Thu, Feb. 26, 2:45 PM
- J.P. Morgan analysts see some encouraging signs for coal (NYSEARCA:KOL), which would be good news for companies such as Peabody Energy (BTU -5.7%), Cloud Peak Energy (CLD -5%), Alliance Resource Partners (ARLP +0.9%) and Foresight Energy (FELP -1.2%).
- Coal equities have bounced off lows, the JPM crew says, which meshes with its belief that the greater financial challenges faced by oil and gas E&Ps should reduce natural gas supply and help coal prices later this year and into 2016.
- JPM has Overweight ratings on the two MLP coal miners ARLP and FELP, which it expects to benefit as the gas market tightens in 2016 and with the added attraction of yield in a yield-starved world; BTU and CLD enjoy stronger balance sheets, which should see the companies through what could still be a sloppy coal market in 2015.
- Alpha Natural Resources (ANR -6.9%) and Arch Coal (ACI -4.3%), however, acquired so much debt that their equity effectively has become primarily an “option" on fluctuations in the coal market, the analysts say.
Tue, Jan. 27, 11:28 AM
- Peabody Energy's (BTU -6.7%) move to slash its quarterly dividend to less than a penny a share is helping push coal company stocks (NYSEARCA:KOL) lower: WLT -1.6%, ACI -1%, CNX -1.8%, CLD -2%, WLB -5.4%, ARLP -1.2%.
- Cowen analysts see the move as "a prudent move amid uncertain coal markets," and Sterne Agee says the dividend cut will save BTU $100M in annual cash payments.
- Citigroup's Brian Hu maintains a Buy rating on BTU, saying that although management expects U.S. thermal coal demand to fall by 50M-60M tons in 2015, "BTU is better insulated due to their heavily contracted position and Y/Y improvement in Southern PRB rail performance.”
Dec. 11, 2014, 11:19 AM
- Consol Energy (CNX +2.3%) is higher after announcing late yesterday that it is preparing to spin off some of its coal operations, creating an MLP for its thermal coal business and approving a $250M stock buyback.
- Sterne Agee says it would add to or introduce positions, citing CNX’s strong relative cash flow generation, overcapitalized balance sheet, and expected continued execution within its unconventional gas assets as allowing for valuation support and expansion.
- FBR Capital believes the thermal coal MLP could potentially provide a material uplift of $3-$9 per share by pulling forward the value of the coal assets and providing growth capex for CNX's E&P business (Briefing.com).
- Citigroup’s Brian Yu, however, does not see how the MLP creates value for CNX; given the lack of growth in CNX’s coal assets, Yu thinks it would be tough to trade at the same valuation as Alliance Resource Partners (NASDAQ:ARLP) or Alliance Holdings (NASDAQ:AHGP).
Nov. 28, 2014, 10:25 AM
- OPEC's Thursday decision to keep oil production unchanged has sparked a commodity stock rout, one that hasn't left coal stocks unscathed.
- Major decliners: BTU -6%. ACI -6.6%. ANR -6.2%. CLD -4.3%. CNX -2.8%. NRP -3.5%. ARLP -3%. CLF -3.6%.
- Thermal coal prices have already fallen sharply this year.
- ETF: KOL
Nov. 6, 2014, 3:35 PM
- “The fundamental case for coal is strengthening but requires several years of patience," and coal miners (NYSEARCA:KOL) still pose too much short-term risk for investors, J.P. Morgan analyst John Bridges says.
- The coal sector is "very much a weather trade" which is sensitive to this winter’s temperatures, Bridges says, "consequently, without another particularly cold winter or a direct cyclonic hit on Australia’s coking coal mines, coal prices and thus the coal equities are likely to remain volatile through the 2014-15 winter."
- In the sector, Bridges recommends Consol Energy (CNX +0.6%), Alliance Resource Partners (ARLP -0.4%) and Foresight Energy (FELP +1.7%), as only high-yielding coal MLPs are resonating with investors.
- Most big coal names are adding to yesterday's gains, as the IEA predicts world coal demand to grow 2.3% in 2015, mostly undaunted by stricter clean air regulations and competition from cheap natural gas: ANR +5.1%, ACI +4.7%, BTU +0.5%, WLT -1.1%, CLD +0.9%.
Sep. 25, 2014, 3:40 PM
- Coal stocks take a pounding as the quarterly benchmark price for metallurgical coal drops to a six-year low, according to Doyle Trading, amid a global oversupply and a slowdown in Chinese demand (KOL -2%).
- Australian coal producers and Japanese steel mills agreed to a Q4 price of $119/metric ton, down $1 Q/Q, dashing hopes for a rebound in the steelmaking coal which has slumped 64% since reaching $330 in 2011.
- CLF -9.2%, WLB -6.6%, ANR -4.9%, ARLP -3.7%, WLT -3.5%, BTU -3%, ACI -2.9%, CLD -2%, YZC -1.9%, CNX -1.2%.
Jul. 29, 2014, 10:33 AM
- Arch Coal (ACI +3.5%) moves higher after its Q2 earnings loss came in better than expected as operating costs per ton fell 7%.
