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

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

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

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How 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

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!