Investors should be taking advantage of coal’s recent pullback by buying some of the producers, said Jeremy Sussman, coal analyst at Brean Murray, Carrett & Co.
“We’re very bullish on the global supply-demand outlook,” Sussman told CNBC.
“We’ve seen some M&A activity recently [within the sector] and we’d be taking advantage of the pullback.” (Scroll down for his full picks.)
For the next two or three years, Sussman said North American metallurgical coal (met coal) is going to remain at a “very high scarcity value” in terms of the global commodity chain, as Australia continues to recover from its recent floods.
“Queensland [Australia], which accounts for 60 percent of the world’s net coal exports, has major flooding where the country is still hurting and so we’ve seen a premium put on North American and U.S. met coal production.”
Sussman’s Coal Picks:
Alpha Natural Resources
Walter Energy
International Coal Group
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Scorecard—What He Said:
- Sussman's Previous Appearance on CNBC (Jan. 6, 2011)
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More Market Views:
- $5 Gasoline? One Ingredient of Toxic Brew
- Smokin’ Hot Tobacco Stock Picks: Analyst
- Buy/Avoid These 'Out on a Limb' Stocks: Strategist
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CNBC Slideshows:
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CNBC Data Pages:
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How Other Coal Firms Stand:
Arch Coal
Peabody Energy
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Disclosures:
Sussman does not own shares of ANR, WLT or ICO.
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