BTU Investment Analysis Report & Stock Research, Peabody Energy Corp.

Peabody Energy Corporation (BTU)

BTU Stock Report

2-Year Price History

View Larger BTU Chart
NYSE:BTU
$42.59
(2/9 2:30PM)
+5.3%
Open$41.39 Mkt Cap$10.8 Billion
High$42.93 52Wk High$52.14
Low$41.34 52Wk Low$20.17
Volume6.4 Million Avg Vol 10D7.6 Million

Ockham's Rating/Recommendation Summary

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BTU Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, BTU the high and low end of the Price to Sales per share ratios are 2.61x and 1.03x respectively.

Notice that BTU's current Price to Sales per share ratio is 1.87x, which is somewhat above its historical average. As such, the current Price to Sales ratio suggests a neutral share price forecast. In order for us to become more positive about BTU we would need to see a drop in the Price to Sales ratio of 2% given current sales per share levels in order to return to its historical weighted average.

BTU Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of BTU, Ockham views their current Cash Earnings as below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for BTU, the current level of Cash Earnings compared to its historical levels helps identify where BTU is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 16.23 and a historical low Cash Earnings per share ratio of 6.74, an investor can relate where value becomes optimal.

With a historical average Cash Earnings ratio of 11.48, the current Cash Earnings ratio of 10.27 is a positive opportunity for value in the Ockham view. Naturally, we would love to see a deeper value opportunity for BTU, but to get there one of two things must occur (or both). Either the stock price must decline further to increase the long term buying opportunity, or the management at BTU needs to earn more cash. If either, or both, of these occur, then we could see a significant gap emerge between what investors were willing to pay for in the past, and where BTU is trading currently (latest close price of $41.91).

BTU Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from BTU against the historic high and low levels over an available data range. Because BTU has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In BTU’s case, the estimated annual dividend is $0.28 producing a current dividend yield of 0.67%. The highest dividend yield from BTU in recent history was 2.43% while the lowest dividend yield was 0.27%. With that range in mind, BTU’s current dividend yield is a full 50.37% below its median dividend yield historically. This is a negative from our perspective.

Peer Comparison

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Peabody Energy Corp. Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including BTU) 85.24 3.47 » 118.97 2.37 0.80 » 4.95 24.39% 15.83%
*10 year range does not include current year values
AngloGold Ashanti Limited AU $12.8 Billion $35.80 248.40 5.70 » 342.33 3.64 1.31 » 6.41 12.53% 0.38%
Nucor Corp. NUE $12.5 Billion $39.57 40.06 3.18 » 50.57 1.14 0.29 » 1.38 30.44% 30.28%
Aluminum Corp. of China Ltd ADS Repr 25 Shs Series H ACH $12.3 Billion $22.82 113.67 2.23 » 156.14 1.79 0.35 » 4.72 31.98% 17.80%
Peabody Energy Corp. BTU $10.8 Billion $40.45 10.27 2.48 » 26.72 1.87 0.32 » 3.69 18.44% 19.72%
Cameco Corp. CCJ $10.1 Billion $25.76 14.09 4.54 » 32.37 3.99 1.66 » 10.16 29.68% 12.76%
POSCO Shares Sponsored American Deposit Receipt Representing 1/4th Shares PKX $9.4 Billion $108.23 9.98 1.69 » 13.43 1.30 0.37 » 2.08 17.30% 17.92%
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Mad Money

Bullish/Bearish: Sentiment and BTU Discussed on Mad Money

It is always benefitial to understand the market's sentiment for a particular stock, and Mad Money talked about some aspects of sentiment for BTU recently.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Peabody Energy Corporation has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on BTU because it trades within the price range that we would expect given current market conditions and fundamentals. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… But that's not what we heist last week from PEABODY ENERGY with the great symbol btu, a coal company that was the most bullish i've ever heard it when the company reported last ... …”

Street Signs

A Discussion of BTU's CEO Occurred on Street Signs

Keeping up with a CEO is one way that we try to better understand the direction of a company, and there was talk about BTU management on Street Signs.

