Does anyone think that ACI is strong enough to get back to the $10 - $12 range this winter? Obama is back in office and there is much pressure on the coal industry. Was early this year’s massive industry sell-off over done, or are these companies (ACI, ANR, JRCC, BTU, CLF) on their way out of business and into penny stock land in the next few years? Just seems that, even though coal might be dirty, it takes years to make a complete shift to other forms of energy. The early this year sell-off seems overdone…
$8.00 seems reasonable short term than $10.00 if we get a harsh winter. I don't think T Boone Pickens bought into Arch Coal for only a Two dollar profit. Maybe he thinks Arch Coal is a takeover candidate..jmho
There is a possibility for that or a merger. There is also a possibility that coal goes by way of MPLs such as Alliance. A lot may depend on pend upon upcoming tax changes, but MPL does make sense. CNX is considering this as an option, among others. I would support a partial or total MLP Vs. common stock. One thing I believe you build a more dedicated investment partners.
I believe there may be a chance Zero backs off a little on coal. If anything extend the EPA requirements in order that technology can catch up for power plants. Coal to liquids, e.g., gasoline projects are under way in WVa via TransGas.
Coal does indeed have advantages over even natural gas. Basically non-hazardous, easy to transport, and is in fact a still a base ingredient in many manufacturing processes. International demand should continue. I think a lot depends upon specific company fundamentals, management, balance sheet, and other businesses that the parent company may own/operate.
Sell offs this year pretty much a combination of EPA requirements on power plants, oversupply due to mild winter, global recession, and Zero/EPA fears. Short-selling hasn’t helped much. I don’t own ACI, but do own CNX. Alliance is an MPL which surged yesterday assuming inter-day low Vs. high; the yield was just too good to pass up by many. As far as ACI, I see no reason why it would not get back to 10-12 or greater beginning perhaps mid-late 2013. If the balance sheet is strong, it should be able the current storm. If it fell to the 3 range based on no company fundamental change, I would buy it over higher priced straight coals.