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METC

Ramaco Resources NasdaqGS:METC Stock Report

Last Price

US$8.59

Market Cap

US$378.7m

7D

-6.0%

1Y

-31.1%

Updated

26 Sep, 2022

Data

Company Financials +

Ramaco Resources Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Ramaco Resources
Historical stock prices
Current Share PriceUS$8.59
52 Week HighUS$21.73
52 Week LowUS$8.43
Beta0.95
1 Month Change-24.45%
3 Month Change-41.84%
1 Year Change-31.12%
3 Year Change129.99%
5 Year Change24.31%
Change since IPO-36.61%

Recent News & Updates

Aug 10

Ramaco Resources: An Overreaction As Cash Flows Remain Strong

Ramaco Resources posted its Q2 results which were a tad light due to a delayed shipment of 90,000 tonnes (representing $9M+ in operating cash flow). Those tonnes will be shipped in the current semester so this is merely a delay in revenue and cash flow. The incoming cash flows should be more than sufficient to cover the sustaining + growth capex. The production rate will increase to 4.3 million tonnes in 2023. If all tonnes are sold, that would represent an 80-90% improvement over H1 2022. Ramaco bought a new mine and estimates it needs just two years as a payback period (based on the spot price). Introduction I have been keeping an eye on Ramaco Resources (METC) (METCL) for over a year now and I initially just purchased the 9% yielding senior notes. As the yield to call of those notes continued to decrease, I sold my entire position. Meanwhile I was still writing put options on Ramaco Resources' common shares and it looks like I will end up with a long position after the most recent share price drop. I wanted to dig into the Q2 results to make sure that was the right decision and wanted to figure out if I should perhaps write more put options or cut my losses. METC data by YCharts The financial results weren't bad at all, the late shipment is just a minor nuisance During the second quarter, the company produced just under 670,000 tonnes of coal but was only able to sell approximately 578,000 tonnes of coal. This means Q2 was the second quarter wherein Ramaco sold less coal than it produced. In the first half of the year, Ramaco produced 1.33 million tonnes of coal but only sold 1.17 million tonnes. The remaining coal is held in inventory and will obviously be sold over the next few months. Ramaco Resources Investor Relations The total revenue in the second quarter was approximately $137M, and after deducting all expenses, the operating income came in at just under $43M. That's lower than in the first quarter of the year as Ramaco generated a higher average sales price (fewer tonnes were sold domestically) at a slightly lower operating cost. Despite this, the net income of $33.3M still represented an EPS of $0.75 which is hardly anything to sneeze about. Ramaco Resources Investor Relations In the first semester, the reported operating cash flow came in at $109.3M. That includes some changes in the working capital position (including an inventory build-up which I will discuss below). Adjusted for these working capital changes, Ramaco's operating cash flow was $102.9M and roughly $100M after deducting the lease payments. As a reminder, this is based on selling 1.15 million tonnes of coal at an average price of $224/t. Ramaco Resources Investor Relations The total capex in the first semester was $54M resulting in an underlying free cash flow of $46M or just over $1/share for the semester. The capex is high (and will be even higher in the second half of the year) as Ramaco is expanding its operations as it aims to produce 4.3 million tonnes of coal in 2023. The sustaining capex is likely just around $8-12M per quarter considering $70M of the current $105-125M capex guidance consists of growth capex. Ramaco Resources Investor Relations This means the Q2 results were OK. Not spectacular, but also not bad. One element that has likely contributed to the underwhelming market reaction is the inventory build-up due to rail delays. Ramaco confirmed it produced approximately 90,000 tonnes of coal that were originally anticipated to be shipped into the higher price export markets but those tonnes will now only be shipped in Q3 and as such recorded as Q3 revenue and cash flow. This will likely result in a stronger than anticipated cash flow in the second half of the year as the volumes have just shifted: The coal isn't just suddenly "gone." The company even calls it a blessing in disguise as some of the newer contracts for delivery in the second half of the year are now generating higher margins than anticipated. Ramaco mentions it signed a contract in July for the delivery of 250,000 tonnes of lower-grade metallurgical coal later this semester at a thermal coal index linked price. At the time the contract was signed, Ramaco anticipated a netback of $250/t so this batch of 250,000 tonnes will generate in excess of $60M in cash flow. This depends on the coal price and looking at the API2 coal price index, the index is now trading about $60/t lower than in July so perhaps we should adjust the expectations accordingly. Ramaco Resources Investor Relations The acquisition of Maben So while Q2 (and H1) was a bit lighter than expected, the situation isn't nearly as dramatic as what the 18% share price drop makes you think. Perhaps the market was also caught off-guard with the announcement Ramaco is spending $30M on a new acquisitions. It's purchasing Maben Coal from Appleton Coal LLC for $9M in cash payable to the seller and an additional $21M payable from the proceeds of a secured note payable to Investec Bank. The Maben Coal reserves total 33 million tonnes of coal of which 1.5 million tonnes will be mined immediately. The production is anticipated to start in Q4 2022 which means the total output in the current financial year will be negligible (25,000 tonnes) but Ramaco anticipates to produce 250,000 tonnes in 2023 at a cash cost of around $80/t. Add in the trucking costs to the Knox Creek preparation plant and a few additional expenses, and one could argue the all-in cost per tonne will be around $105-110/t, in line with the existing assets of the company. Based on the spot price of API2 as of August 4 (which was approximately $330/t) Ramaco anticipates a payback period of less than two years.

