logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

5 Industrial Metals & Minerals Stocks Heading for Trouble?

By  +Follow October 2, 2013 5:25AM
Share:
Tickers Mentioned:

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.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for BHP
CMCMFIN
2 Sep 14 14:10:27
RT @FinancialReview: “Efforts need to be made to pursue a new pricing model,” for #IronOre says #China. #ausbiz $BHP $RIO $FMG http://t.co…
Financial Review
2 Sep 14 14:10:13
“Efforts need to be made to pursue a new pricing model,” for #IronOre says #China. #ausbiz $BHP $RIO $FMG http://t.co/Lm1d0NgVVu
BasJammal
2 Sep 14 13:44:31
RT @CalibreInvest: #IronOre producer cost curve (courtesy of Credit Suisse). $RIO followed by $BHP, operating the lowest cost mines. http:/…
Equities.com
2 Sep 14 11:52:06
Rare Earth Producer Arafura Resources Poised to Tackle $23 Billion Magnet Market $BHP $nem $MCP $ARA:ASX $ARAFF http://t.co/QJHJ3lgUU9
Media Sentiment
2 Sep 14 09:30:03
$BHP received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 274
Market Int Center
2 Sep 14 09:28:54
BHP Billiton $BHP Showing Bearish Technicals With Resistance At $68.99 ( http://t.co/I4apy6VGKL )
Financial News
2 Sep 14 09:07:29
$BHP: Midday movers: AIG, Amgen, Lear & more http://t.co/9O81GZnocw http://t.co/2lZpUWKlHu
MarketCurrents
2 Sep 14 08:49:04
Mining companies happy with mining tax repeal http://t.co/I9wiqB6yYi $RIO $BHP
Stock Market Monitor
2 Sep 14 08:07:41
$BHP: Asian stocks mixed on Jackson Hole, corporate earnings http://t.co/KXa0XVeRLK http://t.co/l3sriqaCB9
Investools
2 Sep 14 08:06:15
Gold (/GC) cracked on strong dollar; $DG pledged more $$ for $FDO; $BHP divergence noted http://t.co/1qyg9I7LKe
aviatelive
2 Sep 14 07:08:57
Iron ore at 87/tn: a sign to buy http://t.co/7WSL1m4lj9 #aviateEUROPE $BHP $RIO #IronOre
Wall Street Monitor
2 Sep 14 07:07:26
$BHP: BHP Billiton Limited Earns "Buy" Rating from Deutsche Bank (BHP) http://t.co/jrlZaoiEG1 http://t.co/fUxCUYhkSB
Kirill Klip
2 Sep 14 07:02:48
RT @LobanovaNatalie: Acquisitions signal a turning market for miners. http://t.co/ol3clVukjH #Lithium #Copper #Gold $MUX $TNR.v $FCX $BHP …
Envestor First
2 Sep 14 06:37:46
"@micmaher: Still think $EOG $DVN or $MRO all make sense as buyers of $PVA here. Maybe even $BHP as they pivot towards oil. Long term play"
Wall Street Monitor
2 Sep 14 06:07:28
$BHP: Why BHP is letting internal projects compete for capital http://t.co/AvxB4tQtM0 http://t.co/GxikPcDDqB
Sleek Money
2 Sep 14 05:23:29
BHP Billiton Limited $ADR to Issue Semiannual Dividend of $1.24 on September 23rd $BHP http://t.co/sru1AT90wd
Thudder & Wicks
2 Sep 14 05:00:33
$BHP, $RIO Tinto shares higher as FTSE 100 gains http://t.co/0va0MekqWW
MarketCurrents
2 Sep 14 04:56:23
BHP, Rio Tinto up as analyst foresees Escondida production boost http://t.co/6YUS0pJInG #premarket $BHP $RIO
Kirill Klip
2 Sep 14 04:35:42
RT @TNR_Gold: Acquisitions signal a turning market for miners. http://t.co/W2Hyhs54pg #Lithium #Copper #Gold $MUX $TNR.v $FCX $BHP $RIO $G…
Natalie Lobanova
2 Sep 14 03:40:27
Acquisitions signal a turning market for miners. http://t.co/ol3clVukjH #Lithium #Copper #Gold $MUX $TNR.v $FCX $BHP $RIO $GG $ABX
TNR Gold Corp
2 Sep 14 03:16:46
Acquisitions signal a turning market for miners. http://t.co/W2Hyhs54pg #Lithium #Copper #Gold $MUX $TNR.v $FCX $BHP $RIO $GG $ABX
Stock News Guru
2 Sep 14 02:07:24
