Peabody’s Perks & Prudence

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Right. So, Gate City Capital Management decided to trim their Peabody Energy (BTU 5.54%) stake. A cool $14.15 million worth of shares walked out the door in February. Honestly? It’s not the most scandalous thing that’s happened this week, but as someone who likes a bit of income in their life, it caught my eye. Let’s unpack this, shall we? Because a 105% jump in a year? That’s… distracting.

What Actually Happened

According to the SEC filings (because, paperwork. Always paperwork), Gate City shaved off 481,537 shares during the last quarter of 2025. That $14.15 million figure is based on average pricing, which, let’s be real, is a bit of a smoothing exercise. At the end of the quarter, they still held $18.11 million worth of BTU, but the value had dipped by $10.83 million from the previous quarter. Which is… a lot. Though, honestly, in this market, what isn’t a lot?

What Else You Should Know (The Nitty Gritty)

  • After the sale, Peabody Energy represented 7.84% of the fund’s 13F assets. So, not completely ditching it. Just… lightening the load. Like after a particularly good Christmas dinner.
  • Top holdings after the filing:
    • NASDAQ: ALCO: $47.21 million (20.4% of AUM)
    • NYSE: EVC: $32.50 million (14.1% of AUM)
    • NYSE: IPI: $25.35 million (11.0% of AUM)
    • NASDAQ: HTLD: $19.80 million (8.6% of AUM)
    • NYSE: BTU: $18.11 million (7.8% of AUM)
  • As of February 16, 2026, Peabody Energy shares were trading at $34.45 – up a frankly ridiculous 104.8% over the past year. It even outperformed the S&P 500 by 93.02 percentage points. I mean, seriously? That’s almost… unsettling.

Company Overview (The Boring But Necessary Bit)

Metric Value
Revenue (TTM) $3.86 billion
Net income (TTM) ($52.90 million)
Dividend yield 0.90%
Price (as of market close February 13, 2026) $34.45

Company Snapshot (The Cliff Notes Version)

  • Peabody Energy mines and sells both thermal and metallurgical coal, operating in the US and Australia. It’s coal. They dig it up. They sell it. It’s not exactly rocket science.
  • They make money from mining, prepping, and selling coal to power plants and factories. A straightforward business model. I appreciate that.
  • They serve clients in Asia and North America. Global reach. Very impressive. Though, honestly, I’m more interested in the yield.

Peabody Energy is, undeniably, a leading coal producer. They have reserves, a diverse customer base, and international operations. It’s all very… solid. But let’s be honest, coal isn’t exactly the darling of the investment world these days. Which makes this whole run-up even more…intriguing.

What This Transaction Means For Investors (Or, What I Think, Anyway)

Big gains always force tough decisions. When a stock doubles in a year, trimming a stake is often just about being sensible. It’s like… realizing you’ve had one too many glasses of wine. You enjoyed it, but you need to step back before things get messy.

Peabody wrapped up 2025 with $3.86 billion in revenue and $454.9 million in adjusted EBITDA. Full-year net income dipped to a $52.9 million loss, thanks to weaker seaborne pricing. But the fourth quarter delivered $118.1 million in adjusted EBITDA, and the Powder River Basin segment performed well, lifting full-year segment EBITDA by 27%. So, not all doom and gloom.

The real story, though, might be Centurion. Longwall mining started two months ahead of schedule, targeting 3.5 million tons in 2026, ramping up to 4.7 million tons annually. That’s a stated $2.1 billion net present value at benchmark pricing. Which materially increases leverage to premium metallurgical coal. Suddenly, things are getting interesting.

Ultimately, with Peabody still a top holding, this looks like reasonable risk management after a 100% run. It doesn’t necessarily suggest a change in conviction. Just… a bit of prudence. And honestly? A little prudence never hurt anyone. Except maybe the reckless gamblers. But we’re not talking about them, are we?

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2026-02-17 20:22