Author Topic: NC - Nacco  (Read 3724 times)


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Re: NC - Nacco
« Reply #10 on: September 14, 2018, 10:07:21 AM »

No doubt over time some coal mines will deliver fewer tons, some closed down, is this offset by new contract wins in coal? I don't know. If the current mines only decline on average by 1/3 by 2034, a few contract wins happen between now and then, and aggregates/minerals at NAM continue anywhere near the current pace, this will work out quite well.

On another note, bisti delivered 3.7m tons in 2017. Delivered 1.2 m tons first half 18' and is expected to deliver a similar number for all of 18' vs 17'. Therefore, bisti should deliver around 2.5m tons 2h 18'. Also, per mgmt, should ramp to 5-6 m tons/year in 2019.

Coal/diesel/salaries/inflation are all accelerating of late and affect the contract escalations. This should cause slight margin expansion.

FCF/ev or eps/ev is simply too cheap. Hard to permanently lose capital here and many upside options.


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Re: NC - Nacco
« Reply #11 on: September 17, 2018, 10:43:08 AM »
I agree that this is cheap and like the risk/reward here, I probably just think that the downside is bigger and the upside smaller.  In lignite, losing contracts is painful and I am just not sure how much scope there is for new contract wins in the space.  Lignite production is 65M-70M tons and NC is doing 37M of that, so how many more contracts can they realistically go get.  I think growth has to come from limestone (and any other materials they can expand into). It's just going to be slow as these operations are more limited and provide smaller fees.