Market Overview

Year-End Short Interest Swings In Coal (AHGP, RNO, SXC)

Year-End Short Interest Swings In Coal AHGP, RNO, SXC
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Among the leading coal-related stocks, Alliance Holdings (NASDAQ: AHGP), Rhino Resource Partners (NYSE: RNO) and SunCoke Energy (NYSE: SXC) saw the most significant swings in short interest between the December 13 and December 31 settlement dates.

The number of shares sold short in Alpha Natural Resources, Westmoreland Coal, CONSOL Energy and Yanzhou Coal Mining increased during the period. On the other hand, short sellers retreated from Cloud Peak Energy, James River Coal, Peabody Energy and Walter Energy.

Alliance Resource Partners and Arch Coal saw little change in short interest from the previous period.

Below we take a quick look at how Alliance Holdings, Rhino Resource Partners and SunCoke Energy have fared and what analysts expect from them.

See also: SunEdison Sees Short Interest Surge

Alliance Holdings

Shares sold short in this producer of coal primarily for utilities and industrial users increased about 13 percent to more than 128,000. That was the highest level of short interest since September, but it was less than one percent of the total float. The days to cover fell to less than three.

This Tulsa, Oklahoma-based company has a market capitalization of more than $3 billion and a dividend yield near 4.9 percent. The forecast for the current quarter calls for EPS and revenue that are flat year-over-year. But the long-term earnings per share (EPS) growth forecast is about 14 percent.

All four analysts who follow the stock and were surveyed by Thomson/First Call recommend holding shares. The mean price target, or where analysts expect shares to go, is more than 11 percent higher than the current share price. That consensus target is less than the 52-week high, though.

Shares are trading in the same neighborhood they were a month ago. The share price is more than 10 percent higher than a year ago. Over the past six months, the stock has underperformed competitors Arch Coal and Peabody Energy, as well as the Dow Jones Industrial Average.

Rhino Resource Partners

This Lexington, Kentucky-based producer and processor of metallurgical coal saw short interest rise more than 25 percent in the period to more than 55,000 shares. That was the fourth consecutive period of rising short interest. But the number of shares sold short represented well less than one percent of the float.

Rhino Resource Partners is expected to show sizable declines on the top and bottom lines for the quarter just ended. It offers a dividend yield of about 14.8 percent, and the company has a market capitalization short of $350,000. The price-to-earnings (P/E) ratio is greater than the industry average, and the return on equity is less than four percent.

For the past three months, the consensus recommendation of analysts polled has been to hold shares. Only one analyst had a price target, and it suggests more than 17 percent potential upside relative to the current share price. However, that target is less than the 52-week high.

Shares have risen more than 18 percent in the past month, though the share price is still more than nine percent lower than six months ago. The stock has outperformed James River over that six months, though it too has underpeformed Alpha Natural, CONSOL Energy and the broader markets.

See also: Short Interest Swings in Semiconductor Stocks

SunCoke Energy

Short interest in this metallurgical and thermal coal producer dropped about 38 percent in the final weeks of December to more than 1.63 million shares. That was the smallest number of shares sold short in the past year, and it was more than two percent of the company's float. Days to cover was more than three.

This Lisle, Illinois-based company is expected to post lower per-share earnings and revenues for the quarter just ended. It has a market cap of more than $1 billion. The P/E ratio is greater than the industry average, but the long-term EPS growth forecast is about 26 percent.

Half of the eight surveyed analysts recommend buying shares, and that has been the consensus recommendation for the past three months. But they see little headroom for shares, as their mean price target is less than four percent higher than the current share price.

The share price has retreated about four percent in the past month but is still more than 42 percent higher than six months ago. SunCoke Energy has outperformed not only the broader markets over the past six months, but competitor Walter Energy as well.

At the time of this writing, the author had no position in the mentioned equities.

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Posted-In: Alliance Holdings Alliance Resource Partners alpha natural resources arch coalShort Ideas Commodities Markets Trading Ideas Best of Benzinga

 

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