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Sep. 11, 2013, 10:37 AM
- There's more room to run in the rally in coal mining stocks (KOL), Sterne Agee says, citing strong China industrial production data that gives investors hope for more coal demand.
- The mining stocks also reflect a more pessimistic outlook for coal prices than actually will occur, the firm believes; improved longer-term thermal and coking coal supply/demand dynamics should allow pricing and volumes to return to a more normalized level, supporting improved equity valuations.
- The firm recommends adding to positions in Alpha Natural (ANR), Arch Coal (ACI), Consol (CNX), James River (JRCC) and Peabody Energy (BTU), even though each has gained more than 20% in the past two months.
Sep. 6, 2013, 8:27 AM
- Peabody Energy (BTU) reaffirms its prior guidance on 2013 sales volumes, earnings, EBITDA, operating costs and capital spending, according to an SEC filing.
- BTU continues to target FY 2013 sales of 230M-250M tons, including 33M-36M tons from Australia and 180M-190M tons from the U.S.; targets Q3 adjusted EBITDA of $210M-$270M and adjusted EPS of -$0.16 to $0.09.
- BTU expects a 2%-3% Y/Y decrease in its U.S. operating costs and expenses and mid-$70s/ton for its Australia costs, as well as 2013 capital spending levels of $350M-$450M.
Sep. 5, 2013, 12:53 PM
- Peabody Energy (BTU +3.2%) powers higher after reports yesterday that it is seeking to refinance some of its $6.3B in debt.
- Citigroup is said to be arranging the financing for a $1.2B term loan and has set a meeting with lenders Friday; such term B financing is mainly sold to non-bank lenders such as hedge funds, bank loan mutual funds or collaterized loan obligations.
- BTU had $862.5M in debt due in Oct. 2016 and ~$301.8M in loans that mature in June 2015; the loans pay interest at 2.0-2.25 percentage points more than Libor.
Aug. 26, 2013, 5:34 PM
- Standard & Poor's cuts its credit rating on Peabody Energy (BTU) a notch further into junk territory, to BB from BB+, believing coal market conditions will remain difficult for the next year or two.
- BTU continues to face low domestic thermal coal prices as utilities continue to work off still-high inventories, S&P says; overseas, prices of met have fallen significantly amid lower demand in Europe, slowing economic activity in China, and a lack of operating disruptions.
- Last week, Moody's and Fitch downgraded their respective ratings on BTU.
Aug. 26, 2013, 9:51 AM
- Peabody Energy (BTU +4.4%) leads S&P 500 gainers in early trading thanks to a Barron's bounce, as a weekend story says even a modest upturn in coal prices would light a fire under BTU's shares.
- "Peabody is positioned well to gain from its Australian platform catering to emerging-market growth," QCI Asset Management's Seerat Sodhi says in the article; she expects BTU to trade up to $30-$35, roughly doubling their current price as earnings recover.
- Other coal names also move higher: ACI +4.1%, ANR +3.9%, WLT +5.3%.
Aug. 24, 2013, 11:18 AM
- 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.
Aug. 22, 2013, 12:59 PM
- Peabody Energy (BTU +5.3%) and Consol (CNX +4.2%) help push the coal sector (KOL +4.5%) to the top of today's gainers, buoyed by signs of a manufacturing recovery in China.
- Other coal names: PCXCQ.OB +11.2%, YZC +7.7%, WLT +6.5%, ACI +6%, JRCC +5.6%, ANR +5.2%, CLD +3.9%, WLB +2.2%, NRP +1.6%, OXF +0.8%.
Aug. 22, 2013, 8:38 AM
- Peabody Energy (BTU) last night selected mining executive Glenn Kellow as President and COO, to be responsible for all aspects of global operations including safety, production, sales/marketing, environmental, productivity improvement, engineering and planning.
- Kellow most recently served as president of the multinational aluminum and nickel business for BHP Billiton.
- BTU +1.1% premarket.
Aug. 21, 2013, 5:25 PM
- Peabody Energy's (BTU) corporate rating is cut to Ba2, two steps into junk territory, by Moody's, which says the coal miner likely will continue to be hurt by a weak market for thermal and met coal.
