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Cloud Peak Energy Inc. (CLD) In the Spotlight Due to President Trump’s Executive Order

Cloud Peak Energy Inc. (NYSE:CLD) is in the spotlight after President Donald Trump signed an executive order to curb the U.S. federal government’s enforcement of various climate regulations initiated by his predecessor. President Trump is doing so to put American jobs first, which to him is more important than regulating global temperature changes. In particular, Trump’s executive order will remove the moratorium on the mining of coal on U.S. federal land, initiate a Federal review of the Clean Power Plan initiative, and aim to loosen energy regulations. Many traders expect Trump’s policies to favor coal activity, whose constituents supported the President in the election.

Sentiment in Cloud Peak has improved of late, in part due to the Trump executive order and in part due to higher natural gas prices. Shares of Cloud Peak have rallied from the high $3’s to over $4.5 in early morning trading.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Of the 742 elite funds we track, 19 funds owned $54.36 million of Cloud Peak Energy Inc. (NYSE:CLD) and accounted for 15.80% of the float on December 31, up from 13 funds and $43.07 million respectively on September 30. Among the new fund holders include Jeffrey Gendell‘s Tontine Asset Management, which initiated a new stake of 1.33 million shares.

The Bottom Line

While the combination of strict regulations and low natural gas prices hurt Big Coal under President Obama, Trump is rolling back the former and the latter’s futures price has risen nicely lately. The combination has improved sentiment, which has caused Cloud Peak Energy Inc. (NYSE:CLD) shares to bounce. In the long term, Cloud Peak shareholders will need natural gas prices to be strong and for Asian coal demand to remain robust in order for shares to do well.

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Disclosure:None