What Coal CEOs Are Saying Entering 2013: Peabody Energy Corporation (BTU), Alpha Natural Resources, Inc. (ANR)

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Investors simply cannot avoid monitoring the natural gas market when considering coal as a bullish investment. Arch Coal Inc (NYSE:ACI) President and CEO John Eaves touched on this after discussing his 2012 performance. In his mind, the downward pressure low natural gas prices have been placing on coal could finally shed some weight.

[We] believe that natural gas prices are unsustainably low today, as companies cannot make sufficient returns to justify continued investment, as evidenced by the rig count decline. Over time we expect market forces to move gas prices higher, which should further bolster coal’s competitiveness in the power sector. We also believe that US generators entered 2013 with conservative burn forecasts, and could potentially find themselves needing coal as the year progresses. This development should initially help to reduce the stockpile overhang, but could eventually lead to more active and dynamic market in the second half of the year and into 2014.

After reading these three outlooks, CONSOL Energy Inc. (NYSE:CNX) reels everyone’s expectations a bit with Chairman and CEO J. Brett Harvey’s skeptically confident forecast:

And remember, it’s demand for energy. It’s not the ability to serve the customer. The demand is just not there, and we think China’s turning a little bit, and that looks pretty strong. As Jim talked about, our inventories there have dropped right inside of China, and we’re optimistic. But it’s a little bit dicey, yet. I wouldn’t give a robust look, but I can tell you we’re cautiously optimistic.

A fifth company, though much smaller than those mentioned here — market capitalization of just $95 million — is James River Coal Company (NASDAQ:JRCC) . Due to its limited scope it is potentially a riskier play on the rebound, but it releases earnings on March 7 for those interested on getting a smaller player’s perspective.

Investing in cyclical industries like coal requires attention to the details that might signal the bottom of a downward cycle. These peaks and troughs are inherent, and that is something that investors must come to grips with. You can only hope that successive troughs are higher than those that came before it.

For those of use who have a penchant for long-term investing, getting in at, or as near as possible to, the bottom of these troughs is ideal. Based on these CEOs’ appraisals of what the landscape looks like toward the horizon, we could have finally reached that point of inflection. Like Benjamin Franklin once said: “Kites rise highest against the wind.”

The article What Coal CEOs Are Saying Entering 2013 originally appeared on Fool.com.

Taylor Muckerman owns shares of CONSOL Energy. The Motley Fool has no position in any of the stocks mentioned.

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