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Aug. 20, 2015, 2:54 PM
- Soros Fund Management disclosed minuscule (for Soros) stakes in Peabody Energy (BTU +24.6%) and Arch Coal (ACI +42.1%) at the end of last week. Combined, the Peabody holding of 1.03M shares and Arch holding of 533K shares amounted to less than $2.5M versus AUM north of $20B.
- The tiny stakes in the two near-bankrupt coal producers could be thought of as a lottery ticket, or maybe it's just The Palindrome - well known for railing against coal as it pertains to climate change - tweaking his political enemies.
- The stocks of both companies didn't do a whole lot for two sessions after the disclosure, but soared yesterday as Arch Coal was reported on working out a debt swap compromise with its creditors.
- News China could be producing a whole lot less in the way of carbon emissions than previously thought could be sending the two flying higher again today.
- CLD +3.9%, WLB +1.4%, RNO -2.15%, CNX -0.8%, KOL flat
Aug. 20, 2015, 12:45 PM
Aug. 20, 2015, 9:14 AM
Aug. 19, 2015, 12:45 PM
Aug. 19, 2015, 9:14 AM
Jul. 30, 2015, 12:48 PM
- Cloud Peak Energy (CLD -3.7%) is not immune to challenging market conditions, even if it is in better position than its coal mining peers, Cowen analysts say as they cut CLD's price target in half to $5.
- After examining CLD's Q2 loss, the firm says CLD can expect flat 2016 results if market pressure persists, but the company still remains the preferred play for Powder River Basin recovery exposure, given its lower relative risk profile.
- Other coal names are mixed: Arch Coal (ACI +13.9%), which missed Q2 earnings expectations, is higher, while Peabody Energy (BTU -0.4%) is slightly lower.
Jul. 28, 2015, 8:33 AM
- Peabody Energy (NYSE:BTU) says it is suspending its quarterly dividend and will evaluate whether to reinstate the dividend in the future as circumstances warrant.
- BTU's board also authorizes a reverse split of common stock; if shareholders approve the reverse split, the company would choose among five alternative ratios between 1-for-8 and 1-for-20 as approved by shareholders.
- BTU -3.7% premarket after reporting its Q2 net loss widened to $1.04B, or $3.84/share, from $73M, or $0.27/share, a year earlier; excluding items, the loss was $0.65, in-line with expectations.
- During Q2, the company priced 14M tons of PRB coal for delivery in 2016, and now has 89M tons of PRB priced at $14.23 next year.
Jul. 28, 2015, 8:02 AM
- Peabody Energy (NYSE:BTU): Q2 EPS of -$0.65 misses by $0.02.
- Revenue of $1.34B (-23.9% Y/Y) misses by $100M.
Jul. 27, 2015, 5:30 PM
- AGCO, AHGP, AIXG, AKS, ALLY, AMG, ARG, ARLP, ARW, AUDC, AUO, AXE, BP, BTU, CIT, CMI, CNC, CNX, COMM, CPLA, CRY, CVLT, CYNO, DD, DHI, DHX, ECL, F, FBC, FCH, FDP, FMER, FSS, GLW, GPN, GRUB, ICLR, IPGP, IPI, IR, JBLU, JEC, KEM, LH, LPT, LYB, MAS, MMC, MRK, MZOR, NCI, NLSN, NOV, NTLS, OAK, OFC, PCAR, PCH, PCP, PFE, POR, RAI, RDWR, SALT, SIR, SIRI, ST, SVU, TXT, UPS, UTHR, WAT, WDR, WYN
Jul. 27, 2015, 4:45 PM
- Peabody Energy's (NYSE:BTU) credit is downgraded to CCC from B at Fitch, reflecting the rating firm’s view that liquidity could become constrained in the absence of higher metallurgical coal prices.
- Fitch believes BTU's 2015 EBITDA could total ~$400M while free cash flow burn could reach ~$500M; while Fitch thinks cash burn would slow in 2016 and reverse in 2017 with the roll-off of hedges and modest recovery in met coal prices, total debt with equity credit to EBITDA could rise above 7x in 2017, which could limit access to capital to refinance $1.5B notes due 2018.
