Hi Chris,
Coronado Resources (CRN): The company estimates an average mining cost of approximately $US100 per metric ton for fiscal year 2025. In the first quarter of 2025, U.S. coking coal prices have increased by approximately 7% from the previous year, reaching $US76 per ton and there lieth the issue. As of December 31, 2024, CRN reported a closing cash balance of $US340 million hence they are ok for now but coal prices need to improve for CRN. We suspect the recent rout in SP is more to do with index selling, the stock lost it’s place in the ASX 200 on the rebalance that happened on the 24th March.
Calix Ltd (CXL): This environmental technology company, which has endured a very tough few years as the market focused on profitability. They already generate revenue, reporting a 30% increase in product and services revenue in 2024, bit from a very low base. It’s still a very interesting business and insiders were buying last year but we would rather see some green shoots before reconsidering it.
Platinum Asset Mgt. (PTM): Unfortunately Regal (RPL) walking away in December told a tale at the time but back around 60c, it is sort of interesting. However, Regal has also fallen sharply, and the rationale for them, would have been about using higher valued scrip to buy lower valued scrip, and this no longer stacks up. We would be very surprised if Regal revisited this deal.
More broadly, for a fund manager, performance is their life blood. Without it, investors pull FUM which has been happening at PTM for many moons. With a market cap of $350 and FUM of $11bn there is some value there, however, if we compare it to say Magellan which manages nearly $40bn, their market cap of $1.4bn roughly equates, however, MFG have ~$500m worth of principle investments and cash on their balance sheet, which when we strip those out, makes it more attractive, in our view. As an aside, RPL manage $15bn, with a market cap now of $800m, but they have strong performance. If that were to fade, we can see RPL continue to trade down as well.
