Can These Coal Companies Hang on for Better Days?
Life is pretty tough for coal companies right now. Prices are down, production is down, and that turnaround in coal prices just hasn't happened yet. If you are an investor in coal, there are three things to look out for that will help to determine whether one coal company will survive while another continues to struggle.
One of those elements is the location of a company's mines. Peabody Energy , Cloud Peak Energy , and Alliance Natural Resources have the distinct advantage of sourcing their coal from either the Illinois Basin or the Powder River Basin instead of the Central Appalachian region. Even though production has not grown much in these two basins, the economics from these regions mean that companies can still turn a marginal profit -- whereas the coal costs in the Central Appalachian region can be higher than the price companies can sell it for today. Tune into the video below to find out two other metrics you should consider when looking at coal companies as they batten down the hatches through this downturn in coal.
The article Can These Coal Companies Hang on for Better Days? originally appeared on Fool.com.Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter @TylerCroweFool. The Motley Fool recommends Alliance Resource Partners. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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