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

A recent article on Benzinga reported that BHP Billiton Limited (ADR)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 BTU and Market Vectors-Coal ETF 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.

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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.