Coal-Related Stocks Will Keep Chugging Along

Politics are against it, but coal still holds major untapped potential.
By Jim Cramer ,

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The coal move must gall all of those who read the papers and understand that neither John McCain nor Barack Obama favors coal. It does seem very counterintuitive that neither

Peabody Energy

(BTU) - Get Report

nor

Arch Coal

(ACI) - Get Report

makes coal that the Democrats and Republicans can get behind.

The senators from the coal lands -- Wyoming and West Virginia -- have no clout. We don't even have

rules

dictating what coal plants we will allow! That's why I can't get behind

McDermott

(MDR) - Get Report

.

But then look at

Burlington Northern's

(BNI)

stock. Look at

Union Pacific's

(UNP) - Get Report

stock. Or

Norfolk Southern

(NSC) - Get Report

. That's coal. That's coal going overseas. That's coal going to China. Our coal is as good as any coal when it comes to the unregulated markets. Coal hasn't appreciated nearly enough to get less competitive than oil. It is much more easily transportable than natural gas.

It is the ideal transferable fuel. Always has been.

So the group's not quitting.

The only barrier to making more money for Arch and Peabody isn't emissions or the cost of shipping -- it is that cheap to ship -- it is getting at the hoards of coal we have. We are sitting on mountains of coal, but the only way to get at it is with machines, typically made by

Joy Global

(JOYG)

. The company reports next week. How this quarter is, isn't clear because of the rising cost of steel. But when you look at the lead times of its machines and the need for them, do you think it they can say anything but the business is fabulous?

My take is that the coals still work and Joy does too, ahead of next week's number.

Not a lot of ways to play coal. The ones that work? They stay strong, they stay parabolic, just like natural gas.

Maybe even better, because of the scarcity of plays and the shorts, who still lurk, I think wrongly, because of how hated, domestically, the fuel happens to be.

Random musings:

The

Financial Times

is filled with fabulous articles this morning including a terrific analysis of the Brazilian ethanol industry -- so much better with much more potent sugarcane base --- and the Moody's piece, which is priceless. ... How could S&P agree with Moody's on so many toxic pieces of junk if it didn't have the flawed software? Interesting query.

At the time of publication, Cramer had no positions in stocks mentioned.

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