Shares of coal producer Peabody Energy have been plunging for the last five years—falling 90 percent over that time. But "Fast Money" trader Steve Grasso is making a huge contrarian call that the worst is behind it.
"The Street doesn't want you to buy coal, nobody wants to buy coal, but I bought coal," said Grasso. According to his logic, if Peabody can stay above its multiyear low of $4.34, it could be off to the races for this beaten-down energy stock.
Grasso is eyeing three catalysts that could change Peabody's fortunes: production cuts in the sector; historically low prices of natural gas that he thinks are due to rise; and the possibility of Republicans reclaiming the White House, which he views as a potential positive development for the energy complex.
"I bought it because I think the upside is huge. They have to do a couple of things right. I think they're closer to the bottom than they've ever been before," said Grasso.
He added that it is a very risky trade, though, and to be wary of too much downside.
Follow Steve Grasso on twitter @grassosteve.
Disclosure: Grasso is long Peabody Energy.