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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
luckypete
22 Oct 14 23:16:42
$DAX Closed 8940, A/M Went down 35 pts following $dow moves, P/M 8898, FUT 8858 DROPPING FROM 75 pts lower AUS $BHP TO 8825 A BAD HAIR DAY
CommSec
22 Oct 14 21:25:16
All Ords -0.1% or 7pts. Miners down ~1.5%. If it wasn't for losses from $BHP & $RIO today, the market would be a touch firmer #ausbiz ^SD
Mike Mustafoglu
22 Oct 14 19:41:50
$AMJ $ARP $BBEP $BHP $BP $CCJ $CHK $COP $CLB $CVX $CRZO $DK $DVN $EOG $EPD $GLNG $GLOG $GPRE $HCLP $HFC $LGCY $LINE Bearish Stochastic Cross
Rex Dwyer
22 Oct 14 18:41:01
Like I thought, $BHP to keep pumping out Iron Ore. They won't “protect other people’s business.” I see $50USD/mt. http://t.co/vLTsCGjtU4
luckypete
22 Oct 14 18:13:45
ASX AUS Giant Miner ADR $BHP Billiton opened 33.72 - 1.60%, FIG projects a NEG open for Ger xetra $DAX, 1st TARGET ^GDAXI - 1.28% or 8825.
Financial Review
22 Oct 14 17:35:21
.@BHPBilliton has been on the back foot, but as London AGM looms, expect it to start selling itself. #ausbiz $BHP http://t.co/JgCV2biSBv
Fe Limited
22 Oct 14 16:31:16
Iron ore prices below $100 are $BHP's base case http://t.co/5CHOA1mgPr #ironore #steel #chinabiz #metals #mining
Sufiy
22 Oct 14 15:25:02
M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/7tDPJDir3u
Stock Relay
22 Oct 14 15:01:39
stockblaster14: Stock Alerts: Bhp Billiton Limited (BHP) 58.99 $BHP Global http://t.co/VLljr1nOAz
stockblaster14
22 Oct 14 14:59:09
Bhp Billiton Limited (BHP) 58.99 $BHP Global Shale Gas Market Outlook 2020: Market is Forecast to Reach $100+ http://t.co/hTK2oCkodn
Stock Relay
22 Oct 14 13:39:08
stockblaster14: Stock Alerts: Bhp Billiton Limited (BHP) 58.99 $BHP Global http://t.co/pyyiX2ONWM
Stockaholics
22 Oct 14 11:52:58
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $BHP $CADX $BSX
Seeking Alpha
22 Oct 14 11:07:53
Stefan Ioannou: Copper, Nickel, And Zinc Won't Be Cheap For Long http://t.co/DYBc12bReS $BHP $CPPMF $CSFFF $HBM $LUNMF $NSU $TREVF $BALMF
US Banking News
22 Oct 14 09:15:06
BHP Billiton Limited $BHP – Research Analysts’ Recent Ratings Updates http://t.co/AymgQpnC4e
InterCooler
22 Oct 14 08:51:27
BHP Billiton Limited $BHP – Research Analysts’ Recent Ratings Updates http://t.co/oTTTfrikTM
Ryan Mallory
22 Oct 14 08:16:20
Scratch $BHP from the list
Zenzo L
22 Oct 14 07:59:24
BHP the latest miner to shovel coal into flooded market http://t.co/WaWqpr2Hn7 $BHP $AAUKF $AAUKY $KOL #mining #coal
Forex  News Insider.
22 Oct 14 07:57:24
BHP the latest miner to shovel coal into flooded market http://t.co/IVbbNEaW1A $BHP $AAUKF $AAUKY $KOL
Media Sentiment
22 Oct 14 07:45:03
$BHP received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 349
MarketCurrents
22 Oct 14 07:43:55
BHP the latest miner to shovel coal into flooded market http://t.co/EmX2rkGFOc $BHP $AAUKF $AAUKY $KOL
Market Int Center
22 Oct 14 07:41:47
BHP Billiton $BHP Showing Bearish Technicals With Resistance At $60.62 ( http://t.co/bqcm6qbw0U )
David Dierking
22 Oct 14 07:35:51
Commented on: "Cliffs Natural Resources Will Continue To Suffer" http://t.co/topDT3M7bp $CLF $BHP $RIO $VALE
shubhankar.c
22 Oct 14 07:35:26
All Female E-Mail at BHP Billiton $BHP Shows Mine Shift From Boys’ Club #mining $LMI $RIO http://t.co/ZlKfWq0Bih @BloombergNews
Fish4Bucks
22 Oct 14 07:18:28
60m $BHP 59.160 Price action Crossing Down Median Support #stocks Signals based on the Fish4Bot indicator Pl... http://t.co/WZwETG8am0
Dividend Master
22 Oct 14 07:14:50
http://t.co/sb4bgJ7VPv , $BHP is out to kill its rivals in long run . But they will take losses themselves doing it #IronOrePriceWars
BusinessNewsNetwork
22 Oct 14 07:12:30
RT @forgefirst: $BHP quarterly production update includes #copper miss due to low grades & power outages in #chile but ok for rest @BNN #oi…
Andrew McCreath
22 Oct 14 07:09:32
$BHP quarterly production update includes #copper miss due to low grades & power outages in #chile but ok for rest @BNN #oil $RIO #stocks
luckypete
22 Oct 14 06:48:51
@petergo99037185 $DAX BACK to ORIGINAL $BHP 1st TARGET this AM, 8985, Index BIAS is UP AGAIN.
