Discovery Capital Increases Ramaco Resources Stake by $164.67 Million
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
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Source: Fool
- Share Increase: Discovery Capital Management disclosed a purchase of 4.18 million shares of Ramaco Resources in Q3, raising its total stake to 5.53 million shares with a market value of $182.21 million, reflecting a significant increase of approximately $164.67 million from the previous quarter, indicating confidence in the coal sector.
- Asset Allocation: Ramaco Resources now constitutes about 10% of Discovery's reportable U.S. equity AUM, making it the fund's largest holding, which highlights the strategic choice in resource allocation, particularly during volatile market conditions.
- Financial Performance: Despite a 28% year-over-year revenue decline to $121 million in Q3, Ramaco's cash costs fell to $97 per ton, with adjusted EBITDA at $8.4 million and liquidity reaching a record $272 million, demonstrating resilience in a challenging market environment.
- Strategic Transition: Ramaco is transitioning to a dual-platform model that includes rare earth and critical minerals development at the Brook Mine in Wyoming, a strategy that not only enhances its market competitiveness but also provides additional optionality for future growth.
Analyst Views on METC
Wall Street analysts forecast METC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for METC is 39.52 USD with a low forecast of 16.15 USD and a high forecast of 50.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
6 Buy
1 Hold
1 Sell
Moderate Buy
Current: 17.380
Low
16.15
Averages
39.52
High
50.00
Current: 17.380
Low
16.15
Averages
39.52
High
50.00
About METC
Ramaco Resources, Inc. is an operator and developer of metallurgical coal in southern West Virginia and southwestern Virginia and a developing producer of coal, rare earth and critical minerals in Wyoming. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. The Company has four active metallurgical coal mining complexes in Central Appalachia and one coal mine and rare earth development near Sheridan, Wyoming in the initial stages of production. Its development portfolio primarily includes properties: Elk Creek, Berwind, Knox Creek, and Maben. It also controls mineral deposits near Sheridan, Wyoming as part of the Company’s initiatives regarding the potential recovery of rare earth elements and critical minerals as well as the potential commercialization of coal-to-carbon-based products and materials. Its Knox Creek Complex includes a preparation plant and 64,050 acres of controlled mineral rights.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
