In honor of celebrating Independence Day this month, let's take a trip around our great country.
Kiplinger recently published a slide show highlighting the one stock in each state (plus D.C.) that warrants an investor’s consideration; 51 stocks as diverse as the United States. To view the article, click here.
Why are we sharing this?
Well, three reasons:
- It’s fun. Who doesn’t love a good slide show?
- Idea generation. We’re always interested in potentially valuable ideas.
- We’re quoted on slide 52 for a coal stock that we’re bullish on. That’s right, a coal stock. I know, sounds crazy, but we can back it up.
The company is called Cloud Peak Energy (CLD) and it is headquartered in Gillette, Wyoming. Back in October 2016, we published a blog called “I Ain’t Saying She’s a Coal Digger” in which we profiled CLD and why our contrarian view on coal could be a valuable investment opportunity. Below are some highlights of that piece.
A secular shift in electric power generation fuel has been underway since 2008 in favor of more cost competitive Natural Gas. The price of natural gas has remained low due to local oversupply, no ability to export (until recently), and sluggish industrial demand (until recently)...However, natural gas prices have been on the rise…As a result, power generation from natural gas or coal have become equal, and actually now favor coal over natural gas.
Meanwhile, coal producer equity values have fallen to distressed levels and are trading at a fraction of their net asset values. For most coal producers, such as Cloud Peak Energy, the difference between profitability and losses is mostly a function of volume and price…It becomes evident that this increase in coal volume has become a game changer for coal producer profits and equity values in recent months. Herein lies the investment opportunity.
To read the original blog post in full, please click here.
ABOUT THE AUTHOR
Ryan Thibodeaux is President / Portfolio Manager of Goodwood Capital Management.
Ryan founded Goodwood Capital Management, LLC in March, 2012 and serves as a Portfolio Manager. Prior to starting Goodwood, Ryan was a Partner and Senior Equity Research Analyst with Maple Leaf Partners, LP. Maple Leaf Partners is a long short equity hedge fund started in New York by Dane Andreeff in 1996. In 2003, Julian Robertson’s Tiger Management seeded Maple Leaf and it became what is commonly referred to as a “Tiger Seed.” The firm eventually grew to over $2 billion in assets under management.
To read Ryan Thibodeaux's full bio or other Goodwood team members, click here.