10 Best Coal Stocks To Buy Now According to Short Sellers

5. Alliance Resource Partners, LP (NASDAQ:ARLP)

Number of Hedge Fund Holders: 5

Short % of Shares Outstanding: 3.24%

Alliance Resource Partners, LP (NASDAQ:ARLP) is a diversified energy company and the largest coal producer in the eastern U.S., providing reliable and affordable energy to major utilities, as well as metallurgical, and industrial users both domestically and internationally.

In Q2 2024, Alliance Resource Partners, LP (NASDAQ:ARLP) reported a total revenue of $593.4 million, down 7.6% from the previous year. This decline was largely attributed to delayed coal shipments and lower export demand. Coal sales volume dropped by 11.8% YoY, with production down 10.2%, but was slightly offset by a 3.8% increase in coal sales prices due to improved domestic price realizations.

Net income for the quarter fell to $100.2 million, down from $169.8 million in the previous year, primarily due to higher operating expenses. The increase in expenses, particularly in the Appalachian region, was driven by challenging mining conditions and longwall moves.

In terms of liquidity, Alliance Resource Partners, LP (NASDAQ:ARLP) strengthened its balance sheet by issuing $400 million in senior unsecured notes and redeeming $284.6 million in debt, boosting liquidity to $666 million.

In January 2024, Alliance Resource Partners and Infinitum announced a partnership to introduce motor technology to the mining sector. This move aligns with the company’s goal of enhancing productivity and cutting operational costs while also supporting efforts to decarbonize and electrify heavy machinery.

Despite declining profitability, Alliance Resource Partners, LP (NASDAQ:ARLP) saw an uptick of 1.89% over the past month and 14.73% YTD, likely driven by a strong liquidity position and increasing coal sales prices. In addition, the company’s growth prospects in its oil and gas royalties segment, coupled with rising electricity demand, have bolstered investor optimism for long-term potential.

As of Q2 2024, five hedge funds with a combined investment of $93.1 million are bullish on the stock, according to Insider Monkey’s database. ARLP is among the best coal stocks on our list.