Why Shares of Natural Resources Partners LP Plunged Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of coal miner Natural Resources Partners LP dropped 17% today after issuing weaker-than-expected guidance.
So what: Revenue and earnings in 2013 are expected to be within previous guidance, but 2014 is expected to be weak again with revenue of between $305 million and $340 million. Net income per share is expected to be $1.10 to $1.30, which is well below the $1.61 that analysts expected.
The company's quarterly distribution was also lowered 36%, to $0.20 per share.
Now what: The weakness in the thermal and metallurgical coal markets is expected to "continue through at least 2014." That's why management lowered guidance and its distribution. As I've said for years now, this is part of the long-term decline of coal, particularly thermal. I'd stay out of this entire sector and look for more promising energy opportunities.
How to play energy now
Record oil and natural gas production is revolutionizing the United States' energy position and replacing coal in the process. Finding the right plays, while historic amounts of capital expenditures are flooding the industry, will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.
The article Why Shares of Natural Resources Partners LP Plunged Today originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.