Analysts at BMO Way Ahead of the Rest, Downgrade Two Coal Stocks

Jul 16, 2012
J. Webster
Comments Off on Analysts at BMO Way Ahead of the Rest, Downgrade Two Coal Stocks

While the rest of us talk about coal stocks and their great potential long term, BMO Market Capital analysts are out in front of everybody else saying coals future doesn’t look so bright, and it’s time to sell Alpha Natural Resources and Arch Coal.

BMO downgraded Alpha Natural from a outperform rating to an underperform rating and Arch Coal from market perform rating to an underperform rating. That’s two underperform ratings for two coal stocks! The price target for Arch Coal? How about $4. And then Alpha Natural’s price target lowered to $5 from $18.

You’d think these analysts had a crystal ball or something to see the slowing in the global economy and China in particular, the hatred for coal, the decrease in the cost of natural gas, the negative environmental effects of coal mining and the burning of fossil fuels like coal.

What foresight and wisdom from this firm! And the make this call when coal stocks aren’t even that beaten down. Their 52 week lows nowhere in sight! In 2008, Arch Coal traded for over $70 a share and now it’s down to under $6. Alpha Natural traded for over $100 a share and now it’s just over $6 a share. To make this call now, just crazy brilliant.

How in the world did these BMO analysts get out in front of everyone else, alert their clients to this, before the stocks got crushed? Save everyone so much money. They deserve some kind of award for the timing of this call. What do they say, buy stocks when they are hated and sell stocks when they are most beloved loved. These guys are just brilliant and a credit to the standard and ethics of Wall Street.

I say these analysts, whoever they are, should have their faces up on billboards in Times Square, alerting everyone to the negative outlook for coal stocks. Nobody had any idea. Outperform to underperform, just genius.

(Truth is, after this downgrade it’s probably time to speculatively purchase some shares in both these coal stocks. Their downgrade is probably the bottom.)

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