Stocks On Radar: Walter Energy Inc. (WLT), Golden Star Resources Ltd. (USA) (GSS), And Plug Power Inc (PLUG)
New York, NY – GDP INSIDER – 01/02/2014.
Times are certainly tough for Walter Energy, Inc. (NYSE:WLT) and its peers in the coal producing and export business. For the entire 2014, demand for met coal was in a slowdown as prices grew even weaker. The tough market condition for coal companies is expected to persist in 2015. As such, individual players must find ways to achieve internal adjustments to comply with the market reality.
Walter Energy, Inc. (NYSE:WLT) is expected to focus aggressively on cost cutting so as to boost its liquidity, and also, to survive the downturn. The company might also decide to offload some of its non-core assets to improve its cash position. Walter Energy disclosed cash and equivalents of nearly $615 million at the end of the recent quarter, but it needs more money to escape an adverse impact on its operations in the unfavorable market conditions.
Demand for met coal has declined in key markets such as China. Even the global demand for the commodity has grown weak in the recent times. Prices of met coal have been hurt by excess supply in the market, which makes a cut in production levels necessary to correct the current situation.
Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) recently made key technical filings for its projects at Prestea mine and Wassa, both in Ghana. In the case of Prestea mine, the company disclosed that for the first production, an initial capital of $40 million will be required. Additionally, the company stated that the project is expected to have a life of five years following one year of its development.
In the case of Wassa, Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) said that the project will be funded with existing credit facilities to the tune of $35 million. Additionally, first underground production at Wassa is expected in early 2016. The project has an estimated life of 10 years.
Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) disclosed roughly $36 million in cash and equivalents and the end of the recent quarter. That was down from nearly $43 million in the previous quarter.
Plug Power Inc (NASDAQ:PLUG) had a mixed bag of fortunes in 2014. The company delivered disappointing bottom line performance, and it could not avoid cuts on its growth guidance. As such, the performance of the stock was underwhelming in 2014, but will 2015 be better?
However, beyond the near-term distress, there appears to be rays of hope that 2015 is shaping up to be a good year for Plug Power Inc (NASDAQ:PLUG). The company has continued to attract new orders for its forklift fuel cell solutions from a variety of customers. Additionally, the marker for fuel cell is expected to grow rapidly in the coming years, which gives hope for growth in PLUG.
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