- Q2 sales fell 7% Y/Y to $713.8M, missing analyst consensus, but operating costs per ton fell to $20.55 from $21.19.
- ACI lowers its FY 2014 sales volume targets, including cutting its thermal sales volumes forecast to 124M-130M tons from 124M-132M tons to reflect the effects of transportation bottlenecks and the impact of a fall in steel production.
- Other coal names also are higher: ANR +4.3%, ARLP +2.4%, PVA +1.9%, WLB +1.9%, BTU +1.4%, RNO +0.9%, WLT +0.8%, KOL +0.4%.
Jul. 28, 2014, 11:46 AM
- Alliance Resource Partners (ARLP +4.9%) rallies to all-time highs after reporting Q2 results that included new quarterly records in coal sales volumes, revenues and net income.
- ARLP's Q2 net income climbed 32% Y/Y to $1.37/unit, revenues rose 8% to nearly $599M while coal volumes sold totaled more than 10M tons.
- Says it has essentially fully priced and committed its estimated 2014 coal sales volumes, securing during Q2 new coal sales commitments for the delivery of ~8.1M tons through 2017.
Jun. 3, 2014, 12:45 PM
- EPA chief Gina McCarthy says she expects for significant changes in proposed state emission goals before a final rule is issued next year if the individual states show they can’t meet the targets.
- McCarthy says the agency made changes when developing its rules on mercury pollution in 2012 after utilities complained, and says she "wouldn’t be surprised if we made significant” revisions to the carbon proposal.
- McCarthy notes "confusion" around the targeted 30% emission cuts, saying it’s not a goal of the plan but an estimate of what the EPA thinks can be achieved.
- Coal names are broadly lower: WLT -4.4%, ACI -3.7%, ANR -2%, ARLP -1.9%, CNX -1.3%, CLD -0.3%, BTU -0.2%.
- Big utilities are mostly higher: EXC +1.6%, AEP +1%, NRG +0.7%, D +0.5%, XEL +0.4%, SO +0.3%, PEG +0.2%, NEE +0.1%, DUK -0.2%
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, IYE, GASX, PXJ, RYE, FENY, UPW, RYU, FUTY, FXN, FXU, DDG, SDP
Jan. 9, 2014, 8:29 AM
- Cowen downgrades Alpha Natural Resources (ANR), Teck Resources (TCK) and Walter Energy (WLT) to Market Perform from Outperform, believing improved sentiment in the coal markets (particularly thermal) has led stocks significantly ahead of fundamental improvement.
- The firm thinks investors may migrate to Peabody Energy (BTU) based on favorable exposure to international met operations and an improving PRB market, but see it also near fair value; it favors thermal-focused names Cloud Peak (CLD) and Alliance Resource Partners (ARLP).
- ANR -1.5%, TCK -0.8%, WLT -1.5% premarket.
Dec. 2, 2013, 3:52 PM
- The late-day rise in coal stocks (KOL) is attributed to comments by the EPA's Gina McCarthy that the agency would give states "significant flexibility" in meeting carbon emission requirements from power plants; the EPA will propose the standards next June, McCarthy says.
- Analysts say such flexibility would be especially positive for James River Coal (JRCC +9.7%), whose shares momentarily popped 25% before calming down a bit.
- Also: ACI +3%, ANR +1.4%, BTU +0.6%, WLT +1.3%, CNX +1.6%, CLD +0.8%, ARLP -0.2%.
Sep. 27, 2013, 3:49 PM
- Alliance Resource Partners (ARLP -2.4%) says its Pontiki mine in Kentucky is expected to close by year end, and its Excel Mining subsidiary issued Worker Adjustment and Retraining Notification notices to all employees at the complex.
- ARLP does not expect the mine closure to have a material impact on 2013 financial results.
Jun. 25, 2013, 2:59 PMCoal stocks (KOL +0.7%) enjoy a bit of a short-covering rally as Pres. Obama's climate change speech displays a similar stance toward the industry as has been heard in prior speeches, but gains don't make up for yesterday's big losses. WLT +7.1%, ACI +4%, PVR +2.8%, YZC +1.8%, PVG +2.4%, PVA +1.9%, RNO +1.6%, ANR +1.4%, AHGP +1.4%, ARLP +1.4%, BTU +1.2%. | 9 Comments
Jul. 18, 2012, 3:29 PMBB&T's Mark Levin is still bullish on one coal producer, rating Alliance Resource Partners (ARLP +1.7%) a Buy partly because its MLP structure pays out consistent dividends while investors wait for the thermal coal market to recover. He's not sure when that uptick will come, but sometimes market perception recovers more quickly than physical markets, he says. | Comment!
Apr. 19, 2012, 11:03 AMA stellar earnings report from Peabody Energy (BTU +6.9%) - fueled in part by production gains in Australia - spills over to help lift up other select names in the beat-up sector along with word that U.S. coal exports to China may double in 2012. Advancers: PCX +6.6%, ANR +3.8%, CNX +2.8%, ACI +6.5%, ARLP +4.9%. | Comment!
ARLP vs. ETF Alternatives
Alliance Resource Partners LPis a diversified producer and marketer of coal to United States utilities and industrial users. It operates ten underground mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia.
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