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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The information contained in this article is provided to each recipient on the following basis: this article has been produced by Katana Asset Management (KAM). This article does not purport to contain any information that the recipient may require to evaluate KAM’s performance KAM is the holder of Australian Financial Services License No: 288412. none of KAM, Katana Capital Ltd, their respective directors, officers, employees advisers or representatives (collectively the representatives of the company/license) make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this article and nothing contained in this article is, or shall be relied upon as a promise of representation, whether as to the past or the future. except insofar as liability under any law cannot be excluded, the Beneficiaries shall have no liability arising in respect of the information contained in or not contained in this article. statements in this article are made as of the date of this article unless otherwise stated. this is a general article only and it is not a recommendation and there is no consideration of the personal circumstances of any person;under no circumstances should this be taken as financial advice.

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Romano  Sala Tenna
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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