The coal miner has the financial flexibility to cope with low natural gas prices.
Its position in the Powder River Basin gives the firm a narrow moat.
We think Cloud Peak is the best way to play a rebound in PRB coal prices.
We expect coal, copper, and iron ore prices to remain below long-term averages as China continues to shift away from an investment-led economy.
Looser credit conditions or fiscal stimulus may temporarily boost China's demand for coal, copper, and iron ore, but the bounce would be fleeting.
Starting from current valuations, stocks simply aren't capable of delivering double-digit annualized total returns, says Morningstar's Matt Coffina.
Basic materials companies are in a period of very mixed near-term outlook in terms of end-market demand.
Lower commodity prices and a break-up of the European potash cartel have weighed on basic materials stocks year-to-date.
Improved demand should underpin stronger potash and PRB coal markets in 2014.
If they mind the pitfalls, individual investors can get a distinct advantage over large money managers in the small-cap arena.