Puda: Best of Coal Stocks

|
 |  Includes: ACIIQ, ANRZQ, BTUUQ, ICO, JRCCQ, PCXCQ, PUDA, YZC
by: Michael Bryant
Coal has been on a run, spiking up with oil, since both are used to produce energy. Demand for coal has been hot, especially from China, the world’s fastest growing economy and India, the world’s second fastest growing economy. Although China is trying to reduce its pollution by investing in green energy, its demand for coal likely won’t slow anytime soon. China still lacks the technology to massively produce green energy, and coal power plants are still by far much cheaper than any green power plant. And as oil continues to climb, coal will always be an alternative. Thus, China will still favor coal to meet its energy needs. India and other emerging markets such as Singapore and Malaysia are no exception to this, either. Coal will be in heavy demand in the developing world.
Coal may have less importance as an energy source in the developing world. Already, the percentage of total energy produced from coal has been declining. But coal is also needed for steel making. And steel, once thought to be a dying industry, will not go away. Buildings, bridges, cars, airplanes and ships all need steel. Thus, coal, believed by some to be a dying industry, may prove critics wrong again.
Below is a list of some coal miners attracting attention and statistics from Yahoo Finance.
G%
year over year revenue quarterly growth (%)
P/B
price/book
tPE
trailing PE ratio
PEG
price/earnings/growth
fPE
forward PE ratio
R/S
revenue/share
P/S
price/sales
%
% short
Click to enlarge
Price
G%
tPE
fPE
P/S
P/B
PEG
R/S
%
ACI
$35.26
42.20
51.10
13.11
1.87
2.57
0.40
$18.54
7.7
ANR
$60.16
37.40
71.36
14.16
1.84
2.70
0.80
$31.72
4.3
BTU
$64.21
11.90
26.50
13.81
2.59
3.84
1.05
$24.75
2.6
$7.84
16.10
160.00
13.07
1.29
1.97
0.40
$6.18
15
JRCC
$25.21
1.80
14.23
12.60
0.98
3.11
1.09
$25.64
27
PCX
$19.70
-1.10
--
--
0.85
1.88
-1.89
$22.15
16
$13.80
60.40
12.08
7.46
0.89
1.85
--
$16.04
10
$30.01
63.40
13.83
--
3.09
2.83
--
$9.42
1.6
Click to enlarge
From the chart, JRCC, PCX, and PUDA have R/S greater than their price, meaning they could be undervalued despite their high short interest. The shorts are betting the most that JRCC will fall is a short interest of 27% and the least in BTU will be a short interest of 4.3%. High short interest could also cause a short squeeze for a stock in a strong uptrend. JRCC, however, has a very poor G% of 1.80%, and P/B is very high at 3.11. PEG is about one, which is good, though it is the highest on the list. Generally, the smaller PEG is the better. ACI and ICO share the smallest PEG in the list, but that is about it. They are both trading about 2-3 times their R/S. PCX has the best P/S and P/B, while PUDA has the best tPE and fPE. PUDA also has the second best G% after YZE. Thus, based on this analysis alone, PCX and PUDA look like the best bet.
But one should always look at the chart besides the fundamentals when deciding a stock. Below are the charts of the stocks mentioned above with the 14-Period MFI (Money Flow Index), RSI (Relative Strength Index) and volume. General consensus says an MFI of 80 is overbought and an MFI of 20 is oversold. General consensus also says a RSI of about 70 is overbought and a RSI of about 30 is oversold.
Technical analysis alone only works for short term price moves. Fundamental analysis is crucial for long term investments. Graphs are from MSN Money.
Arch Coal (ACI)
Click to enlarge
(Click to enlarge)
Alpha Natural Resources (ANR)
Click to enlarge
(Click to enlarge)
Peabody Energy (BTU)
Click to enlarge
(Click to enlarge)
International Coal ((NYSE:ICO))
Click to enlarge
(Click to enlarge)
James River Coal (JRCC)
Click to enlarge
(Click to enlarge)
Patriot Coal (PCX)
Click to enlarge
(Click to enlarge)
Puda Coal ((NYSEMKT:PUDA))
Click to enlarge
(Click to enlarge)
Yanzhou Coal Mining ((NYSE:YZC))
Click to enlarge
(Click to enlarge)
An increase in volume as the stock ticked higher, a neither overbought nor oversold MFI and RSI, and a general upward momentum trend make PUDA the most attractive chart. And in fact, PUDA was also one of the best picks from the fundamental analysis done earlier. Thus, out of these eight stocks, PUDA is the best pick.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.