luckypete
22 Oct 14 06:34:59
@DBZNappa 8985 was my $BHP 1st Target this AM, 8934 now, we only 60 points away, ?? Don't Understand WHY U question?
Cristobal Barberis
22 Oct 14 06:25:08
Top 5 stocks with Up days in a row. #bearish $MCRS {10}, $VTR {10}, $AGNC {8}, $ATHM {8}, $BHP {7} #brberisReport
nasdaq_crazy
22 Oct 14 05:27:39
STRONG BUY $BHP. Very nice report out yesterday by them.
Kirill Klip
22 Oct 14 05:21:56
RT @Sufiy: M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/AILmMhc…
Ticker Report
22 Oct 14 05:13:33
Jefferies Group Downgrades BHP Billiton Limited to Hold $BHP http://t.co/CQB5XZ4f0h
Sufiy
22 Oct 14 04:30:43
RT @kirillklip: M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/6a…
Sufiy
22 Oct 14 04:23:46
RT @TNR_Gold: M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/W2Hy…
Media Sentiment
22 Oct 14 04:23:23
$BHP received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 122
Futures and Options
22 Oct 14 04:21:38
$BHP Billiton reports Q3 production numbers showing the iron ore and coking coal divisions performed as well as or better than expected
Sleek Money
22 Oct 14 03:23:46
BHP Billiton Limited Cut to Underperform at Zacks $BHP http://t.co/zWXwtpZEVW
NASDAQ
22 Oct 14 02:58:06
$BHP - ASIA MARKETS: Japanese Stocks Lead Rally In Asian Markets http://t.co/YER7zDocx3
Kirill Klip
22 Oct 14 02:10:27
RT @TNR_Gold: M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/W2Hy…
Anthony Milewski
22 Oct 14 01:38:43
RT @TNR_Gold: M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/W2Hy…
TNR Gold Corp
22 Oct 14 01:37:40
M&A Watch: Los Azules #Copper - Acquisitions signal a turning market for #miners. $MUX $TNR.v $GDX $FCX $BHP http://t.co/W2Hyhs54pg
Stockaholics
22 Oct 14 00:51:39
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $BHP $CADX $BSX
luckypete
21 Oct 14 23:42:10
$DAX closed 8886, Pre-Mkt 8955, futures about 8940, My $BHP 1st TARGET is much higher at 8985<<
luckypete
21 Oct 14 23:41:46
@petergo99037185 $DAX late $BHP AUS Miner exporter, projection for 1st TARGET 8985 Up there ===> 9K close! We need to SHORT THAT!
Interactive Brokers
21 Oct 14 23:40:42
#IBTI Stocks - 7th straight rally for Australian equities as global sentiment rebounds http://t.co/sguSs3arUN $BHP $RIO $XJO
Dee on Money
21 Oct 14 23:09:54
RT @JSEtracker: Jefferies downgrades BHP as it lowers metals price targets http://t.co/t5uJlaaiok $BHP $RIO $VALE
'ga re Tshwane'
21 Oct 14 23:07:12
RT @JSEtracker: Jefferies downgrades BHP as it lowers metals price targets http://t.co/t5uJlaaiok $BHP $RIO $VALE
Cratos Capital
21 Oct 14 23:06:56
Jefferies downgrades BHP as it lowers metals price targets http://t.co/t5uJlaaiok $BHP $RIO $VALE
Paul Robinson
21 Oct 14 22:52:52
RT @Cape_Lambert: Iron ore prices below $US100 are 'baked into' $BHP plans http://t.co/iuwASqXVB4 #MikeHenry #Ausbiz #IO #supply #resources…
				
				
By  +Follow October 2, 2013 5:25AM
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