As a result of the sharp decline in industry demand, coal stocks have tumbled, creating attractive investment opportunities, Dudas said. Also, Alpha Natural Resources Inc.'s acquisition of Foundation Coal Holdings Inc., speculation that U.S. and global economies have bottomed and rising industrial energy demand all signal good news for coal stocks, he added.

Dudas recommended buying shares of Consol Energy Inc. and Peabody Energy Corp., his favorite large coal producers. He rates both "Buy."

Shares of Consol climbed $2.60, or 7.6 percent, to $36.99 in afternoon trading. Peabody shares rose $1.51, or 5.2 percent, to $30.45.

Among smaller capitalized producers Dudas rated both Massey Energy and James River Coal Co. "Buy." Shares of Massey rose $1.48, or 8 percent, to $20.03, while James River gained $1.80, or 9.3 percent, to $21.24
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