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Coal Price Signals Opportunity in Stock Plunge: Chart of the Day
Oct. 06, 2011 01:21PM PST
Industrial MetalsBloomberg reported that the drop in coal stocks is inconsistent with coal prices, and this represents an opportunity for investors.
Bloomberg reported that the drop in coal stocks is inconsistent with coal prices, and this represents an opportunity for investors.
As quoted in the market news:
The ETF tumbled 43 percent between July 22 and Oct. 3 as five of its holdings — Alpha Natural Resources Inc., Arch Coal Inc., Patriot Coal Corp., Peabody Energy Corp. and Walter Energy Inc. — reduced profit or production estimates. The Newcastle index lost 0.4 percent in the same period.
US Global Investors CEO Frank Holmes explained:
“This extreme divergence between coal companies and the commodity seems unwarranted.”