Walter Energy Soars Nearly 30%
Walter Energy (WLT) is a leading met coal pure play not only in the US but in the world. The stock is up nearly 30% this morning on news of a potential bid from Anglo American at $120 share. While yesterdays closing price of $75 does make a $120 bid appear attractive one needs to step back and realize that the stock traded over $130 as recent as the end of July. Not many long term investors would be willing to take such a low price. This stock along with our favorite met stock, Alpha Natural Resources (ANR), and the sector have just been crushed with the fear of a global recession. Ironically the main growth drivers of China and India don't appear to be weakening much at all. The assets of ANR and WLT remain just as attractive as it did back in July. WLT has a 52 week high of $143.76 and I'd expect any accepted offer to exceed that price. ANR appears more attractive with a much larger met coal reserve base. The stock also remains over 50% below its 52 week high of $68.0...