The Motley Fool CAPS data suggests that investors believe Peabody Energy Corporation will beat the market in the foreseeable future. Check the news on this stock because there is a catalyst that has allowed this stock to advance 5.28% today. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, BTU has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on BTU.

“… p PEABODY ENERGY saw sales shrink. Shares up 5%. Expecting coal prices to go up the second quarter of the year. Here exclusive to talk about the chairman and ceo of the ... …”

10:06A, Jan. 26,2010 BTU $46.48 Peabody Energy Corp.
Fox Business

It's Been a Month or More Since Fox Business Discussed Peabody Energy Corporation

There has not been much to report from BTU in the last few weeks at least, but Fox Business talked about the stock recently.

Peabody Energy Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; BTU has received less coverage from the financial media in business television and blogs.

“… PEABODY ENERGY fashionable. The group crusng that rosy pipiure right noww that something we are launching. > > turn to the company for a second. I am constantly asked, is ... …”

Closing Bell

BTU News Mentioned on Closing Bell Recently

The latest news on Closing Bell in regards to BTU came through on RazorWire recently.

In comparison to the other stocks that we follow, Peabody Energy Corporation has seen more discussion in relation to its normal ranking among the group. So, be aware that the news sources we track are focusing on this stock more recently. Be aware that crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on BTU because it trades within the price range that we would expect given current market conditions and fundamentals.

“… Archco, PEABODY ENERGY, devon energy all down for the day. Relatively light trading. Coal. Like at snapple. A little late afternoon joke for you today. …”

Fast Money

Peabody Energy Corporation (BTU) Discussed on CNBC's Fast Money

Peabody Energy Corporation is in the news. Find out how this impacts BTU trading on Ockham Research.

That's tomorrow night, 5:00 p.M. Eastern time, here on "fast." cracking up. You're giggling like a school girl over there. Coming up next, a first on "fast" interview with the ceo of PEABODY ENERGY following the company's better than expected earnings release. You're watching "fast money" on we're first in business worldwide. >> "squawk box" rewind. >> getting numbers from dupont because we are waiting on a flood of earnings. >> five dow components topping the earnings list today. >> what are other areas where you think the key players have maybe gotten a little fat and

“… ease. You're watching "fast money" on we're first in business worldwide. >> "squawk box" rewind. >> getting numbers from dupont because we are waiting on a flood of earnings. >> five dow components topping the earnings list today. >> what are other areas where you think the key players have maybe gotten a little fat and …”

Fast Money

Peabody Energy Corporation (BTU) Discussed on CNBC's Fast Money

Peabody Energy Corporation is in the news. Find out how this impacts BTU trading on Ockham Research.

I look to some of these names. Yes, they've absolutely scorched to the up side. I mean, we were talking about this when they were upgrading the coal sector in may at goldman sachs. They put in attractive. Later on we've got the PEABODY ENERGY folks out there, the ceo that's going to be talking. That whole area, when you're talking copper, when you're talking coal, the mining segment, you've got to like those that are most heavily exposed to mining. Joy global, terex -- >> no, no, no. >> after you, guy. >> listen, third quarter profit was down for caterpillar. Third quarter profit was down

“… ere, the ceo that's going to be talking. That whole area, when you're talking copper, when you're talking coal, the mining segment, you've got to like those that are most heavily exposed to mining. Joy global, terex -- >> no, no, no. >> after you, guy. >> listen, third quarter profit was down for caterpillar. Third quarter profit was down …”

Closing Bell

Peabody Energy Corporation (BTU) Discussed on CNBC's Closing Bell

Peabody Energy Corporation is in the news. Find out how this impacts BTU trading on Ockham Research.

