A Natural Resource Partners Insider Likes Coal and Dividends

Page 1 of 2

A business connected to Natural Resource Partners LP (NYSE:NRP) Board member Christopher Cline purchased almost 760,000 shares from the company for $15 million (which comes out to a price of $19.82 per share). Natural Resource Partners is a $2.4 billion market cap company which primarily owns (and then leases) coal mines in the United States.

We track insider purchases because insiders start out with a close economic relationship to their company; the principles of diversification therefore suggest that they should avoiding increasing their dependence on it. As a result we think that insider purchases should indicate quite high confidence in the company, and we would add that studies have shown a slight outperformance by stocks that insiders buy. So insider purchases can serve as a screen for companies which might then by worthy of further research. Other insiders were buying shares of Natural resource Partners last summer at prices in the $20 to $22 range (see a history of insider purchases at Natural Resource Partners).

SOROS FUND MANAGEMENT

The coal industry can be divided into two verticals, both of which have been experiencing demand pressures. Thermal coal, which is used by utilities to generate electricity, has been increasingly replaced by natural gas as high production has driven prices of the commodity down (though this trend does appear to be slowing). Metallurgical coal is used to produce steel, which in turn depends on global macro conditions; poor numbers in Europe in particular have therefore rippled backwards through the supply chain to impact metallurgical coal producers. Natural Resource Partners’ coal assets include both types of coal, with metallurgical coal associated with just under half of the company’s coal royalty revenues.

Natural Resource Partners pays a dividend yield of about 10%, and the record of dividend payments is very strong. It generally hasn’t cut its payments, and though in recent years the rate of increase has been slow it doesn’t need to increase its dividend at all to be a potential income stock. We would note, however, that the stock price has fallen 21% in the last year. In terms of value, the stock trades at 18 times trailing earnings and 12 times analyst consensus for 2013. That’s not quite low enough to recommend it from a pure value perspective, but investors who put weight on yields should consider the stock.

Let’s look at other coal companies:

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!