4 U.S. Non-Metals Miners With Healthy Operating Margins

Michael Teague |

Investors seeking a strong point entry into mining stocks will have their work cut out for them. With the rise of emerging market economies since the turn of the milleneum, miners, especially companies digging for hard commodities like copper and iron ore, have generally benefitted from a voracious demand for metals that has often exceeded supply.

In recent months, however, the prospects for the same rate of growth out of emerging market economies, in particular China, has become far more ambiguous than it has in some time, and a substantial number of analysts have been predicting a possible major price cut for previously in-demand metals, as stockpiles begin to overtake demand.

Add to this the cyclical nature of basic materials stocks, and what you have is a space in which it is difficult to find worthwhile equity investments, at least ones off the beaten path. Companies whose business is dependent on mineral as opposed to metals mining may offer a interesting angle on the space, however.

The following four companies are all listed in the non-metals mining industry. They were selected based on positive year-to-date performance, but more importantly for their strong operating margins. Operating margin, or the amount of money a company has left after paying the costs of production, is one of the most important metrics by which to measure any basic materials company. These companies are all sporting very healthy operating margins, which is very likely an indication that money is being well-managed, and moreover is available for future operational contingencies.

 

Alliance Holdings GP, L.P. (AHGP)

Market-Cap: $3.5 billion

Price: $58.50

Year-to-Date Return: 29.70 percent

Operating Margin: 19.70 percent

 

Suncoke Energy Partners, L.P. (SXCP)
Market-Cap: 853.75 billion

Price: $27.19
Year-to-Date Return: 53.7 percent

Operating Margin: 16.60 percent

 

Westmoreland Coal Co. (WLB)

Market-Cap: $210.70 million

Price: $14.44

Year-to-Date Return: 54.60 percent

Operating Margin: 5.30 percent

 

Rhino Resource Partners LP (RNO)

Market-Cap: $201.50 million

Price:$12.91

Year-to-Date Return: 7 percent

Operating Margin 23.90 percent

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. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AHGP Alliance Holdings GP L.P. 29.71 1.35 4.76 104,240
WLB Westmoreland Coal Company 19.42 1.75 9.90 614,835
SXCP SunCoke Energy Partners L.P. Representing Limited 20.95 1.00 5.01 591,331
RNO RNO n/a n/a n/a 0
AGRM Playworld Interactive Holding Corp n/a n/a n/a 0

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