Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On January 18, 2013, we upgraded our recommendation on Walter Energy Inc. (WLT - Analyst Report) to Neutral from Underperform. The company currently has a short-term Zacks Rank #3 (Hold).

Why the Upgrade?

There are several significant growth factors, which allowed us to improve our recommendation on the stock.

As per the International Energy Agency’s projection, the coal industry will grow at an average rate of 2.6% till 2017 due to an increase in coal-consumption, primarily in India, China and South Korea due to increase in power generation.

In addition, entry to the prospective Latin American steel markets will open up new possibilities for Walter Energy’s forthcoming growth.

We view Walter Energy as an organization committed to maintain a strong balance sheet with a flexible liquidity position. The company’s cash balance was $129.9 million as of Sep 30, 2012, marginally up from the year-end 2011 level. During third-quarter 2012, the company had solid operating cash flows of $333 million, which will enable it to execute its growth projects.

However, we are skeptical about several regulatory pressures, which could undermine the company’s aforementioned growth factors.

Other Stocks to Consider

Apart from Walter Energy Inc., other coal companies Natural Resource Partners L.P. (NRP - Analyst Report) and Hallador Energy Company (HNRG - Snapshot Report) are currently performing well and carry short-term Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively. Arch Coal Inc. (ACI - Analyst Report), a peer of the company, currently has a short-term Zacks Rank #3 (Hold).

Birmingham, Alabama-based Walter Energy produces and exports metallurgical coal for the steel industry, primarily in the United States. With market capitalization of $2.32 billion, the company has 4,200 total employees.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%