This Day On The Street
Continue to site
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

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."

Must Read: [video] Quick Take: Satya Nadella Is Microsoft's CEO, Gates Takes Larger Role

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
KOL $8.69 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs