Cloud Peak Energy (NYSE:CLD)
has done better than most of its peer group over the past year, but
does that really count for much when the shares are still down almost
two-thirds? Making matters worse, pricing for thermal coal continues to
be weak both in the U.S. and in the export markets, giving producers
like Cloud Peak no place to hide.
Powder River Basin (or PRB) coal
is barely competitive with natural gas at current prices and isn't
competitive with Australian or Indonesian coal in Asian markets, but
there is some hope that coal and gas prices could bottom this year.
Cloud Peak also benefits from a low cost basis and a relatively
comfortable liquidity position. The shares of coal companies are pretty
speculative today, particularly as the industry is likely is long-term
decline in the U.S., but Cloud Peak does still offer some worthwhile
upside if/when coal prices do finally reach that bottom.
Continue here:
Cloud Peak Energy Dug In For The Long Haul
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