Coal Stocks' Super Strength Isn't Built to Last

It's been a banner year for coal prices and, subsequently, coal mining stocks. Alliance Resource Partners (NASDAQ: ARLP) is up 92% since the end of 2021, while Peabody Energy (NYSE: BTU) is higher to the tune of 167%. Consol Energy (NYSE: CEIX) shares have rallied an incredible 214% year to date. The sky-high cost of natural gas is forcing electric utility companies to shop around for cheaper fuel sources, and coal is it. The International Energy Agency estimates this year's global consumption of coal is on pace to roughly match a previously set record.

These stocks' incredible strength, however, is likely only a temporary phenomenon. Investors lucky enough to be in any of these hot stocks may want to think about getting out of them sooner than later, as the underpinnings of this bullishness isn't apt to last.

That's an admittedly tough thing to do. The prevailing advice (as well as instinct) suggests sticking with your winners as long as they're making forward progress. Tickers like Peabody and Consol Energy are still doing so.

Continue reading


Source Fool.com