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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.

Results for BHP
Kodiaq
17 Apr 14 13:05:47
@BenJGunn they aren't getting bought. Harper and Wall are both still in their seats. It's more likely $BHP JVs Jansen w/ them IMO
Mining Man
17 Apr 14 10:12:39
long $bhp or #short $bhp find out here
MarketCurrents
17 Apr 14 09:37:38
Bloomberg: BHP needs rebound, not spinoffs http://t.co/vjiGrvaeBz $BHP
WKRB News
17 Apr 14 09:29:23
BHP Billiton Rating Increased to Hold at S&P Equity Research $BHP http://t.co/VrBliWI2p2
Foghorn returns
17 Apr 14 09:13:55
Commented on StockTwits: The price has to go up. It can't stay at these levels. $BHP just cut production of it. http://t.co/Whv7c7e6BU
Mining Man
17 Apr 14 09:02:34
$BHP $RIO $VALE talk about these #bluechip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
17 Apr 14 08:03:07
long $bhp or #short $bhp find out here
Alex Tees
17 Apr 14 06:52:19
RT @FinancialReview: $BHP Billiton increases full-year iron ore guidance on record output. #ausbiz #resources http://t.co/VOGCXvpngB
Tara Lachapelle
17 Apr 14 05:54:46
RT @Real_MNA: What $BHP Billiton really needs. (Hint: it's not a breakup) --> http://t.co/0WfBdBqGpG by @AngusWhitley1 & @ElisBehrmann
Bloomberg Real M&A
17 Apr 14 05:54:36
What $BHP Billiton really needs. (Hint: it's not a breakup) --> http://t.co/0WfBdBqGpG by @AngusWhitley1 & @ElisBehrmann
Stock Signaling
17 Apr 14 04:01:16
Upgrades: $HBHC $GOGO $EFX $RALY $UPS $BCC $SONS $ASML $LIN $CYOU $BRS $BHP $ITW $BV $ENT http://t.co/DEd0xkelME #swingtrading #wallstreet
AllyGMorrison
17 Apr 14 03:59:26
$BHP Walter Energy Inc Is in a Race Against the Clock http://t.co/0y64jggx5S
AllyGMorrison
17 Apr 14 03:59:26
$BHP Peruvian Mining Stocks: Boom or Bust? http://t.co/8R1rEURm5l
AllyGMorrison
17 Apr 14 03:42:07
$BHP BHP Billiton's Production Up 10% Y/Y http://t.co/bzkOK9R0bf
AllyGMorrison
17 Apr 14 03:36:36
$BHP [video] Pisani: Yellen 'clear' on Fed's intentions http://t.co/FtfmBa1emh
GavinGreenberg
17 Apr 14 03:12:10
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/XkVdNg8TXH
seekthet
17 Apr 14 02:34:34
RT @StockSignaling: Basic Materials Sector: Upgrades: $BHP $CJES $RDC $EOX $PES $SEMG $NGD $GSS $GDP $PDS $MPO $FTK $VLO $PSX $FET http://t…
Stock Herald
17 Apr 14 02:12:36
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/BUgPaOabJ6
miningman
17 Apr 14 01:41:15
hear from $BHP, $RIO why these shorts are the top #longs for 2014
James
17 Apr 14 01:31:35
RT @StockSignaling: Basic Materials Sector: Upgrades: $BHP $CJES $RDC $EOX $PES $SEMG $NGD $GSS $GDP $PDS $MPO $FTK $VLO $PSX $FET http://t…
Stock Signaling
17 Apr 14 01:31:21
Basic Materials Sector: Upgrades: $BHP $CJES $RDC $EOX $PES $SEMG $NGD $GSS $GDP $PDS $MPO $FTK $VLO $PSX $FET http://t.co/3gvJLENZtD #nyse
miningman
17 Apr 14 01:28:07
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
Informer
17 Apr 14 01:12:28
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/ETRp3CNibT
Alexander Morris
17 Apr 14 01:03:56
