We came across a bullish thesis on Natural Resource Partners L.P. (NYSE:NRP) on Special Situation Investing’s Substack by Six Bravo. In this article, we will summarize the bulls’ thesis on NRP. Natural Resource Partners L.P. (NYSE:NRP)’s share was trading at $108.70 as of Dec 30th. NRP’s trailing P/E was 8.76 according to Yahoo Finance.
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Natural Resource Partners (NYSE:NRP) remains a compelling investment, with ongoing debt reduction and a strong free cash flow profile. The company has eliminated preferred equity and warrants, leaving just $181 million in debt. Annualizing last quarter’s $55 million cash flow suggests debt could be fully repaid within a year, though coal expert Matt Warder projects 2025 cash flow at $150 million, indicating debt repayment may extend into 2025. Notably, NRP’s CEO has signaled flexibility, suggesting that if debt nears a comfortable target, excess cash flow could be allocated to other strategic priorities. This approach underscores management’s adaptability and focus on value creation. Trading at an 18% trailing twelve-month free cash flow yield, NRP presents an exceptional bargain. While timelines for debt elimination may extend, the company’s robust cash flow and strategic positioning offer a compelling risk/reward profile for long-term investors.
Natural Resource Partners L.P. (NYSE:NRP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held NRP at the end of the third quarter which was 6 in the previous quarter. While we acknowledge the risk and potential of NRP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NRP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.