I thought you said it has gotten out of the $10 range for good? Seriously, do you ever tire of being wrong?
Hit the nail on the head...When China begins their devaluation in response to the Yen's dive things really start to spiral out of control. China's debt load, nonperforming loans is quite large and grows daily, throw in devaluing their currency their economy and capital flows starts looking a lot like Russia. Not good for BTU which relies on China for exporting their dirty black death (coal).
The collapse of the junk bond market will be the catalyst for BTU's next leg down. Currency war in the early stages and will lead to huge dislocations in the coming months. Russia, other emerging markets in huge trouble!
First let me address this ridiculous rumor that BHP or any other entity was considering purchasing BTU. Who in their right mind would purchase a company saddled in debt, employed in a dying industry, hit hard by a rising greenback and a slowing China? Today's price action proved that gossip to be nothing more than manipulation, planted by those seeking to get out of their position at a higher price, leaving the bagholders miffed and highly dejected.
One must comprehend we are currently firmly planted in a global currency war, all in the desperate name of creating jobs and growth in nearly every other country beyond our borders. Debasing the currency is a losing proposition and does not tackle the real issues of stagnant growth which our highly complex, born of decades of corruption, govt intervention and the death of free market forces.
QE temporarily worked for the U.S. and in turn the global economy because of one important fact, the Greenback is the reserve currency. Now that U.S. QE is over and the QE ball has been handed over to the likes of Japan, Europe, the dynamics have changed. The money printing of less sought out currencies will not translate into global growth, it will only strengthen the dollar, punish commodities. In fact, currency wars will soon take the next logical step of various tariffs and other forms of protectionism, which we are already seeing in China (Tariffs on imported coal). This is just the beginning of a vicious cycle and the United States is not immune. Look for a major sell-off in the not too distant future in the U.S. stock market, the catalyst will most like be the collapse of the junk bond market very much exposed to downward spiral in commodity prices. I see BTU trading well below $10 by the first quarter of next year, possibly sooner.
Forecast is for temps to moderate quickly, polar vortex was a fluke brought on by strong tropical storm.
Absolutely pathetic! Any bounce will be short-lived. Coal is dead!
Truly a travesty of the highest order.
Truly an odd and irrelevant assumption on your part. I made no mention of investing in other stocks, especially the one's you made reference to. Our planet and it's inhabitants cannot afford to continue using coal as an energy source for the many reasons I have expounded many times before. The cost to make coal "Clean" is cost prohibitive, if even possible. And coal is not stored solar, the majority of coal is derived from the partially decomposed ancient tropical forest and plant life, hence the reason for the high carbon and hydrocarbon content. Not trying to bring anyone down, simply warning the uneducated and unaware. Coal is an absolutely terrible long-term investment. If one is tired, they should try and get some sleep.
Beyond the obvious coal is a dying industry due to the endless poisonous emissions, it's huge role in man-made global warming, mining techniques and ash piles that destroy our fresh water supplies, yes beyond these self-evident fatal flaws BTU will be under severe pressure for many years to come for the following reasons...
A bet on BTU is a bet on China. As domestic consumption of coal continues to fall BTU and alike rely heavily on exports of the black death to the emerging markets, a critical player in this equation is China. The problem, China is a Ponzi scheme. A state run economy built on corruption, unsustainable infrastructure spending, bad loans, the propping up unprofitable industries via the central govt. Eventually this charade will crumble which has already begun revealed by the recent reporting of China's largest banks nonperforming loans and the dramatic slow down in their economy. China is responding by attacking any outside importer that possess profit margins, imposing tariffs, protecting and promoting their own industries.
China does not have much in the way of oil and nat gas but they do have lots of coal. The recent tariffs imposed on coal is China saying we don't want BTU's coal imports, we want to develop our own coal, create jobs here. This trend bodes poorly for BTU who rely on critical exports to China.
One must comprehend the present currency war is a form of protectionism and will soon be followed by tariffs of all kinds as countries outside the U.S. battle their sagging economies, high unemployment. The United States is not an island and will eventually be dragged down by the forces beyond our borders. Commodities such as coal will be hammered. I strongly suggest BTU be sold on any strength. The recent GOP induced bump represents such an opportunity. One is misguided to believe that republicans can continue to prop up an industry that inflicts so much damage on our planet in the name of campaign contributions, votes.
SNY stock is presently residing in what I would call La La Land, hedge funds and institutions avoiding or selling SNY before year-end for tax purposes or to steer clear of the appearance they have a loser on their books. Another critical factor driving SNY down is mgt broke the Wall Street golden rule with analysts, NO SURPRISES, any negative information should be given way in advance to maintain their insider relationship. Now SNY is being punished for the sudden removal of a popular CEO on the Street. Of course none of the above changes the reality SNY is undervalued, possessing strong fundamentals. Has it reached bottom? With no conviction short-term and plenty of animosity from the analyst community, uncertainty involving the new CEO, SNY is clearly in the grips of technical trading. $44.50 was the low this recent cycle, and the programmers will most likely make sure that price is tested once again before we shoot higher. I would be very surprised if we broke $44.50 and I think one is taking a rather large chance waiting for a lower price. Any positive news could be a huge catalyst for SNY, and that is very unpredictable when that might take place. I would be happy buying now at this level knowing you purchased at a bargain price.
Well I know Pfizer came out with a similar product a few years back that was a bust. But with that said Pfizer's product was in a canister the size of a tennis balls container, Afrezza is much more user friendly (the size of a whistle). SNY must feel pretty good about the chances of this being a success because they were well aware of Pfizer failure since SNY sold the rights of that product to Pfizer for $1.4 billion. Afrezza has some major advantages, it works much faster than a shot, leaves the body much faster, and is quite effective. Another major advantage is because it leaves the body so much quicker it helps reduce weight gain. This is a mealtime drug and in most cases would be used in conjunction with a basal insulin. So SNY would basically be offering the whole package. I think it makes a lot of sense, I am surprised Mannkind made such a sweetheart deal with SNY...Good for SNY shareholders.
Not many bargains left at these S&P 500 levels, Wall Street will be moving into beaten up names like SNY that offer value, dividend, and future capital gains.
1. Competition in the diabetes space is way overblown. Lantus is a daily Basal insulin used by Type II diabetes patients. Humalog and Novalog are mealtime only insulins used by Type I diabetes patients. Huge difference. There are 10 times more Type II diabetes patients and Lantus controls 80% of that market.
2. One must keep in mind as the world grows in population, becomes fatter, older, more sedentary, those developing Type II diabetes, in need of medication, will spike.
3. SNY is on the right side of the currency war. The Euro will continue to fall in the coming years as the Greenback rises, this will be a big plus for SNY products and income.
4. SNY Board realizes it is under extreme pressure and scrutiny to hire a credible CEO who will continue down the path of reform and innovation. The day SNY announces the CEO, which is a certainty, a guarantee rise in share price.
5. SNY currently trading 1.9 book, the lowest of the large pharmas, possesses a 4.3% yield, and a 12.4 foward PE (S&P 500 avg PE 17). The pipeline is strong and the patent cliff muted unlike many other large pharmas.
6. Safety and yield plays are the place to be in this uncertain world, hence the reason the utility index is breaching new highs today. It is a logical conclusion pharmas will follow suit in the coming months offering solid yields and higher returns than utilities, especially a beaten down stock in the space such as SNY.