Yep, i'm actually 5-10% into margin right now. Absolutely no cash to allocate to anything unless I unload something =P. I try not to exceed 10% margin, so it would take a fantastic opportunity for me to do so.
Q4 is a big mining quarter for SGZH as the ground freezes (It was COLD this winter BTW) and they use dynamite to mine. So the mine that produced 0 tons in Q3 will do very well in Q4. Add that to the fact that Thermal coal prices skyrocketed in November...
Its hard to see a way to lose money in SGZH by buying now and waiting for Q4 results.
Those worried about the Q3 drop have valid concerns, but note what dropped: It was the brokered coal segment (mainly). Given how cheap the company is right now there are way way more catalysts to drive the price much higher than catalysts to drive it lower. We need to remember that this is *not* a consumer discretionary item they are selling, people *need* coal and what matters is how much they produce. Someone *will* buy it at some point, regardless of what happens with a customer.
Consider what they will do with all that cash on their books, we are bound to hear about a use for that cash before too long.
I'm obviously bullish on coal right now and LLFH has gone up significantly since I was buying a month ago around $4.5. I'm bullish on LLFH but I gotta reallocate some cash into the stocks that didn't move, without reducing my coal exposure =)... That means more SGZH.
-Fernando