Jul 14

Ramaco dips dividend -2.6% to $0.11/share

Ramaco (NASDAQ:METC) declares $0.11/share quarterly dividend, -2.6% decrease from prior dividend of $0.11. Forward yield 4.05% Payable Sept. 15; for shareholders of record Sept. 1; ex-div Aug. 31. See METC Dividend Scorecard, Yield Chart, & Dividend Growth.

Shareholder Returns

METCUS Metals and MiningUS Market
7D-6.0%-7.4%-5.2%
1Y-31.1%-16.6%-23.0%

Return vs Industry: METC underperformed the US Metals and Mining industry which returned -16.6% over the past year.

Return vs Market: METC underperformed the US Market which returned -23% over the past year.

Price Volatility

Is METC's price volatile compared to industry and market?
METC volatility
METC Average Weekly Movement9.6%
Metals and Mining Industry Average Movement8.7%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: METC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: METC's weekly volatility (10%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2015454Randy Atkinshttps://www.ramacoresources.com

Ramaco Resources, Inc. produces and sells metallurgical coal. The company’s development portfolio includes the Elk Creek project consisting of approximately 20,200 acres of controlled mineral and 16 seams located in southern West Virginia; the Berwind property comprising approximately 41,300 acres of controlled mineral and an area of Squire Jim seam coal deposits, which is situated on the border of West Virginia and Virginia; the Knox Creek property consisting of approximately 62,100 acres of controlled mineral that is located in Virginia; and the RAM Mine property comprising approximately 1,570 acres of controlled mineral, which is situated in southwestern Pennsylvania. The company serves blast furnace steel mills and coke plants in the United States, as well as international metallurgical coal consumers.

Ramaco Resources Fundamentals Summary

How do Ramaco Resources's earnings and revenue compare to its market cap?
METC fundamental statistics
Market CapUS$378.71m
Earnings (TTM)US$100.43m
Revenue (TTM)US$457.42m

3.8x

P/E Ratio

0.8x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
METC income statement (TTM)
RevenueUS$457.42m
Cost of RevenueUS$264.35m
Gross ProfitUS$193.07m
Other ExpensesUS$92.64m
EarningsUS$100.43m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.28
Gross Margin42.21%
Net Profit Margin21.95%
Debt/Equity Ratio32.4%

How did METC perform over the long term?

See historical performance and comparison

Dividends

5.3%

Current Dividend Yield

10%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is METC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for METC?

Other financial metrics that can be useful for relative valuation.

METC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1x
Enterprise Value/EBITDA2.8x
PEG Ratio-0.1x

Price to Earnings Ratio vs Peers

How does METC's PE Ratio compare to its peers?

METC PE Ratio vs Peers
The above table shows the PE ratio for METC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average31.9x
ZEUS Olympic Steel
1.8x-91.5%US$257.4m
MSB Mesabi Trust
6.4xn/aUS$269.7m
HUDI Huadi International Group
115.6xn/aUS$292.6m
SCHN Schnitzer Steel Industries
3.9x-19.2%US$785.3m
METC Ramaco Resources
3.8x-34.2%US$378.7m

Price-To-Earnings vs Peers: METC is good value based on its Price-To-Earnings Ratio (3.8x) compared to the peer average (31.9x).


