We recently published a list of Jim Cramer Recently Shed Light on These 9 Stocks. In this article, we are going to take a look at where Peabody Energy Corporation (NYSE:BTU) stands against other stocks that Jim Cramer recently highlighted.
Jim Cramer, host of Mad Money, recently discussed a possible looming energy crisis in the U.S. that has taken many by surprise. He warned that if the country doesn’t act swiftly, it will soon be overwhelmed by an energy shortfall. According to Cramer, we need to tap into every available energy source including natural gas, wind, geothermal, and hydroelectric power. However, he stressed that the most critical energy source right now is nuclear power. He added:
“Crisis comes down to the fact that we had no real industrial growth in this country for decades so we haven’t had to build much energy infrastructure. Now all of a sudden these data centers start coming online like the ones that will be part of Stargate, the Oracle, SoftBank, OpenAI project… And these data centers consume insane amounts of electricity. It’s a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly gotta go back into growth mode.”
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Cramer went on to discuss an energy source that many are reluctant to consider: coal. While it may seem counterintuitive, he argued that coal could make a comeback in the U.S. energy mix.
“When the president gave his inaugural address on Monday, he declared a national emergency aiming to produce more domestic fossil fuels, including coal. Once the mainstay utility fuel, coal has been phased out year after year after year because it is terrible for the environment. 10 years ago, coal-based fuel was responsible [for] about 33% of electricity. Now it’s fallen to 15%.”
Yet, with the push to decommission nuclear plants, and the rising cost of natural gas, Cramer suggested that coal might need to be reintegrated into the energy mix. He argued that, despite the environmental drawbacks, the demand for power is now so great that coal’s long decline could be nearing its end.
“Under this president, coal could have… a renaissance. Sure, coal’s time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there’s not really a choice anymore. Yes, the demand is that great, [and] we so foolishly mothballed good nuke plants that it wouldn’t surprise me if coal’s long decline may have finally run its course.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 22. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A coal miner in a thick protective suit and helmet drilling for coal under bright lights.
Peabody Energy Corporation (NYSE:BTU)
Number of Hedge Fund Holders: 25
Cramer noted that Peabody Energy Corporation (NYSE:BTU) is cheap but also mentioned that the company trades like a steel company rather than a coal company.
“… Who’s the winner? It’s hard as the coal cohort is made up of companies that mine coal for steel production and others that mine coal for utilities. But the latter has been such a dog for so long that the US companies have tried to merge their way into steel-making coal and to lessen exposure in utilities. Peabody Energy and Core Natural Resources are the big ones. I think they’re cheap, but they trade more like steel companies than coal companies.”
Peabody Energy (NYSE:BTU) is a coal mining company involved in the extraction, preparation, and sale of thermal and metallurgical coal. In April 2024, Cramer mentioned the company as he remarked, “No, I’m not a coal guy…I do not want to own BTU, and I think it should be sold.”
Meanwhile, on January 5, Jefferies analyst Christopher LaFemina reduced the price target for Peabody Energy (NYSE:BTU) stock to $26 from $30 while maintaining a Buy rating on the stock. The firm has adopted a more cautious stance on the near-term outlook for the metals and mining sector, citing cyclical factors and a belief that consensus estimates may be at risk of being too high.
However, Jefferies believes it is too late to downgrade ratings and remains focused on buying “preferred” miners and steel producers following recent market weaknesses. The firm expects stronger demand to emerge in 2026 and 2027, which should result in significantly higher prices for key commodities and for the shares of many companies.
Overall, BTU ranks 5th on our list of stocks that Jim Cramer recently highlighted. While we acknowledge the potential of BTU as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BTU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.