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More sell-side chatter following the Patriot bankruptcy: Use the weakness to add to...

  • Tuesday, July 10, 2012, 9:55 AM ET
    More sell-side chatter following the Patriot bankruptcy: Use the weakness to add to attractively-valued CONSOL (CNX) and Alpha Natural (ANR) says Nomura's Curt Woodworth, who remains negative on Arch Coal (ACI) and Neutral on Peabody (BTU). Raymond James recommends buying the dip on Alpha Natural and Peabody.
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This news story has 9 comments:

  •  
    Why buy coal and NG items now? Can't you wait? Not their time yet, soon, but not now.

    Capt. Brian
    The Lost Navigator
    10 Jul 2012, 10:09 AM Reply Like
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    The low cost producer will be the one to buy,but which one is it?
    10 Jul 2012, 11:04 AM Reply Like
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    Stay away from coal stocks that's one sector that can sink like a rock because this whole market is scary it's feeling a lot like 2008 sorry to say.
    10 Jul 2012, 11:22 AM Reply Like
  •  
    The captain is right.

    A dip is not a dip if it is a stairstep to the depths of despair.
    10 Jul 2012, 12:11 PM Reply Like
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    I would not touch a US coal stock as long as the current administration is in office. Arch and Peabody are the best in breed but even good management, reserves, and marketing expertise can't fight overzealous clean air advocates.
    10 Jul 2012, 12:54 PM Reply Like
  •  
    If you only buy when you feel confident and selling when you are fearful, you will always be buying high and selling low. The time to buy coal stocks is now.
    10 Jul 2012, 01:01 PM Reply Like
  •  
    @eagle
    I agree with your first sentence. However the fundamentals of the US coal industry are very tough right now. Rising labor and health care costs with the utilities beating up on the miners for price concessions. Most of the US steam coal producers sell their output under long-term contracts with very tight pricing. When volumes decline the margins of the miners suffer. As the economy improves volumes will increase which will help. Right now the best friend of the coal business is the hot Midwest weather which is driving up utility demand. I have spent over half of my professional career in the energy business and I am long domestic oil but there is plenty of time to wait for coal to start back up.
    10 Jul 2012, 02:22 PM Reply Like
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    JJMC2001: I am short oil and long coal stocks. It will be interesting to see which one of us has made money on our positions, six months from now. I am curious, given your professional career in the energy business, why are you feeling it's appropriate to be long oil?
    10 Jul 2012, 05:35 PM Reply Like
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    @Eagle
    I hope we are both happy with our investments in 6 months but if Obama is re-elected I am not optimistic about the domestic coal industry. I love the mining industry but domestic steam coal producers are generally locked into long-term contracts and right now the US is making it tougher to burn coal. The coal industry will not turn upwards quickly but macro-economic improvements coupled with change in Washington could make it vibrant again. Domestic oil producers on the other hand are doing OK now with WTI in the 80s. If it stays above $75 most are fine and if oil shoots up the domestic names will take off. It only takes one wacky Iranian with an itchy trigger finger to make oil prices jump.
    10 Jul 2012, 10:10 PM Reply Like
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