In Covestor’s Focus Value model (performance shown above – click to enlarge), the goal is to capture mispricing opportunities caused by market inefficiencies. On December 27th, Focus Value manager Analytic Investment added Puda Coal Inc (AMEX: PUDA) to the model. Many investors are looking to green energy providers for long-term investments but, as Joseph Levy mentions in an October 2nd article on SeekingAlpha, long-term might mean really, really long-term:
For those looking to profit from investments in alternative energy like solar, wind, geothermal etc., it will take some time for these sources to become a big part of the overall energy picture. As a percentage of world power consumption these alternative energy sources increased from just 0.2% in 1980, to 0.9% in 2004 and only 1.0% in 2006.
Coal consumption, on the other hand, has risen almost 7.5 percent per year over the past 10 years in developing countries alone and accounted for 29 percent of the worldwide energy use in 2009. PUDA announced a second public offering of 7.85 million shares on December 8th priced at $12 a share. On the same day, PUDA closed at $12.04 per share. As Michael Bryant noted in this article from December 31st, even at $13.80 (PUDA’s December 30th closing price) the stock may be undervalued.
…JRCC, PCX, and PUDA have R/S greater than their price, meaning they could be undervalued despite their high short interest.
PUDA has also announced the expansion of its coal mining rights and assets through the acquisitions and asset transfer agreements completed under its subsidiary Shanxi Puda Coal Group.
*Prices courtesy of Yahoo Finance.
