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5 Industrial Metals & Minerals Stocks Heading for Trouble?

By  +Follow October 2, 2013 5:25AM
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Prices for hard commodities are always subject to unexpected fluctuations that typically result from disruptions to the delicate supply-demand balance.

So far in 2013, iron ore has been one example of how the relationship between supply and demand can affect an industry and the companies operating within it. For instance, the so-called miracle of Chinese economic growth that has been one of the most enduring features of the global economy in the new millennium saw the world’s most populous nation consuming ever-larger amounts of iron ore to feed enormous investments in housing and infrastructure projects.

Major mining companies in the industry, such as BHP Billiton (BHP) , shifted their operations accordingly, even selling off assets in other less lucrative metals in order to make more iron ore. But then Chinese growth started to slow, relatively speaking, in late summer, sparking fears that the ride was coming to an end. Financial institutions from Deutsche Bank AG (DB) to Goldman Sachs (GS) all of a sudden were predicting that iron ore prices would drop dramatically as a result of oversupply.

The coal industry, by comparison, is in even worse shape, especially in the US and Canada, where the view of the commodity as a major, and unnecessary, environmental menace has become a very mainstream one. Coal-related stocks, of course, have suffered as a result of this scenario, and there does not seem to be a very promising outlook for the immediate future.

The following companies, mostly coal miners, have been selected from the Industrial Metals and Minerals industry, based on a number of criteria:
-a relatively low price-to-cash ratio of less than 3, indicating that the company may not have enough cash on hand to make the changes necessary to adapt to an industry downturn.
-a negative Return-on-Equity rate, indicating that investor cash is not being spent to the best effect.
-a relatively high debt-to-equity ratio, over 0.5, indicating that the bills for these companies could constitute a significant source of pressure in the event of a further misfortunes for coal

Alpha Natural Resources Inc. (ANR)            

Price: $5.82
Market-Cap: $1.3 billion
P/C Ratio: 2.51
ROE: -9.60 percent
Debt/Equity Ratio: 0.72

The Bristol, Virginia-based company operates over 100 mines and 25 production facilities throughout the US, in Virginia, West Virginia, Pennsylvania, Wyoming, and Kentucky. While the stock has rebounded, adding about 10 percent in the current quarter, shares have lost almost half their price in 2013, down over 40 percent.

Arch Coal Inc. (ACI)

Price: $4.02
Market-Cap: $852.6 million
P/C Ratio: 0.96
ROE: -13.60
Debt/Equity Ratio: 1.88

The St. Louis, Missouri-based miner operates over 30 mines in the US that the company boasts represent over 5 billion tons of proven reserves of coal, and is often cited as one of the better coal stocks to own. That said, the company has seen its share price drop nearly 45 percent year-to-date, despite a 10 percent rally over the course of the present quarter.

Thompson Creek Metals Company Inc. ($TC)

Price: $3.54
Market-Cap: $605.7 million
P/C Ratio: 1.5
ROE: -36.70 percent
Debt/Equity Ratio: 0.78

The Denver, Colorado-based company mines gold, copper and molybdenum throughout the US and Canada, and provides an instructive contrast to the coal companies on this list. While Thompson has seen shares amost 20 percent lower in 2013, the stock has rallied by about as much during the present quarter.

MFC Industrial Ltd. (MIL)

Price: $8.37
Market-Cap: $523.56 million
P/C Ratio: 1.58
ROE: 27.80 percent
Debt/Equity Ratio: 0.52

The Vancouver, Canada-based company makes its business primarily from the storage and transporation of commodities and materials, including but not limited to coal. MFC is the exception on this list, with a positive return-on-equity. THe stock has not moved significantly throughout the year, but is up over 3 percent during the current quarter.

