Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of coal miner and steel company Mechel
So what: Southeast Asian investors are interested in a 25% stake in the Elga coal deposit owned by Mechel. The company plans to spend $2.87 billion to develop the mine, and has been looking for funding options.
Now what: Mechel doesn’t currently have the balance sheet to make the investment needed to develop Elga, so this would be a positive development outside of another financing method. With coal companies encountering challenging conditions right now, any sale would be positive, in my opinion. This doesn’t make Mechel a buy, considering the worsening economics in the industry, but it’s probably a good strategic move if management can pull off a deal.
Interested in more info on Mechel? Add it to your watchlist by clicking here.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.