SOURCE: Paragon Financial Limited
NEW YORK, NY--(Marketwire - Oct 30, 2012) - Coal stocks have struggled in 2012 as abundant supplies and historically low prices have made natural gas a cheaper alternative for utilities. Natural gas futures in April plummeted to a 10 year low of $1.91 per thousand cubic feet. The Market Vectors-Coal ETF (KOL) -- which seeks to replicate the price and yield return performance of the Stowe Coal Index -- has fallen over 22 percent year-to-date. The Paragon Report examines investing opportunities in the Coal Industry and provides equity research on Walter Energy, Inc. (NYSE: WLT) and James River Coal Company (NASDAQ: JRCC).
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Coal companies, despite some reporting steep drops in their third quarter profits, have surged recently as they believe the market for coal is beginning to turn around. Arch Coal, Alpha Natural Resources, and Peabody Energy have all seen gains of at least 20 percent over the last month. According to Peabody's CEO Gregory Boyce coal's market share of electricity generated in the U.S. has risen from a low of approximately 30 percent in the second quarter to roughly 39 percent in September.
"While the global coal environment remains challenged, there are indications that markets are stabilizing through U.S. gas-to-coal switching, higher European coal-fueled generation and increased China infrastructure spending," Boyce said.
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Walter Energy is the world's leading, publicly traded "pure-play" metallurgical coal producer for the global steel industry with strategic access to high-growth steel markets in Asia, South America and Europe. The company is scheduled to release third quarter 2012 financial results on November 6, 2012, and has reported it will include a goodwill impairment charge.
James River Coal mines and sells metallurgical, bituminous, steam and industrial-grade coal through eight operating subsidiaries located throughout Eastern Kentucky, Southern West Virginia and Southern Indiana. The company is scheduled to release its third quarter 2012 financial results on November 7, 2012.
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