4-Star Stocks Poised to Pop: Peabody Energy

Recs

5

Based on the aggregated intelligence of 115,000 investors participating in Motley Fool CAPS, the Fool's free investing community, private-sector coal king Peabody Energy (NYSE: BTU) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Peabody Energy's business, and see what CAPS investors are saying about the stock right now.

PeabodyEnergy facts 

   

Headquarters (Founded)

St. Louis (1883)

Market Cap

$16.00 billion

Industry

Coal & Consumable Fuels

TTM Revenue

$5.20 billion

Management

CEO Gregory Boyce (since January 2006);

CFO Michael Crews (since June 2008)

Return on Equity (avg. last three years)

21.7%

CAPS members bullish on BTU also bullish on

Transocean (NYSE: RIG),

Vale (NYSE: RIO),

Freeport-McMoRan Copper & Gold (NYSE: FCX)

CAPS members bearish on BTU also bearish on

Arch Coal (NYSE: ACI),

Potash Corp. of Saskatchewan (NYSE: POT),

Google (Nasdaq: GOOG)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, some 96% of the 431 All-Star members who have rated Peabody Energy believe the stock will outperform the S&P 500 going forward. These All-Star bulls include BankOnJesus and the Fool's own TMFSinchiruna, both of whom are ranked in the top 15% of our community.

In June 2007, BankOnJesus reminded Fools that Peabody is:

Largest coal producer in the world. ... When oil is gone coal will still be burning. Coal to Gas is going to be a play and BTU will be there to supply the coal.

A more recent pitch from TMFSinchiruna in March of this year echoed that bullish belief, highlighting Peabody as an attractive long-term play:

BTU is the best play in the coal sector by far, because of its geographic scope and strategic focus on international sales. Coal prices are going up right alongside oil, and I expect BTU to continue rising for several years. In real life, I've bought in and out of this one more times than I can count. But every time I play that game, the stock breaks out of a channel and leaves [me] wishing i owned more. These are the stocks you want to stop channel trading and start holding for the long haul. I'd be very surprised if BTU doesn't reach $100 by the end of the decade.

What do you think about Peabody Energy, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

What do the unfolding financial crisis and ongoing market volatility mean for your money? The Fool's here with answers. Get the best of our daily commentary and analysis in your inbox simply by entering your email address in the box below.

Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 14, 2008, at 7:19 PM, Brettze wrote:

    Oil will not be gone so soon...Why? We are now on a crash course to conserve oil. Car makers had shut down practically all guzzler plants or convert them into fuel sipper plants. There will be no return to old days again ever. Sure oil is finite but we will be able to meet demand in the long run as long as we maintain our sustainable efforts to conserve oil. Our new cars will go twice or thrice as far on every gallon of gasoline and this will push the doomsday much further into the future if not next century or two. The real problem with oil is that we just cannot drill and refine as fast as our guzzlers burn it up. This is what it is all about. This is insane lifesytle that has to stop forever!

  • Report this Comment On August 14, 2008, at 7:30 PM, Brettze wrote:

    This is no different to the horse and buggy era of past long gone. As you know that our population kept on mulitplying and we have more and more horses and also more manure on the streets. We had to invent something called automobiles to solve the manure issue. This is just a repeat of history. Now we have too much drilling going on and we have to reinvent automobiles to reduce that as well as air pollution (manure in the air so to speak). We have to cut down on that. We will not run out of something new to invent. never! Life just goes on. Now coal is a whole different story, but coal is talking about clean fuel technology as if we already have that in big numbers. This is not true yet. It is all talk and no action. So much second guessing and all that. It is a fair bet that alternate energy will not displace coal and natural gas and other sources by a big part for a really long time.As soon as our governement start coming to its senses that it simply cannot finance alterneate energy forever as it wll grow so big to keep supporitng for long. The coal players had no choice but to wait until things all boils over first before they can be sure to spend money on clean coal technology that will cost a lot of money. The question lies on which is cheaper... clean coal technology or alternate energy with governemnt help. You ask yourself that. It would be foolish to spend money on clean coal technology while alternate energy keep on getting free money to compete against clean coal technology, right?

  • Report this Comment On August 14, 2008, at 7:41 PM, Brettze wrote:

    I dont think that clean coal techmology would ever be developed as long as our government keep on championing alternate energy like solar and wind power. Maybe our governemnt will simply force utilites to adopt clean coal technology on top of reduced sulfur emissions already enforced. Clean coal technology will eliminate carbon dioxide emissions and will be so costly and it may mean utilites will probably abandon coal and turn to alternate energy. Alternate energy sounds so good but there will be a big issue with land use as there will be so much real estate required to site those sprawling alternate energy techologies. Nobvody is making up his mind in any big way yet. It is still a confusing time now. Someone got to stand up and make a hard choice and stick to it... I personally doubt that alternate energy will ever grow big.

    It is possible that the biggest portion of our energy policy will be simply energy conservation. We are still far from maixmizing the potential out of energy conservation. There is so much we can do to reduce our energy consumption through conservation efforts . We are still not doing much of that yet... We are just getting confused about the need to grow our economy on continual growth in our energy consumption and we are still doubtful about the economical benefits coming out of energy conservation if they come in a big way. We dont see energy conservation as a wonderful way to create job and weatlth . this is the trouble with energy conservation and we are still content to ignore that .

  • Report this Comment On August 14, 2008, at 7:56 PM, Brettze wrote:

    America use 25% of world energy output. The emerging world is growing and is competiiting for the same pie that America is enjoying. Millions are buying first cars in their lifetimes and are thrilled about it. Americans already have tenth or more cars in their liffetimes No matter how hard we drill for oil, the world will take more of the oil from the market. We will never drill our way to oil independence ever again. Lets face it. We are forced to look at other options like coal, nuclear, solar, wind , etc. Coal is the easiest answer until we are concerned about carbon dioxide and climate change. We became wishy washy on our energy policies. Energy conservation would be a wonderful way to buy us plenty of time to figure out which way to go. This is why I am stressing energy conservation as the first line on our energy policy. It is the fastest way to become energy independent to a degree. No political squabble at all as everyone will agree to any practical new energy saving idea whether we like it or not. it is much smoother sailing there . Solar and wind power will encounter political problems stemming chiefly from real estate issues as they are too bulky to install. Energy conservation has almost no issues to make beef with at all..We can easly cut our energy conservation by 50% in a short order. So why delay on that? We seem to be more interested in creating jobs in solar and wind power than to conserve energy in any form and shape! this is the real trouble!

Add your comment.

Compare Brokers

TD AMERITRADE
more info
ShareBuilder
more info
Power E*Trade

more info
Scottrade
more info
Fool Disclosure

DocumentId: 707074, ~/articles/articlehandler.aspx, 12/4/2008 9:24:21 PM,

Sign up for FREE Motley Fool site access to keep reading:

“4-Star Stocks Poised to Pop: Peabody Energy”

Signing up allows you to comment on articles and on the discussion boards.

It's completely FREE and will take only 10 seconds.

Privacy / Legal Information

We will use your email address only to keep you informed about updates to our web site and about other products and services that we think might interest you. The Motley Fool respects your privacy. Please read our Privacy Statement

.

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

What Fools Are Saying

Most Recent

Most Recommended

Market Summary

S&P 500845.22 -2.93%
DJIA8,376.24 -2.51%
NASD1,445.56 -3.14%
Updated: 4:02:39 PM
Sponsored by:

Related Tickers

Peabody Energy Corp

CAPS Rating 4/5 Stars

$18.13

-3.85 (-17.52%)

Outperform1562

Underperform62

Rate This Stock