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Investment In Peabody Can Double Your Investment In 2014: How?

Updated on February 19, 2014

For most investors, it is undeniable that they want a secured place for their money. Each investor would like to see their investment grow and come up with higher dividends, as stated in Peabody Energy Corporation stock news. With so many different stocks to choose from, it will be difficult to really make a good decision without the right information and knowledge. However, at this point in time, Peabody Energy Corporation stock price deserves a second look and find out how an investor’s money can double within this year.

A quick overview of Peabody Energy Corporation

Peabody Energy Corporation started in 1883. From then, it was unstoppable in growth and development to the point that it is now the largest coal company in the world. It operates internationally and delivers about 2% of the world’s electricity generation. Through BTU estimates, the united States acquire its 10% energy consumption. In 2011, after the company acquired a new mining area in Queensland, Australia, it was included in the Fortune 500, according to BTU stock news. It was number 338 in the list along with other top, powerful, and influential companies in the United States. In 2008, the company was awarded the America’s Most Admired Company award and was ranked at number 1 in terms of Innovation, Social Responsibility, People Management, and Financial Soundness. In addition to this, Peabody Energy Corporation stock is part of the Standard & Poor’s component. The stock of Peabody Energy is traded in the New York Stock Exchange as BTU.

A growing concern against coal mining

There are many movements that were made to stop coal mining and thus, minimizing BTU earnings. One of the most common reasons is the environmental concern. It is no secret that coal, when used as a source of energy, has a negative impact on the environment. As a result, environmentalists push the use of alternative source of energy instead of coal, as mentioned in one of the Peabody Energy Corporation stock analysis. For this reason, the United States, along with developed countries, make it a point to decrease the use of coal.

In addition to this, coal’s price is so low that making a profit can be very difficult, based on Peabody Energy Corporation stock news. During the last quarter of 2013, the market displayed a sluggish comeback for coal mining. China, one of the largest consumers of coal in the world, has recently decreased its demand for coal. With the decrease in the demand, coal mining companies are forced to lower its BTU stock price to attract customers.

Moreover, natural gas is now being more preferred than coal, according to BTU stock news. Because natural gas is more eco-friendly and much cleaner, coal is becoming less of a choice. The recent price drop on natural gas is also a reason for decrease in demand for coal and decrease in BTU earnings.

With all these being said, is it still wise to invest in coal mining companies such as Peabody Energy? Let’s look at the Peabody Energy Corporation stock analysis.

There will be an increased demand on coal

Forecasters and market analysts are very positive to predict that Peabody Energy Corporation stock will be again in demand in the year 2014. For the past years, specifically 2011 and 2012, coal’s demand decreased because of various contributing factors. Moreover, the supply for coal increased by 11%, but the demand for it decreased by 5%. One of the main reasons this had happened is because of the increase coal reserve of various utility companies, according to BTU stock analysis. Thus, instead of buying coals, the utility companies choose to first exhaust its reserve. According to one source, this trend may last up to a few months, but after that, the utility companies need to replenish its depleted supply of coal.

The global demand for BTU stock will also improve. There is an increasing need for many countries to supply power to its growing economy. Now that there are many developing countries around the globe, power consumption will increase and thus, demand for coal will also increase to improve Peabody Energy Corporation stock price.

Optimistic approach of the company

Peabody Energy is the largest coal mining company today. When compared to other tight competitors, BTU estimates are seen to be more feasible and robust. Though the industry was in bad shape last year, the company has a lot of reasons to smile about. At the start of 2014, the company has seen positive growth in sales and profit.

A demand surge from China and India

There is no doubt that the demand from these two developing countries declined for the past year, based on BTU stock analysis. China and India decreased its need for steel. Since coal is needed in steel production, the coal industry was also affected by this situation. The environmental concern as well in these two countries forced them to seek alternative options aside from coal.

It will be good to take a look at what China is doing for the last few months and how it will affect BTU stock price. In 2012, there are over 1,300 deaths related to mining activities. Because of poor mining practices, the death toll in China is 50 times higher compared to the United States, as mentioned in BTU stock news. As a result, China will close around 5,000 mining areas across the country.

China is also seeking for cleaner coals which are primarily derived from the United States’ Peabody Energy Corporation and other related companies.

Because of these changes, China will have lower domestic coal production and this is where BTU enters the picture to maintain sufficient supply of coal. As a matter of fact, China signed a contract with Peabody to ensure continued coal supply for 2014.

Conclusion

With all these being said, it is clear that there will be surge in BTU stock demand. In addition to what was already mentioned, the coal demand is also rising in the Asian and European region. Thus, it is very easy to see why an investor’s money can increase within this year. An investor should buy stock from Peabody Energy Corporation as soon as possible to get the highest return of investment as possible.

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