$BHP: 1mHugeRngBar- [x4], ch:+0.8%, PrvCHi, PDayGp+, AtPivS1, 4:2Accel-, tf:60, AvgDyV/R=3.41M/0.86[x0.8]; 15x:18xTrdVol; TLM:0.3
GavinGreenberg
17 Apr 14 00:12:10
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/Oa7UoKBCgP
Stock Herald
16 Apr 14 23:22:38
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/BUgPaOabJ6
Stock Herald
16 Apr 14 23:12:21
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/8AtXDSJfSV
Bubblews Mogul
16 Apr 14 23:09:23
RT @sheriffmako Checkmate the Shale Market in Three Moves $RDS $BHP $ECA http://t.co/6N1UFsji22: http://t.co/rlYCmHNizn
Informer
16 Apr 14 22:18:34
$BHP: BHP Billitons Production Up 10% Y/Y http://t.co/revalz3eAA
Mining Man
16 Apr 14 22:16:44
long $bhp or short $bhp find out here
Informer
16 Apr 14 22:12:17
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/Y3x5VU7hce
miningman
16 Apr 14 22:11:50
hear from $BHP, $RIO why these shorts are the top #longs for 2014
GavinGreenberg
16 Apr 14 21:55:33
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/m7reZPdof0
Ani Anirudhan
16 Apr 14 21:45:39
$BHP bull flag https://t.co/859h2dxzr7 from http://t.co/sFhRmJpeCy
Mining Man
16 Apr 14 21:38:39
long $bhp or #short $bhp find out here
AllyGMorrison
16 Apr 14 21:25:33
$BHP Former Shell executive joins BHP Billiton's board http://t.co/tEMWqWS1Wn
Bubblews Mogul
16 Apr 14 21:23:23
Checkmate the Shale Market in Three Moves $RDS $BHP $ECA http://t.co/6N1UFsji22
GavinGreenberg
16 Apr 14 21:18:06
$BHP: BHP Billitons Production Up 10% Y/Y http://t.co/Pcq7zpxbsM
GavinGreenberg
16 Apr 14 21:12:16
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/QVbaFrZ2EI
miningman
16 Apr 14 21:03:07
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
Mike Mustafoglu
16 Apr 14 20:56:30
BHP Billiton: Potash patience - http://t.co/tXP9LgzNaV http://t.co/lqtKJxGuYm via @FT $BHP $POT
Stock Herald
16 Apr 14 20:22:33
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/bTxc0MrnHO
Stock Herald
16 Apr 14 20:17:04
$BHP: BHP Billitons Production Up 10% Y/Y http://t.co/USxRNJ9VSo
Stock Herald
16 Apr 14 20:12:14
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/9TSYTy0tw4
Informer
16 Apr 14 19:50:04
$BHP: BHP Billitons Production Up 10% Y/Y http://t.co/revalz3eAA
Stock News 24
16 Apr 14 19:34:13
$BHP - BHP Billitons Production Up 10% Y/Y -> http://t.co/LqPStRhCDT #stock #stocks #stockaction
Informer
16 Apr 14 19:34:05
$BHP: [video] Pisani: Yellen clear on Feds intentions http://t.co/Y3x5VU7hce
MarketNews
16 Apr 14 19:25:37
$BHP - [video] Pisani: Yellen clear on Feds intentions -> http://t.co/sA2OwPBGtp #stock #stocks #stockaction
UKMetals
16 Apr 14 19:11:05
RT @KupangResources: BHP’s manganese ore output down in March quarter http://t.co/sYYtRIfllu #manganese #ore #mining #metals #ASX $BHP #aus…
Kupang Resources
16 Apr 14 19:10:19
BHP’s manganese ore output down in March quarter http://t.co/sYYtRIfllu #manganese #ore #mining #metals #ASX $BHP #ausbiz
				
				
By  +Follow October 2, 2013 5:25AM
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