Gloucester Coal Significantly Undervalued, Says RBS

It is hard to get excited about the coal space right now given annual contract prices are being settled 50-60% lower than last year and a weakening demand for steel is seeing the emphasis switch away from metallurgical coal to thermal coal. The collapse in commodity demand has seen Gloucester Coal’s (GCL) share price also collapse – from the dizzy heights of nearly $14 a year ago to $2.50 late last year. A bit more interest in commodities since that time have helped to revive the share price, but it’s takeover activity which has taken the trading price to $5.30 today.

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