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Rayk Riechmann

As a leading natural resources company headquartered in the heart of the United States with an established domestic customer base, Alliance Resource Partner LP (NASDAQ:ARLP) may hedge the global trade uncertainty you have been looking for.

ARLP operates a portfolio of coal mining complexes in the Illinois Basin and Appalachia, making it the second largest coal producer in the United States in the eastern United States, and the company's unique vertically integrated business model includes preparatory plants, barge terminals and loading. Providing tailored coal mixtures and flexible delivery options can improve perceived product quality and defend ARLP's domestic market share.

Protection of economic uncertainty stems from an extensive multi-year contract. The company's exposure to spot price fluctuations and demand fluctuations is limited due to over 96% of expected sales in 2025. Revenue broadly avoided the increase in tariff policy issues, with only 9.6% of sales coming from the export market and limited foreign input materials needed to maintain operations.

First-class income diversification protects the highest lines from demand challenges in the State party’s domestic market. Old-style coal manufacturers have already realized innovative value-creating opportunities in the Bitcoin industry, oil and gas interests, electric vehicle infrastructure, and technology solutions for mining and industrial companies. Management shows that while net leverage ratios are above 0.6 times, it has a firm commitment to opportunistic exploration of new industries.

It is worth noting that currently, 6.7% of sales are generated through all rights to oil and gas mineral rights and royalties. Perhaps surprisingly, ARLP operates a cryptocurrency and custodial joint venture that can accommodate 513 bitcoins and earns money by running 3,500 miners.

Despite the challenges of the year, ARLP created $383.5 million in FCF, highlighting strong corporate fundamentals. The Trump administration has faced policy headwinds under fuel optimism in the coal industry, which is expected to benefit from growing energy demand for artificial intelligence, data centers and electric vehicles. We believe that with its defensible business model and excellent fundamentals, ARLP can perfectly utilize the favorable industry environment, which is an excellent entry point for growth investors. Even dividend investors can get their funds as ARLP has paid $4.4 billion in tax cash allocations over the past 25 years.