In this article, we discuss the top 5 extreme value stocks to buy now. If you want to see more stocks in this selection, check out Top 10 Extreme Value Stocks To Buy Now.
5. Warrior Met Coal, Inc. (NYSE:HCC)
Number of Hedge Fund Holders: 24
Warrior Met Coal, Inc. (NYSE:HCC) is an Alabama-based company that produces and exports non-thermal metallurgical coal for the steel industry. Warrior Met Coal, Inc. (NYSE:HCC) is one of the top extreme value stocks to consider. On November 2, the company announced a Q3 GAAP EPS of $1.90 and a revenue of $371.94 million, beating market estimates by $0.06 and $1.2 million, respectively. Revenue over the period climbed approximately 84% on a year-over-year basis.
On November 3, BMO Capital analyst David Gagliano raised the price target on Warrior Met Coal, Inc. (NYSE:HCC) to $39 from $30 but kept a Market Perform rating on the shares. The company’s Q3 results were “solid,” said the analyst as he raised his FY22 EPS view to $14.24 from $13.53. Warrior Met Coal, Inc. (NYSE:HCC) remains positioned to benefit if met prices stay robust, the analyst told investors in a research note.
According to Insider Monkey’s data, 24 hedge funds were long Warrior Met Coal, Inc. (NYSE:HCC) at the end of Q3 2022, and Jim Simons’ Renaissance Technologies held the largest stake in the company, consisting of 1.6 million shares worth $45.3 million.
Here is what Horos Asset Management has to say about Warrior Met Coal, Inc. (NYSE:HCC) in its Q3 2021 investor letter:
“In addition, we trimmed our stake in the U.S. company Warrior Met Coal (“Warrior”), following its excellent recent performance. The metallurgical coal producer, which is necessary to produce steel in blast furnaces, benefited during the quarter from the sharp rise in the price of this commodity. Specifically, the price of Warrior’s metallurgical coal, referenced to Australia’s Premium Low-Vol FOB Hard Coking Coal, rose by 100% in the quarter and is up 300% from the lows of the beginning of the year, when it was trading at around 100 dollars per tonne. The reason for the huge price increase can be found in the bottleneck that this industry is experiencing, due to a few factors. On the one hand, the recovery of economic activity after the worst of the pandemic ended and the extra boost given by the huge fiscal and monetary stimuli from governments globally and, on the other hand, the lack of investment in new supply in recent years due to the hangover from previous overcapacity, the poor situation of some players in the industry and, especially, the political and social agenda against climate change.
This rise in the price of metallurgical coal has seen Warrior’s share price appreciate by more than 70% from last summer’s lows, contributing significantly to our fund’s performance. However, the downside of the story is that Warrior has had the bulk of its employees on strike since April, which means that the company is not producing at one of its two mines and the other is not at 100% capacity, so it is not benefiting from the current positive dynamics like other players in the industry.”
