KOL Gets Burned
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Market Vectors Coal ETF (NYSE: KOL) is taking a beating again today, dropping 1.7 percent and adding to a 12 month decline of 40 percent that has stocks in the sector near 52 week lows. KOL holds equities in publicly traded companies worldwide that derive greater than 50% of their revenues from the coal industry.
The demise of companies in the coal industry is directly tied to increasing popularity of natural gas, which is touted as a cheaper and cleaner alternative. Slower growth in China manufacturing is also adding to KOL's woes.
Overall outlook for major coal companies looks dim, especially in light of recent EIA outlook that says U.S. coal consumption this year to be at its lowest level in a quarter-century.
The industries latest causality is Patriot Coal (NYSE: PCX), which has a 1 percent weighting in KOL. Today shares of the company are getting slammed after it predicted it sell will less coal this year than previously forecast. The stock is down 14 percent on the news.
The demise of companies in the coal industry is directly tied to increasing popularity of natural gas, which is touted as a cheaper and cleaner alternative. Slower growth in China manufacturing is also adding to KOL's woes.
Overall outlook for major coal companies looks dim, especially in light of recent EIA outlook that says U.S. coal consumption this year to be at its lowest level in a quarter-century.
The industries latest causality is Patriot Coal (NYSE: PCX), which has a 1 percent weighting in KOL. Today shares of the company are getting slammed after it predicted it sell will less coal this year than previously forecast. The stock is down 14 percent on the news.
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