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 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!