Why are coal companies P/E ratios so high right now? i.e BTU, MEE, ANR or FCL. Is global demand hot right now?
Best Answer
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Oldman answered one year ago …
The expectations are high for the use of the coal for transportation to "Chindia" and for steel making (China's steel requirements are growing about 17%/yr) and for use in electric power plants. The Chinese have a lot of coal, but they import a lot more. As petrol and NatGas prices rise, the companies that produce "alternative fuel for power generation" also increase - as do the costs of shipping...Railroads and bulk shippers have seen an increase in P/E's, as wll as barge companies.
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3963 points
MNSL answered one year ago …
Yes you are right. I was wondering why recently these coals related stocks are trading in higher P/E when compared to other stocks
Last year there was sudden demand for coal related stock in New Zealand Stock exchange. Some analysts said there will be demand for this stock due to demand for coal worldwide.
I think investors are betting that these stocks will have higher earnings as alternative energy. in the future.
