Who Can Survive the Coal Crunch?

Even before President Obama's speech on climate change emphasized the need to limit carbon emissions, coal companies were having a rough go of it. Declining revenues, balllooning debt, and competition from natural gas have made it very difficult for some companies to survive. With debt-to-capital ratios approaching that of the now-bankrupt Patriot Coal, it looks as though Walter Energy (NASDAQOTH: WLTGQ  ) could be heading into some very dire financial times. 

At the same time, there are a few glimmers of hope for the coal industry. Cloud Peak Energy's (NYSE: CLD  ) balance sheet shows some characteristics that could help it survive another rough patch for coal. It may not be a great balance sheet overall, but it's certainly better than many others in the space. Tune into the following video to get contributors Tyler Crowe and Aimee Duffy's take on a couple other coal companies that either look like they are headed for a big fall or have stronger balance sheets to weather the storm.

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  • Report this Comment On June 30, 2013, at 11:10 AM, earthunit wrote:

    Your analysis of WLT is flawed and blatantly INCORRECT.

    WLT's debt to equity ratio was much worse in 2003, 2004, 2005, 2006, and 2007 and the stock and company did very well.

    Check it out! You're definitely wrong.

  • Report this Comment On July 01, 2013, at 2:41 PM, rsinj wrote:

    If the picture was so dire for WLT, can you explain why in the world would every officer and director be purchasing lots of shares during May and the first week of June at prices from $15.50 up to $19?

    I tend to believe what the insiders are saying more than folks like yourself who cannot know nearly as much as they do.

    So, with the shares trading below $11 today, just how much risk is there considering all the insider purchases at prices 50% to 75% only weeks ago?

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