$BHP: BHP Billiton Limited's “Buy” Rating Reaffirmed at Deutsche Bank (BHP) http://t.co/Oeaah6TdJm http://t.co/fU7AlAgchz
Klondike Strike
2 Sep 14 01:32:25
RT @kirillklip: Acquisitions signal a turning market for miners. http://t.co/6ahvUyKSw2 #Lithium #Copper #Gold $MUX $TNR.v $FCX $BHP $RIO …
Kirill Klip
2 Sep 14 01:30:07
Acquisitions signal a turning market for miners. http://t.co/6ahvUyKSw2 #Lithium #Copper #Gold $MUX $TNR.v $FCX $BHP $RIO $GG $ABX
Alysia Sarkisian
2 Sep 14 00:49:18
RT @SeekingAlpha: BHP Billiton's Decision On Nickel West Is Sound http://t.co/bQ6lyKvbed $BHP
Seeking Alpha
2 Sep 14 00:42:54
BHP Billiton's Decision On Nickel West Is Sound http://t.co/bQ6lyKvbed $BHP
luckypete
2 Sep 14 00:16:35
$DAX opened at $BHP TARGET... NOW at 9531 +52 Lets try DOWN full load..
luckypete
1 Sep 14 23:28:20
$DAX closed 9479, Pre-Mark now 9485, Futures 9472, $BHP AUS projected $DAX POS open, 1st TARGET +0.41% or 9518.
RIU Publishing
1 Sep 14 22:51:36
Oil & Gas Gazette - Apache turns on Tap lawsuit http://t.co/1R6winTnYj $TAP #Apache $BHP
Market News
1 Sep 14 21:07:37
$BHP: Must-know: The long-awaited split http://t.co/cYspDtVhkx http://t.co/aILqgemfIZ
David de los Angeles
1 Sep 14 20:45:58
Commented on: "Natural Gas: Will The Haynesville Resurrect?" http://t.co/1kVpLS7WE6 $APC $BHP $BX $CHK
Fraser Mackie Ltd
1 Sep 14 20:17:29
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
DeAnna Lynn Garza
1 Sep 14 19:58:48
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Stockaholics
1 Sep 14 19:50:20
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $BHP $CADX $BSX
Dr Marwaha
1 Sep 14 18:33:00
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Cap News
1 Sep 14 18:27:11
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Andrew Bayer
1 Sep 14 18:18:24
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Alysia Sarkisian
1 Sep 14 18:10:22
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Auto Binary option
1 Sep 14 18:07:53
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
FinanzLinksASIA
1 Sep 14 18:07:11
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
MKTWAsia
1 Sep 14 18:03:44
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
MarketWatch
1 Sep 14 18:03:44
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Evener Investment
1 Sep 14 18:03:32
RT @KitchenNews: Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Michael Kitchen
1 Sep 14 18:03:25
Australia stocks inch down with big banks weak -- details here: http://t.co/uO0qOIK1ID $AUD $XJO $BHP $RIO $QAN
Alessandro
1 Sep 14 08:22:56
These 3 #Australian Iron Ore #Miners Stand Up Best To Weakening Spot Prices - $BHP | Seeking Alpha - http://t.co/twijipSqlq
awolam
1 Sep 14 03:10:59
RT @SeekingAlpha: These 3 Australian Iron Ore Miners Stand Up Best To Weakening Spot Prices http://t.co/Gl9etytqOT $FSUMF $RIO $BHP
Seeking Alpha
1 Sep 14 03:00:08
These 3 Australian Iron Ore Miners Stand Up Best To Weakening Spot Prices http://t.co/Gl9etytqOT $FSUMF $RIO $BHP
Sufiy
1 Sep 14 02:16:45
RT @kirillklip: Los Azules in San Juan, one of the largest undeveloped #copper deposits in the world http://t.co/RzfmcwARiF $ABX $MUX $GDX…
Market News
1 Sep 14 01:07:37
$BHP: Twenty-First Century Fox Inc (FOX), BHP Billiton Limited (ADR) (BHP) And ... http://t.co/kRERakQafY http://t.co/UZPQhbxeII
luckypete
1 Sep 14 00:09:43
$dax OPENED HIGHER AT $bhp TARGET,...
				
				
By  +Follow October 2, 2013 5:25AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.