Centennial Coal (CEY) Update

Submitted by Share Trading on 24 April, 2008 - 14:01

Centennial Coal (CEY) has some stock trading market commentary from analyst Macquarie Research Equities.

Is Coal the New Gold?

As coal prices continue to rise, the commodity is drawing more and more investor attention. This became apparent after Centennial Coal (CEY) released a strong set of March production statistics. In a list results that saw production rise 11.4% ahead of Macquarie Research Equities (MRE), the company is now better placed to produce balanced earnings across all of its production sites. In addition to this the company reported saleable production to also be 9% above MRE’s forecast.

A main driving force behind the results were the record production figures from the companies Newstan Mine. With development work continuing on this mine there is a strong possibility that this may be completed in time to capitalise on other changes in the mine. Further to this the company also announced an extension to another of their major mines lives. The Awaba Mine has been extended another year out to 2010.

With further upgrades announced for FY08, combined with these current strong figures, the company is well place to capitalise on organic production growth initiatives which will lead to higher export tonnage. Despite the positive glow over the company, MRE still has a neutral recommendation over it after the stock has been bought up strongly in the last month leading to a 45% jump. Essentially what has occurred is the stock price has simply caught up to the value of the company. This may very well change if consistently high production continues into the future supported by raising commodity prices.