Peabody Energy Corporation Surges; Balyasny’s Zann Picks BTU As A Value Play

Peabody Energy Corporation Surges; Balyasny’s Zann Picks BTU As A Value Play

Christian Zann, a partner and portfolio manager at Balyasny Asset Management, picked Peabody Energy as a value play in the coal industry. As a result, the stock price of the company increased almost 7% to $5.40 per share around 1:41 in the afternoon in New York.

During an interview with CNBC on Tuesday, Zann explained that coal is a relative low capital intensive business while shale producers need to spend a significant amount of money to drill new wells to maintain their production base. He noted that the decline rate of the average shale producers was about 40%.

ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics

Investing Greenhaven Road CapitalADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more Read More

In addition to Peabody Energy, Zann likes Schlumberger, Halliburton, and Marathon Oil. According to him, Balyasny Asset Management is trading the stocks of these three companies very actively.

He added that late last year, the firm reduced its service positions because of declining oil prices and decreasing customers’ cash flows as well as the diminishing ability of service producers to make money.

Peabody Energy completes tender offer of senior notes

Peabody Energy completed the previously announced tender offer to purchase for cash any or all of its 7 3/8% senior notes due 2016 with an aggregate principal amount of $650 million.

According to the company, after the expiration of the early tender offer period on March 13, an additional $1,228,000 principal amount of notes were tendered and not validly withdrawn.

Peabody Energy said the total principal amount of all outstanding notes tendered and not validly withdrawn were $566,879,000 during the deadline on March 27 at 11:59 P.M. in New York. The amount represents 87% of all of its outstanding notes.

Short interest in Peabody Energy increased

The number of investors with short interest on Peabody Energy increased to 65,317,535 shares as of March 13, an increase of 7.4% from 60,791,431 shares on February 27, according to report from Stock Ratings Network.

Analysts at Deutsche Bank recently recommended a Hold rating on Peabody Energy with a price target of $6.00 per share. On the other hand, analysts at Bank of America downgraded their rating on the stock to Underperform and lowered their price target to $5.00 per share.

The shares of Peabody Energy traded between $4.70 and $19.63 per share over the past 52-weeks. The company lost more than 68% of its stock value over the past year.

No posts to display