- BTU, which is due to report earnings tomorrow morning, fell another 16.5% in today's trade to $1.03.
Jul. 22, 2015, 12:45 PM
Jul. 22, 2015, 11:34 AM
- J.P. Morgan finally gets around to downgrading Peabody Energy (BTU +11.7%), cutting its rating to Neutral from Overweight, two days after shares hit a 52-week low.
- After Arch Coal ([ACI]] +1.1%) and Alpha Natural’s (ANR +8.1%) share prices fell below $1, the spotlight fell on BTU, the firm explains, adding that the stock is vulnerable to squeezes, as 36% of BTU equity is now shorted; but in view of the firm's cautious commodity view on natural gas into year's end, it says it is "uncomfortable" with its Overweight rating on BTU.
- JPM says its coal Overweights are now restricted to Alliance Resource Partners (ARLP -1.9%) and Foresight Energy (FELP +2.1%).
Jul. 16, 2015, 8:48 PM
- The coal industry’s multi-employer pension fund is suing miners Peabody Energy (NYSE:BTU) and Arch Coal (NYSE:ACI) in an effort to saddle them with nearly $800M of liabilities Patriot Coal could escape in its bankruptcy.
- Patriot, which was formed from assets once owned by BTU and ACI, filed for Chapter 11 bankruptcy protection in May following a collapse in coal prices, and the fund argues that “a principal purpose” for the transactions creating what is now Patriot was "to evade or avoid their obligations to the 1974 Pension Plan."
- BTU says it “has no liability to the plan” and that the claims are without merit.
Jul. 16, 2015, 10:27 AM
- The NYSE says it is delisting Alpha Natural Resources (NYSE:ANR), based on "abnormally low" price indications; shares are halted but were -37% premarket.
- WSJ reported yesterday that ANR was engaged in potential restructuring negotiations with senior lenders; Walter Energy filed Chapter 11 on the same day.
- Other coal companies are mostly higher in early trading: ACI -0.6%, BTU +1.3%, CLD +1.2%, WLB +2.1%.
Jul. 14, 2015, 3:43 PM
- Challenging results should be expected across the spectrum of coal producers, including Peabody Energy (BTU -3.3%), Cloud Peak Energy (CLD -1.5%), Alpha Natural Resources (ANR +0.6%) and Arch Coal (ACI +5.1%), Cowen analysts maintain, seeing average Q2 EBITDA estimates for the group ~4% below consensus.
- Among the coal names, Cowen says it is farthest below consensus for ACI (13% below consensus) and ANR (27% below consensus); amid deteriorating financial conditions, self-bonding capacity has become a hot topic for these companies and will be at the forefront of Q2 earnings calls.
- Cowen considers Alliance Resource Partners (ARLP +0.2%) its top pick and believes the company's White Oak transaction solidifies distribution growth potential; the firm rates ARLP, ACI and Foresight Energy (FELP -2.3%) at Outperform, and Natural Resource Partners (NRP -1.3%) and Teck Resources (TCK -0.2%) at Market Perform.
Jul. 13, 2015, 12:49 PM
- For a real sense of coal's diminishing prospects (NYSEARCA:KOL), check out what is happening in the bond market, where three of the biggest U.S. coal producers had the worst-performing bonds for Q2: Alpha Natural Resources (NYSE:ANR) -70%, Peabody Energy (NYSE:BTU) -40%, Arch Coal (NYSE:ACI) -30%.
- Bonds are where coal companies traditionally turn to raise money for new mines and environmental cleanups, but investors are increasingly reluctant to lend to them, as coal bond prices tumbled 17% in Q2, Bloomberg reports.
- Even setting aside environmental and health issues, renewables are on a trajectory to outcompete fossil fuels, starting with coal; between now and 2040, two-thirds of the money spent on adding new electricity capacity worldwide will be spent on renewables, according to the analysis.
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