ARLP:xnas - Alliance Resource Partners LP

Alliance Resource Partners, L.P. is engaged in the production and marketing of coal primarily to utilities and industrial users in the United States. It operates 10 underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. The company also leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and purchases and resells coal. As of December 31, 2013, it had approximately 1.1 billion tons of coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, the company provides mine products and services comprising design and installation of underground mine hoists for transporting employees and materials in and out of mines; design of systems for automating and controlling various aspects of industrial and mining environments; and design and sale of mine safety equipment, including its miner, and equipment tracking and proximity detection systems. Further, it offers ash and scrubber sludge removal, coal yard maintenance, and arranging alternate transportation services. Alliance Resource Management GP, LLC serves as the general partner of Alliance Resource Partners, L.P. The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.

Análise Técnica:



A cotação encontra-se acima da média móvel, tocou na linha de tendencia descendente e quebrou para baixo. Apresentou bons resultados trimestrais o que fez com que a cotação subisse nos últimos dias, seguido de uma pequena correcção quando tocou na linha de tendência descendente.

Análise Fundamental:

PER forward - 9,87
PER indústria - 214,5



Modelo de avaliação futura com EPS do gráfico acima para 2015:



Modelo de avaliação futura com EPS calculado com base nos resultados criados:



Recomendação:

Segundo o ZACKS a recomendação é hold.

A nossa recomendação é compra no suporte 46 dolares (antiga resistência) perto da média móvel de 21 dias.

Defendiamos uma compra na zona de 46 dolares e de facto a empresa encontra-se a cotar nesse valor. Porem, depois de revista a análise não nos parece apropriado devido á linha de tendência descendente que está a forma uma resistência bastante válida.

Correcção brutal nos últimos dias a quebrar todas as linhas de suporte.

ANÁLISE DO SEEKING ALPHA:

Why I'm Considering Adding To My Position In This High-Yield MLP
Dec. 16, 2014 9:58 AM ET

Summary

Alliance Resource Partners has gotten crushed over the past month, along with the sell-off in the broader market.
ARLP is highly profitable and has an excellent management team. Units now trade for 9 times forward EPS and offer a well-secured 6.5% yield.
ARLP has increased its distribution for an outstanding 26 consecutive quarters, and future increases are very likely thanks to the company's low-cost operating structure and excellent balance sheet.

High-yield Master Limited Partnerships are taking a beating right now. Obviously, most of them are in the oil and gas industry, and the carnage rippling through the oil market is taking its toll. This is dragging down high-yield MLPs of all sorts, even though some of them have nothing to do with oil. Coal MLP Alliance Resource Partners LP (NASDAQ:ARLP) is one of these. Alliance Resource has declined in unit price along with the overall market, to its current level of $39, which is a striking sell-off considering it traded at $50 as recently as November. This represents a 22% decline in just one month.

Unit holders (including myself) are obviously dreading a further sell-off, but the market is throwing the baby out with the bathwater in this case. Alliance Resource Partners is an extremely well-run company. It reports higher production and sales volumes with each passing quarter, and has rewarded investors with distribution increases in an amazing 26 quarters in a row.

The sell-off has pushed Alliance Resource's distribution yield to 6.5%, which is the highest level in two years. But investors should view this as nothing more than a great buying opportunity, because Alliance Resource has outstanding fundamentals that make it an attractive pick for both value and income investors.
Record performance driven by increased production, cost cuts

Alliance Resource Partners has a fantastic business model that is resulting in record performance. Management laid out its strategic advantages in a recent presentation. Alliance Resource is the 3rd largest eastern coal producer with nearly 39 million tons produced last year. While coal has come under pressure from increasing public and regulatory scrutiny in the United States, Alliance Resource remains highly successful. According to management projections, it is on track to deliver 5%-13% EBITDA growth this year. If the company meets its forecast for $750 million in EBITDA in 2014, it will have generated 8.5% EBITDA growth per year over the past five years, compounded annually.

Investors may be wondering how Alliance Resource Partners can produce such impressive growth in light of the fallout in the coal industry more broadly. Indeed, other coal companies like Cliffs Natural Resources (NYSE:CLF), Alpha Natural Resources (NYSE:ANR), and Peabody Energy (NYSE:BTU), are reporting very weak earnings. In fact, all three lost money last quarter. Cliffs Natural lost a whopping $5.9 billion last quarter, due mostly to impairment charges. In the same period, Peabody Energy lost $154 million from continuing operations. For its part, Alpha Natural lost $185 million last quarter.

Coal companies are having a hard time maintaining consistent profitability. It is becoming increasingly difficult to build new coal-fired plants, and demand from end users such as utilities has dipped in recent years due to the rise of natural gas in the United States. In order for Cliffs Natural, Alpha Natural, and Peabody Energy to become profitable once again, they will need to drastically cut costs and shutter plants, which is a painful process that they are still going through. But Alliance Resource is getting stronger with each passing quarter. Revenue increased 6% last quarter, due to higher sales volumes of coal as well as higher prices per ton sold. At the same time, Alliance Resource reduced operating costs per ton by 2.6%. Earnings per share soared 50.6% year over year, to $1.13 per unit.

