| Stock (Symbol) | Stock Price | |
Peabody Energy (BTU) |
$65 |
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| Data is as of | Expected to Report | Sector |
February 20, 2011 |
Apr 19 |
Energy & Commodities |
| Sharek’s Take | ||
 Peabody Energy (BTU) is largest coal producer for 40 straight years, supplying half the electricity consumed by Americans. It also supplies coal to China. China, long a coal exporter, became a net importer of more than 100 million tonnes of coal in 2009. (source: BTU 2009 Annual Report).Peabody missed by 6 cents last quarter, lowered next quarter’s estimates, then increased estimates for this year and next. Overall this is positive. The sector is really heating up and these energy stocks are going up, even as the techs or the market don’t. Energy is the investment to make in 2011. |
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| One-Year Chart | ||
 BTU has been steadily rising. The Long Term Growth Rate (top) just increased from 22% last quarter to 26% today. Last quarter’s P/E was 14 and in black. Now its 13 (top/right) is in green because I think the combination if rising annual estimates, a better estimated long term growth rate, and positive sector performance make this stock look better than last quarter. |
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| Earnings Table | ||
 BTU’s profits have doubled during the last two quarters. Revenue grew 17% last quarter, 21% two quarters ago.BTU missed by 6 cents last quarter. It had beat by 6 to 11 cents the previous three quarters.Annual Profit Estimates increased for 2011 and 2012 — that’s the overall news in this article.
Estimates for the next four quarters show 15%, 87%, 22% & 22% growth coming. Next quarter’s estimates got slashed by 49 cents to 60 cents but investors didn’t seem to mind. |
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| Fair Value | ||
 BTU had a median P/E between 18 and 22 during 2002-2006 (and also in 2009). I continue to think BTU’s Fair Value is 20 times earnings/ That means this $65 stock is worth $97 this year and $123 next year (almost a double). |
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| Ten-Year Chart | ||
 Peabody’s ten-year chart is successful — but wicked. There are Huge swings in stock price — including two steep drops that I would consider crashes. Still, overall, a good investment for most during the decade. 2011 profits should be the best ever for this company. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
8 of 22 |
Energy continues to shine. Peabody Energy is ranked 8th in the 22 stock Growth Portfolio Power Rankings. The stock is timely and there’s good upside here.Peabody is poised to get into the Aggressive Growth Portfolio but I haven’t added it yet. We could have entered a correction today, and I’m not sure oil stock can climb in a stock market correction. Best to keep it safe for now and not buy BTU in a ten-stock portfolio. | |
Aggressive Growth Portfolio
N/A |
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