Today is the first trading day of the new year. All indices have shot up after their poor performance late last week. As of time of writing the DJI is back on its march to 20,000, up 0.36% for the day.
In our portfolio we’ve been watching GPP as it climbed dramatically in the new year, back to its price at time of last valuation. This is due to improved earnings predictions – back in line with previous months. We’ve increased our price target for this issue to $25 (up from $23) and expect to close our position sometime this year.
A continued concern is our position in CloudPeak Energy (CLD) which has continued to underperform our expectations for a few days now. Our price target has not changed – and neither has the analyst consensus target but the fact remains that it has fallen considerably in the last few days. The losses we’ve faced have been due to the continued change in this months forecast. We expect no further fundamental movement in this issue until the next earnings announcement in February, when CLD is expected to announce an EPS of between $0.20 and -$0.04. P/E and MRQ for CLD remain extremely low – CLD remains the most profitable of the US Coal producers. As long as they post some positive earnings this quarter we can expect price to pass $6.20 immediately, and hit our price target of $8.00 sometime in the next quarter.