If you are a value investor you may now also be looking at coal companies which have stock prices in many cases down 70% from recent highs.
Ross was on CNBC and had some comments on coal:
- The downturn in coal is secular and not just cyclical.
- There has been structural change, the EPA has made a decision that means there won’t be any more coal plants built.
- Natural gas needs to be at least $4/mcf for coal to be even close economically.
- But even if coal is economically equivalent it still is behind because of environmental reasons.
- If he had to pick one coal stock it would be Arch Coal (ACI).