This Day On The Street
Continue to site right-arrow
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!

Coal Rebounds as the Flexible Fuel for the Long-Term Investor

Stocks in this article: BTU KOL USO UNG BP

NEW YORK (TheStreet) -- I've written before on the reasons to be bullish on coal as Peabody Energy (BTU), the sector blue-chip, and Market Vectors Coal (KOL), the exchanged-traded fund, are both up for the last week and month of market action.

Market Vectors Coal has also risen for the last quarter, six months and year of trading. It also outperformed United States Oil (USO), the exchange traded fund for oil, and United States Natural Gas (UNG), the exchange traded fund for natural gas, over the last month, quarter, and six months. 

There are many reasons to expect Peabody Energy, Market Vectors Coal, and other securities from the coal group to reward long term investors.

The first is the easiest to comprehend and the most important: demand. Over the last decade, coal use has added more to the global energy supply than any other source. Coal provides electricity for more than 40% of the world and that too is increasing. The amount of power that comes from coal in the U.S. is now at 42%, nearly a one-fifth jump from 2012 when it was at 36%.

READ MORE: Peabody Energy Becomes #124 Most Shorted S&P 500 Component, Replacing Denbury Resources

Next is that coal is the easiest fuel source to access. Coal can be dug up and carried home to provide heat and power: try doing that with oil, natural gas, or any form of alternative energy. In a recent article in Real Money, Glenn Williams laid out why, "…liquefied natural gas is a nation’s last fuel of choice." Natural gas and oil require extensive, expensive pipeline networks. Ease of use is why the demand for coal has increased globally and will continue to do so in the future.

For all of its problems, coal has many other advantages over oil, natural gas, and alternative energy, too.  It is not only the easiest to access, it is also the easiest form of fuel to store. That is the great weakness of alternative energy. Shipping coal is much safer, too: if a train carrying coal tips over it causes a mess, not an explosion like that for oil. It can be transported in a wide variety of modes. It is also a much more flexible fuel. That is why usage of coal grew by 3% last year, more than any other form of energy according to the Statistical Review of World Energy from BP (BP), the British oil giant.

READ MORE: Bullish Two Hundred Day Moving Average Cross - KOL

1 of 2

Select the service that is right for you!

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 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • 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