|
For All Your Investing Needs |
|
Welcome to the Equities Section of Options Realm |
|
Today (2/13/2007) I am writing to you about a company that I first started following over a year ago. The company is Alliance Resource Partners, L.P. The ticker symbol for Alliance Resource Partners, L.P. is ARLP. ARLP is a coal mining and marketing company that operates throughout the Eastern United States. As of December 31, 2005 The Partnership had around 549 million tons of proven and probable coal reserves.
Over the past year the partnership has continued to expand by buying up small minefields. The Partnership has shown a very impressive history with their ability to create very impressive return on investment. The Discounted Cash Flow from ARLP is a very interesting topic because of the way the company reinvests in itself. The Partnership spends a lot of money on expanding and because of this the DCF models can be done in multiple ways. I feel that based off of what the DCF models say $35 is a conservative price to pay for ARLP. This is important because it means that by buying ARLP the purchaser’s investment is going to grow with the company. ARLP has proven to be a well run company in the past and all indications lead me to believe that this will continue into the future.
Lastly ARLP pays a 6% dividend which is financed completely through Free Cash Flow which is extremely important. ARLP has very little debt for a company its size and I feel is a very safe investment in a time where many equities are severely overpriced. It is this reason I am putting 20% of my portfolio into ARLP as a safe and conservative pick to hold on to for the long term. |
|
|