SunCoke Energy Up 10% In Holiday Week...What's Ahead?
Before selling off last Thursday, SunCoke Energy Inc (NYSE: SXC) stock was on a six-day winning streak albeit on lighter than normal volume.
Despite the holiday week gains, the producer of coking coal and owner of a coal logistics business has seen its shares down 79 percent in 2015 as the coal industry tries to outlast the political and regulatory war being waged against it by a Democratic party that is finishing up its seventh year in control of the most powerful house on the planet.
SunCoke has operating cash flow of $136.9 million and total debt outstanding of $999 million. All of this debt matures past 2019 so there is no refinance or roll risk over the intermediate term.
On December 17, the company’s Board of Directors met and voted to suspend its dividend in an effort to reallocate capital for businesses operations; SunCoke’s management is well known as a success within the industry.
Book value is currently calculated at $4.35 per share, but this is subject to asset write downs as the company grapples with the current operating environment. Cash per share is $1.61 and the price to cash flow is 1.6X. The stock has traded at a four year average of 7.8X cash flow.
Insiders have been trickling in with a purchase valued at $578,000 on 12/14/15.
The stock is 14 percent above its 20 day SMA and 8 percent below its 50 day SMA; it’s currently trading near its upper Bollinger band of $4.02.
Coal should begin to trade off the election front-runners and with a share price that’s 11.5 percent below book value, SunCoke may be a decent call option on a Republican victory.
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