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!

3 Ways to Profit from Coal's Eventual Rebound

NEW YORK (TheStreet) -- Despite signs to the contrary, there is a bullish outlook for coal over the long term. Recent reports from BP (BP), Caterpillar (CAT) and ExxonMobil (XOM) were positive. Even though there may be a "War on Coal" from the Obama Administration, the approval of the Keystone Pipeline should also be a boost eventually for securities such as Peabody Energy (BTU), the biggest coal company, and Market Vectors Coal (KOL), the exchange traded fund for the sector.

There is certainly no doubt that coal has a long way to rebound. Market Vectors Coal, now around $17.60 a share, is down from about $60 a share in June 2008. Peabody Energy was close to $90 a share at that time. Now it is around $16.50. The same story persists for other publicly traded companies in the coal industry. During 2008 and into 2009, manufacturing activity from big consumers like China, Europe, and Russia, among others, fell off.

Natural gas declined in price, which made it more attractive as an energy source to utilities. The "War on Coal" has made it more difficult for coal producers as it favors fuel sources that are more environmentally friendly.

According to the World Coal Association, a collective of major industrial coal producers and stakeholders, more than 40% of the world's electricity and about 30% of the primary energy needs come from coal.

Recent reports from BP and ExxonMobil predict that the use of coal also will increase in the decades ahead. The "BP Global Energy Outlook 2035" has the consumption of coal growing by 1.1% annually. ExxonMobil's "The Outlook for Energy: A View to 2040," sees the world's demand for coal rising until 2025.

In a recent earnings call, Doug Oberhelman, chairman and CEO of Caterpillar, the biggest heavy equipment maker on earth, remarked, "The good news is, mine production has generally been up and improved in 2013. And we think it will likely be up again in 2014."

1 of 2

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 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

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