Alpha Natural Resources and Arch Coal Shares Fall After Analyst Cuts Ratings
NEW YORK, NY -- (Marketwire) -- 07/18/12 -- Coal stocks had a dismal year as demand fundamentals continue to struggle. The Market Vectors-Coal ETF (KOL) -- which replicates an index that provides exposure to publicly traded companies worldwide that derive greater than 50% of their revenues from the coal industry -- has plummeted over 27 percent this year. The Paragon Report examines investing opportunities in the Coal Industry and provides equity research on Alpha Natural Resources, Inc. (NYSE: ANR) and Arch Coal Inc. (NYSE: ACI).
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Coal stocks took a hit Monday after Bank of America Merrill Lynch analysts stated that prices for thermal coal have sunk to the lowest levels in two years as a result of rising inventories. Analysts had suggested companies to continue to slash production and delay expansion plans. "Although such output curtailments will provide support to prices, it will take time and discipline to work through the glut," Bank of America Merrill Lynch analysts wrote in a recent note.
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With $7.1 billion in total revenue in 2011, Alpha Natural Resources ranks as America's second-largest coal producer by revenue and third-largest by production. Alpha Natural Resources shares fell over 10 percent Monday after the company's rating was lowered to "Underperform" from "Outperform" by BMO Capital Market analyst Meredith Bandy. The company is scheduled to report its second quarter 2012 results before the market opens on Wednesday, August 8, 2012.
U.S.-based Arch Coal is a top five global coal producer and marketer, with 157 million tons of coal sold in 2011. Arch is the most diversified American coal company, with active mining complexes across every major U.S. coal supply basin. The company's rating was lowered to "Underperform" from "Market Perform" by BMO Capital Market analyst Meredith Bandy.
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