Thursday, January 9, 2014

Why Alpha Natural Resources (ANR) Is Down Today

NEW YORK (TheStreet) -- Alpha Natural Resources  (ANR) was falling 4.6% to $6.21 in mid-day trading Thursday after Cowen Group downgraded the stock to Market Perform from Outperform.

Cowen noted challenged metallurgical coal fundamentals thanks to ample supply, fresh production and muted demand as the reasons for the downgrade of the Bristol, Va.-based producer. Cowen also lowered the target price to $7 from $9, which represents a 7.36% potential upside from Alpha Natural Resources' close on Wednesday.

Alpha Natural Resources has a one-year high of $10.20 and a one-year low of $4.78.

TheStreet Ratings team rates ALPHA NATURAL RESOURCES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALPHA NATURAL RESOURCES INC (ANR) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 893.0% when compared to the same quarter one year ago, falling from -$46.15 million to -$458.24 million. Net operating cash flow has decreased to $111.08 million or 34.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. The share price of ALPHA NATURAL RESOURCES INC has not done very well: it is down 24.38% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. ALPHA NATURAL RESOURCES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ALPHA NATURAL RESOURCES INC reported poor results of -$11.06 versus -$3.25 in the prior year. This year, the market expects an improvement in earnings (-$2.28 versus -$11.06). The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ALPHA NATURAL RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500. You can view the full analysis from the report here: ANR Ratings Report

Stock quotes in this article: ANR 

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