The conference call gets under way at the top of the hour. We will have all the developments from there. We'll also take our position on wells fargo and morgan stanley tomorrow. And a "first on cnbc" interview with the ceo of PEABODY ENERGY, which by the way hit a new 52-week high. That and much more top of the hour on "fast." we'll see you about five minutes away, melissa. Thank you. Could move the markets tomorrow. We'll get you set up for when that opening bell sounds.

“… way hit a new 52-week high. That and much more top of the hour on "fast." we'll see you about five minutes away, melissa. Thank you. Could move the markets tomorrow. We'll get you set up for when that opening bell sounds. …”

Closing Bell

Peabody Energy Corporation (BTU) Discussed on CNBC's Closing Bell

Peabody Energy Corporation is in the news. Find out how this impacts BTU trading on Ockham Research.

We await yahoo! Reporting. A first on cnbc interview with the ceo of PEABODY ENERGY. Melissa and the traders are live at 5:00. >> we have 20 minutes before the closing bell. Yahoo! The stock is down. Technology is mixed. The rest of the market 53 points lower on the dow.

“… ower on the dow. …”

12:59P, Oct. 20,2009 BTU $43.76 Peabody Energy Corp.
Power Lunch

Peabody Energy Corporation (BTU) Discussed on CNBC's Power Lunch

Peabody Energy Corporation is in the news. Find out how this impacts BTU trading on Ockham Research.

>> i'm looking the same. I think some of the banks come in weaker. Then i'll be a buyer tomorrow. >> that does it for us at the first on cnbc interview with the ceo of PEABODY ENERGY which hit a 52-week high today after the company released earnings. Katherine smith discusses where he's putting her $250 billion under management to work. Michelle, what else are you working on? >> a lot coming up. Andrew ross sorkin is standing by with his book "too big to

“… erine smith discusses where he's putting her $250 billion under management to work. Michelle, what else are you working on? >> a lot coming up. Andrew ross sorkin is standing by with his book "too big to …”

10:33A, Oct. 20,2009 BTU $44.53 Peabody Energy Corp.
Squawk On The Street

Peabody Energy Corporation (BTU) Discussed on CNBC's Squawk On The Street

Peabody Energy Corporation is in the news. Find out how this impacts BTU trading on Ockham Research.

Hard. Warned that sales may slump. Pens costs may jump. It is selling is off on that news. PEABODY ENERGY, beat estimates up more than 3% but just look at probably down 71% but there's a couple of things in the notes about how it's positioning well in china for coal and that seems to be the biggest bullish element of the report. Coach, retail sector weak, this stock down 2.5%. Revenue up, profit down. Promotions hurt their margin,

“… na for coal and that seems to be the biggest bullish element of the report. Coach, retail sector weak, this stock down 2.5%. Revenue up, profit down. Promotions hurt their margin, …”

View All Peabody Energy Corp. Stock News

Key Fundamentals

BTU - Peabody Energy Corporation Fundamentals
Price (2/9 2:30PM) $42.59
Volume (2/9 2:30PM) 6.4 Million
Last Close Price $40.45
10 Day Average Volume 7.6 Million
13 Week Price Range $39.88 - $52.14
52 Week Price Range $20.17 - $52.14
LTM Revenue $6.0 Billion
 
Shares Outstanding (12/2009) 267.8 Million
Market Capitalization $10.8 Billion
Shares Held By Institutions 223.4 Million
Institutional Holders 729
% Shares Held By Institutions 83.50%
Earnings Per Share (EPS) $1.66
P/E Ratio 24.40
Book Value Per Share $14.12
 
Gross Margin 22.00%
Annual Dividend 0.28
Dividend Yield 0.70%
Beta 1.45
Fiscal Year Ends December

About Peabody Energy Corp.

Peabody Energy Corporation is considered to operate in the Basic Materials sector. They specifically operate in the Industrial Metals/Mineral business segment contained within the Metals & Mining industry.

The Company is engaged in the mining of steam coal for sale mainly to electric utilities and metallurgical coal for sale to industrial customers.