3 Small-Cap Stocks to Buy as Coal Prices Soar

: HCC | Warrior Met Coal, Inc.  News, Ratings, and Charts

HCC – Due to the shortage of natural gas supply, coal prices are surging worldwide and could be the most expensive in 13 years this winter. Given this scenario, it could be wise to bet on fundamentally sound small-cap coal stocks Warrior Met Coal (HCC), SunCoke Energy (SXC), and Ramaco Resources (METC).

Australian thermal coal at Newcastle Port, the benchmark for the vast Asian market, has more than doubled this year to about $180 a metric ton, driven by surging demand from utilities and plunging stockpiles. According to Goldman Sachs (GS), coal prices are expected to average $190 from October to December. Moreover, in Europe, coal prices have risen to $169, up from $65 in mid-March. In addition, with China’s bulk of electricity still being generated by coal, growing demand from the power sector should further drive the prices higher.

According to the Energy Information Administration, in the U.S., the share of electricity generation from coal is expected to rise from 20% in 2020 to about 24% in both 2021 and 2022 due to increased natural gas prices.

Therefore, fundamentally sound small-cap coal stocks Warrior Met Coal, Inc. (HCC), SunCoke Energy, Inc. (SXC), and Ramaco Resources, Inc. (METC) could benefit significantly from the rising coal prices and deliver solid returns in the near term.

Warrior Met Coal, Inc. (HCC)

HCC is a producer and exporter of metallurgical coal for the global steel industry, operating two underground mines located in Alabama. The company serves markets in the U.S., Europe, Asia, and South America. In addition, it has the operational capacity to mine about eight million tons of coal per year. HCC has a market capitalization of $1.2 billion.

HCC’s sales increased 41.3% year-over-year to $224.76 million for the second quarter ended June 30, 2021. Its total revenues grew 38.9% from the year-ago value to $227.44 million. The company’s operating loss declined 46.9% from the prior-year quarter to $2.83 million. Also, its net loss reduced 48.9% year-over-year to $4.68 million.

Analysts expect HCC’s revenue for the fiscal year 2022 to be $1.15 billion, representing a 32.7% growth year-over-year. Also, its EPS is expected to grow 273.5% in the current year and 209.5% next quarter. Its stock price has increased 38.4% over the past six months.

HCC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has an A grade for Momentum, and a B for Growth. We’ve also graded HCC for Sentiment, Stability, Value, and Quality. Click here to access all of HCC’s ratings. HCC is ranked #4 of 10 stocks in the B-rated Coal industry.

SunCoke Energy, Inc. (SXC)

With a market capitalization of $521.47 million, SXC is a raw material processing and handling company. It serves steel and power customers, with principal business in cokemaking and logistics. The company operates through three segments: Domestic Coke; Brazil Coke; and Logistics. Additionally, SXC owns and operates five cokemaking facilities in the United States and one in Brazil.

In June, SXC priced its offering of $500 million aggregate principal amount of senior secured notes due 2029. The company intends to use the net proceeds from the offering for redeeming its outstanding senior unsecured notes due 2025.

During the second quarter ended June 30, 2021, SXC’s revenue increased 7.8% year-over-year to $364.3 million. The company’s operating income grew 36.1% from the year-ago value to $33.9 million. Its cash and cash equivalents rose 6.8% from $48.4 million as of December 31, 2020, to $51.7 million as of June 30, 2021. Also, the company’s total adjusted EBITDA increased 15.3% year-over-year to $68 million.

SXC’s revenue is expected to increase 14.7% year-over-year to $1.53 billion in the fiscal year 2021. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. The company’s EPS is expected to increase 525% in the current quarter. Moreover, its stock has gained 42.7% over the past nine months and 83.6% over the past year.

SXC’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has an A grade for Momentum, and a B for Quality and Value.

In addition to the POWR Rating grades I’ve just highlighted, one can see SXC’s ratings for Growth, Stability, and Sentiment here. The stock is ranked #1 in the same industry.

Ramaco Resources, Inc. (METC)

METC is an operator and developer of metallurgical coal in central and southern West Virginia, southwestern Virginia, and southwestern Pennsylvania. The company operates in three deep mines and a surface mine at Elk Creek mining complex. It also serves blast furnace steel mills and coke plants in the United States. METC has a market capitalization of $542.99 million.

In July, METC announced a public offering of senior unsecured notes due 2026. The size of the offering has been increased from the previously announced $25.0 million aggregate principal amount to $30.0 million aggregate principal amount of Notes. It plans to use the net proceeds from the offering for funding acquisitions, capital expenditures, and working capital.

METC’s revenue increased 109.1% year-over-year to $76.1 million for the second quarter ended June 30, 2021. The company’s net income grew 266.7% from the year-ago value to $9.9 million. Its adjusted EBITDA rose 67.6% from the prior-year quarter to $18.1 million. Also, the company’s EPS increased 283.3% year-over-year to $0.23.

METC’s revenue for the fiscal year 2021 to be $258.85 million, representing 53.2% year-over-year growth. The company’s EPS is expected to increase by 908.3% in the current year. METC’s stock price has surged 333.5% over the past nine months.

It’s no surprise that METC has an overall B rating, which equates to a Buy in our POWR Rating system. Also, the stock has an A grade for Momentum, and a B for Growth and Quality.

Click here to see the additional POWR Ratings for METC (Value, Stability, and Sentiment). METC is ranked #3 in the same industry.


HCC shares were trading at $25.21 per share on Friday afternoon, up $1.94 (+8.34%). Year-to-date, HCC has gained 19.20%, versus a 17.02% rise in the benchmark S&P 500 index during the same period.


About the Author: Priyanka Mandal


Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HCCGet RatingGet RatingGet Rating
SXCGet RatingGet RatingGet Rating
METCGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Recession is Here...Watch Out Below!

More and more it looks like recession is here. This includes a dramatic decline for ISM Manufacturing discovered this morning. As you likely know, most economist call manufacturing the "canary in the coal mine" for the US economy as it often shows weakness before other areas. In fact, GDP Now from the Atlanta Fed reads it loud and clear with a negative revision for the US economy down to -2.1% for Q2. Ouch! We are going to discuss these new economic facts...what it means for the stock market outlook...and an interesting view on why the S&P 500 (SPY) does not decline in orderly fashion. All that and more is coming your way in this week's commentary…

:  |  News, Ratings, and Charts

4 Ideal Stocks to Add to Your Portfolio in July

While sluggish consumer spending data led to the stock market ending the last trading session of June in the red, a moderate inflation forecast is nurturing hopes over the economy to avoid a recession. Therefore, investors might consider buying quality stocks ARC Document Solutions (ARC), Core Molding Technologies (CMT), DLH Holdings (DLHC), and Friedman Industries (FRD) at their current low price levels to benefit from their big rebounds. Read more…

:  |  News, Ratings, and Charts

Stocks to Fall MUCH FURTHER this Bear Market Cycle

Spoiler alert...the bear market is not over. Unfortunately history shows that the S&P 500 (SPY) has much further to fall to squeeze out excess valuation. That is just a natural part of the bear market process that is properly explained in this timely market commentary. More importantly, this commentary provides a strategy on how to profit in the days and weeks ahead as the market finds its way to bottom. Read on below for more...

:  |  News, Ratings, and Charts

Wall Street Analysts Predict More Than 160% Upside in These Stocks

The high global inflation and hawkish federal reserve are leading to heightened volatility in the market. However, despite the market uncertainties, Wall Street analysts see a more than 160% upside potential in IonQ (IONQ) and Rigetti Computing (RGTI). Thus, these stocks could be ideal additions to your watchlist. Keep reading…

:  |  News, Ratings, and Charts

Stocks to Fall MUCH FURTHER this Bear Market Cycle

Spoiler alert...the bear market is not over. Unfortunately history shows that the S&P 500 (SPY) has much further to fall to squeeze out excess valuation. That is just a natural part of the bear market process that is properly explained in this timely market commentary. More importantly, this commentary provides a strategy on how to profit in the days and weeks ahead as the market finds its way to bottom. Read on below for more...

Read More Stories

More Warrior Met Coal, Inc. (HCC) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All HCC News