There are several reasons for Alliance Resource Partners' strong fundamentals. First is its low-cost operating structure. Alliance Resources' mines, in the Illinois Basin and Appalachia, are positioned close to its regional customers. This has allowed for great improvements made in operating costs. For example, last quarter Alliance Resource cut operating expense per ton at its Tunnel Ridge Longwell development by 25% quarter-over-quarter. Meanwhile, production is set to increase there by 62% in 2014, from the previous year. In addition, Alliance Resource has a strong balance sheet which provides an extra cushion. The company's debt-to-EBITDA ratio stands at 0.97, which is a good level for an MLP.
Sell-off provides a great opportunity

Due to the sell-off taking place in the broader market, Alliance Resource is now down to $39 per unit. At this price, units yield 6.5%, which is the highest yield Alliance Resource has offered since 2012. Alliance Resource is a fantastic income play. It has increased its distribution by 11% compounded annually over the past five years. Combined with its 6.5% yield and 11% distribution growth going forward, investors buying in at this level can see their distributions grow by 17.5% assuming reinvested distributions. This is fantastic income potential that should be attractive for income investors. Alliance Resource is also cheap, as units trade for just 8 times trailing earnings and 7 times forward EPS estimates. This is a significant discount to the broader market multiples.

Alliance Resource is a very well-run company with an excellent management team. The company is successfully navigating the tough environment for coal companies more broadly. Investors should view the recent sell-off as a great buying opportunity. Should Alliance Resource continue to trade below $40 per unit, I will consider adding to my position once I have available funds to do so.

Com uma correção bastante acentuada durante as últimas semanas a ARLP tem um pt de 60 dolares aproximadamente pelo nosso modelo de avaliação futuro.

No grafico do finviz parece formar-se uma head and shoulders invertido, se tal se verificar poderá ter uma subida elevada nas próximas semanas.

No nosso ponto de vista, a cotação parece ter atingido uma zona de suporte bastante válida.
Indicadores técnicos que o validam no gráfico mensal é a correcção no 38,20 do fibonacci (onda mais comprida do gráfico), bem como correcção 50 fibonacci (onda mais curta do gráfico).
Para exemplificar deixamos o gráfico mensal com a onda mais comprida e correcção de fibonacci:

A nossa recomendação é de compra tendo em conta o que foi dito no post anterior.

Compra nos 39,50 dolares com price target de curto prazo nos 43,50 dolares.

Possivelmente iremos abrir uma posição na carteira.

Coal stocks could be near a bottom, J.P. Morgan team says
Feb 26 2015, 14:45 ET | By: Carl Surran, SA News Editor [Contact this editor with comments or a news tip]

J.P. Morgan analysts see some encouraging signs for coal (NYSEARCA:KOL), which would be good news for companies such as Peabody Energy (BTU -5.7%), Cloud Peak Energy (CLD -5%), Alliance Resource Partners (ARLP +0.9%) and Foresight Energy (FELP -1.2%).
Coal equities have bounced off lows, the JPM crew says, which meshes with its belief that the greater financial challenges faced by oil and gas E&Ps should reduce natural gas supply and help coal prices later this year and into 2016.
JPM has Overweight ratings on the two MLP coal miners ARLP and FELP, which it expects to benefit as the gas market tightens in 2016 and with the added attraction of yield in a yield-starved world; BTU and CLD enjoy stronger balance sheets, which should see the companies through what could still be a sloppy coal market in 2015.
Alpha Natural Resources (ANR -6.9%) and Arch Coal (ACI -4.3%), however, acquired so much debt that their equity effectively has become primarily an “option" on fluctuations in the coal market, the analysts say.

Aqui está o sector em que insere a ARLP.

As recomendações não se tem validado, a empresa parece estar numa tendencia de descida no medio longo prazo pelo gráfico mensal. Vamos reavaliar a empresa tendo em conta os resultados para 2015.

Tendo em conta, uma margem liquida final de 17% (semelhante á de 2013), a empresa tem em 2016 um justo valor de 50 dolares aproximadamente. Em 2015 espera-se uma quebra de vendas, mas uma ligeira recuperação na margem liquida em 2016, com EPS a crescer para 4 dolares por acção.
Está desvalorizada embora num canal descendente de medio longo prazo.

Neutral

Factor negativo, quebra no free cash flow em 2014 e redução da margem liquida. Necessitará de mais financiamento ou diluirá capital em bolsa (embora não costume diluir).

Se a cotação suportar no retracement do 61,80 do fibonacci de acordo com o gráfico, pode estar a formar uma onda 5 de elliot. Considera-se um price target nos 60 dolares aproximadamente, embora fique um pouco acima do nosso jv do modelo de avaliação (50 dolares).