In this article, we discuss the 5 best coal mining stocks to buy. If you want to read about some more coal mining stocks, go directly to 10 Best Coal Mining Stocks to Buy.
5. BHP Group (NYSE:BHP)
Number of Hedge Fund Holders: 24
BHP Group (NYSE:BHP) is an Australian natural resources firm with interests in petroleum, copper, iron, and coal. Recent reports indicate that JSW, an Indian conglomerate, is reportedly considering the acquisition of coal mines in Australia owned by BHP Group. The potential deal, valued at around $1.5 to $2 billion, would allow JSW to secure a long-term coal supply for its steel mills. JSW’s interest in the Australian coal mines comes as part of its efforts to diversify its coal sourcing and reduce dependence on imports. The discussions between JSW and BHP Group are still at an early stage, per these reports.
On April 28, investment advisory JPMorgan maintained a Neutral rating on BHP Group (NYSE:BHP) stock and lowered the price target to 2,320 GBP from 2,370 GBP. Analyst Lyndon Fagan issued the ratings update.
At the end of the first quarter of 2023, 24 hedge funds in the database of Insider Monkey held stakes worth $122 million in BHP Group (NYSE:BHP), compared to 28 in the preceding quarter worth $1.4 billion.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in BHP Group (NYSE:BHP) with 863,916 shares worth more than $54 million.
In its Q1 2022 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and BHP Group Ltd. (NYSE:BHP) was one of them. Here is what the fund said:
“Our purchase of Australian mining company BHP Group Ltd. (NYSE:BHP) is an example of a quality company at a moderate valuation that should deliver attractive long-term returns. We believe the market has undervalued its enduring competitive advantage due to its low cost iron and copper mining operations which has allowed the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle. While the variability of commodity prices prevents BHP from scoring in the top ranks of measured quality, we are willing to bear some of that uncertainty in return for a more attractive valuation given the company’s strong business fundamentals.”
4. CONSOL Energy Inc. (NYSE:CEIX)
Number of Hedge Fund Holders: 33
CONSOL Energy Inc. (NYSE:CEIX) is a Pennsylvania-based energy company founded in 1864. The company primarily produces and exports bituminous coal. The firm owns and runs the Pennsylvania Mining Complex which comprises the Bailey Mine, the Enlow Fork Mine, the Harvey Mine, and the Central Preparation Plant. It has over 657 million tons of proven and probable coal reserves at the complex. Consol Energy posted a 9.4% increase in coal production during the first quarter, focusing on exports due to weakened domestic markets caused by low natural gas prices.
The Pennsylvania Mining Complex, which ran all five longwalls, produced 7.0 million tons of coal, compared to 6.4 million tons in the previous year. The average cash cost of coal sold at the complex rose to $33.61 per ton, attributed to inflationary pressures on supplies, maintenance costs, and contractor labor.
At the end of the first quarter of 2023, 33 hedge funds in the database of Insider Monkey held stakes worth $284 million in CONSOL Energy Inc. (NYSE: CEIX), compared to 32 in the previous quarter worth $298 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Greenlight Capital is a leading shareholder in CONSOL Energy Inc. (NYSE:CEIX) with 2.7 million shares worth more than $158 million.
3. Peabody Energy Corporation (NYSE:BTU)
Number of Hedge Fund Holders: 39
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.The firm recently announced that it had temporarily closed the Shoal Creek Mine in Alabama due to a fire incident. The exact reopening date has not been determined yet. This mine is the only source of metallurgical coal production for export within the US. The underground mine produced approximately 800,000 tons of coal last year, accounting for around 10% of Peabody Energy’s total metallurgical coal exports.
On May 1, B. Riley analyst Lucas Pipes maintained a Buy rating on Peabody Energy Corporation (NYSE:BTU) stock and lowered the price target to $29 from $39, noting the updated target reflects a lower thermal coal price deck.
At the end of the first quarter of 2023, 39 hedge funds in the database of Insider Monkey held stakes worth $955 million in Peabody Energy Corporation (NYSE:BTU), compared to 40 in the preceding quarter worth $1 billion.
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 21 million shares worth more than $540 million.
2. Arch Resources, Inc. (NYSE:ARCH)
Number of Hedge Fund Holders: 42
Arch Resources, Inc. (NYSE:ARCH) produces and sells coal. In late April, the company posted earnings for the first quarter of 2023, reporting earnings per share of $10.02, beating market estimates by $0.02. The revenue over the period was $869 million, beating estimates by more than $100 million.
On April 28, B. Riley analyst Lucas Pipes maintained a Buy rating on Arch Resources, Inc. (NYSE:ARCH) stock and lowered the price target to $198 from $200, noting that the highly competitive cost structure of the firm was a key feature of the investment case.
At the end of the first quarter of 2023, 42 hedge funds in the database of Insider Monkey held stakes worth $479 million in Arch Resources, Inc. (NYSE:ARCH), up from 34 in the previous quarter worth $717 million.
1. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 66
Teck Resources Limited (NYSE:TECK) is a diversified metals and mining firm. Recent reports indicate that Eric Sprott, a Canadian mining investor, has made an offer to invest in the coal unit of Teck. The investor is proposing to invest in coal operations that have been facing challenges due to the transition away from coal and increased environmental concerns. Sprott aims to capitalize on potential opportunities in the coal market and believes that there is still value in the industry.
In late April, B. Riley analyst Lucas Pipes maintained a Buy rating on Teck Resources Limited (NYSE:TECK) stock and raised the price target to C$68 from C$66, noting that the path of least resistance is for Teck shares to trade higher.
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 11 million shares worth more than $404 million.
At the end of the first quarter of 2023, 66 hedge funds in the database of Insider Monkey held stakes worth $2 billion in Teck Resources Limited (NYSE:TECK), compared to 62 in the preceding quarter worth $2.5 billion.
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