Price to Earnings Ratio vs Industry

How does METC's PE Ratio compare vs other companies in the US Metals and Mining Industry?

Price-To-Earnings vs Industry: METC is good value based on its Price-To-Earnings Ratio (3.8x) compared to the US Metals and Mining industry average (6.3x)


Price to Earnings Ratio vs Fair Ratio

What is METC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

METC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio3.8x
Fair PE Ratio4.6x

Price-To-Earnings vs Fair Ratio: METC is good value based on its Price-To-Earnings Ratio (3.8x) compared to the estimated Fair Price-To-Earnings Ratio (4.6x).


Share Price vs Fair Value

What is the Fair Price of METC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: METC ($8.59) is trading below our estimate of fair value ($23.92)

Significantly Below Fair Value: METC is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Ramaco Resources forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-34.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: METC's earnings are forecast to decline over the next 3 years (-34.2% per year).

Earnings vs Market: METC's earnings are forecast to decline over the next 3 years (-34.2% per year).

High Growth Earnings: METC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: METC's revenue (8.2% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: METC's revenue (8.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if METC's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Ramaco Resources performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


49.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: METC has high quality earnings.

Growing Profit Margin: METC's current net profit margins (22%) are higher than last year (2.2%).


Past Earnings Growth Analysis

Earnings Trend: METC has become profitable over the past 5 years, growing earnings by 49.2% per year.

Accelerating Growth: METC's earnings growth over the past year (2100.4%) exceeds its 5-year average (49.2% per year).

Earnings vs Industry: METC earnings growth over the past year (2100.4%) exceeded the Metals and Mining industry 82.4%.


Return on Equity

High ROE: METC's Return on Equity (35.9%) is considered high.


Discover strong past performing companies

Financial Health

How is Ramaco Resources's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: METC's short term assets ($132.1M) exceed its short term liabilities ($110.8M).

Long Term Liabilities: METC's short term assets ($132.1M) exceed its long term liabilities ($99.2M).


Debt to Equity History and Analysis

Debt Level: METC's net debt to equity ratio (16.8%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if METC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: METC's debt is well covered by operating cash flow (143.3%).

Interest Coverage: METC's interest payments on its debt are well covered by EBIT (24.7x coverage).


Balance Sheet


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Dividend

What is Ramaco Resources's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


5.28%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: METC's dividend (5.28%) is higher than the bottom 25% of dividend payers in the US market (1.66%).

High Dividend: METC's dividend (5.28%) is in the top 25% of dividend payers in the US market (4.57%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether METC's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if METC's dividend payments are increasing as they only just started paying a dividend.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (10%), METC's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (35.1%), METC's dividend payments are well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Randy Atkins (69 yo)

1.75yrs

Tenure

US$4,355,848

Compensation

Mr. Randall W. Atkins, also known as Randy, has been the Chief Executive Officer and Chairman of the Board at Ramaco, LLC since 2011 and is its Sole Owner. Mr. Atkins is an Owner or Controller of a number...


CEO Compensation Analysis

Randy Atkins's Compensation vs Ramaco Resources Earnings
How has Randy Atkins's remuneration changed compared to Ramaco Resources's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$100m

Mar 31 2022n/an/a

US$77m

Dec 31 2021US$4mUS$600k

US$40m

Sep 30 2021n/an/a

US$16m

Jun 30 2021n/an/a

US$5m

Mar 31 2021n/an/a

-US$3m

Dec 31 2020US$3mUS$540k

-US$5m

Sep 30 2020n/an/a

US$2m

Jun 30 2020n/an/a

US$12m

Mar 31 2020n/an/a

US$20m

Dec 31 2019US$2mUS$500k

US$25m

Sep 30 2019n/an/a

US$26m

Jun 30 2019n/an/a

US$27m

Mar 31 2019n/an/a

US$27m

Dec 31 2018US$2mUS$425k

US$25m

Sep 30 2018n/an/a

US$19m

Jun 30 2018n/an/a

US$7m

Mar 31 2018n/an/a

-US$7m

Dec 31 2017US$2mUS$391k

-US$15m

Sep 30 2017n/an/a

-US$14m

Jun 30 2017n/an/a

-US$10m

Mar 31 2017n/an/a

-US$7m

Dec 31 2016US$2mUS$300k

-US$8m

Sep 30 2016n/an/a

-US$7m

Jun 30 2016n/an/a

-US$6m

Mar 31 2016n/an/a

-US$6m

Dec 31 2015US$106kUS$81k

-US$2m

Compensation vs Market: Randy's total compensation ($USD4.36M) is above average for companies of similar size in the US market ($USD2.89M).