- The downgrade reflects prolonged weak industry conditions for both types of coal, with little improvement expected over the next 12-18 months.
- Moody's expects BTU's credit metrics to weaken further in 2013-14, as higher-priced thermal contracts expire and low met coal prices persist.
- BTU -0.3% AH.
Aug. 21, 2013, 3:19 PM
- A federal appeals court keeps Peabody Energy (BTU -1.6%) on the hook for health benefits for ~3,100 retired Patriot Coal (PCXCQ.OB +40.2%) miners, a reversal of the bankruptcy judge's earlier ruling that BTU no longer owed the benefits.
- Patriot praises the ruling, that BTU "should not be permitted to use Patriot's bankruptcy to escape its health care obligations to thousands of retirees."
- Patriot earlier this year gained court permission to abrogate its labor deals for current and retired workers, and recently agreed to new, cost-cutting deals.
Aug. 13, 2013, 3:59 PM
- Coal stocks (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.
Aug. 9, 2013, 5:44 PM
- Coal stocks (KOL) rallied today after Moody’s raised its coal industry outlook to stable from negative, saying business conditions have hit bottom and it doesn't expect industry fundamentals to deteriorate further over the next 12-18 months.
- "Sustained natural gas prices will prop up demand for the thermal coal used in power production through mid-2014 to early 2015, while supply rationalization should help stabilize prices for metallurgical coal, which is used in steelmaking," the ratings agency says.
- Surging today: WLT +13.7%, JRCC +11.8%, ANR +11.4%, ACI +8.6%, BTU +7.8%, CNX +4%, CLD +3.6%.
Aug. 9, 2013, 2:59 PM| Aug. 9, 2013, 2:59 PM | 2 Comments
Aug. 4, 2013, 4:29 AM
- Australian Prime Minister Kevin Rudd has called a general election for September 7, saying the poll will be about who can best lead the country "through the difficult new economic challenges which now lie ahead."
- Rudd's Labor Party has reduced the lead of the right-of-center Liberal Party since Rudd deposed Julia Gillard as PM six weeks ago in an internal Labor coup.
- The Liberals, led by Tony Abbott, have vowed to scrap mining and carbon taxes if they win the ballot, policies that would affect the likes of BHP (BHP), Rio Tinto (RIO), Peabody Energy (BTU), Vale (VALE), and Glencore (GLCNF.PK).
- Relevant country ETFs include: Stocks - EWA, EWAS, KROO, AUSE, FAUS. Bonds - AUD, AUNZ; Forex - FXA, GDAY, CROC
Aug. 2, 2013, 9:26 AM
- Alpha Natural Resources (ANR) slightly lowers its 2013 coal shipment guidance to 83M-91M tons from a prior 83M-93M.
- It 2013 price guidance for Western coal has been lowered by $0.10 to $12.64/ton, and guidance for Eastern Metallurgical coal by $1.73 to $102.20/ton. Eastern Steam coal guidance has been raised by $0.70 to $62.66/ton.
- ANR's 2013 capex guidance has been raised by $25M to $300M-$350M.
- The company had an adjusted weighted average coal margin/ton of just $3.90 in Q2, down from $6.23 in Q1 and $8.16 a year ago.
- 5.6M tons of metallurgical coal were shipped in Q2, flat Q/Q and +10% Y/Y.
- The company says it had $1.9B in liquidity at the end of Q2, inc. $1B in cash/investments. Long-term debt stood at $3.6B.
- ANR: "The global market for seaborne metallurgical coal remains oversupplied, further pressuring margins. The market for export steam coal in the Atlantic basin is currently uneconomic for most, if not all, U.S. production."
- Other coal stocks are off slightly: BTU -0.7%. ACI -0.8%. WLT -2.7%. CLF -0.7%. JRCC -2.1%.
- Q2 results, PR
Jul. 25, 2013, 6:18 PMPeabody Energy Corporation (BTU) declares $0.085/share quarterly dividend, in line with previous. Forward yield 2.07%. For shareholders of record Aug. 8. Payable Aug. 29. Ex-div Aug. 6. (PR) | Jul. 25, 2013, 6:18 PM
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