You're watching...
Sterne Agee senior research analyst Michael Dudas on a court ruling striking down an EPA pollution rule and its impact on the coal industry.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
-- -- I coal stocks have been in -- -- over the past year.
Alpha natural resource is down nearly 80% but a court ruling striking down an EPA pollution rule to the stock.
A boost in whole sector in fact but will the gains continue Jamie -- Michael did this Sterne Agee senior research analyst.
Welcomes you like up up up there you are a -- a -- rating on some of these stocks for months what does this EPA decision mean for the industry.
Certainly after -- losing streak critical sectors since last November when no winter decide about the show up in the United States.
-- and and went with the natural gas prices collapsing in inventory levels building.
It's it's some good news for the sector it certainly longer term it might.
Allow a little bit more coal consumption in the United States than we would have seen otherwise I think psychologically it's a little bit more important than what we've seen.
It was gonna happen in the market today which really gonna drive coal -- -- will be.
More demand less supply and higher exports which I think we're starting to see in US.
-- ask you about politics the Obama administration's been quite tough -- industry for many years yeah -- right I mean even just last week you know with the with the environmental.
Platforms that are laid out bio drama and Romney explain more about that -- Industry.
So -- EO since the over the past three and a half years there's been policies put forth that.
-- on one hand restricted the use of coal or the future use of coal by primarily electric utilities which use it to make electricity.
But on the other hand to produce coal -- mines in West Virginia and Kentucky because of -- issues that the environmental protection AG have put forth a limit.
The granting of such.
So from both sides of the equation it's been difficult for all the old has -- -- -- -- -- some really good moves in the stocks and we've had a global resurgence in coal demand.
The certainly when steel production goal we picks up in the US is a very important exporter.
Of metallurgical coal with higher margin products so there have been -- -- been very helpful.
Right now it's been very difficult selecting towards November that could be a positive catalysts for stocks as well.
So I'm learning from you Michael just out of watch -- that industry and also natural gas prices what is sure other advice for investing called -- incorporate some names -- -- Yes sure so -- certainly what you need -- -- for coal consumption recovery is.
Increased electricity generation which is helped by better economy.
Also -- natural gas prices move higher and continues the trend that we've seen that'll make it more competitive for coal to be consumed.
Which therefore would reduce inventory levels and help pricing it.
As we look out over the next six to twelve months there's some extraordinary values in the group.
It's -- your last comments about the homebuilding stocks accused of what they've done the last of twelve wants Michael already got kind of get me some good names which your favorite -- sector start.
Art for small cap investors Arch Coal and Alpha Natural Resources are for larger cap investors consol energy and Peabody those of Californians agree.
Thank you so much Michael did especially are -- for -- coal industry.
