- Coal stocks (NYSEARCA:KOL) head south after a recent run of gains, as natural gas prices turn lower: CLD -4.2%, BTU -3.1%, ACI -1.1%, CNX -0.7%, ANR -0.6%.
- J.P. Morgan’s John Bridges notes the strong link between coal stocks and the price of natural gas because coal competes with gas for marginal sales; a high gas price means more sales for more affordable coal power.
- At the same time, Bridges thinks the better coal names may become interesting for patient investors if China's economy indeed has stabilized; the difficulties in valuing ANR and ACI keep him Neutral, but he remains positive on CNX as a special situation in coal.