It is no secret that shares of coal companies have been beaten down in the past two years. Many coal companies, including Peabody (BTU) ,the largest private coal company in the world, are now probing their 2009 lows. We made money trading the coal sector during Mitt Romney’s 2012 presidential campaign, but it has been a death trade ever since.
Now it appears things may go from bad to worse for the coal sector. As reported by The New York Times, the Obama administration is readying emissions limits for existing coal burning power plants. This news, along with terrible Asian macro data, will continue to push coal company shares lower.
Coal as a means of power production is not going away and I am bullish on the sector long term. However, in the short term I am waiting for ugly headlines before adding to any positions.
Disclosure: Long partial position CNX