Good afternoon investors,
What an incredible week for the “All In” portfolio. The portfolio was up 15.40% this week and currently is up 121.79% for the entire year.
For subscribers who missed it, I decided to start covering my “All In” portfolio. The idea of this portfolio is to drop 100% of my entire Robinhood account into my top investment idea. If my research is accurate, the “All In” portfolio should rapidly compound throughout the next few years.
The All In portfolio has been invested in one single coal name since August 4th, 2021 when I penned an article to subscribers titled “I have started to buy this company hand over fist”. Since the article the stock has re-rated over 88%, hitting my low-ball price target in the matter of one month.
I think Company X can re-rate to $35-50/share and once 2022 production rates are established, assuming they lock in current level pricing, the stock could very well run to $75-100/share. - Written August 4th, 2021
When I wrote that article one month ago I was assuming the price per ton Company X would get be around $115/ton (a very conservative/low ball price per ton). With $71/ton in cost, Company X would be spitting out $44/ton in mine level margins, which equated to 50-100% upside at the valuation at the time. One month later the margin per ton is pushing $150-200 (depending on where the coal is sold).
Margin pricing at these levels would equal $80-95/share in EPS for 2022, should pricing get locked in at current spot. With a share price just north of $50/share, the valuation metrics are insanely absurd.
My plans are to hold Company X at the current price giving the insanely cheap forward looking valuation, despite the near 100% run-up in less than a month. Company X is my top idea and by far largest position.
If you want access to my top idea in the “All In” portfolio you can subscribe to the premium version of the newsletter for only $10/month.
New Stock Idea
I wrote up a new stock idea for subscribers this week. If you missed it you can get access here.
This stock is not new to subscribers. If you have been reading my newsletter for a while, you might remember me writing up this stock back in April, calling it a reopening play with over 100% upside.
My original article on that company worked out extremely well, seeing the stock more than double in a couple months time. After selling out I have continued to monitor the price and the business model.
Recently the stock sold off on weak guidance for the back half of 2021. After digging into the guidance and refreshing my model I decided to take a second bite from this apple. I think the stock could potentially double again, and with a current activist shareholder I think we could see the company “at play” over the next few months.
The stock will likely continue to be soft going into Q3 earnings given the weak guidance. I plan to use any material weakness in the stock price to aggressively average down.