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XMFSinchiruna (26.51)

The King of Coal Strikes it Rich



October 17, 2008 – Comments (4)

Did you Fools see those earnings from Peabody?? Earnings up over 1,000%.. are you kidding me? EBITDA margin of 32%! Reports spot prices remain near thehighs and in some cases double the 2007 prices! Revised guidance upward with a strong long-tern outlook for the industry. Coal stocks are going to go to the moon if more miners come out with numbers like this.

Mark my words, select commodities like silver and coal, and the currency gold, will most assuredly be the first equity sectors to experience significant recovery from these levels.

Hope you enjoy the article. Have a great weekend everyone.

4 Comments – Post Your Own

#1) On October 17, 2008 at 4:46 PM, DemonDoug (31.56) wrote:

sinchi, i agree.  I'd put fertilizer/ag sectors under that too.  Anything in the "real" economy that has a demand that is relatively inelastic is going to recover quickly and may spike up huge, once all this flood of dollars starts being traded for things that are actually tangible instead of pieces of paper and digital bits floating around in cyberspace.

I just need at least one more big down leg before I really start my buying spree (just got my money from my savings into my brokerage today).

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#2) On October 17, 2008 at 5:37 PM, kdakota630 (28.96) wrote:

I strongly agree with both of you and is exactly where my real money is.

Truth be told, no exposure to Peabody.

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#3) On October 17, 2008 at 7:43 PM, GNUBEE (< 20) wrote:

Inelastic demand is the icing on the cake. For those pumping "buy JNJ, colgate,  etc. because in tough economic times people still need sundries".

Put coal on that list. Electricity is coal, plain and simple. In tough economic times people still need electricty. 

Over this week I have noticed nibbling on almost all Coal Co's.


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#4) On October 18, 2008 at 12:30 AM, AnomaLee (28.95) wrote:


sinchi, i agree.  I'd put fertilizer/ag sectors under that too.  

Demon, I'd be careful with my timing in agriculture right now. In general, we just had a very good season. Supply expectations are still trailing and prices could decline further along with expectations for demand.

Today, I bought into some names in the fertilizer sector before the close for a trade. Longer-term I think this industry is as exposed to legislation as healthcare.

Since, there's not a lot of growing going on right now I think you can afford to wait a while(months) and watch things develop a little more...

I also bought this one coal name and some more of this one oil service company with a very high dividend today during the pullback in the afternoon. If the trade doesn't go well within 15 days I'd feel comfortable holding for 15 months.

If the easing in the credit market continues then we know the likely outcome...

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