Barron’s: Global Coal Usage to Increase 55% by 2025

Barron’s sure loves coal in 2009, spotlighting a new pick over the weekend.

In September, Barron’s reiterated its positive outlook for Consol Energy (CNX), noting that analysts’ 2010 price targets were still at a 10% premium. After a close brush with the $50 mark, Consol has retreated to mid-September levels. Meanwhile, Barron’s has turned bullish on the largest U.S.-listed coal player, Peabody Energy (BTU), which weighs in with a $9.4 billion market cap.

In a report issued over the weekend, Barron’s highlighted Peabody’s growing presence in Asia, which it expects to pay off as China and India increase their appetite for coal power. According to the report, coal usage is projected to increase 55% in the next 15 years.

A demand spike bodes well for components of the Coal Stocks Index, which is moving higher by another 3% today. Over the last month, coal stocks have outperformed the S&P 500 by 5.7%.

Utah’s Headwaters (HW) is leading the rally with an 8% jump. Close behind are Knoxville, Tennessee-based micro-cap National Coal (NCOC) and multi-billion-dollar giants Massey Energy (MEE) and Yanzhou Coal Mining (YZC). All three are advancing by more than 4%.

Over the last month, International Coal Group (ICO) and Patriot Coal (PCX) are both ahead by more than 25%, though, as of this writing, the entire sector is in the red in the last five sessions.

At the start of the third quarter, 25 Pros counted Alpha Natural Resources (ANR) among their top-15 U.S.-listed holdings, more than any other coal miner. Peabody and Walter Energy (WLT) were also popular among the Pros at the end of Q2.

As of this writing, the Coal Stocks Index is one of the top-50 performing tickerspy Indexes over the last month, up by 6.6%.

Tags: ANR, BTU, CNX, HW, ICO, MEE, NCOC, PCX, WLT, YZC