Nathan Tinkler is losing $4 million a day on his stake in Whitehaven Coal and has dropped plans for a takeover, but analysts still have faith in the coal producer.
In an investor note this morning Foster Stockbroking analysts said while Tinkler had dumped takeover plans Whitehaven was "still strong".
"We maintain our view that Whitehaven is fundamentally undervalued and represents attractive buying opportunity at these levels," they said.
Foster said while sale volumes had declined ten per cent for Whitehaven its revenues were "relatively unchanged".
It also said the Narrabri longwall operation had improved from "initial teething problems" but permitting delays at the Maules Creek project could push production back by six to nine months, which would impact short term earnings.
According to Fairfax Media sources in Tinkler's camp have blamed Whitehaven's profit figures for the failed takeover.
But Whitehaven boss Tony Haggarty said blaming the company's earnings was "a rather strange excuse".
Tinkler was long expected to privatise Whitehaven but has been unable to find funds to support the $5.3 billion deal.