Warrior Met Coal - 02/06/24

Chart of the Day: (02/06/24)

Warrior Met Coal

(HCC, NYSE)

ACB: $51.77

Last $60.93

Stop: 65 EMA

• Warrior Met Coal has some of the highest quality matallurgical coal deposits, used in steel production, in the world. 

• Some quick calculation this weekend show me that, while HCC is producing roughly $300 million in Free Cash Flow that number should move to $800 million - $1 Billion once their fully financed Blue Creek Blue development project is finished closer to late 2025. 

• This puts HCC at roughly 3X 2026 Free Cash Flow, or very cheap. 

• I think that means, barring a serious global depression or financial crisis, that HCC could easily be worth 100% more over the next two years.

• Still, two years is a long time away and we will be using the 65 EMA as our stop on this name, after which we'll look for a renewed entry set up.