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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
20 Nov 14 19:36:37
ASX AUS Giant Miner ADR $BHP Billiton opened 31.74 - 0.17%, FIG projects a NEG open for Ger xetra $DAX, 1st TARGET for ^GDAXI -0.14% or 9470
Pete
20 Nov 14 17:02:33
RT @FeLimited: Boom days gone for #ironore: $BHP chief http://t.co/YHrrWjylXf #metals #mining #steel #chinabiz #bulks #resources #commods
Phillips River
20 Nov 14 17:00:11
$BHP to hold May EGM on plan to spin off #al, Silver, #coal, #manganese& #potash biz with #ASX & joburg listings http://t.co/gUuFzaScRL
Fe Limited
20 Nov 14 16:54:47
Boom days gone for #ironore: $BHP chief http://t.co/YHrrWjylXf #metals #mining #steel #chinabiz #bulks #resources #commods
TS Binary Options
20 Nov 14 16:23:13
ALERT: New Social signal created on $BHP - Low at 31.915 - Time: 00:23 - Strength: 2. Powered by http://t.co/dJICEo9P6s
Investing Insight
20 Nov 14 16:22:20
KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Yr9Vr0wTWx $XJO $AUD $BHP $RIO $MYR $SFR
Steven S.
20 Nov 14 16:21:37
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Alpha Maven
20 Nov 14 15:55:59
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
stockmarketnow
20 Nov 14 15:55:10
RT KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/R0sKYHszox $XJO $AUD $BHP $RIO $MYR $SFR
FinanzLinksASIA
20 Nov 14 15:52:26
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
awolam
20 Nov 14 15:51:27
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Estrada
20 Nov 14 15:48:54
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Jo
20 Nov 14 15:47:55
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Gabe Clendenning
20 Nov 14 15:47:25
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Francis Jenkins
20 Nov 14 15:47:19
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Laurie
20 Nov 14 15:47:12
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
MarketWatch
20 Nov 14 15:46:33
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
MKTWAsia
20 Nov 14 15:46:33
RT @KitchenNews: Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Michael Kitchen
20 Nov 14 15:46:20
Australia stocks seesaw after week of losses -- details here: http://t.co/Vqk4bNmgOc $XJO $AUD $BHP $RIO $MYR $SFR
Fat Tail Capital
20 Nov 14 15:36:10
$ANR CEO today: Would love to see $BHP cut production but they seem more interested in running everyone else into the ground.
SwingTradeBot
20 Nov 14 15:01:57
Scan results - New 52 Week Low today: $JMEI $CYBX $LQDT $BBVA $MOV $ABCO $BBL $RIO $BCOR $BHP ... http://t.co/0MHP5MZ60W
Houston Chronicle
20 Nov 14 13:54:17
RT @kfeser: Bottom Houston 150 stocks: Hercules O $HERO, $BBVA, Kinder Morg $KMI, United $UAL, $KMP, Target $TGT, $BHP, $PRO s Hld, SW Air …
Katherine Feser
20 Nov 14 13:52:19
Bottom Houston 150 stocks: Hercules O $HERO, $BBVA, Kinder Morg $KMI, United $UAL, $KMP, Target $TGT, $BHP, $PRO s Hld, SW Air $LUV, $TISI
jonnie gijon
20 Nov 14 13:07:50
$BHP: 'The Time For Massive Expansion Of Iron Ore Is Over’ @ASX
Jugador Apuestas
20 Nov 14 13:07:50
$BHP: 'The Time For Massive Expansion Of Iron Ore Is Over’ @ASX
Ismael Tillawi
20 Nov 14 13:01:29
RT @GdayRebecca: Iron Ore's Massive Expansion Era is Finished: $BHP CEO http://t.co/m6Xz2tIGdN via @BloombergNews #ausbiz #ironore #mining
Quantheta
20 Nov 14 12:59:56
