Can Alpha Natural Resources Beat the Odds and Outperform in 2013?

With shares of Alpha Natural Resources (NYSE:ANR) trading around $10.60, is ANR an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalysts for the Stock’s Movement: EarningsCoal Mining

ANR will report its fourth-quarter 2012 earnings on February 22, and if the stock’s current volatility is any indicator (beta is sitting at 2.33) the release is bound to generate a flurry of trading activity. To get a head start on the game, analysts are expecting the company to post a loss of $0.53 per share for the quarter, and losses of $1.28 per share for the year.

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For the same quarter last year, analysts were expecting EPS of $0.26, but ANR missed the mark with a loss of $0.07 per share. However, ANR beat third-quarter estimates by 29 cents with a loss of just $0.16 per share.

E = Equity-to-Debt Ratio is Closer to Zero Than its Competition

ANR’s debt-to-equity ratio of 0.59 looks pretty good when compared to its major competitors. Peabody Energy Corp. (NYSE:BTU) currently holds a debt-to-equity ratio of 1.07, while Arch Coal Inc. (NYSE:ACI) sits at 1.45.

It’s also important to consider total debt and total cash on hand, which for ANR is $2.99 billion in total debt, and $549.4 million in cash. Peabody Energy currently holds $6.36 billion in total debt, and $648 million in cash, while Arch Coal carries $4.58 billion in total debt, and $650.11 million in cash.