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Consol Energy (CNX): A "solid play" on coal
"Green investing and clean energy may be the politically-correct topic at cocktail parties, but coal is the economically-correct vehicle for investors," says Ronald Rowland and Brandon Clay. insert.a.chart.CNX The editors of All Star Investor explain, "Coal has been an energy source for millennia -- and is still the number #1 source of energy for electric power plants in the world." And, they add, "One of the best places to invest in coal is Consol Energy. "Prehistoric Chinese are said to have used coal for heating. According to Roman historians, Britain burned coal in the first century. Throughout history, coal has been the primary source of heat in homes. "Rapidly industrializing nations like China are still dependent upon coal for energy. Overall global consumption has not diminished either. Coal fuels 48% of electricity plant generators. "And the trend is heading upward – probably for the next 30 years. Despite the deafening rhetoric, coal is not going away anytime soon. Investors should take notice. "Their profit margins are running at 7.5% versus Peabody Energy at 5.8% and Westmoreland Coal at -4.3%. Moreover, their diversified offering in oil, timber, and energy services continues to deliver results to their growing bottom line. "Consol’s prospects look good too. Because they own 70% of their coal reserves they are less hampered by mining acquisition costs. Management is taking advantage of global demand. Growing exports at over 18% a year, Consol is well-positioned for continued growth in the international energy market. "Technically, the stock's chart suggests investors are starting to take notice. CNX has broken through overhead resistance and there does not appear to be anything else to stop it. Natural resources are near the top of our rankings right now. "We’re not promising a meteoric rise, but the fundamentals support continued appreciation in the sector. Consol will be a great place to grab those gains if they happen. For an economically solid play on coal and natural resources, go with CNX." by TheStockAdvisor (TheStockAdvisor.com) Disclaimer: Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests. Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk. There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital. |
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