Coal

[Tommy]

$JRCC - An Update On James River Coal's Risk

http://seekingalpha.com/article/1265061-an-update-on-james-river-coal-s-risk?source=email_rt_article_readmore

... "We can draw three main conclusions from this work:

First, the Z-Score would have been useful to predict James River's bankruptcy back in 2003;
Second, the Z-Score would have been useful to show, in May 30 2012, that James River's near-term solvency risk was similar to that of Arch Coal and Alpha Natural Resources and much lower than that of Patriot Coal. This would have been useful both to avoid Patriot Coal's demise, and to take some temporary long trades in JRCC;
Finally, now we can now conclude that James River Coal risk is greatly increased and indeed, if the coal market does not recover, James River might at some point face solvency risk. It would thus perhaps be advisable not to take long trades in it.

On a side note, James River Coal management of working capital still seems sound enough that very near-term insolvency is not yet at hand. Indeed, James River still holds $127.4 million in cash plus $36.5 million in restricted cash. Still, I believe the increased risk at this point should override speculative long endeavors." ...