ARCH Coal Filed For Bankruptcy
In 2015 we already published that ARCH Coal had to accomplish a large payment of a debt by December 2015. However, they opted to defer payment to mid-January 2016. The goal here was to buy some time with the holders of debt. We asked our sources which are the reasons for the request to defer the payment one month. Are they going to receive a line of credit? That did not happen and the company finally filed for bankruptcy.
Much as we anticipated, ARCH Coal, which is the second-largest coal mining company in the United States, filed for Chapter 11 bankruptcy.
All these problems in ARCH Coal do not mean that the industry is having problems at all. This 2020 was not the exception to this trend. Coal remains one of the world’s most important energy sources. Therefore, prices should continue to rise – much to the delight of some coal miners and their shareholders.
There may indeed be far more efficient and, above all, more environmentally friendly energy sources than coal. However, this raw material is still relatively cheap. That is why emerging and developing countries in particular are increasingly relying on energy generation from coal. The hunger for energy in China, India, and the like (that did not stop despite the pandemic of 2020-2022) is gradually causing the price of coal to rise. At the end of June, the raw material in China was already more expensive than it had been in two years. In addition, given the increased energy demand in the summer months, demand is likely to continue to rise – much to the delight of coal producers, whose profits are likely to increase significantly this year.
ARCH COAL: From Bankruptcy To An Expansion?
The high price of coal comes at just the right time for Arch Coal. After all, the group is on a course of expansion. In mid-June, Arch Coal announced that it had completed the acquisition of rival International Coal Group with a volume of $ 3.4 billion. This deal makes the company the second-largest US producer of metallurgical coal, which is mainly used for steel production. The already strong growth will be further accelerated by the acquisition. After doubling profits in 2010, Arch Coal should be able to do the same in 2011. For 2012, analysts are again expecting a strong profit increase, which would mean the P / E ratio would drop to just 7. The stock is one of the top picks in the sector.
We have many reviews of different brokers where you can operate with all the assets that we discuss in these articles. From all of those, we would recommend a few that we find are suitable for beginners and intermediate investors so you do not have to read all our reviews: Robinhood, Tastyworks, Firstrade, Interactive Brokers, and Webull.
As much as we have studied in this website technical analysis, I should not underestimate fundamental analysis. We have interesting articles that can be useful to understand how companies are behaving: how are their sales? are they investing in new plants? Are they divesting and splitting? This information can be helpful to perform fundamental analysis before investing.
We study assets more in terms of what are these companies doing in long-term investments, what happens with their management accounting and balances in a wide array of securities and markets.
Therefore, I can recommend you some articles.
We have studied investments from Netflix, new contracts signed by Orbital, SolarCity earnings report and their negotiation with Tesla for the acquisition of the Powerball battery, the problems that ARCH coal is facing, how IBM is investing in the treatment of the Zika virus, how Moon Express is planning to mine minerals in the moon, and how Citigroup is engaged in commodity trading.
We follow a lot Tesla here, from the fundamental analysis and from the technical as well. See how the Chevy Bolt and the Tesla 3 are dimensioning the evolution of the price of this shares and how this could affect technical analysis, and how the Autopilot functionality is working: the evolution of the Autopilot software has always influenced the prices of their stocks. Tesla Model S 70D is considered the “car of the century”, not by us of course, but we are interested to see how these awards affect the evolution of the stocks. Tesla and other companies signed an agreement so that autobraking became the standard in 2022. A trend in the automobile industry started by Mercedes Benz and Tesla, is having a platform to sell pre-owned vehicles: now General Motors is joining that trend as well.
We have studies how the stock slump of GoPro should be considered not only from the view of technical analysis. Also, check the functionality from Facebook, the “login approval” and if it really protects users or other interests. The reports from Volkswagen about their very low injury claims, how now other companies in China can use the name “IPhone” apart from Apple. We continue in China to learn about the Marketplace Alliance Program from Alibaba, and the joint investment in CloudFlare from Google Inc, Microsoft Corporation, Qualcomm, and Baidu.
About Google, a company we follow a lot here, I want to see how they have entered in the batteries market and how this will affect their current projects and the evolution of the stocks. Interesting are the Chrome updates to decrease CPU usage.
We discuss briefly how Oracle adressed the changes in the cloud-computing industry, why Morgan Stanley is optimistic after the pandemic and the Brexit, the divestment in Dell regarding Perot Systems, and the effects of the huge minimum wage rise in Costco. Chipotle is cutting the executive compensation, the issues that BP is facing, what happens with Macy´s earnings and how fundamental analysis can be done in those cases. About Apple, we analyze the effect of the launch of this product Apple Watch where sales performed very irregularly.
I am David, economist, originally from Britain, and studied in Germany and Canada. I am now living in the United States. I have a house in Ontario, but I actually never go. I wrote some books about sovereign debt, and mortgage loans. I am currently retired and dedicate most of my time to fishing. There were many topics in personal finances that have currently changed and other that I have never published before. So now in Business Finance, I found the opportunity to do so. Please let me know in the comments section which are your thoughts. Thank you and have a happy reading.