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Westmoreland Coal Company is up 83% while other coal stocks suffer

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Introduction

In last couple of months, we’ve covered American coal producers (KOL) including Walter Energy (WLT), Peabody Energy (BTU), Arch Coal (ANR), Alpha Natural Resources (ANR), and Cloud Peak Energy (CLD). We’ve looked at the challenges facing these producers and how each of them is positioned to face these challenges based on the region they operate in and its financial condition. In this series, we add Westmoreland Coal Company (WLB) to our coverage universe.

part 1 wlb ops

About Westmoreland Coal Company

Founded in 1854, Westmoreland Coal Company (WLB) is now the sixth largest North American coal producer after its acquisition of Sherritt International’s Canadian assets. The company originally started operating in Westmoreland County in Pennsylvania, hence its name.

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The company currently doesn’t have any operations in the eastern U.S. WLB operates 13 surface mines producing thermal coal. Six of these are located in the U.S. and six are in Canada. The company also operates two coal-fired power plants in the eastern U.S. The U.S. operations are located in Montana, Wyoming, North Dakota, and Texas. The Canadian operations are located in Alberta and Saskatchewan.

Stock market performance

One thing that drew our attention towards WLB is its stock market performance. While stocks of other coal producers are down substantially since the start of the year, WLB is up 83%. In this series, we’ll look at WLB’s business model closely to help you understand what makes it different from its peers. After analyzing its business model, we’ll try to figure out reasons behind the company’s stock market performance and assess its sustainability.

We’ll have a look at the company’s U.S. operations in the next part of this series.

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