Seeking Alpha

Peabody Energy may be on its way back: Barron's

  • Peabody Energy (BTU) CEO Gregory Boyce believes coal prices are set to rise over the next year and Barron's thinks "even a modest upturn would light a fire under [the company's] shares."
  • Jacqueline Doherty says "there are multiple signs of equilibrium returning to the industry," including pressure on supply thanks to the closure of high-cost mines and increasing demand as some electric utilities switch back to coal from natural gas.
  • If "the ideal time to buy cyclicals is when earnings are depressed and price/earnings multiples are lofty," then BTU shares may be a bargain.
  • Watch for a potential Barron's bounce on Monday.
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Comments (25)
  • haleiwahu
    , contributor
    Comments (3708) | Send Message
     
    I don't know about this one. Coal has a lot of headwinds to conquer before taking this positive of a stance. Delivery of coal, environmental tree huggers and Nat Gas competition to mention a few.
    24 Aug 2013, 11:39 AM Reply Like
  • vireoman
    , contributor
    Comments (1078) | Send Message
     
    .....damn environmental air-breathers and their petty complaints!
    24 Aug 2013, 01:38 PM Reply Like
  • wigit5
    , contributor
    Comments (4216) | Send Message
     
    the problem is they'll never be satisfied not that they breathe air
    24 Aug 2013, 01:50 PM Reply Like
  • Jake2992
    , contributor
    Comments (831) | Send Message
     
    Most people won't be satisfied until the air they have to breath is safe. With conservatives constantly fighting to repeal clean air laws the fight never ends.
    24 Aug 2013, 03:45 PM Reply Like
  • wigit5
    , contributor
    Comments (4216) | Send Message
     
    once all the 'fossil fuels' are gone they'll start advocating population control, vegetarianism, and living without manufactured goods.
    24 Aug 2013, 04:18 PM Reply Like
  • Jake2992
    , contributor
    Comments (831) | Send Message
     
    Why wait for fossil fuels to run out to advocate the use of condoms and contraceptive? I think all right wingers should use contraceptives. That alone would raise our collective IQ.
    24 Aug 2013, 05:37 PM Reply Like
  • wigit5
    , contributor
    Comments (4216) | Send Message
     
    Ah an extremist! I don't affiliate with a party so liberals and conservatives would both be raising the collective IQ by not having children. win win for me so I don't disagree pop control should already be in...
    24 Aug 2013, 07:47 PM Reply Like
  • schubidoo
    , contributor
    Comments (8) | Send Message
     
    It is funny to consider it is you lefties who are dispatching yourselves through abortion.
    25 Aug 2013, 09:48 AM Reply Like
  • schubidoo
    , contributor
    Comments (8) | Send Message
     
    Conservatives don't want to repeal clean air laws. They do want to stop the carbon dioxide scam you frauds are perpetrating. Carbon dioxide cannot cause extreme warming, due to its physical properties and the fact of the carbon cycle.
    25 Aug 2013, 09:48 AM Reply Like
  • schubidoo
    , contributor
    Comments (8) | Send Message
     
    I have been selling BTU options for years. The main reason BTU is down is the attack by the Obama administration on coal. This is really foolish for several reasons:
    1. The US has the largest coal reserves in the world and it is part of a energy independence strategy.
    2. Carbon dioxide is not harmful, but a necessary food source for plants, and thus all life.
    3. Global warming is a big fraud.
    4. The rest of the world uses coal as a cheap fuel for electricity.

     

    Coal prices will rise as supply dwindles due to short sighted governments.
    25 Aug 2013, 09:49 AM Reply Like
  • buffett222
    , contributor
    Comments (1125) | Send Message
     
    fact: most voters that lack a college degree are democrats
    25 Aug 2013, 03:43 PM Reply Like
  • J Mintzmyer
    , contributor
    Comments (4338) | Send Message
     
    That'd be nice... Been long coal since this late winter/early spring, with massive buys in May-June.
    24 Aug 2013, 12:19 PM Reply Like
  • Sirvasq
    , contributor
    Comments (335) | Send Message
     
    $WLT and $ACI are the better plays from here, and have shored up finances recently. Three trade together on up days.
    24 Aug 2013, 12:44 PM Reply Like
  • Julius Ferraro
    , contributor
    Comments (495) | Send Message
     
