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  • Coal

    I found an interesting and informative research piece on the North American coal producers.

    EJ hasn't commented on them in quite some time; as I recall he had not yet determined if they were
    priced correctly for the amount of risk involved.

    I'm attaching the report below.

    Attached Files

  • #2
    Re: Coal

    BTU - Peabody was recommended(IIRC) here on iTulip below $16 a share I believe.

    Sitting at $14.97 as of today, just over its 52 week low, and it's GFC lows.

    i'm wondering if it's worth waiting for a shakeout in equities over the next 6 months or so to look for an even better entry point for coal?

    Comment


    • #3
      Re: Coal

      Originally posted by lakedaemonian View Post
      BTU - Peabody was recommended(IIRC) here on iTulip below $16 a share I believe.
      Yes, around the same time last year. On that basis I created a model portfolio of coal stocks (including others that were discussed here) on July 19, 2013. The performance to date is shown here. Coal Portfolio.jpg

      The sector performance has been mixed, with Peabody falling less in value compared to others like Arch Coal and Alpha Natural Resources. Consol Energy on the other hand has done really well.

      Originally posted by lakedaemonian View Post
      i'm wondering if it's worth waiting for a shakeout in equities over the next 6 months or so to look for an even better entry point for coal?
      I'm thinking along similar lines, but how much lower can the entry point get to?

      Comment


      • #4
        Re: Coal

        Originally posted by lakedaemonian View Post
        BTU - Peabody was recommended(IIRC) here on iTulip below $16 a share I believe.

        Sitting at $14.97 as of today, just over its 52 week low, and it's GFC lows.

        i'm wondering if it's worth waiting for a shakeout in equities over the next 6 months or so to look for an even better entry point for coal?
        I can't tell you how long i've been waiting for this shakeout in equities before purchasing the stock of any more coal producers. I hope EJ's mid-year update sheds some light on the topic but from what I gather, it may be that equities trade sideways with little to no fall in general prices levels. In which case, is now a good time to start loading up the truck? Beats me.

        Comment


        • #5
          Re: Coal

          Originally posted by sunpearl71 View Post
          I'm thinking along similar lines, but how much lower can the entry point get to?
          Never under-estimate just how bad it can get.

          Comment


          • #6
            Re: Coal

            BTU - just note that there are no recommendations, just was one that was on the 'watch list' and a timeline of 'years' was mentioned, rather than weeks or months.

            For the U.S. coal companies in general this quarterly announcement coming up (for Q2) ain't going to be pretty - met coal is soft, rail issues have affected everyone in the PRB and production volumes are going to be cut in this pricing environment.

            BTU's Aussie operations help it tremendously. CNX - believe the stock has moved due to focus on gas ops and MLP spin off announcement, if memory serves.

            All in all, still seems early - lots of moving parts to consider on this one - nat gas market, the high debt to market caps of the coal companies, met coal vs. thermal coal, seaborne component, asset divestitures, guidance downward revisions amid fixed cost ops, etc...
            --ST (aka steveaustin2006)

            Comment


            • #7
              Re: Coal

              Originally posted by steveaustin2006 View Post
              BTU - just note that there are no recommendations, just was one that was on the 'watch list' and a timeline of 'years' was mentioned, rather than weeks or months.

              For the U.S. coal companies in general this quarterly announcement coming up (for Q2) ain't going to be pretty - met coal is soft, rail issues have affected everyone in the PRB and production volumes are going to be cut in this pricing environment.

              BTU's Aussie operations help it tremendously. CNX - believe the stock has moved due to focus on gas ops and MLP spin off announcement, if memory serves.

              All in all, still seems early - lots of moving parts to consider on this one - nat gas market, the high debt to market caps of the coal companies, met coal vs. thermal coal, seaborne component, asset divestitures, guidance downward revisions amid fixed cost ops, etc...
              Yep. I was one of the ones who took an initial foothood into BTU. Never went all in and still see no *compelling* reason to.

              At least not yet. I've found patience is 95% of successful investing.

              Comment


              • #8
                Re: Coal

                J. C. Parets is an interesting fellow. He made a remarkably accurate (bearish) call on Gold in February 2013 - before the breakdown in April of last year.

                Now he sees the potential of a breakout to the upside in the coal etf, symbol KOL. He was smart enough to begin buying just above 18 but looks to greatly increase his position on a high-volume breakout above $19.20 or so.

