Let’s talk coal.
With the bad news that’s been flooding the coal industry over the past few years, sentiment in the stock market for US coal producers couldn’t be worse. Two big names in the industry tell the story; Alpha Natural Resources (Symbol: ANR) and Arch Coal (Symbol: ACI). Over the past year both stocks have tumbled more than 50%, even while the S&P 500 Index has racked up a double-digit gain.
Most other coal plays in the US have suffered a similar fate, too. And fundamentally it makes some sense. After all, coal is considered “dirty” energy. So legislation has not been favorable here in the US.
Plus, at the same time the coal industry is facing a formidable headwind from Washington, the shale gas boom is delivering lots of super-cheap natural gas — a development that has made coal-burning power plants and coal-using steel manufacturers virtually a thing of the past. Natural gas is now cheaper, more efficient and cleaner to burn. So when coal-fired power plants have the choice to switch to gas, they do.
It’s a coal bloodbath! But it’s also a perfect opportunity to “buy low.” You see, although coal use in the US may be gearing down, the rest of the world is ratcheting it up. The best way to look at this situation is through US coal exports. Here’s a look at the recent export action…
Read More at Daily Reckoning . By Matt Insley.