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3 Reasons To Follow Coal & BHP Billiton Limited (ADR)

3 Reasons To Follow Coal & BHP Billiton Limited ADR
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A recent article on Benzinga reported that BHP Billiton Limited (ADR)(NYSE: BHP), the world's largest natural resources company, is reorganizing into four core areas: coal, copper, iron ore and oil.

Here are three reasons why long-term investors could consider following the lead of BHP Billiton and check out securities in the coal sector, such as Peabody Energy Corporation (NYSE: BTU) and Market Vectors-Coal ETF (NYSE: KOL).

Coal Is Being Used More

Long term and short term, coal is being utilized more as a fuel source around the world. Coal is the fuel of choice in growing emerging market economies, such as China and India.

Related Link: 3 Reasons To Be Bullish On Paychex

Coal Is The Easiest Fuel Source To Produce And Use

No other fossil fuel compares to coal in ease of use. It can be dug up, put in a sack and carried home to heat a house or power an engine. That can't happen with natural gas, or crude oil on a mass scale.

Coal Is Selling Cheap Compared To Historic Prices.

Market Vectors Coal recently traded around $19.20; in June 2008, it was over $60 per share. Peabody Energy is around $14.86; in June 2008, Peabody Energy was near $90 per share.

There is tremendous upside to the coal sector that BHP Billiton seeks to profit from.

The author does not have a position in any of the securities mentioned in this article.

Posted-In: coalLong Ideas Sector ETFs Commodities Economics Markets Trading Ideas ETFs Best of Benzinga


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