This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Two Coal Stocks to Watch

NEW YORK ( TheStreet) -- The 2010 outlook for U.S. based coal producers James River Coal (JRCC) and Walter Energy (WLT) has improved to a positive undertone over other U.S. based coal producers, lifted by factors such as robust company outlook, comparison multiples and recent stock performance.

James River Coal mines, processes and sells bituminous, steam and industrial-grade coal through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. Walter Energy is a producer and exporter of metallurgical coal for the world steel industry and also produces steam coal, metallurgical coke and other related products.

Currently, James River and Walter Energy have attractive EV to EBITDA ratios of 3.19, and 4.59 respectively over Peabody Energy's (BTU - Get Report) 6.42, Consol Energy's (CNX - Get Report) 4.66, and Alpha Natural Resources' (ANR), 4.64.

James River Coal

As on March 31, 2010, the company has $153.1 million of cash accounting for 21.9% of the total assets, the percentage among the highest in the metals and mining sector. Essentially, this substantial liquidity balance will likely drive growth opportunities for the company.

James River leads major coal producers with a return-on-equity of 43.2% for the past 12 months, in comparison to Consol Energy's 33.2%, Walter Energy's 30.8, and Peabody's 13.1%.

Commenting on the first quarter results, Chairman and CEO Peter Socha said "With regard to the coal markets, we are beginning to see clear signs of a recovery from recession levels. We will continue to be patient with our contracting strategy. We believe that James River Coal Company is well positioned for a sustained period of profitability."

Capitalizing on the current market environment, the company is expected to report earnings of $2.81 per share during 2010, in comparison to the earnings of $1.85 per share for 2009. Currently, the stock has seven buy, three hold and no sell ratings, according to TheStreet's Analyst ratings guide.

Walter Energy

The company reported a strong first quarter as the recovery in both the domestic and international steel industries was the positive catalyst that increased the demand for coking coal.

The company has settled coking coal contracts totaling 1.7 million tons with prices at around $235 a ton for the six-month period beginning April 1. "Looking forward, Walter Energy expects to generate increased earnings for the second quarter following our recent coking coal settlements," said the company's interim CEO Joe Leonard on April 28.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
WLT $0.00 0.00%
JRCC $0.00 0.00%
ANR $0.04 3.17%
BTU $21.05 -6.24%
CNX $11.37 -1.30%


Chart of I:DJI
DOW 17,081.89 -49.97 -0.29%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,796.6090 -42.0340 -0.87%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs