Last night on stockspotter I received a signal to exit a short position for Peabody Energy Corp. (BTU). The trade earned 1.67% after being held for 9 days. Does this stock offer more than just a clever ticker symbol? Let’s take a look!
As you can tell from the monthly chart, their stock has struggled for the past several months to find a base. However, incoming overseas demand for coal, coupled with the termination of the stockspotter short, could be viewed as predictive of a reversal.
Apparently, global demand for two coal types produced in Appalachia will likely boost mine operators’ profits in the coming quarters, despite plans by U.S. electric companies to use more natural gas. India and Europe will likely to import more of the plentiful, dirtier-burning coal used by electric plants. Also, spiking prices for the hot-burning metallurgical coal used to make steel are likely to boost profits even more, as developing nations use up the metal to expand their infrastructures. And, tapping international markets should be easier because of unused space on the rail lines that carry coal from mines to seaports.
In sum, I like this stock and believe the entire energy sector is set for a bullish reversal. Thanks for reading!
Additional Company Info: Peabody Energy Corporation engages in the exploration, mining, and production of coal worldwide. It owns interests in 28 coal operations located in the United States and Australia, as well as owns joint venture interests in a Venezuelan mine. The company also markets, brokerages, and trades coal. It also develops mine-mouth coal-fueled generating plants; and develops Btu Conversion technologies, which are designed to convert coal to natural gas and transportation fuels. The company sells its thermal coal to electric utilities and metallurgical coal to industrial customers.