Coal stocks got burned pretty badly in 2013. Increased carbon emissions regulations from the Environmental Protection Agency, competition from a domestic natural gas boom, and a slowdown in normally coal-hungry China all weighed on the industry.
Shares of Peabody Energy (BTU), Alpha Natural Resources (ANR) and Cliffs Natural Resources (CLF) plunged on June 24th when reports surfaced that President Obama planned to take aim at coal when outlining new emissions standards.
Obama said the United States must use less "dirty energy," and he issued directives requiring the EPA to establish carbon pollution standards for plants that are already active. That's on top of regulations for new coal plants that his administration put into place during his first term.
Still, despite dire predictions about the end of coal as we know it, bargain hunters may beg to differ. In November, Goldman Sachs upgraded Peabody Energy to a "buy," citing bottoming coal prices and an attractive valuation.
But investors still should be nervous about the future of the coal industry. Alpha Natural Resources and Cliff Natural Resources have landed on the Fortune 500 list of worst-performing stocks two years in a row. --J.S.
