By Taylor Kuykendall

The total market value of publicly traded U.S. coal companies has rebounded slightly in recent months, but remains nearly 63% lower than a total of the same companies at a near-term coal market peak in April 2011.

Total market capitalization of publicly traded U.S. coal companies was $23.99 billion as of April 21, up from $19.59 billion on July 2, 2013. While total market capitalization of current publicly traded companies as of April 21 rebounded about 23% since a July 2013 analysis by SNL Energy, the market capitalization lost since April 2011 is still about $40 billion — nearly the size of the 2012 gross domestic product of Ghana.

The now private Patriot Coal Corp. was excluded from historical data for the analysis.

A perfect storm of factors, including new federal regulations impacting coal-burning power plants, cheap competing fuels, railroad service issues and weak global markets has kept pressure on a number of coal operators since the industry's 2011 near-term peak.

James River Coal Co. saw its market value plummet 99%, from about $891 million at the beginning of April 2011 to just $11 million by April 21 this year. Ongoing concern about the company's liquidity and capital structure forced the company to seek Chapter 11 bankruptcy protection April 7.

Also facing liquidity problems, Oxford Resource Partners LP has seen its market value fall 95% since April 1, 2011. The company's total market capitalization was just $28 million as of April 21.

On the heels of disappointing first-quarter earnings report from Arch Coal Inc., which improved its market cap 36% in the July 2013 to April 21 period, BMO Capital Markets analyst Meredith Bandy suggested long-term investors stick with coal producers with strong balance sheets and limited exposure to the high-cost Central Appalachian thermal coal market.

In an April 22 note, Bandy recommended investors favor producers such as Peabody Energy Corp. and Cloud Peak Energy Inc. Both companies saw a growth in market capitalization between July 2013 and April 21. Cloud Peak only lost about 4.5% of its market capitalization value since the near-term coal industry peak in April 2011. Bandy has "outperform" ratings on Peabody and Cloud Peak and a "market perform" rating on Arch.

Eight of the 13 publicly traded coal companies analyzed by SNL Energy saw market capitalization grow since July 2013. The top three companies by market capitalization — CONSOL Energy Inc., Peabody and Alliance Resource Partners LP, all reported various levels of improvement in market value over the period.

Alliance Resources Partners, a producer focused on the Illinois and Northern Appalachia coal basins, has maintained a relatively flat market value and has consistently set quarterly records for its major operating and financial measures. The partnership has said it is looking forward to seeing market dynamics that favor producers who have staked their bet on the Illinois and Northern Appalachia basins.

As of April 21, Peabody's market capitalization has improved 13% from July 2, 2013. The improvement brought Peabody's market capitalization to $4.53 billion as of April 21, after falling 80% from $19.68 billion on April 1, 2011, to $4.01 billion on July 2, 2013.

Peabody's U.S. operations are primarily in the Powder River Basin and Illinois Basin.

Many analysts and industry observers see opportunities for thermal coal producers as recent weather and other supply issues have prompted utilities to begin replenishing declining coal stockpiles. Thermal coal producers in lower-cost regions such as the Powder River, Illinois and Northern Appalachia basins are expected to rake in the greatest benefits, particularly if there is little movement on persistently low coal prices.

"Heading into [first-quarter] earnings season, we continue to expect steam coal names to generally benefit from positive commentary around demand trends and supply constraints," Mitesh Thakkar, an FBR Capital Markets analyst, wrote in an April 17 research note. "Utilities' struggle in getting enough PRB coal, which could create some spillover near-term demand for eastern coals, but also highlights the incentives for higher future inventory buildup."

While most coal producers suffer as natural gas strengthens its share of electricity generation, CONSOL differs from other major coal producers in that it also holds a major stake in natural gas extraction. The company cemented this shift with the sale of five top-producing longwall coal mines to Murray Energy Corp., the proceeds of which CONSOL said it would use to boost its natural gas segment.

As of April 21, CONSOL has further strengthened its market capitalization lead over Peabody with a total market value of $9.61 billion.

CONSOL also stood out among coal-producers by not participating in a buying frenzy over metallurgical coal assets that began in 2011 when met coal prices hit record highs. The decision to sit out the wave of met coal asset acquisitions of 2011 has proven valuable for CONSOL, as participants in the merger wave suffer from the collapse of met coal prices brought on by oversupplied global markets.

With the current second-quarter met coal benchmark price settled at $120/tonne, Thakkar estimated that seven out of 11 major global met coal producers are currently out of the money and suggested producers need to rationalize their capacity.

Alabama-based Walter Energy Inc., a met coal producer, has seen its market capitalization shrivel 94% since the coal market near-term peak in April 2011. The company saw its market value plummet from $8.51 billion in April 2011 to $495 million by April 21 this year. Walter recently announced it would idle its Canadian met coal mines, which produced a combined 3.5 million tonnes in 2013.

Thakkar said other met coal producers such as CONSOL, Peabody and Alpha Natural Resources Inc. are likely to soon announce met coal production rationalizations as well. In its earnings release April 22, Arch announced a significant reduction in met coal guidance in response to weak pricing.

Alpha, the nation's largest met coal supplier, slid down the rankings in market capitalization, from 4th to 7th among publicly traded coal companies between April 2011 and April 2014, to a market value of $974 million. The company's market value has dropped 87% from its $7.28 billion market value noted in April 2011.

Powder River Basin producer Westmoreland Coal Co.'s market capitalization was up 125% from its market value in April 2011. Alliance was the only other producer to see positive market capitalization growth over that period.