We’ve seen a lot from Porter Stansberry in the past year or so, as he came back to lead the company he founded (Stansberry Research, which became MarketWise), and he has recently participated in a lot of promo presentations for various publications of that firm (with pundits like Whitney Tilson, Marc Chaikin, Louis Navellier, David Eifrig, etc.), and then, just a couple weeks ago, he surprisingly left MarketWise again… so now it looks like he’s sticking with the new business he started a couple years ago, Porter & Co., which publishes a few newsletters.

(This happens with publishers and newsletters all the time, to be clear, there are revolving doors everywhere in this business — but MarketWise (MKTW) went public through a disastrous SPAC merger a couple years ago, so we get more insight into the mess at that company than we ever have for any of the private companies in the space who don’t have to report to the SEC).

And the latest try at building a paying customer base at his newer company, Porter & Co., has been selling not the higher-end subscriptions he wants to focus on, like The Big Secret on Wall Street ($1,450/year) or their various other more expensive products, but just selling their special reports piecemeal, to try to ease potential customers on board who aren’t willing to pay full price or commit today… but perhaps could be convinced tomorrow.

So that’s what’s happening with Porter’s latest long spiel, which he calls “America’s Second Coming” — it’s a long story about Appalachia and the destruction of the coal towns of that region, and about how energy is the key to growth for the United States… which leads in to his actual sales pitch (did I mention it being long?), which is asking for a $199 one-time fee (no subscription) for a package of special reports based loosely on that “America’s Second Coming” theme.

The theme plays out in three different ways — there’s the primary promo, which is about converting old coal-fired power plants into new businesses by putting small modular nuclear reactors (SMR’s) on those sites, which might provide some respite for some towns, (since the construction and installation of a SMR will probably require a couple thousand workers during peak construction, at least for these first few projects that are underway now, and maintenance of these small nuclear power facilities will probably lead to a couple hundred jobs for that local area). A SMR power plant does not replace the kind of employment that a coal mine did 25 years ago, for sure, but perhaps it’s at least one possible engine of partial revival for some towns.

Lots of coal plant operators are looking into this, and governments encouraging it, though probably TerraPower in Wyoming is the most advanced (that’s the Bill Gates project to build a SMR plant, using a new reactor design, on the site of a coal-fired power plant — the early construction is underway now, but not the reactor construction, which isn’t permitted yet, and it will probably take them at least five years to get into operation, the earliest goals for most SMR projects are to be online around 2030).

So this main pitch from Porter is essentially just a repackaging of his “AI Keystone” special report, which we’ve talked about many times — that’s a pitch focused on the need for nuclear power to create electricity generation growth in the future, in part because of how power-thirsty AI data centers are, and the core recommendation is to buy shares of BWX Technologies (BWXT), a stock he has been teasing in his ads since May of 2023 (first as the “Secret Energy Grid” company, then later as the “AI Keystone”).

You can check out my longer piece about that AI Keystone promo, I imagine his “special report” is also unchanged from when it came out back in January. I also own shares of BWXT, which is both the critical provider of reactors and nuclear services to the US Navy, and a leading contractor for other nuclear-related work, from site cleanup to component manufacturing for new reactors (among other things). This is part of the comment I shared with the Irregulars after their last earnings update:

BWX Technologies (BWXT) is currently expected to have roughly 10% annual earnings growth over the next few years, with revenue growth in the 5% neighborhood, and they currently trade at a pretty lofty valuation of about 30X forward earnings. I think that might be sustainable for BWXT, given the potential that booming interest in nuclear power could ramp up their order pipeline over the next few years, and given their pretty unique position as one of the few available manufacturing and contracting partners for nuclear reactor projects in North America… and there’s a clear decade-plus growth potential from this point that makes me a little more flexible with my valuation assessments… but the growth is not really accelerating just now, and they could also see speed bumps (including a slowdown in the aircraft carrier delivery schedule — that’s giving BWXT a “lower tempo of work” than expected, probably through 2026, though submarines and small modular reactor projects should keep their plants busy anyway).

