Peabody Energy Corp (BTU)

Increasing relative price strength

Coal. Attractive valuation and growth opportunities (especially in Asia).

Buy before earning report

You pick the wars, I show you how to fight them. That is what this is all about here. Last week I asked you all what stock you would like for me to analyze a strategy to trade. You picked Freeport McMoRan and the response was overwhelming. So this weeks results pointed me to coal miner and producer Peabody Energy (Ticker: BTU).

Read my complete analysis for free at my site.

http://financialderivatives.net/?p=1064

I have already sold half,but I think China holds the key to the stocks fate, they being coal using GIANT.

China still buys/burns US coal, on the other side of the world...
Regardless of Obama's "save the planet" BS over "Cap-n-Tax".

No matter how much you hate coal, prices are going to go up as supply goes down. Coal powers more than half our electricity. What about China? And India? And the rest of the developing world? Coal is still the cheapest source of energy. Developing countries need cheap energy.

Yes, the developed world is going to green energy. Yes, Obama is against coal, according to Cramer. But does that erase the big picture: coal fuels the world.

BTU has paid out a dividend of $0.06

Ready to implement Clean Coal technology at a moments notice. Good market share.

Bullish
Writing puts below market value to hopefully acquire stock on a downturn.

the move to more international markets will pan out over the next few years. Coal will be providing energy AND products for years as easy to reach petroleum gets harder and harder to find.

simple math. increasing world population, with increasing energy demand per capita as developing countries become more urbanized and affluent equals a need for more power generation.

renewable energy, as it exists today, will not scale to current, much less future, energy requirements. developing nations are not going to listen to the fancy, civilized world sanctimoniously lecturing at them not to deforest their land or build coal power plants, when we did the same thing less than 100 years ago.

coal will be a big part of the energy solution, like it or not. and no, we humans probably won't be farsighted. we'll remain short sighted & selfish & tribalistic/nationalistic, and developing countries' governments will justifiably pursue their own development agenda, using dirty energy.

unless, of course, the fancy developed nations want to give large monetary subsidies or transfer technology to the poorer developing nations. what's that? we can't because we're having problems of our own? ok, then, coal it is.

BTU is well diversified geographically, has mines in the USA & Australia, as well as a 50% stake in a mine in the South Gobi region of Mongolia, and is investigating a stake in the Shaxi mine in the NW China, where 40% of China's coal reserves are.

Amazing margins, & ROE/ROA before the recessionary period, still regularly profitable even during the recession. Paying down debt, buying back stock, and paying a small but increasing dividend.

And, for whatever it's worth, a recent buy upgrade from GS, with a price target of $41. my own investment horizon is measured in decades, and i think over the years it will head well north of that. price target.

I work for Peabody.As much coal as we sell the prices are bound to come up.

Coal is a US alternate to oil

This is a superb long-term play. Estimates show that the coal sector will grow faster than any other energy sector. This isn't something you should overlook. What better way to play the growing coal industry than the only US pure-play coal company with exposure to China? As far as the rest is concerned, fundamentals are sound and management is solid as a rock.

Coal - A well run company that should be stable even if the market falls. This company was a bear market leader for most of last year and it pays a steady dividend to boot.

Chinese love coal as much as the US does. BTU has loads of it!

Alternative energy and clean energy are the future.

Coal if used to generate the vast majority of US electricity even though it is "dirty". Thousands of generators can't be converted to "clean" fuel over night, it'll take years and years. Besides BTU furnishes coal to scores of countries besides the US.

Great price longterm, cap and trade notwithstanding.