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Fellow
investor,
Efforts to put global caps on carbon emissions, like at last
year's Global Warming summit in Copenhagen, are an absolute
joke. Every government in the world knows it. So they agree that
something needs to be done, and then do nothing.
It’s been that way for years, and it’s not going to change. Not
when countries like China are dependent on coal as a cheap way
to generate the electricity they so desperately need to keep
their economy growing.
I recommended a $6 coal stock to my Energy World
Profits members in early 2010. It's now a $12 stock that’s going to see at least a
50% move
because of two ironclad trends…
Reliable Profits
from Coal Sector Consolidation
China
uses more coal than other country in the world. And it’s not
going to stop. In the last four years,
China has increased coal use
by 35%. And coal powered plants will provide 75% of China’s
electricity needs over the next 20 years. That means a 50%
increase in coal use for China.

Coal
demand in China is so strong, it must import coal from Australia
and even the United States. But that just means that China’s
domestic coal producers have no problem selling all the coal
they can dig up. China's gross crude coal output will top 3
billion tons in 2010. And with coal prices moving higher, the $12
coal stock I'm still recommending is all but certain to exceed revenue
expectations. In fact, it's already up 100% since I first added
it to the portfolio in early 2010.
But that’s only half the story. Because this perfectly
positioned mining company has been hand-picked by the Chinese
government to make more money…
Easy Profits from
Government Regulation
2,631
coal miners died in mining accidents in 2009 in China. That was
18% better than 2008, a testament to China’s “focus” on mine
safety. But it’s not enough. That’s why China’s mining watchdog
shuttered 1,088 small coal mines in 2009.
It’s the small mines that are the problem. With 10,000 small
coal mines in China, it’s just too hard to make sure they all
conform to safety regulations. That’s why the Chinese government
is hand-picking coal miners like this $6 company to lead a
massive consolidation in the coal industry.
And you can bet the companies that are working with the
government’s consolidation effort are getting sweetheart deals
to add capacity. The Chinese government is basically making it
cheaper for them (and you!) to make more money.
Here’s what I mean…
Sweet-heart
Consolidation Deals to Boost Stock Prices
In the Shanxi province, 2,598 coal mines will be reduced to
1,000. The $6 company I am recommending operates in Shanxi. It’s
about to add 30% to its production capacity in the near future.
I expect its revenues and earnings should to get an immediate
boost. Same goes for the stock price, as should its stock
price.
Because right now, the stock is cheap. The company has a
trailing P/E of 12 and trades at 0.5 times sales. The current
market cap is just $85 million, even though it sells over $200
million worth of coal a year. Soon, the stock’s going to get
even cheaper…
The company just closed on its acquisition of two coal mines, adding 450,000 metric tons of coal to its annual
production. And this company plans to double that output in the
next 12 months.
It’s simple – more coal for sale means more revenue, and a
higher stock price. All you have to do to make what could be a
44% gain – or more – is own the stock before it starts moving
higher. Like I said, it’s easy. And it can be done in small,
conservative amounts.
+44% Gains Coming
for Investors
Now,
because the two companies that this $7 company is acquiring are
private Chinese coal companies, there’s no way to be sure how
much revenues they take in. But we can, with some back of the
envelope calculations, get a feel for this deal.
It’s reported that this company is paying $41.7 million for
450,000 metric tons of production. That works out to $92.66 per
ton.
Now, if you know anything about the coal industry, you know that
coal prices are not set like gold or oil prices are. Coal prices
per ton vary widely based on supply, quality and demand. Coal
can fetch anywhere from $50 to $100 a ton. Right now, Australian
coal goes for around $80 a ton in China.
At
that price, it’s clear, this is a sweetheart deal. And my
expectation for 52% is a conservative one.
Welcome to Energy
World Profits
Hello, I'm Ian Wyatt. My research and stock recommendations have
been helping individual investors bank market-beating profits
since 2001. But when I read the groundbreaking research from
Gregor Macdonald, I knew immediately why he's one of the world’s
leading energy economists.
I was floored. I knew I had to find a way to turn his energy
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prices.
Not
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Even though you may have seen Gregor on CNBC or MSNBC, this
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Your Ace Up Your Sleeve Energy Expert: Gregor Macdonald
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Should investors buy oil services stocks?
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Many of the
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At Energy World Profits, we'll keep you focused on
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At Energy World Profits, we make profitable
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FULL MONTHLY ISSUE:
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Now is not the time to wait for oil prices to pull back – it
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By the time the truth of the current energy crisis makes front
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