The bulk of the earnings from government contracts should be very predictable, and I think BWXT is unlikely to dip much below 20X earnings for very long, which reduces the risk somewhat — that gives me enough confidence to overpay a little bit to be positioned for the potential boom in civilian nuclear work over the next five years, and for the small-but-fast-growing medical division.

I keep my “max buy” and “preferred buy” levels updated for the Irregulars, for all of my personal investments, and I’m sure I’ll keep covering BWXT, since it’s in my portfolio… but it’s currently just on the border of being too expensive for me to buy. Nuclear power is appealing, and they are busy working with some of the SMR developers to get reactors designed and built, in addition to their microreactor prototypes for the military that could bleed over into civilian use in the future… but it’s also an industry where it is REALLY hard, time-consuming and expensive to do anything new. They should have a few good years as nuclear power begins this renaissance, assuming that continues to get a push from the government, but pushing an aircraft carrier or a couple large submarines out a few years will probably have a bigger impact on their financial performance than the first wave of test installations of SMR power plants in North America.

The government is promising to speed up permitting and get projects into the pipeline faster, which might provide a meaningful boost… but we’ve also heard about permitting reform for years, without any real progress from the Nuclear Regulatory Commission just yet. And, of course, if there’s one accident at an SMR installation that scares the local residents, or a resurgence in anti-nuclear sentiment, we might see things slow down even more.

BWXT has had its ups and downs this year, but the overall performance has been very solid, beating the S&P 500 by a bit, since Porter started pitching that story back in May of 2023…

The second theme from Porter is not sold as hard in this presentation, but it’s essentially the argument that natural gas is going to be of increasing importance as electricity demand increases around the world, particularly if we want to try to wean ourselves and the rest of the world off of coal in the many years before nuclear or “green” alternatives could possibly grow enough to take its place.

And that leads into the second special report he’s peddling in this $199 packages, which is his “Gods of Gas” report — you almost certainly know that one if you’ve been a Stock Gumshoe reader for a while, because it was Stansberry’s first real promo pitch when launching Porter & Co., and he has lightly updated and aggressively pushed it for much of the past two years.

The primary recommendation of that “Gods of Gas” promo, which I last covered in early 2023, is to buy EQT (EQT), the biggest natural gas company in the United States, and the dominant producer in the Marcellus (which, as it so happens, also runs under much of Appalachia). He also throws in two other pitches, one for Viper Energy (VNOM), which owns royalties on the Permian Basin fields being produced by Diamondback Energy (FANG), and the other for his much more speculative pick on the resurgence of LNG exports from the US, Tellurian (TELL).

All of those have been subject to energy price volatility since he started pitching them in 2022, not least because of the invasion of Ukraine that upset the natural gas market so dramatically… and EQT, in particular, has stagnated as the US has continued to have a glut of natural gas, and as LNG exports were briefly put in permitting limbo earlier this year by President Biden’s permit halt (since lifted by the courts)… though getting LNG exports rising again, which would probably be critical to maintaining meaningfully higher gas prices for very long, does still depend on building more pipelines and more LNG export capacity, neither of which is easy or cheap. Tellurian is a special case, since they have gone through so many failures in their attempts to get financing for their Driftwood project, and they also got a takeover bid from the Australian LNG leader Woodside (WDS) this summer, at a price that would disappoint any long-term Tellurian investor but might at least lead to the project actually getting built someday. (Woodside might be the best way to get pretty concentrated exposure to global LNG, just FYI, though I’ve never analyzed the company in any detail.)