#SENTISHIFTDOWN $GM $RIO $GILD $HE $WLT $ACHN $JMEI $ADSK $SSYS $BHP #quantheta #sentiquant
Kamikaze Kuroda ™
20 Nov 14 12:59:33
Closing Time Losers- $KMI $KMR $BHP Winners- $GLNG $INTC $SLW
Rebecca Jones
20 Nov 14 12:56:05
Iron Ore's Massive Expansion Era is Finished: $BHP CEO http://t.co/m6Xz2tIGdN via @BloombergNews #ausbiz #ironore #mining
John Durstig
20 Nov 14 12:55:21
RT @FinancialReview: .@BHPBilliton calls time on ‘massive expansions’ of #ironore. #ausbiz #wapol $BHP $RIO $FMG http://t.co/91oPyaH21y
New New South Wales
20 Nov 14 12:50:21
"@FinancialReview: .@BHPBilliton calls time on ‘massive expansions’ of #ironore. #ausbiz #wapol $BHP $RIO $FMG http://t.co/n2JlElzk2A"
Alex Adkins (Aldu)
20 Nov 14 12:27:15
RT @FinancialReview: .@BHPBilliton calls time on ‘massive expansions’ of #ironore. #ausbiz #wapol $BHP $RIO $FMG http://t.co/91oPyaH21y
Financial Review
20 Nov 14 12:18:11
.@BHPBilliton calls time on ‘massive expansions’ of #ironore. #ausbiz #wapol $BHP $RIO $FMG http://t.co/91oPyaH21y
Financial Review
20 Nov 14 12:10:16
Ivan Glasenberg’s flying visit to WA revives talk of Nickel West sale. #ausbiz $BHP http://t.co/Uo0rw1Pvsf
Dividend Master
20 Nov 14 12:09:58
$BHP new 5yr low .... $RIO @ 52 week l,ow
luckypete
20 Nov 14 12:09:37
$EWA Australia Country index ETF, ~ AUS is in trouble like entire Asia region, depends heavily on $OIL & iron exports into China (ADR $BHP).
US Banking News
20 Nov 14 12:05:11
BHP Billiton Limited Reaches New 1-Year Low at $54.36 $BHP http://t.co/2NuxeSBzAB
Sleek Money
20 Nov 14 12:05:00
BHP Billiton Limited Reaches New 1-Year Low at $54.36 $BHP http://t.co/Lz3IbTRXQy
Stockaholics
20 Nov 14 12:01:28
578% Gains On Penny Stocks in one month! Plus a New Pick Is Coming: http://t.co/2W3yKD2d5Q $BHP $CADX $BSX
Chris Lau
20 Nov 14 11:45:47
The next two years could be huge for Gulf of Mexico's oil production | $BHP $APC $BP | Kapitall:http://t.co/FaJou4GGOJ
leahanne
20 Nov 14 11:11:36
Volume Alert - BHP 54.98 Bhp Billiton Limited $BHP Hit a high today of 55.18 Closing the day 10:30 at 54.98 -0 http://t.co/EWDKt6O6J8
leahanne
20 Nov 14 11:11:12
$BHP Volume Alert - BHP 54.98 Bhp Billiton Limited $BHP Hit a high today of 55.18 Closing the day 10:30 at 54.98 -0 http://t.co/u1S4q0bXv5
Seeking Alpha - All
20 Nov 14 11:04:21
Rio Tinto: Attractive Investment For Income-Oriented Investors http://t.co/94cD2MNG5V $BHP $GLNCY $VALE $RIO
Quantheta
20 Nov 14 10:59:50
#SENTISHIFTDOWN $GM $RIO $GILD $HE $JNJ $WLT $GLW $BHP $SSYS $ADSK #quantheta #sentiquant
Kamikaze Kuroda ™
20 Nov 14 09:31:03
Lunch: Chicken, Waffles and Beer Losers- $BHP $KMB $IBM Winners- $GLNG $EEP $AAPL
NASDAQ
20 Nov 14 09:27:12
$BHP - LONDON MARKETS: Miners, British Gas Parent Pull FTSE 100 Lower http://t.co/iXZHsw7DkV
NASDAQ
20 Nov 14 09:19:19
$BHP - EUROPE MARKETS: European Stocks End Lower On Disappointing PMI Data http://t.co/LOEHi5xYl7
Vikash Jain
20 Nov 14 09:16:09
Iron ore at $70/tonne, down by half. Ouch! for Aussie miners $BHP, $RIO and $LIF/TSX http://t.co/egFn0L14Jg via @WSJ
Forex  News Insider.
20 Nov 14 09:15:36
BHP vows focus on investor returns while downplaying dividend action http://t.co/F82PgTyFeo $BHP
Quantheta
20 Nov 14 08:59:51
#SENTISHIFTDOWN $GM $RIO $JNJ $ADSK $GILD $UPS $SSYS $BBRY $BHP $VRTX #quantheta #sentiquant
				
				
By  +Follow October 2, 2013 5:25AM
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