SA seems to have maybe "decided" they
have been short long enough. And it's \
time to go long:
Patriot Coal Corporation (PCX) is a coal mining company. It has a market cap of $112.06 million. Since the whole coal mining industry is highly correlated, Patriot Coal should be considered together with Alpha Natural Resources (ANR), Arch Coal (ACI), and James River Coal (JRCC). Patriot Coal engages in the mining, production, and sale of thermal coal primarily to electricity generators in the eastern United States. It has operations and coal reserves in the Appalachia and the Illinois Basin coal regions. The company is also involved in the production of metallurgical quality coal and sells it to steel mills and independent coke producers.
Patriot Coal's price/book ratio is 0.22. The company is selling below book value, something worth further investigation: is the company undervalued or are its assets overvalued? Patriot Coal has an enterprise value/ EBITDA ratio of 41.82, largely driven by its deteriorating EBITDA. The company had a net income of $-198.52 million and EBITDA of $10.69 million on revenue of $2.31 billion. The company has $114.99 million cash on its balance sheet. Its debt burden is $443.58 million.
Liquidity could be a potential problem. This month, 25.48 million shares are being shorted. Comparing to 23.58 million shares shorted over the previous month, the shared short has increased by 8%. The short ratio of Patriot Coal is 2.10, accounting for 28.00% of floating shares. Given the historically high trading volatility and quick turnaround of the coal industry, it is still worth watch for changes with Patriot Coal.
