NHC - New Hope Corporation

[So_Cynical]

I added New Hope Corporation to my portfolio today @ $4.05 ~ i have watched this stock on and off for over 3 years never thinking i would get a chance to get in at a decent price and then on the weekend i spent a bit of time revisiting this stock and came away convinced i wanted in.

• Market Cap = 3.4B
• Debt = 0
• Cash = 1.6B

Essentially valuing the New Acland Mine (Mine life of 30 yrs at 10 mtpa) the Jeebropilly and New Oakleigh Mines (short life span) and the 10 mtpa Brisbane Coal loading Facility http://www.qbh.com.au/ at just 1.8B ~ Now i know the coal price is falling and i know there's only limited potential for new coal discovery's and developments near by, however this company has a wonderful history of finding a way forward, making money and paying dividends.

The top 20 Holders own over 90% and the Gross dividend yield should be in the range of 15 to 20 CPS, so about 3.75 to 5% at today's price and they have all that money so multiple possibly's there, coal demand wont stop, the Chinese and the Indians cant turn the lights off....plus i needed more energy exposure.

10 yr AUD Thermal coal chart and 5 Yr NHC chart below...trading at a pretty much 3 yr low today.
~

 

[dillybag]

Hi Cynical, unfortunately I had bought NHC when there were NHC put itself on the market for sale.
Bought at $6.25 per share. Reading your thread made me think, maybe at the current price I could buy a few too and improve my average price. Thanks for posting.

 

[So_Cynical]

Some News for New Hope today...They decided to spend some money (45 mill) by taking over (unlisted) Bridgeport Energy, NHC already owed about a third of Bridgeport so its not a total surprise, however it would come as a surprise to some...its a bold yet conservative first move into what may prove to be a broader stratagy to broaden New hopes business into a diversified energy company.

http://www.bridgeport.net.au/index.html

http://www.bridgeport.net.au/images/announcement_letter.pdf

Bridgeport Has some nice producing (Oil) assets and some potential for further Oil and Gas discovery's..perhaps even some Shale gas as the eastern edge of the Nappamerri Trough is under the western edge of their lease.

----------------

Also nice to see the SP holding at round the $4 level over the last couple of Months.
~

 

[Smurf1976]

Anyone have any recent opinions on this company and where the share price might be heading? I'm no technical analysis guru, my approach is more fundamental, but to me it looks like it's run out of steam and maybe now heading down again?

So far as I can tell, despite their involvement in oil and interest in finding other minerals it is still almost entirely a coal company in terms of current production and activities. At a guess, the 6000 barrels of oil per month they are producing is probably just offsetting their exposure to oil prices in their coal mining activities. I mean, it's a minor amount of oil production and the company would presumably use quite a bit of diesel themselves (though they'd be selling their oil to someone else to refine rather than using it themselves as such).

 

[So_Cynical]

In for a trade today at $2.30, the second time in the last 5 months for me as i did ok last time back in July/Aug with an entry at $2.83 and exit at 3.03 - i think the SP decline is a little over done considering the blissful state of of the New Hope balance sheet.

 

[notting]

Resources have been enjoying a deluded bounce hinged on a weakening US $ and nothing else.
However New Hope has had absolutely no love.

Probably because of this -

New Hope
agreement to purchase a 40 percent interest in the Bengalla thermal coal mine in New South Wales from a subsidiary of Rio Tinto has now completed.
New Hope’s acquisition of this high quality, low production cost asset to New Hope’s portfolio is expected to
deliver an immediate positive contribution to the group’s operating and financial performance.

Like a well run company it has made a rather great purchase at the bottom of the market. But one has to wonder wether coal is dead and it just makes WHC look like something we should be watching for a turn and a big short.

 

[Zaxon]

I presume this will have a big impact on NHC. I noticed we're down 3.55% on Friday.

