Alpha Natural Resources, Inc. (ANR) is an Underrated Coal Play

Page 1 of 2

Alpha Natural Resources, Inc. (NYSE:ANR) is down over 50% year-to-date on the back of lower than expected coal demand and depressed mineral prices. Being the third largest coal producer in the U.S., Alpha is still sometimes overlooked. Sales were up 80% in 2011, thanks in part to its acquisition of Massey Energy, but revenues are only expected to be up 2% in 2012. Driving the stock down has also been a decline in coal volumes, which were in part a product of high stockpiles at utility companies due to the ongoing natural gas switchover.

CITADEL INVESTMENT GROUP

Alpha has some of the strongest expected sales growth of the major coal stocks for 2013; the sell-side expects it to grow top line revenues by 6%. Billionaire Ken Griffin – founder of Citadel Investment Group – was one of Alpha’s biggest investors last quarter (check out Ken Griffin’s newest picks).

In general, the vast amount of production cuts by U.S. coal companies should help reduce the stockpile buildup at utilities, and set the industry up for higher prices in 2013. The expected rise in natural gas prices should be a near-term catalyst as well. We believe that Alpha should trade more in line – currently at only 0.3x sales – with its thermal coal peers Arch and Alliance. We are also encouraged by the coal company’s 5-year expected growth rate that comes in at 5%, which is second to only Walter Energy.

Peabody Energy Corporation (NYSE:BTU), like many of its coal brethren, expects flat sales growth in 2013, following a 17% increase in 2012. Peabody has a robust operating scale, giving the coal company an advantage in relation to its peers. Part of this includes the company’s international exposure. Demand and pricing will primarily be driven by increased demand from China, in addition to a more bullish global steel environment. George Soros was one of Peabody’s biggest hedge fund owners last quarter (check out George Soros’ new picks).

What about the remaining competitors in this space?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!