Coal Stocks Revisited
Coal stocks, like most other commodity-related stocks, have been beaten like a rented mule lately on Wall Street. Many of these stocks, such as Peabody Energy (BTU) and Bucyrus International (BUCY) are down 40% - 50% over the past two months. Is this justified? On a fundamental basis, the drop in coal stocks is not justified. Worldwide demand for steel is expected to grow at 4 to 5 percent over the next several years. This demand is being driven by the industrialization occurring in the emerging markets. This growth rate exceeds the current capacity of both iron ore and metallurgical…