    What would you expect the CEO of a coal company to say....
    24 Aug 2013, 01:16 PM Reply Like
  • vireoman
    , contributor
    Comments (1078) | Send Message
     
    I hate to dispute the unbiased opinion of a coal CEO, but here's another take on this topic: http://bloom.bg/18b9ysP
    24 Aug 2013, 01:37 PM Reply Like
  • ClintonSPX
    , contributor
    Comments (228) | Send Message
     
    Seems to me there's more supply than demand. Some times its that simple.
    24 Aug 2013, 02:54 PM Reply Like
  • justaminute
    , contributor
    Comments (858) | Send Message
     
    With the recent decline in NG prices, I don't see why utilities would be switching.
    24 Aug 2013, 01:57 PM Reply Like
  • chuck lewis
    , contributor
    Comments (416) | Send Message
     
    The Lewis Letter
    BTU has been in and out (and now in) my model portfolio for over two years. You summarized the Barron's piece most accurately. The majority of the comments are incorrect as natural gas has spiked over the past two weeks insuring utility conversion to coal, the Chinese/Eurozone PMI latest readings bodes well for coal as the steel industry heats up and demand from India increases as well. The new addition of a seasoned coal executive as President and COO when announced gave BTU a lift. Financially strong as most peers going bankrupt. . Strong Buy.
    24 Aug 2013, 04:20 PM Reply Like
  • nemonemo
    , contributor
    Comments (324) | Send Message
     
    Good old flood in Australia is good enough to give all US coal producers 2-3X gain in just a month.
    24 Aug 2013, 05:44 PM Reply Like
  • CoinSlot
    , contributor
    Comments (39) | Send Message
     
    I agree - quoting a coal CEO probably isn't the best way to make the case for coal, but I recently wrote a post that makes a very compelling case for investment in BTU for sure: http://bit.ly/1cLI1oN)
    24 Aug 2013, 07:49 PM Reply Like
  • Nasir Khan
    , contributor
    Comments (152) | Send Message
     
    I think Barron is spot on on this call. A modest increase in prices may lit a fire under BTU shares. Why only a modest increase, coz stocks are way oversold, and just a catch up to normal levels would generate massive gains in stock.

     

    Coal story is going to be very interesting in next 12 to 18 months.
    25 Aug 2013, 10:01 AM Reply Like
  • moseslarsen
    , contributor
    Comments (479) | Send Message
     
    I may even sell my AAPL position shortly, putting that money into coal...long BTU and ACI. Cheers, Moses
    25 Aug 2013, 09:21 PM Reply Like
  • chuck lewis
    , contributor
    Comments (416) | Send Message
     
    Editor The Lewis Letter
    Perhaps AAPL will utilize coal to fuel computers some day.
    26 Aug 2013, 10:19 AM Reply Like
  • justy727
    , contributor
    Comments (37) | Send Message
     
    Schubidoo is partially correct about coal. (The 2nd reason coal stocks are down is because of Obama's battle against Coal Power Plants and his re-election). Peabody's stock dropped 30% on Obama's re-election alone. However, Peabody and other coal names rallied a few points when Romney mentioned his support of the coal industry (since he was backed by the coal lobbyists) in the presidential debates.

     

    But the #1 reason coal prices suffered was because of the glut of natural gas, which caused the subsequent drop in prices. Natural gas and thermal coal are used almost exclusively for electricity production, heating and air conditioning in the U.S.

     

    Now is the time to buy coal AND natural gas stocks, before we start exporting nat gas in 2015 (3 approved LNG export contracts as of today), and we get a new president in 2016.

     

    Utilities only want the cheapest energy source whether it be solar, nuclear, coal, or nat gas. These low prices are unsustainable. Which is why the U.S. is exporting record levels of coal until prices recover.

     

    My whole portfolio is long XCO and BTU. Will be buying my first house with my gains :)
    25 Aug 2013, 09:21 PM Reply Like
  • moseslarsen
    , contributor
    Comments (479) | Send Message
     
    justy727, I like your call on buying both coal and NG. That's why I chose GLNG, to get ahead of the transport of all that gas that will head overseas. Long ACI, BTU, GLNG.
    25 Aug 2013, 09:27 PM Reply Like
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