Time to start nibbling at Coal?
I suspect that coal is probably the most despised commodity at the moment. The President certainly hates it. But as I mentioned elsewhere, I suspect that once we start exporting nat gas in earnest nat gas prices will rise possibly considerably since it will be competing with much higher world prices hence making thermal coal actually cheaper to use.
With all the production in the shale for oil I was expecting oil to actually decline once supply started hitting the East Coast. Instead it has gone up closing the gap between WTI and Brent.
Maybe it is the masochist in me but I tend to look at stocks making new 52 week lows than stocks making new 52 week highs. My thinking is I probably missed my chance with those highs but with the lows, with patience, I may find some great opportunities.
Just look at the price declines of some of these coal stocks. In 2008 ANR was over $100 and is now $5.59. WLT just from 2011 was selling over $140 and is now selling $12.46. ACI was over $70 in 2008 and now is $3.92. MTL was over $57 in 2008 and is now only $3. JRCC was $50 in 2008 and now is $1.84.
ARLP has actually held up well and PVR with their transformation to pipelines may get an extra boost down the road for their coal royalties.
With a long term view in mind, and with my thesis that exporting lng may actually turn into a catalyst for coal, it might be time to nibble.