NEW YORK (TheStreet) –- Coal mining is a hazardous industry and investors in coal companies exposed themselves to even more risk, betting this industry would rebound this year after posting 2013 losses of more than 18%. It didn't happen.
With year-to-date declines of 10.81%, according to Fidelity, the metals and mining group was one of 2014's biggest laggards, trailing the 7.41% gain in the Dow Jones Industrial Average and the 12.03% gain in the S&P 500.
In fact, with the Dow Jones U.S. Coal Index (DJUSCL) falling another 32.98% on the year, according to CNNMoney, investors learned timing the bottom" is a dangerous game. Absent drastically improved business fundamentals, things can always get worse -- regardless of how cheap some of these shares may look.
Are there any coal stocks worth buying? Yes, exactly one -- Consol Energy (CNX) , the fifth-largest U.S. coal producer, whose losses have been nowhere as near as bad as its competitors. This company is actually growing revenue (up 10% Y/Y) and is buying back its stock. Consol's goal to enter the realm of natural gas, which is cheaper to produce and is more efficient, makes this the only name worth buying in 2015.
But if you are interested in the other companies in the sector, which has plummeted 71.82% over the past five years, buyer beware.
With declines of 60% and 59%, respectively, for the year to date, Peabody Energy (BTU) and Arch Coal (ACI) were two of the industry's worst performers. In 2013 both companies lost 29% and 42% of their values, respectively. That's not because the market their fundamentals were strong.