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Is Alpha Natural Resources, Inc. (ANR) a Good Stock to Buy?

CONSOL Energy Inc. (NYSE:CNX) and Peabody Energy Corporation (NYSE:BTU) are on somewhat firmer ground, and in fact CONSOL has “only” fallen 5% in the last year. Revenue at these two companies did decrease significantly in their most recent quarterly report, yet the decline compared to the fourth quarter of 2011 was closer to 10-15%. Peabody was profitable in terms of adjusted earnings numbers for 2012, and analyst consensus for 2014 implies a forward earnings multiple of 11. That figure- as well as Walter Energy, Inc. (NYSE:WLT)’s, obviously- would actually qualify the company for value status if it did hit its earnings targets. CONSOL currently carries trailing and forward P/Es of 18 and 15 respectively, suggesting that while it has taken less of a hit than other coal companies it also has less of an upside than the rest of the industry.

We certainly wouldn’t take sell-side forecasts at face value, but forward earnings estimates for some coal companies do look intriguing. Value investors might want to watch for any improvements in coal markets, and we would also wonder if there is any chance of industry consolidation which might help push up prices.

Disclosure: I own no shares of any stocks mentioned in this article.

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