Is it finally time to buy turnaround stocks Glencore plc and Premier Oil plc?

Glencore(LSE: GLEN) on Monday said it was looking to sell its Rolleston mine as part of its ongoing efforts to reduce debt and improve shareholder returns. It's the second Australian coal mine to be put up for sale by the company, after it had announced it was seeking a buyer for its Tahmoor underground coal mine in New South Wales earlier this year.

Coal comfort

Glencore is not giving up on coal though. While coal is on a long-term decline, most analysts still see the fossil fuel playing a vital role in the global primary energy mix. McKinsey & Company, a global consulting giant, reckons coal will still generate 16% of the world's electricity in 2050 -- that will be significantly lower than its current 41% share now, but still large enough to justify continued investment in higher-quality pits with low unit production costs.

Instead, its motivations stems from its new capital allocation policy, which seeks to maximise value creation for shareholders. The Rolleston mine is put up for sale because it offers limited potential for operational and infrastructure synergies, due to its geographical isolation from the group's other operations. "This decision is part of Glencore's ongoing programme to optimise its portfolio and redeploy capital into other opportunities," the company said in yesterday's statement.

Balance sheet

The mining giant is still on the lookout for attractively-priced, high-quality coal assets after agreeing a $1.14bn deal to buy 49% stake in the Hunter Valley Operations coal mines that Yancoal Australia agreed to buy from Rio Tinto earlier this year. Glencore's balance sheet is clearly on the mend, after cutting net debt by more than 60% from its peak in 2013 to currently less than $14bn.

But although the Swiss miner is past its rough patch, valuations aren't too tempting. After gaining in value by more than 90% over the past year, shares in the company trade at 13.9 times its expected earnings next year. This compares unfavourably to its sector average of just 11.1.

Bullish catalysts

Meanwhile, Premier Oil(LSE: PMO) may be a better pick for value hunters looking for bullish catalysts. The beaten-down independent oil exploration and production company is in talks with the UK government as it is seeking export finance to fund the development of its Falkland Island oilfield.

Export credit finance represents a cheap source of funding at time when credit for the sector has become more difficult. The indebted oil producer, which recently concluded a protracted refinancing deal, is struggling to finance big new investments on its own. As such, it has so far been unable to make a final investment decision on its Sea Lion project in the Falklands.

Separately, Premier Oil is set to begin production from its North Sea Catcher oilfield after the company announced that the floating, production, storage and offloading (FPSO) vessel has left its yard in Singapore and is on course for the UK to begin operations. The start-up of production could massively add to Premier Oil's production rate, boosting cash flows and helping it to pay down debt after its big investment.

Sure, there's still huge uncertainty for the company as it faces big execution risks. But valuations are seductive, with shares in Premier Oil trading at just 4.8 times its expected earnings in 2018.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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