In this article, we discuss 5 cheap coal stocks to buy now. If you want to read about some more cheap coal stocks to buy now, go directly to 10 Cheap Coal Stocks to Buy Now.
5. Alliance Resource Partners, L.P. (NASDAQ:ARLP)
Number of Hedge Fund Holders: 5
Share Price as of August 17: $23.10
Alliance Resource Partners, L.P. (NASDAQ:ARLP) is a diversified natural resource company. In early August, Joseph W. Craft, the CEO of the firm, said that Alliance Resource Partners, L.P. (NASDAQ:ARLP) has been able to execute new coal sales commitments for delivery of 24.9 million tons through 2025 at prices above recent expectations. Craft noted that this was due to global superpowers scrambling to bolster low stockpiles in the near term and secure longer term reliable supply. The firm has already sold 8,933 tons of coal in the past 12 months, up from 7,846 tons in the previous 12-month period.
Alliance Resource Partners, L.P. (NASDAQ:ARLP) posted earnings for the second quarter of 2022 on August 1, reporting earnings per share of $1.23, beating market estimates by $0.29. The revenue over the period was $616 million, up 70% year-on-year.
At the end of the first quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $94 million in Alliance Resource Partners, L.P. (NASDAQ:ARLP), the same as in the previous quarter worth $79 million.
Among the hedge funds being tracked by Insider Monkey, Delaware-based investment firm Magnolia Capital Fund is a leading shareholder in Alliance Resource Partners, L.P. (NASDAQ:ARLP), with 4.9 million shares worth more than $76 million.
In its Q2 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Alliance Resource Partners, L.P. (NASDAQ:ARLP) was one of them. Here is what the fund said:
“Alliance Resource Partners, L.P. (NASDAQ:ARLP) rose 20.3% in the period. Alliance Resource Partners, L.P. (NASDAQ:ARLP) reported 1Q22 revenue of $460.9 million, +44.7% Y/Y, but down 2.7% from 4Q21, as a result of lower coal sales volume due to previously reported coal shipment delays. The company reported 1Q22 Adjusted EBITDA of $152.3 million, +61.5% Y/Y, and +16.9% from 4Q21, due to higher realized prices for coal and higher oil and gas royalties. The company also raised its 2Q22 cash distribution to $0.35 per unit, implying a 6.7% annualized based on the stock’s 7/13 closing price, and representing a 40% increase from the 1Q22 distribution of $0.25 per unit. Additionally, management now expects to deliver coal for $54-63 per ton in 2022, up 16.7% from January’s estimate of $49.05-51.25 per ton at the midpoint, and to sell as much as 37 million tons this year, compared to previous guidance for as much as 36.7 million tons.”
4. Ramaco Resources, Inc. (NASDAQ:METC)
Number of Hedge Fund Holders: 22
Share Price as of August 17: $10.80
Ramaco Resources, Inc. (NASDAQ:METC) produces and sells metallurgical coal. On August 8, the company announced that it would be purchasing Maben Coal from Appleton Coal for $30 million. The former owns 33 million tons of mineable coal reserves on more than 28,000 leased acres in West Virginia. The firm expects to mine 1.5 million tons of coal contained in the Sewell seam as well as another 31 million tons of coal contained in the Pocahontas 3 and Pocahontas 4 seams in the near future.
On August 10, B. Riley analyst Lucas Pipes maintained a Buy rating on Ramaco Resources, Inc. (NASDAQ:METC) stock and lowered the price target to $24 from $31, identifying higher capital spending and cost assumptions as some of the reasons behind the target drop.
At the end of the first quarter of 2022, 22 hedge funds in the database of Insider Monkey held stakes worth $38 million in Ramaco Resources, Inc. (NASDAQ:METC), compared to 14 in the previous quarter worth $13 million.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Marshall Wace LLP is a leading shareholder in Ramaco Resources, Inc. (NASDAQ:METC), with 485,907 shares worth more than $7.6 million.
In its Q1 2022 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and Ramaco Resources, Inc. (NASDAQ:METC) was one of them. Here is what the fund said:
“This quarter we sold our entire stakes in Ramaco Resources, Inc. (NASDAQ:METC). The reason is purely due to their lower upside potential after a very strong performance. In the case of Ramaco Resources, Inc. (NASDAQ:METC), as we mentioned in the previous quarterly letter, its high volatility allowed us to realize high returns on two different occasions (we exited the position and then re-entered it) in a short period of time, demonstrating the importance of rebalancing positions in our portfolio. Meanwhile, although with somewhat different dynamics, our investments in the metallurgical coal companies Ramaco Resources has strong returns and we sold them during the period.”
