NEW YORK (TheStreet) -- Walter Energy (WLT) shares are down -4.4% to $4.89 on Monday following reports that new U.S. emissions standards is forcing energy companies to reduce pollutants while looking for coal from the Illinois basin, according to a Bloomberg report.
Coal from the Illinois basin has a higher sulfur content and is therefore cheaper than coal from other regions. New EPA rules that forced coal plants to install sulfur dioxide removing scrubbers have made the cheaper coal more attractive.
Sales of Illinois basin coal reached their highest mark since 1990 last year while sales of Appalachian coal, the kind that Walter Energy mines, dipped.
Illinois basin coal's share of U.S. production is expected to rise to 20% by 2040 from its current level of 13%, according to the Energy Information Administration.
TheStreet Ratings team rates WALTER ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate WALTER ENERGY INC (WLT) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself."