If you are new to the blog, a sampling of the series of articles I wrote on coal are below
- Originally went bullish mid September [Crude at $80? What to Buy]
- Another look a few days later
- Consol Energy turning into an exporter - late October [Coal Continues to Amaze]
- Bullish on Russian coal play Mechel early November [Two New Foreign Positions Added Today]
- Jumped into Massey mid November [Initiating Massey Energy on Continued 'Shortage' Theme]
These are not sexy like solars, and won't fly 30% in a week but they are steady contributors and from time to time can put 20% moves on in two weeks time. In the carnage in November these all held above their 50 day moving averages showing wonderful strength - what more can you ask for, downside protection and solid upside. Any American producer is also a weak dollar play (exporters win), and the US is the "Saudi Arabia of coal". So you get an energy play, a China play, a weak dollar play, all rolled into one. Even the Chinese version, Yanzhou Coal (YZH) is performing very well in the overall weak (of late) market for Chinese shares. As I stated when I first went bullish on this group, earnings in the near term would be horrid but these were 2008 plays and the charts were perking up - people are ignoring the current bad news and looking to the future. That thesis certainly is playing out.
Long Peabody Energy, Massey Energy, Mechel, Massey Energy in fund; no personal positions
2 comments:
While not pure plays like some you mention, you should take a closer look at Sasol (SSL) as well. The specialize in coal-to-liquids, which should gain in popularity, even in the US, over the next few years. In addition to them, I also own Rentech (RTK) which is a more speculative pick but they are set to benefit the most in the US as they continue to drive their technology to commercialization. Rentech has a strategic partnership with Peabody (BTU) to develop their technology at the mouth of their coalmines.
Here's a write-up I did on Rentech...
http://seekingalpha.com/article/50675-is-rentech-the-answer-to-u-s-energy-problems
Parker
http://parkercapital.blogspot.com
Hi, I've looked at SSL before and always liked it; especially being outside the USA. Just never bought it. Have not heard of RTK but I believe there are a few of those speculative names like FTEK (?) that are all trying to get into the game. Thanks for the links.
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