James River Coal Co. (JRCC)

Price: $2.04
Market-Cap: $71.34 million
P/C Ratio: 0.75
ROE: -32 percent
Debt/Equity Ratio: 1.66

The Richmond, Virginia-based companies mines coal in Kentucky, Indiana, and West Virginia, and claims over 300 million tons of coal reserves to its credit. Shares have had a rough year like all the other coal miners on this list, down 36 percent in 2013, despite a 12 percent jump on the quarter.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for BHP
Anne
25 Nov 14 23:54:32
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
luckypete
25 Nov 14 23:52:55
$DAX close 9861, pre-mkt 9877, $BHP projects 1% up for index close to 10,000, maybe a BIG PUSH today, UP SEAT BELTS ON, trip to VENUS!
Daniel Gschwend
25 Nov 14 22:19:14
@zerohedge sure the €300b stimulus for infrastructure will be build by $FB $AAPL rather than $BHP $RIO call this mrkt rational u r an idiot
lookn4wins
25 Nov 14 22:03:16
BHP -1.59% Stock Charts $BHP BHP Billiton Ltd. ADS (NYSE) Any opinions on BHP? Please reply to this post. Last http://t.co/mWqDJWKgrz
Mark Trader
25 Nov 14 21:22:48
http://t.co/FOdvsRfk32 has 6 pro traders in their chat room. real-time trade alerts, and offer a 14-day trial. $BYI $ESRX $BHP $ERIC $AXP
Nick Szabo
25 Nov 14 19:10:57
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
luckypete
25 Nov 14 17:31:11
ASX AUS Giant Miner ADR $BHP opened 32.50 1.25%, FIG projects a POS open for Ger xetra $DAX, 1st TARGET for ^GDAXI, 1.00% or 9960.
Jugador Apuestas
25 Nov 14 17:09:28
Volatility is the new normal in iron ore prices so expect wide Bolinger bands and significant price variations for $BHP and $RIO #buystock
jonnie gijon
25 Nov 14 17:09:28
Volatility is the new normal in iron ore prices so expect wide Bolinger bands and significant price variations for $BHP and $RIO #buystock
Joe Aston
25 Nov 14 16:33:41
@bhpbilliton chairman Jac Nasser's office is in Manhattan's prestigious Seagram building. Why? http://t.co/4CmCLwNR0p ($) $BHP #ausbiz
Dan McComb
25 Nov 14 16:24:31
RT @LouCaruana: “@LongwallNews: International Coal News $BHP #coal mines remain profitable but more cuts to come #ausbiz http://t.co/Fnm…
Lou Caruana
25 Nov 14 16:18:08
“@LongwallNews: International Coal News $BHP #coal mines remain profitable but more cuts to come #ausbiz http://t.co/Fnmhv75B8X”
Phillips River
25 Nov 14 15:35:08
$BHP chief sees Uralkali flood as confirmation time is right to move into #potash http://t.co/FmjWrE5ifF #fertilizer #mining #investing #ASX
Margie
25 Nov 14 14:37:32
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
overandout
25 Nov 14 13:51:03
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Jolon Faichney
25 Nov 14 13:01:19
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
John Durstig
25 Nov 14 12:52:57
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Chris Thomas
25 Nov 14 12:48:07
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Ottavio GM
25 Nov 14 12:45:58
Miners in focus http://t.co/IiejF77Kgd via @theage #Ironore trades < $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG
Gary Fallon
25 Nov 14 12:45:23
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Ottavio GM
25 Nov 14 12:39:19
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Street News
25 Nov 14 12:39:05
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
gail simmons
25 Nov 14 12:38:53
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Ganzorig Vanchig
25 Nov 14 12:35:31
RT @FinancialReview: .@BHPBilliton chairman's prestigious NYC perch costs $US1.4m a year. $BHP #ausbiz http://t.co/6aEeMTssCv http://t.co/8…
Rex Dwyer
25 Nov 14 12:32:53
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Financial Review
25 Nov 14 12:25:23
