This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China's Serious Coal Problem

By Kevin McElroy

NEW YORK (TheStreet) -- Chinese President Hu Jintao meets with President Obama today in Washington DC.

The two presidents are supposed to have a private lunch and then discuss a variety of topics including trade, military, North Korea, Iran, human rights, the dollar, the yuan and the weather, no doubt.

As the east coast is being hammered with a wintry mix of sleet, freezing rain, snow and ice, you might expect the topic of coal to come up.

After all, a majority of electricity in the United States and China is provided by coal. And for the past few years, China has started to import coal -- mostly from Australia.

As a result, China's domestic coal companies are practically minting money. They can't produce coal fast enough, because no matter how much coal they bring to market, there's a near-guarantee that they'll be able to sell it for top dollar.

They don't have to worry about anything except for increasing production.

And now, with floods in Australia, the amount of coal being shipped to China has decreased substantially.

Coal prices have responded favorably -- rising from $89 per metric ton up to over $120 per metric ton -- with no signs of stopping:

It's been a year since my boss, Ian Wyatt, recommended one small Chinese coal company to subscribers of his research service Energy World Profits.

And folks who bought this company when he recommended it are now sitting on 81% gains.

Today, Ian still targets an even higher price for this company -- and it's still a buy.

I'm talking about Puda Coal (PUDA).

A lack of Australian coal puts this company in an even better position. Even when Australian coal production resumes, the market will have to play catch up. There's no substitute for coal in China, and they've been increasing their imports.

So my recommendation would be to buy Chinese coal companies like Puda -- with domestic production. Even if China's coal demand is reduced by half, they'll still need to tap into their domestic supply. It's relatively cheaper than Australian coal, it's readily available and it's extremely important to China's growth and sustainability.

I'd recommend picking up shares of Puda under $20. That's about a 50% upside from today's price.

But if you're interested in finding out the next area in energy growth, consider taking a trial subscription to Energy World Profits. You can click here to learn about an opportunity to invest in American oil production, far, far away from the Gulf of Mexico.

Wyatt Investment Research, founded in 2001 as a publisher of newsletters, offers independent investment research of financial markets, stocks, bonds, ETFs and mutual funds to about 250,000 individual investors. The company is led by founder Ian Wyatt, who serves as publisher and chief investment strategist.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,106.70 +29.83 0.17%
S&P 500 2,000.02 +2.10 0.11%
NASDAQ 4,570.6370 +13.29 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs