@zhanginu gives a preview of his New Hope thesis here:
Valuations models for $NHC, $WHC, along with info on 46 Canadian/N.A. oil and gas companies:
https://docs.google.com/spreadsheets/d/1KqXzZ1I_ln39TYttCeYvrkuzcHNe4sojDrKZ931SZb4/edit?usp=sharing
00:02:00 @zhanginu, the Twiggy Marsdust of #CoalTwitter, takes the stage and introduces his new avatar.
00:05:00 ITP focuses on Aussie microcaps (<$1B AUD) -- illiquid companies where bargains are found, similar to young Warren Buffet's approach.
ITP fell in love with coal because it was so cheap, and you can't live without it. He sees coal prices being elevated through 2025-26.
00:08:00 Because of ITP's banking background, he sees NHC as a strong asset basically run by Soul Pattinson ($SOL / $WSOUF) with high FCF.
Soul Patt was the second firm listed on the Australian Stock Exchange, founded in 1872. The Berkshire Hathaway of Oz? Soul Patt has a strong reputation for capital allocation.
00:12:30 After selling a met coal asset to BHP, NHC was able to cheaply purchase thermal assets.
Soul Patts sees NHC as its cash cow, so those shares are unlikely to ever be sold. You might as well consider NHC's float to be half what you see listed.
00:16:00 ITP touches on New Hope's non-coal assets then focuses on New Acland -- which could seriously increase production.
The New Acland (NA3) mine approval process has taken 15-16 years. ITP sees final approval being given in a month or two.
00:22:30 Because of a tax loophole, NHC's royalty payments to the Queensland Government will be minimized.
What will NHC do with its free cash flow?
00:29:00 NHC issued convertable notes that could be dilutive? Will NHC buy those back? NHC and WHC historically sit on piles of cash during the good times -- NHC pays special divvys and buys assets. Is this time different?
Whitehaven has only recently "gotten religion" regarding buybacks. ITP says the key is New Hope executes a buyback in the near future if it is contemplating one.
00:39:00 Who are the international competitors? Colombia, South Africa and Russia. ITP discusses.
"Joules are joules": Touching on nuclear and LNG as potential replacements.
00:44:30 @ReserveList joins and asks about NHC's hedging out to 2024 and its available shares.
00:48:00 Comparing NHC's approach to hedging v. WHC. Is NHC too conservative?
00:55:00 Steaks and oil? ITP discusses some of the other assets that WHC owns. The company owns valuable land, an export freight terminal, among other things. ... These assets currently valued at zero. ITP looks at the bull/bear case.
1:09:30 Any other energy companies in Australia worth looking at? ITP mentions a few names, but then makes the case for coal over other types of energy.
1:15:30 @InvestInOnG asks about $WDS (Woodside). Canada w/ bikinis? Bruce asks about Oz labor (and real estate).
"Australia is a country of koalas" --
1:28:00 @MC_Mike411 asks about the AUD and how it could affect the investment thesis. @InvestInOnG asks if the real estate bubble pops in Oz, will coal plummet
1:35:00 @mfwarder joins and discusses U.S./Oz coal stock volatility.
Options trading is a big part of the issue. Attn: @timber001! $WHC options are now available! Matt discusses the @zerohedge Tweet about U.S. coal prices reaching new highs. What does it mean for $ARCH and $AMR?
1:44:00 "This is where we get the gift. ..."
1:59:00 Matt concurs with ITP's assessment of $NHC and loves the increased number of #CoalTwitter #COM mashups. ITP gives his 3 "sell" criteria. @JamesHMackay asks about coal and NG storage.
2:10:00 James: Coal not coming from Colombia.
@BugHumbled: Are institutional investors returning to coal stocks? ITP says there are funds that have slightly less than 5% in $WHC, (funds must report the holding at >5%).
2:19:00 Humbled asks about $WHC return of capital plan. @InvestInOnG asks the same of $NHC.
@zhanginu likes the optionality of deciding whether or not to use his $NHC dividends to buy more shares. ... His conclusion is that Whitehaven and New Hope will return 100% of capital to shareholders.
2:26:30 @timber001 asks what differentiates the two Oz coal firms.
Joe asks about taxation of Australian dividends. @JamesHMackay is going to host a Colombian real-estate Space in a few weeks.
2:42:00 The genesis of ITP's Twitter handle. Haute couture @OHare888 changes avatars and discusses Costco. Set yourself on fire? NOPE!
2:56:00 @KNLCBD discusses potential OPEC production cuts. OPEC could be in full control.
3:04:30 @Nandospage and @slocumfortexas join.
3:10:30 @WhiteTundraSG discusses OPEC -- they waited for SPR to be drained before acting. Shubham also discusses Indonesian issues.
Shubham can't be any more bullish right now. Oil up $4.20 this week or $4.69? If you're not juvenile on a Tuesday night, are you even trying?
3:21:00 Shubham describes how he has been maneuvering his portfolio of late.
Deep discusses his strategy of always buying time with options, when discussing $OBE with Shubham.
3:29:30 @sohaibab9 joins. Long $SGY, short Hertz?
High-Energy Tuesday