met coal would need to more than halve to justify the current share price. 

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Portfolio Manager
Katana Asset Management

Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.

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