                Today is an important day to watch this etf.
                Attached Files

                Comment


                • #9
                  Re: Coal

                  Coal has been up and down all year but the ETF (KOL) is at a three month high and also near the high year to date set in early January.

                  Is it really that bad with individual stocks or are a couple isolated from the industry?

                  Comment


                  • #10
                    Re: Coal

                    Originally posted by vt View Post
                    Coal has been up and down all year but the ETF (KOL) is at a three month high and also near the high year to date set in early January.

                    Is it really that bad with individual stocks or are a couple isolated from the industry?
                    perhaps due to the KOL mix being more international (natural gas bubble making natural gas prices cheap is a US phenomenon & foreign natural gas prices are higher, creating a better competitive environment for coal in some foreign markets.) and broader than just coal mining to include other aspects of the industry (equipment, transport).

                    here's the top 10 holdings according to Yahoo! Finance
                    http://finance.yahoo.com/q/hl?s=KOL+Holdings

                    Aurizon Holdings Ltd - rail company which moves coal QRNNF.AX 8.35
                    CHINA SHENHUA ENERGY - China state-owned enterprise CUAEF 8.15
                    CONSOL Energy Inc. Common Stock - has a heavy footprint in natural gas, has went up when the coal pure plays were falling CNX 6.89
                    Joy Global Inc. Common Stock - makes mining equipment JOY 6.45
                    Peabody Energy Corporation Comm - one of the better performing pure play coal company in the US (w AU operations too). not as debt leveraged & has fallen less than other smaller coal stocks BTU 6.04
                    PT UNITED TRACTORS - tractors PUTKF 5.54
                    BANPU PUB CO LTD UTS - Thailand BNPJF 4.97
                    Alliance Resource Partners, L.P - one of the few US coal companies which has went up while most tanked ARLP 4.78
                    Alliance Holdings GP, L.P. - affiliated with the above. market cap is now about the same as BTU AHGP 4.67
                    Westshore Terminals Investment Corp - Vancouver coal storage and loading terminal WTSHF.TO 4.50

                    Comment


                    • #11
                      Re: Coal

                      Good points.

                      However we are in a global market so it might be easier to buy this index.

                      Comment


                      • #12
                        Re: Coal

                        Does our old pal Putin play into this? Will he actually shut off the gas to the EU, or is this just posturing? If he did shut the gas off, would coal be used as an alternative. Will Europe stock pile coal as a defense? I have a small postion in KOL, with Oct 19 calls written on it. I have my fingers cross that if KOL goes up, I can roll my calls forward and up for a credit.

                        Comment


                        • #13
                          Re: Coal

                          Originally posted by Raz View Post
                          ... Now he sees the potential of a breakout to the upside in the coal etf, symbol KOL. He was smart enough to begin buying just above 18 but looks to greatly increase his position on a high-volume breakout above $19.20 or so.
                          Volume declined on the move above the 200-day Exponential Moving Average.
                          Looks like it was a Bull Trap.


                          Attached Files
                          Last edited by Raz; 07-31-14, 12:42 PM.

                          Comment


                          • #14
                            Re: Coal

                            Originally posted by lakedaemonian View Post
                            BTU - Peabody was recommended(IIRC) here on iTulip below $16 a share I believe.

                            Sitting at $14.97 as of today, just over its 52 week low, and it's GFC lows.

                            i'm wondering if it's worth waiting for a shakeout in equities over the next 6 months or so to look for an even better entry point for coal?
                            BTU sitting at a "limbo low" $6.91 a share.

                            Less than half the price of 6 months ago.

                            Does it have the cash to make it thru the dry spell?

                            Or does it become the victim of "the scone owner makes the money" as GRG55 recently reminded us?

                            Comment


                            • #15
                              Re: Coal

                              Originally posted by lakedaemonian View Post
                              BTU sitting at a "limbo low" $6.91 a share.

                              Less than half the price of 6 months ago.

                              Does it have the cash to make it thru the dry spell?

                              Or does it become the victim of "the scone owner makes the money" as GRG55 recently reminded us?
                              Really unbelievable -- I stuck a toe in this (BTU) some time back but never saw the opportunity to load up. Glad I didn't.

                              Just goes to show you, no matter how low something goes, it can always go lower. And as low as things are now, I don't see a catalyst bringing BTU back for now although I personally think they'll be one of the survivors.

                              Comment

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