Alpha Metallurgical Resources (AMR) Stock

Alpha generated a total of $49 million during 3Q2024. The company currently focuses on the extraction of metallurgical coal, which is mainly exported. Only 29% of production is destined for the US, the remaining 71% is exported to various. When we analyze what happened in 3Q2024, we see that the cash generated by Alpha was $189.5 million, higher than the $138.1 million of 2Q2024.

Here is how Alpha Metallurgical (AMR) and First Majestic Silver (AG) have performed compared to their sector so far this year.

Alpha Metallurgical Resources is a significant player in the met coal industry, crucial for steel production, with a strong export business, especially to India. Despite a stock price drop from $400 to $200, AMR's fundamentals and valuation suggest a potential value opportunity for investors. AMR passes key investment factors: it is an important company, and founder-led with insider alignment. It fails on gross margins and predictable revenue growth due to coal price volatility.

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Lead Independent Director Gorzynski to Assume Chairman Role BRISTOL, Tenn. , Dec. 6, 2024 /PRNewswire/ -- Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today announced the retirement of chairman David Stetson from its board of directors, effective December 13, 2024.

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I rate Alpha Metallurgical Resources as a strong buy due to its undervalued stock price, despite missing earnings expectations and macroeconomic headwinds. AMR has managed cash flows and liquidity well, improving FCF to $158M and reducing CapEx by 36% YoY. Management is making tough decisions like idling mines to save costs and expects $10/short ton savings in 2025.

Alpha Metallurgical Resources, Inc. offers a strong investment opportunity due to strong cash generation, low valuation, healthy balance sheet and potential aggressive share buybacks. Met coal, its product, is essential for steel production. It has no viable substitutes, unlike thermal coal, which faces a declining future in developed countries. I assign a Buy rating on AMR stock due to the dip in coal prices as well as the continued commitment by management to reduce the share count float.

Alpha Metallurgical Resources had a very weak Q3, with an adjusted EBITDA of $49M and a net income of only $4M. The free cash flow was surprisingly good in Q3, though. The 2025 guidance was also positive with lower costs and capital commitments, lowering the breakeven next year.