Peabody Energy Corporation (BTU), CONSOL Energy Inc. (CNX): 2 Good Coal Stocks to Invest In

Page 1 of 2

Coal stocks have been under constant pressure since the financial crisis. Most are trading at a fraction of pre-crisis value which has some investors wondering if the value of these stocks has plunged too far, making now a good time to invest in a rebound in coal. As you can see from the chart below, the performance has been absolutely abysmal:

CNX Chart

CNX data by YCharts

If that chart has you seeing opportunity instead of failure then I have good news for you. Among the group, I see two coal stocks with business models that set them apart from the group and give them an edge. If you are looking to invest in coal, these are the two stocks worth digging into if you want to play the future rebound of coal.

Peabody Energy Corporation (NYSE:BTU)

The global pure-play: Peabody Energy Corporation (NYSE:BTU)
With a leading presence in Australia, the southern Powder River Basin and the Illinois Basin, Peabody Energy Corporation (NYSE:BTU) has the best assets to access the world export markets. That’s vitally important because while coal might not be all that popular here in the U.S., Pacific Rim markets such as India and China are expected to import record coal volumes this year. Overall, seaborne thermal coal demand is likely to increase 50 million tonnes on growing Asian demand. The following slide really sums up coal demand from those two key Asian countries.

Source: Peabody Energy Investor Presentation (link opens a PDF)

Peabody Energy Corporation (NYSE:BTU) is ahead of its U.S.-based peers in tapping this demand. First, it acquired coal operations in Australia, which places it closer to its customers. In addition to that, it’s been active in securing long-term export capacity in the U.S. Last year it signed a deal with Kinder Morgan Energy Partners LP (NYSE:KMP) to increase its export capacity to more than 7 million tons of coal per year from Kinder Morgan Energy Partners LP (NYSE:KMP)’s Houston terminal. Overall, Kinder Morgan is adding to its coal export capacity in Louisiana as well as considering a coal export terminal at its existing bulk facility in Charleston, S.C. The clear trend here is that access to export markets is important to coal producers.

Page 1 of 2
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 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!