Compensation vs Earnings: Randy's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: METC's management team is considered experienced (3.2 years average tenure).


Board Members

Experienced Board: METC's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: METC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NasdaqGS:METC Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
02 Sep 22SellUS$49,450David FrischkornIndividual5,000US$9.89
18 Aug 22SellUS$58,300David FrischkornIndividual5,000US$11.66
09 Nov 21SellUS$890,486Randall AtkinsIndividual57,575US$15.56

Ownership Breakdown

What is the ownership structure of METC?
Owner TypeNumber of SharesOwnership Percentage
Private Companies28,1690.06%
Individual Insiders5,011,56611.4%
General Public9,517,09921.6%
Institutions14,641,46333.2%
VC/PE Firms14,889,44933.8%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 66.84% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
33.77%
Yorktown Partners LLC
14,889,449$127.9m-11.84%11.98%
6.59%
Randall Atkins
2,904,865$25.0m0.55%no data
3.11%
BlackRock, Inc.
1,370,704$11.8m600.3%no data
2.9%
The Vanguard Group, Inc.
1,280,496$11.0m194.18%no data
2.67%
Marshall Wace LLP
1,179,170$10.1m142.67%0.03%
1.77%
Millennium Management LLC
778,205$6.7m48.53%0.01%
1.63%
Two Sigma Advisers, LP
716,600$6.2m61%0.02%
1.59%
Intrinsic Edge Capital Management LLC
699,538$6.0m0%0.53%
1.48%
Citadel Advisors LLC
651,754$5.6m89.33%0.01%
1.18%
WEDGE Capital Management LLP
521,042$4.5m1817.5%0.07%
1.16%
Christopher Blanchard
510,469$4.4m0%no data
1.01%
Healthcare of Ontario Pension Plan Trust Fund
444,800$3.8m-11.78%0.02%
1%
Jeremy Sussman
440,344$3.8m0%no data
0.85%
Acadian Asset Management LLC
375,435$3.2m-9.57%0.01%
0.8%
State Street Global Advisors, Inc.
353,203$3.0m877.48%no data
0.7%
Dimensional Fund Advisors LP
308,401$2.6m107.41%no data
0.64%
Geode Capital Management, LLC
282,392$2.4m149.03%no data
0.59%
Northern Trust Global Investments
261,555$2.2m180.77%no data
0.57%
Goldman Sachs Asset Management, L.P.
249,452$2.1m256.59%no data
0.57%
Two Sigma Investments, LP
249,125$2.1m-8.29%0.01%
0.5%
Invesco Capital Management LLC
218,794$1.9m0%no data
0.46%
Bridgeway Capital Management, LLC
203,000$1.7m-15.13%0.04%
0.46%
JPMorgan Chase & Co, Brokerage and Securities Investments
202,413$1.7m27.41%no data
0.43%
South Dakota Investment Council
191,300$1.6m0%0.04%
0.42%
Morgan Stanley, Investment Banking and Brokerage Investments
184,353$1.6m-46.24%no data

Company Information

Ramaco Resources, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Ramaco Resources, Inc.
  • Ticker: METC
  • Exchange: NasdaqGS
  • Founded: 2015
  • Industry: Steel
  • Sector: Materials
  • Implied Market Cap: US$378.714m
  • Shares outstanding: 44.09m
  • Website: https://www.ramacoresources.com

Number of Employees


Location

  • Ramaco Resources, Inc.
  • 250 West Main Street
  • Suite 1800
  • Lexington
  • Kentucky
  • 40507
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
METCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDFeb 2017
5R0DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 2017

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/26 00:00
End of Day Share Price2022/09/26 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.