 

[jonnycage]

another yearly comp pick - looking to recover from a sea of negatively in 2020

 

[Smurf1976]

My top pick for the 2021 competition.

My reasoning is that whilst I'm firmly in the camp that advocates renewable energy, from a short term perspective I think sentiment's swung too far against coal in terms of the actual market for it and viability of mining it.

That being so, that sentiment has swung strongly against both coal itself and coal mining companies, it would seem a reasonable prospect for a decent bounce especially if the situation improves with respect to international trade in coal a I expect it will.

There are of course a lot of assumptions there, it's speculative.

 

[Dona Ferentes]

New Hope Corporation has slumped to a $55.4 million loss in the first half of the 2021 financial year as lower realised costs weighed heavily. pricing in Australian dollar terms decreased from $97.8 per tonne in the comparative period to $78.8 per tonne in the current period while coal sales for the period were 4.9 million tonnes, down 1.4 mill tonnes.

Revenue fell 34.4 per cent to $405.5 million, dragging the company to a loss. EBITDA fell 61.8 per cent to $81.2 million.

Despite the loss, New Hope still declared an interim dividend of 4¢ a share, down on the 6¢ interim dividend it paid a year earlier.

 

[Ann]

This may be an interesting stock for a little while. Coal futures have done a massive spike up recently and may put upward pressure on the price of the coalers. If this breaks above the 10-year overhead falling trendline and keeps going, using a measured move/swing trade calculation it may get to around $8.50. Time will tell let's see!

 

[Ann]

NHC recently paid a nice fully franked dividend so there is a bit of a price discount happening at the moment. (Buying opportunity?)
I will be astounded if there isn't going to be a lift in its price with the sort of publicity happening about coal demand overseas....

''US Coal Stockpiles Slump To Two Decade Low As Power Plant Demand Surges

Wednesday, Oct 27, 2021 - 06:30 PM

One of the biggest ironies this year is the transition from fossil fuel generation to green energy has created a global energy crisis that is forcing the U.S., among many other countries, to restart coal-fired power plants ahead of the Northern Hemisphere winter. Coal is roaring back this fall but supplies are not catching up with demand.

According to Bloomberg, US coal supplies dropped to 84.3 million tons in August, the lowest level since 1997. "

More here....

ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[Sean K]

Start throwing darts at coal companies, if you haven't already.

 

[divs4ever]

i already have a few , NHC , has only recently gone green for me ( after years of cautiously buying the dips )

WHC has been very profitable , despite the nervousness , i also hold BHP and S32 ( and WEC which has ashed my cash )

take care the shorters love raiding these

 

[Sean K]

i already have a few , NHC , has only recently gone green for me ( after years of cautiously buying the dips )

WHC has been very profitable , despite the nervousness , i also hold BHP and S32 ( and WEC which has ashed my cash )

take care the shorters love raiding these

Yes, need to take care. I do wonder how fundamental a shift it will be in Europe stopping taking oil, gas and coal from Russia. If what we hear in the news is right, then Russia is going to be shut out for some time.

 

[qldfrog]

Interesting: look at first post of this series, in 2012 SP $4.05
Add 10y $3.05 but was $2.5 a week ago,what a looser ....

 

[frugal.rock]

YAL and WHC having a good time out of it...

 

[So_Cynical]

Interesting: look at first post of this series, in 2012 SP $4.05
Add 10y $3.05 but was $2.5 a week ago,what a looser ....

I did sell some in 2019 for 4.40, sold out last year for a dollar something, paid some good divis over the years. overall one of many stocks that was not good to hold over the last decade.

 

[TechnoCap]

I'm only a newcomer to the dirty coal sector but at $1.91 entry recently I'm pretty happy this dirty old girl is performing.
Around $3.10 looks like some resistance from 2019 bottoms?

 

[qldfrog]

YAL and WHC having a good time out of it...

Yes got YAL in system and doing well too.probably not a holding you buy and forget..if there is such thing