Goldman's Peabody upgrade lifts other coal shares


Goldman's bullish take on Peabody Energy (BTU +4.2%) and other cost-cutters in the segment is lifting shares of other coal companies.

Other companies with strong cost control potential cited by Goldman include Neutral-rated Walter Energy (WLT +7.3%) and Alpha Natural Resources (ANR +5.7%).

The firm also likes restructuring stories, such as Buy-rated SunCoke Energy (SXC +2.3%); the firm sees high potential that SXC drops down coke-making assets from the parent to its MLP early next year.

Even Arch Coal (ACI +5.2%), which Goldman suggests avoiding because of its weak balance sheet, is sharply higher.

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Comments (16)
  • deercreekvols
    , contributor
    Comments (9485) | Send Message
     
    Goldman's bullish take on coal has nothing to do with the fact that they own 3.25M shares of BTU.

     

    Pay no attention to that man behind the curtain. It is only Lloyd Blankfein.
    8 Nov 2013, 06:50 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (11004) | Send Message
     
    hahaha - good one.
    9 Nov 2013, 06:59 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    Attaboy GS way to get on board
    8 Nov 2013, 09:12 PM Reply Like
  • cfb5006
    , contributor
    Comments (85) | Send Message
     
    How can you say avoid ACI because of a weak balance sheet, but recommend WLT? WLT has the worst b/s of them all. It wasn't too long ago that GS was recommending ACI over the others due to their PRB exposure.
    9 Nov 2013, 08:12 AM Reply Like
  • deercreekvols
    , contributor
    Comments (9485) | Send Message
     
    Remember that this is Goldman Sachs we are talking about. They will continue to do whatever it takes to make themselves money.

     

    I would guess, and I have not looked this up, that GS has more shares of WLT than they do of ACI.

     

    Don't ever forget that GS rated NOK a "sell" and they bought over 63M shares for themselves.
    9 Nov 2013, 11:40 AM Reply Like
  • cfb5006
    , contributor
    Comments (85) | Send Message
     
    They own almost 2% of the outstanding shares of ACI. They have a very small position in WLT. I think that ACI is the best able to survive through this current downturn. I mean they have a lot of debt, but it's not due for quite some time. If the market stays poor until 2018, most of these companies would have long gone BK by then. WLT will have been a distant memory by that point.
    9 Nov 2013, 12:59 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    WLT is the best met pure play get your facts straight
    11 Nov 2013, 11:41 AM Reply Like
  • cfb5006
    , contributor
    Comments (85) | Send Message
     
    You are not worried at all about that b/s? They are by far the most levered coal company.
    11 Nov 2013, 12:25 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    Nope, I dont look at just one metric, thats too easy. I look at the whole company. You cant just say I look at the large debt and sell it. They have, from my calculations, 7 different ways of raising capital, if needed, and lowering costs. They retired most of 2015 debt and met coal market is improving as supply glut has been worked off. Macroeconomics show major improvement in global economy.
    11 Nov 2013, 12:55 PM Reply Like
  • cfb5006
    , contributor
    Comments (85) | Send Message
     
    I do not disagree with you. I have and currently do own the stock. You missed the point of my original post. I was just talking about how they downgraded ACI because of b/s issues, but upgraded WLT.
    11 Nov 2013, 01:29 PM Reply Like
  • al roman
    , contributor
    Comments (16949) | Send Message
     
    LB has Gasification in the process.
    9 Nov 2013, 09:27 AM Reply Like
  • al roman
    , contributor
    Comments (16949) | Send Message
     
    Clean Coal would put some jobs back in the reports.
    9 Nov 2013, 01:19 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (11004) | Send Message
     
    There is no such thing as "clean coal" - if you look under "oxymoron" in Websters, it says "clean coal".

     

    The "clean coal" plant in MS being built by Southern is a complete disaster. How do does one shove CO2 in the ground anyway? Regardless, CO2 is only one problem with coal - the dirty little secret is the toxic heavy metal cocktail "fly-ash" left over after you burn it. Where does that go? For the TVA, it ended up in the Tennessee River:

     

    http://bit.ly/WtCnxg

     

    But how can anyone be bullish on coal when the outlook for natural gas is sub $4 for a long time to come??
    9 Nov 2013, 07:02 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    Doessnt carbon capture produce methane which they pump out of the ground to produce energy?
    11 Nov 2013, 11:42 AM Reply Like
  • al roman
    , contributor
    Comments (16949) | Send Message
     
    Some countries have a lot of coal and not much money.
    And are interested in solutions in reducing the negative by products.
    In my area the municipality converted from Diesel to natural gas and their was some back and forth,but it's sure easier to be stuck in traffic behind one of those guys than it used to be.Seeing how coal is so depended upon Globally I hope solutions can be found their also.
    9 Nov 2013, 07:18 PM Reply Like
  • al roman
    , contributor
    Comments (16949) | Send Message
     
    Coal does burn cleaner than wood probably about now is cheaper.
    All energy sources have their problems.
    9 Nov 2013, 08:41 PM Reply Like
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