3. SunCoke Energy, Inc. (NYSE:SXC)
Number of Hedge Fund Holders: 15
Share Price as of August 17: $7.06
SunCoke Energy, Inc. (NYSE:SXC) operates as an independent producer of coke. The firm is trying to build a dividend profile in line with other coal miners. On August 2, the company declared a quarterly dividend of $0.08 per share, an increase of over 33% compared to the previous dividend of $0.06 per share. The forward yield was an attractive 4.38%. The dividend is payable to shareholders by early September. The firm was founded in 1960 and is based in Lisle, Illinois.
On August 2, SunCoke Energy, Inc. (NYSE:SXC) posted earnings for the second quarter of 2022, reporting earnings per share of $0.21, missing market estimates by $0.02. The revenue over the period was $501 million, up 37% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in SunCoke Energy, Inc. (NYSE:SXC), with 2.9 million shares worth more than $26 million.
At the end of the first quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $60 million in SunCoke Energy, Inc. (NYSE:SXC), compared to 16 in the preceding quarter worth $63 million.
In its Q4 2021 investor letter, Steel City Capital, an asset management firm, highlighted a few stocks and SunCoke Energy, Inc. (NYSE:SXC) was one of them. Here is what the fund said:
“SunCoke Energy, Inc. (NYSE:SXC) owns five cokemaking facilities in the U.S. capable of producing 4.2 million tons per annum (mtpa) of blast furnace coke. Coke is a key raw material used in the process of producing steel via the blast furnace method. In addition to its cokemaking operations, SXC owns a collection of marine terminals, the largest of which is the Convent Marine Terminal (CMT) in Louisiana. CMT has the capacity to transload 15 mtpa of coal and other industrial materials. In 2020, CMT accounted for 55% of U.S. thermal coal exports from the U.S. Gulf Coast and 15% of total U.S. thermal coal exports.
While the broader steelmaking industry recently benefitted from all-time high steel prices, resulting in record production levels, growing cash flow, and improving balance sheets, SXC has continued to trade with a free cash flow yield in excess of 20%, reflecting considerable concern about the company’s prospects. I believe there is a broad misunderstanding of the SXC story driven in part by shallow analysis of the company’s business model and cash flow prospects. I believe fair market value ranges from $14-$17, representing upside of 84-122% from current levels. What’s more, SunCoke Energy, Inc. (NYSE:SXC) represents an attractive takeout target for industry-consolidator Cleveland Cliffs (CLF), which at a minimum provides downside protection, but also offers a potential catalyst for value realization in the future. ” (Click here to see the full text)
2. Hallador Energy Company (NASDAQ:HNRG)
Number of Hedge Fund Holders: 8
Share Price as of August 17: $6.47
Hallador Energy Company (NASDAQ:HNRG) engages in the production of steam coal. The company owns and runs the Oaktown Mine 1 and Oaktown Mine 2 underground mines. These are located in Indiana. It also operates Ace in the Hole, another mine in the same state. Apart from coal, the firm has been involved in gas exploration activities as well. The company was founded in 1949. In early July, the firm raised the 2023 EBITDA guidance to $160 million in light of new contracts.
Hallador Energy Company (NASDAQ:HNRG) posted earnings for the second quarter of 2022 on August 15, reporting a revenue of more than $65 million, up over 18% compared to the revenue over the same period last year.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm CastleKnight Management is a leading shareholder in Hallador Energy Company (NASDAQ:HNRG), with 935,625 shares worth more than $3.7 million.
At the end of the first quarter of 2022, 8 hedge funds in the database of Insider Monkey held stakes worth $8.3 million in Hallador Energy Company (NASDAQ:HNRG), compared to 9 in the previous quarter worth $5.8 million.
1. American Resources Corporation (NASDAQ:AREC)
Number of Hedge Fund Holders: 4
Share Price as of August 17: $2.58
American Resources Corporation (NASDAQ:AREC) engages in the metallurgical coal business. On August 11, the company announced that it would be starting the planning and development of two carbon mines in Kentucky. These mines will supply the McCoy Elkhorn complex of the firm with additional metallurgical carbon. The mines are capable of producing 45,000 tons of coal a month and have a low cost of development. The firm also recently received $4.9 million in federal tax credits for its Wyoming County Coal complex in West Virginia.
American Resources Corporation (NASDAQ:AREC) posted earnings for the second quarter of 2022 on August 15, reporting a revenue of more than $16 million, up over 312% compared to the revenue over the same period last year.
At the end of the first quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $2.1 million in American Resources Corporation (NASDAQ:AREC), compared to 2 in the previous quarter worth $461,000.
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