Alliance Resource Partners, L.P. (ARLP)

Yes, the Democrats will be bad for the coal business, the economy has been weak, and coal prices have been declining. But ARLP owns 549 million tons of coal reserves. Like it or not, this is an energy source that the United States will have to rely on in the future.

ARLP, formerly known as Mapco Coal, produces and sells coal to utilities and industrial users in the U.S. ARLP performed fantastically well relative to the S&P 500 until it peaked at 45.58 in August 2005. Since then the price has declined close to 25%, but recently ARLP has been bid back up every time it has dipped below 34, forming a large descending triangle with bullish implications. ARLP stock also looks cheap according to conventional valuation measures and the dividend yield is 5.78%. There is a good dividend history too. I think the risk-reward ratio is starting to look attractive.

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4 Responses to “Alliance Resource Partners, L.P. (ARLP)”

  1. Mike Koether Says:

    I have been a long time holder and these guys know what they are doing. Management is the majority shareholder and they are taking care of business everyday. Join the team and enjoy the ride!

  2. Alligator Investor Says:

    Thanks, I believe I will, very soon. Recent price action of ARLP is encouraging; demand for coal is strong, and prices are improving.

  3. Buy Alliance Resource Partners LP (ARLP) « Alligator Investor Says:

    […] I bought ARLP yesterday afternoon at what I hope will turn out to be a good entry point. This stock was first discussed in the blog on November 24. I was pleased to see that Michael Kaye of Standard & Poors Equity Research agrees that Alliance offers a good value. After running a screen to find stocks with a PEG ratio below 1, a dividend yield above 2.6%, and return on equity exceeding 25%, Kaye came up with ARLP and four other energy stocks: BP PLC (BP), Global Partners (GLP), Precision Drilling (PDS), and Suburban Propane (SPH). […]

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