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Bear of the Day: Arch Coal (ARCH)

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Sometimes you just gotta let go. Let go of the past that is. Those Member’s Only jackets may have had their day in the sun but that doesn’t mean they’re going to come full circle. And maybe, just maybe, it’s time to give up on that 89 Dodge Caravan. Not exactly a classic muscle car. So for you folks out there thinking that we’re going to get an epic surge in coal and suddenly West Virginia real estate is going outpace San Francisco, allow this to serve as a cold dose of reality.

Today’s Bear of the Day is Arch Coal (ARCH - Free Report) .  Arch Coal, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. The company’s flagship mine is the Leer Complex located in Taylor County, West Virginia. As of December 31, 2016, it operated 12 active mines located in West Virginia, Kentucky, Virginia, Illinois, Wyoming, and Colorado. The company owned or controlled, primarily through long-term leases, approximately 28,315 acres of coal land in Ohio; 1,060 acres of coal land in Maryland; 46,542 acres of coal land in Virginia; 355,205 acres of coal land in West Virginia; 103,733 acres of coal land in Wyoming; 274,273 acres of coal land in Illinois; 85,459 acres of coal land in Kentucky; 9,840 acres of coal land in Montana; 21,802 acres of coal land in New Mexico; 358 acres of coal land in Pennsylvania; and 18,443 acres of coal land in Colorado.

This summer was actually slightly positive for thermal coal prices in the US. However, the overall market sentiment towards coal continues to be bearish. You have heard some campaign promises from Trump about helping out the coal industry by reducing regulation. I’m sure that will continue to happen throughout the next few years. But is this going to be enough to counter market forces leading to lower demand for coal?

I’m not saying you can’t make a few bucks in the meantime, but there are easier places to turn a profit than in this industry. Year-to-date the S&P 500 is up 12.8% while shares of ARCH are down 6.7%. Investors looking for other stocks in the Mining industry should check out Zacks Rank #2 (Buy) stocks General Moly (GMO - Free Report) and Materion Corp (MTRN - Free Report) .

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Materion Corporation (MTRN) - free report >>

General Moly, Inc (GMO) - free report >>

Arch Coal Inc. (ARCH) - free report >>

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