Citigroup Downgrades Massey Energy (MEE) to Sell
MEE Hot Sheet
Rating Summary:1 Buy, 11 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Citigroup downgrades Massey Energy (NYSE: MEE) from Hold to Sell.
Citigroup analyst, John H. Hill, says, "Massey preannounced disappointing 3Q numbers, continuing the trend of operational woes. It is difficult to see how the situation will improve in the near-medium term. Massey is plagued by poor productivities, labor shortages, and under-capitalized operations. The
response has been to redeploy resources to the best mines, yet labor and capital cuts suggest this may only be stop-gap measure. The company has been selling non-core reserves, and has retained an adviser to explore "strategic options." Despite a dismal series of production and earnings shortfalls, the
shares have recently been bid up by investors sensing a possible sale of the company. We believe that "salvage value" for the assets is well below that implied in the current share price, and recommend that investors take advantage of recent strength to lighten positions."
Citigroup analyst, John H. Hill, says, "Massey preannounced disappointing 3Q numbers, continuing the trend of operational woes. It is difficult to see how the situation will improve in the near-medium term. Massey is plagued by poor productivities, labor shortages, and under-capitalized operations. The
response has been to redeploy resources to the best mines, yet labor and capital cuts suggest this may only be stop-gap measure. The company has been selling non-core reserves, and has retained an adviser to explore "strategic options." Despite a dismal series of production and earnings shortfalls, the
shares have recently been bid up by investors sensing a possible sale of the company. We believe that "salvage value" for the assets is well below that implied in the current share price, and recommend that investors take advantage of recent strength to lighten positions."
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