In this article, we discuss 10 cheap coal stocks to buy now. If you want to read about some more cheap coal stocks to buy now, go directly to 5 Cheap Coal Stocks to Buy Now.
Slowing economic growth and energy market turbulence have added to the uncertainty around coal stocks in recent months, hitting a market that was already in turmoil due to environmental concerns and pandemic shocks. One of the main reasons for this uncertainty was demand issues from China. The economy of the country is now recovering from the lockdowns that brought manufacturing to a standstill. Coal consumption around the world is also expected to rise in 2022 due to soaring energy prices as countries look for alternatives to fossil fuels.
According to a report by the International Energy Agency, global coal consumption is forecast to rise by 0.7% in 2022 to 8 billion tons. This is the highest consumption of the resource since 2013. The agency expects next year to be even better for coal firms with regards to consumption. Rising gas prices, which have benefited energy giants like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), are another reason for the bullish near-term outlook for coal.
The soaring prices have forced many countries to switch to coal, including manufacturing hubs in China and India. This has led to a coal shortage, giving a boost to coal stocks. Coal consumption in India and the European Union is expected to rise by 7% in 2022. A ban on Russian coal imports in Europe will benefit American coal miners. For investors who want to ride this boom for the coal sector, but do not want to opt for expensive options, there are many coal stocks trading at relatively cheap prices which offer the same bang for the buck.
Our Methodology
The companies that operate in the coal sector and were trading at below $50 per share, as of August 17, were selected for the list. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to quantify the popularity of each stock in the hedge fund universe.
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Cheap Coal Stocks to Buy Now
10. NACCO Industries, Inc. (NYSE:NC)
Number of Hedge Fund Holders: 5
Share Price as of August 17: $44.49
NACCO Industries, Inc. (NYSE:NC) engages in the natural resources business. The company has an impressive dividend history stretching back more than thirty-five years. In the past eight years, the payouts have registered consistent growth. In mid-May, the company declared a quarterly dividend of $0.2075 per share, an increase of more than 5% from the previous dividend of $0.1975 per share. The forward yield was 1.57%. The firm operates surface coal mines under long-term contracts for power generation companies.
NACCO Industries, Inc. (NYSE:NC) posted earnings for the second quarter of 2022 on August 3, reporting earnings per share of $5.07 and a revenue of more than $37 million. The stock has climbed over 60% in the past year amid rising coal prices.
At the end of the first quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $16 million in NACCO Industries, Inc. (NYSE:NC), the same as in the preceding quarter worth $18 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in NACCO Industries, Inc. (NYSE:NC), with 263,415 shares worth more than $10 million.
Just like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), NACCO Industries, Inc. (NYSE:NC) is one of the stocks benefiting from soaring energy prices.
9. Natural Resource Partners L.P. (NYSE:NRP)
Number of Hedge Fund Holders: 2
Share Price as of August 17: $42.75
Natural Resource Partners L.P. (NYSE:NRP) owns and manages a portfolio of mineral properties. The stock has gained in the past few months as Western countries, especially the United States and allies in Europe, impose tough sanctions on Russian imports due to the invasion of Ukraine. In early April, the European Union imposed a coal embargo on Russia, boosting the stocks of firms like Natural Resource as EU businesses looked towards miners in the US to fill the gap.
On August 4, Natural Resource Partners L.P. (NYSE:NRP) posted earnings for the second quarter of 2022, reporting earnings per share of $3.29 and a revenue of $99 million, up more than 159% compared to the revenue over the same period last year.
At the end of the first quarter of 2022, 2 hedge funds in the database of Insider Monkey held stakes worth $23 million in Natural Resource Partners L.P. (NYSE:NRP), the same as in the preceding quarter worth $18 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm GoldenTree Asset Management is a leading shareholder in Natural Resource Partners L.P. (NYSE:NRP), with 543,469 shares worth more than $23 million.
8. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 56
Share Price as of August 17: $34.59
Teck Resources Limited (NYSE:TECK) is a diversified metals and mining firm. On July 27, the company posted earnings for the second quarter of 2022, reporting earnings per share of C$3.25, missing market estimates by C$0.05. The revenue over the period was C$5.7 billion, up more than 126% compared to the revenue over the same period last year and beating analyst expectations by C$190 million. The firm said that capital cost guidance had increased by U$1.4—$1.5 billion due to inflation impact on labor costs.
On August 16, investment advisory Stifel maintained a Buy rating on Teck Resources Limited (NYSE:TECK) stock and lowered the price target to C$59 from C$62. Analyst Alex Terentiew issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Soroban Capital Partners is a leading shareholder in Teck Resources Limited (NYSE:TECK), with 12.2 million shares worth more than $495 million.
At the end of the first quarter of 2022, 56 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in Teck Resources Limited (NYSE:TECK), compared to 40 in the preceding quarter worth $1.6 billion.
7. Warrior Met Coal, Inc. (NYSE:HCC)
Number of Hedge Fund Holders: 31
Share Price as of August 17: $33.84
Warrior Met Coal, Inc. (NYSE:HCC) produces and exports non-thermal metallurgical coal primarily for the steel industry. On August 3, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $5.87, beating analyst expectations by $0.63. The revenue over the period was over $625 million, up more than 174% compared to the revenue over the same period last year and beating market estimates by $50 million. The firm guided coal sales of 5.5-6.5 metric tons in 2022.
On July 7, B. Riley analyst Lucas Pipes maintained a Buy rating on Warrior Met Coal, Inc. (NYSE:HCC) stock and raised the price target to $48 from $45, backing coal prices to remain well above historical levels in the coming months.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Warrior Met Coal, Inc. (NYSE:HCC), with 2.1 million shares worth more than $78 million.
At the end of the first quarter of 2022, 31 hedge funds in the database of Insider Monkey held stakes worth $353 million in Warrior Met Coal, Inc. (NYSE:HCC), the same as in the previous quarter worth $212 million.
In its Q1 2022 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and Warrior Met Coal, Inc. (NYSE:HCC) was one of them. Here is what the fund said:
“Among others, we can highlight that at Horos Value Internacional we exited our position in the metallurgical coal producer Warrior Met Coal, Inc. (NYSE:HCC), following the strong performance of its stock. Meanwhile, although with somewhat different dynamics, our investment in the metallurgical coal company Warrior Met Coal also had strong returns and we sold it during the period. The reason is purely due to its lower upside potential after a very strong performance.”
6. Peabody Energy Corporation (NYSE:BTU)
Number of Hedge Fund Holders: 27
Share Price as of August 17: $23.47
Peabody Energy Corporation (NYSE:BTU) is a Missouri-based coal mining firm. It has interests in 17 coal mining operations. These are based in the United States and Australia primarily. The operations have 2.5 billion tons of proven and probable coal reserves and almost 450,000 acres of surface property. In late July, the firm posted earnings for the second quarter of 2022, reporting a revenue of more than $1.32 billion, up over 82% compared to the revenue over the same period last year.
On July 7, B. Riley analyst Lucas Pipes maintained a Buy rating on Peabody Energy Corporation (NYSE:BTU) stock and lowered the price target to $33 from $34, predicting that higher thermal prices will act as a backstop for met coal prices in the medium term.
At the end of the first quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Peabody Energy Corporation (NYSE:BTU), compared to 28 in the preceding quarter worth $421 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Elliott Management is a leading shareholder in Peabody Energy Corporation (NYSE:BTU), with 25 million shares worth more than $634 million.
In addition to Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), Peabody Energy Corporation (NYSE:BTU) is one of the stocks that hedge funds are monitoring as energy prices rally.
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Disclosure. None. 10 Cheap Coal Stocks to Buy Now is originally published on Insider Monkey.
