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

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Bloodiest UFC Fights Ever Fought

Most Expensive Rum Brands in the World

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!