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Alias Born | 02/05/2008 |
Monday, May 13, 2019 2:14:49 PM
2q 2019/2018:
revenue
rail $1063k/$889k 20% increase
tool $45k/$206k 78% decrease
margin(cost):
rail 17% vs 24% 7% decrease
tool 21% vs 1% 20% increase
2 macro thesis applicable in 2019:
1 production comeback of "high quality coal";
2 trade war inflates price and improve margin
correlation so far:
1 yes,20% revenue q/q jump support the comeback:production of coal is on a move in the Appalachian region;
2 no,shrinkage of margin disproved "trade war inflates price and improves margin".
Is 7% basis cost increase here to stay(83%+ of revenue the new norm) or a temporary hiccup(before backing down to 80%-,historical norm)?how soon we see a 200+ basis point margin expansion??the million dollar question asked again and again.
ps-i can smell it opportunity is near,and "buck" has given his hardest fight waiting for a major margin break,will the macro thesis "trade war inflates price and improve margin" finally materialize and give him the eluded margin expansion he had been seeking since 2016?50/50 chance likely it starts next q.
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