.@BHPBilliton chairman's prestigious NYC perch costs $US1.4m a year. $BHP #ausbiz http://t.co/6aEeMTssCv http://t.co/8wIe66cloA
James Stanhope
25 Nov 14 12:18:43
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
A Macdonald-Smith
25 Nov 14 12:16:08
RT @FinancialReview: #Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http…
Financial Review
25 Nov 14 12:14:48
#Ironore trades under $US70 for 1st time in 5 years, falling 1.2%. #ausbiz $BHP $RIO $FMG http://t.co/HW27uJC5df http://t.co/Z4CnP5WKCU
Market Int Center
25 Nov 14 11:44:37
Potential BHP Billiton $BHP Trade Targets 2.82% Return ( http://t.co/KyziqsC1RX )
Stockaholics
25 Nov 14 11:13:40
Our Platinum Penny Stock Pick On $STTK Is Up Over 128% This Morning. Huge News: http://t.co/MHaHGSIsXk $BHP $CADX $BSX
Mark Trader
25 Nov 14 10:16:30
http://t.co/FOdvsRfk32 has 6 pro traders in their chat room. real-time trade alerts, and offer a 14-day trial. $BYI $ESRX $BHP $ERIC $AXP
Natalie Lobanova
25 Nov 14 10:07:19
RT @kirillklip: BHP: "Copper Demand Is Going To Continue To grow For A Really Long Time." http://t.co/zTIYxMAyij $BHP $MUX $TRRXF $GDX $GD…
Sufiy
25 Nov 14 09:56:14
RT @kirillklip: BHP: "Copper Demand Is Going To Continue To grow For A Really Long Time." http://t.co/zTIYxMAyij $BHP $MUX $TRRXF $GDX $GD…
Kirill Klip
25 Nov 14 09:38:33
BHP: "Copper Demand Is Going To Continue To grow For A Really Long Time." http://t.co/zTIYxMAyij $BHP $MUX $TRRXF $GDX $GDXJ
AdvantageData
25 Nov 14 09:08:13
A bout of profit-taking in #commodities and energy-producers' shares, as $BHP shed 2.1% while $AAL gave up 2.3%. #oil
Lennex
25 Nov 14 07:10:16
RT @H3bK11: Iron ore drops below $70 for first time since 2009 as glut widens http://t.co/9fRgf4Igs1 $BHP $VALE $RIO
Redders World  AJ
25 Nov 14 06:56:55
Iron ore drops below $70 for first time since 2009 as glut widens http://t.co/PxX479pJGC $BHP $VALE $RIO
Trading The Bias
25 Nov 14 06:54:36
RT @H3bK11: Iron ore drops below $70 for first time since 2009 as glut widens http://t.co/9fRgf4Igs1 $BHP $VALE $RIO
Forex  News Insider.
25 Nov 14 06:52:55
Iron ore drops below $70 for first time since 2009 as glut widens http://t.co/9fRgf4Igs1 $BHP $VALE $RIO
Juan E Villalva
25 Nov 14 06:10:39
Iron ore drops below $70 for first time since 2009 as glut widens http://t.co/erFmrKHQSP $BHP, $VALE, $RIO
MarketCurrents
25 Nov 14 06:01:06
Iron ore drops below $70 for first time since 2009 as glut widens http://t.co/VNINhFszBN #premarket $BHP $VALE $RIO
GotSanctuary
25 Nov 14 05:34:01
BHP Billiton $BHP weighing investments in #technology to curb #pollution from power stations in #China http://t.co/FRVThTVUYQ
StockKingz
25 Nov 14 04:21:34
PREMARKETS LOSERS- $WTSL $GOMO $POST $WDAY $RVLT $DANG $ANFI $CYBR $XCRA $BHP $BRCD $TIF $NQ #STOCKS #TRADING
NASDAQ
25 Nov 14 02:14:11
$BHP - LONDON MARKETS: Kingfisher Shares Drop In London As Profit Declines; FTSE 100 Flat http://t.co/jb2vpoDFHW
NASDAQ
25 Nov 14 02:07:11
$BHP - LONDON MARKETS: Kingfisher Shares Drop In London As Profit Declines; FTSE 100 Flat http://t.co/kTSYzRekzK
Meghan.T.Biro
25 Nov 14 00:21:14
RT @Bidnessetc: The mining giant said it has no plans to reduce its workforce http://t.co/KZFoa6FDw2 $BHP
Adrian Tout
24 Nov 14 23:33:29
@CMEGroup @Nouriel Great! Short the 'heck' out of it on any strength: http://t.co/TsYxv8wIs9 #china $BHP $RIO
Mark Trader
24 Nov 14 22:53:25
http://t.co/FOdvsRfk32 has 6 pro traders in their chat room. real-time trade alerts, and offer a 14-day trial. $BYI $ESRX $BHP $ERIC $AXP
Sentifi UK_Market
24 Nov 14 21:45:36
TOP 10 Most Discussed $FTSE 100 Companies Today http://t.co/sMau6MDzSo $AV $FLG $BTA $RBS $BHP http://t.co/PBHWxCMTAN
				
				
By  +Follow October 2, 2013 5:25AM
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