Coal Producers Struggle With Price Dips

The standard stock market advice is "Never try to catch a falling knife."  I'd add "especially if it's made of tons of coal."

I know shares of coal producers look like tempting bargains right now. Shares of Peabody Energy (BTU) are down 29.6% in the last 12 months -- and that's one of the sector's best performing stocks. Shares of Arch Coal (ACI) are down 49.7% in the last 12 months; shares of Alpha Natural Resources (ANR) are down 50.2%; and shares of Australia's Whitehaven Coal are down 63%. But I don't think we've seen a bottom yet in the sector. The deal between Australian coal producers and Japanese consumers of thermal coal (the kind burned in power plants) serves as a benchmark for coal. Those negotiations set the price at $115.20 per metric ton in 2012-2013. (That's below the record high of $129.85 a ton set in 2011-2012.) This year negotiations are pointing to a benchmark price that might be as low as $94 a delivered metric ton....389 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.