Coal used to be the equivalent of gold for utilities. So what if some power plants and mills still use coal. It is nasty and it is the scourge of the green movement for clean energy and renewable energy. To many people, it does not even matter that coal can be used much cleaner these days. So, guess what happens when you see another wholesale downgrade of the coal sector from yet another Wall Street brokerage firm’s research department?
UBS downgraded the coal stocks on Wednesday, mirroring downgrades elsewhere. The move is also on the heels of the James River Coal Co. (NASDAQ: JRCC) bankruptcy filing this week. James River shares are down to $0.29, more than 90% lower than its 52-week high. James River now has only a $10 million market value, and delisting may be the least of its concerns.
So, the UBS downgrades were as follows:
Alpha Natural Resources Inc. (NYSE: ANR) was downgraded to Sell from Neutral and the price target was cut to $3 from $5. In mid-afternoon trading, Alpha Natural shares were down more than 8% at $4.48, against a 52-week range of $4.12 to $8.40. Its market cap is down to $990 million.
Arch Coal Inc. (NYSE: ACI) was downgraded to Sell from Neutral. What stands out here is that we gave a signal earlier this year in our own report that Arch Coal could be the one standout stock — potentially one of nine stocks that could double in 2014. Despite the carnage, this share price drop of almost 5% to $4.93 is still considerably higher than when we said it could double. Its status is one that is still active on that list. Arch Coal has traded in a range of $3.47 to $5.82 over the past 52-weeks.
Walter Energy Inc. (NYSE: WLT) was downgraded to Sell from Neutral and the price target was cut to $5 from $8 by UBS. Walter has been hit by other calls of late as well. The downgrade put shares down more than 6% to $7.84 in mid-afternoon trading. Its 52-week range is $7.07 to $26.00.
With the trend moving to cleaner energy, the overall bias on coal remains in the toilet. Much of the fear is easily justified, but many oil companies have still included coal in their 20-year and longer outlooks on what energy sources would be used.
CONSOL Energy Inc. (NYSE: CNX) is not participating in the nasty day for coal. In fact, Macquarie raised its rating to Outperform from Neutral. CONSOL shares were up 1.3% at $41.53 in mid-afternoon trading on Wednesday, against a 52-week range of $26.25 to $41.75 (that high was hit on Wednesday).
Maybe all the coal companies can or will go bust. Or maybe not.
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.