NEW YORK (TheStreet) -- General weakness persists in the thermal coal markets; "we are still seeing some production push-backs and relative oversupply," in that area, according to S&P analyst Mathew Christy.
Still, many coal companies and industry analysts remain confident that growth opportunities for the coal sector remain plentiful, given the strength in the metallurgical coal markets this year -- fueled by the red-hot emerging economies, the hungry steel companies that supply these companies and tightness of met-coal supplies, especially in the Asia-Pacific regions.
Also of note is that electricity demand should firm-up along with the recovering the global economy, which would increase the need for thermal coal.
In light of all this, we've provided
readers with a
. But now it's your turn to tell us which one of them you think will outperform the sector.
Here's a taste of the stocks that we previewed for this week ...
Analysts are expecting a largely positive earnings report for
first quarter 2010 due to its predominant exposure to the metallurgical coal market -- widely expected to be a more profitable coal category to be in. Walter Energy entered the quarter with significant un-priced met, but reports say the company is now pricing much of the met at $240 to $250 a ton -- a strong price point, according to BMO Capital Markets analyst Meredith Bandy.
For the past month,
has been in the news for all the wrong reasons -- those reasons all stemming from the accident at the company's Upper Big Branch Coal mine in West Virginia. And on Wednesday -- when Massey reported a decline in both earnings and revenue for the first quarter -- the company could offer little in the way of positives with which to change the conversation. But analysts believe that hope lies ahead for Massey through its recently completed, $960 million acquisition of mine operator Cumberland Resources.
In July 2009,
Alpha Natural Resources
and Foundation Coal announced the completion of a merger. The new company retains the name Alpha Natural Resources and became, overnight, the third-largest coal producer in the U.S., with 2008 pro forma revenues of $4.2 billion.
Negative productivity trends stemming from potential legislation or regulation following the Massey Upper Big Branch Coal mine accident in West Virginia will be an issue that investors will be look out for when
releases its first quarter 2010 earnings call. Still, Tian notes that fairly high metallurgical realizations to come point to a decent quarter for International Coal.
Natural Resource Partners
, for its part, is a limited partnership formed in April 2002, engaged primarily in the business of owning and managing coal properties. "Based on the growth plans of the coal group, all of the lessees of NRP are ramping up their met coal production, which bodes well for NRP," FBR Capital Markets analyst David Khani said in an investor note.
On Apr. 23,
reported first quarter net income of $4.261 million, or 5 cents a share, down from $32.143 million, or 41 cents a share the year before. Still, UBS analyst Shneur Gershuni wrote in an investor note that he still holds a stronger outlook on the company's earnings per share as a result of Patriot Coal's enlarged met-coal business and strong booked business among other factors.
In light of the overview of all of these coal mining stocks -- and of the bullish signs for the coal industry -- which coal mining stock do you think will outperform the sector in the coming quarter? Take our poll below to learn the consensus of
-- Reported by Andrea Tse in New York
>>Coal Stock Heavyweights? Take Your Pick
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