I’m sure Porter is still pitching EQT, and likely still VNOM, I don’t know if he’s still touting Tellurian after the takeover bid… here’s how those three have done since these “Gods of Gas” promos really started running in mid-2022 (August 19, 2022 was when we saw the first real “tease” for Porter & Co., I think, highlighting EQT (purple), and that’s where this chart begins, even though the other two picks came a bit later… by October of that year, TELL (blue) was thrown in as part of the teaser ad, too, after the stock had that first drop on the left edge of the chart, and VNOM (green), by far the most successful of these picks, was added in December of 2022… all of them were repeatedly promoted for most of the past 18 months):

And the third piece? That’s the much more contrarian “we still need a lot of coal, too” pitch — that’s the “Coal’s Comeback: Green Energy is a Scam” special report. We get a little bit of a tease about the specific investment he likes in this space:

“And there is one coal company that you must know about.

“Investing in this coal company will not endear you to your liberal friends.

“But this is one of the best businesses in America.

“And I believe it’s trading for a fraction of its actual real value.

“This company is generating $500 million a year in annual free cash flows.

“It’s got a gleaming balance sheet, recently, eliminating 75% of its debt.

“As the world is forced to temporarily turn back to coal, I believe this hated company is going to emerge from the ashes to be one of the most critical companies in the entire country.”

I haven’t seen him tease this one before, and don’t know when this report might have been written, but there are a relatively small number of meaningful coal companies in the US — CONSOL Energy (CEIX) produces mostly thermal coal, so is more of a pure plan on coal for electricity, and Peabody Energy (BTU) operate lots of coal mines, producing both metallurgical coal (used in steelmaking) and thermal coal (burned to generate electricity). Either of those could be a fit for Porter, as could the partnerships who are more like royalties on coal mines, like Natural Resource Partners (NRP) and Alliance Resource Partners (ARLP). When it comes to those clues about the levels of free cash flow and debt reduction in recent years, that probably narrows it down to BTU or CEIX.

For metallurgical coal, which is less dependent on our willingness to burn coal for electricity, there are a number of other nearly pure-play stocks in the US, including Warrior Met Coal (HCC), Ramaco Resources (METC), Arch Resources (ARCH), Alpha Metallurgical Resources (AMR). From that group, the best match would be ARCH… though AMR is pretty close, too, and got rid of almost all its long-term debt.

In general, the coal stocks have low growth, high cash flow and profitability at the moment, and low valuations. I’m not interested in owning any of them, since I expect utilities, industrial customers and governments to push more aggressively for lower coal usage over the next 20 years, given the clear health risks and the easy and cheap availability of much cleaner natural gas… but it’s also true that metallurgical coal is harder to replace, even with the gradual transition to electric arc furnaces for steel foundries, and there might certainly be plenty of profit to earn from the companies as that industry shrinks (and, of course, things could change — coal power plants are still in use in most countries, and some are even building new ones).

Plenty of folks disagree with me and find coal enticing, it’s not just Porter Stansberry — just as one example, Mohnish Pabrai, a widely admired value investor and Warren Buffett super-fan, owns a bunch of coal stocks, including Alpha Metallurgical Resources (AMR), CONSOL Energy (CEIX), Arch Resources (ARCH) and Warrior Met Coal (HCC).

Which one does Porter actually recommend? I don’t know. Beyond the limited clues, I would guess that the ones most likely to strike his fancy would be either the most diversified of the bunch, Peabody Energy (BTU), which has also been the performance laggard among the publicly traded coal stocks, or the largest of the more royalty-focused coal stocks, Alliance Resource Partners (ARLP), but those are just guesses from following the kinds of stocks he has pitched over the years — I’d say most of these companies are similarly valued, and they have almost all dramatically outperformed the S&P 500 over the past three years, with many really spurred on by excitement about AI electricity demand starting late last year.

Though if you go back to the pre-COVID days, you can see more of the downside of the high volatility in the space… this is that same group since late 2017, still some strong performers but now a few more average ones, too… and that highlights how relatively stable (and disappointing) Peabody has been…

Have a favorite, or a prediction for how any of these “America’s Second Coming” stocks will do? Love or loathe the coal sector? Let us know with a comment below… thanks for reading!

Disclosure: of the companies mentioned above, I own shares of BWX Technologies. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.