'OLE NAT KING COAL.....

STOCK HIGHLIGHTS

I'm sure you never heard of this singer, but I sure do hope you've heard of Coal. Right now, Coal has to be one of the hottest commodities. I'm serious, check out any coal companies stock price over the last few months and you will see what I'm talking about. Just like Oil prices, Coal prices have also started to accelerate. With this growth and acceleration, coal companies have followed this growth and momentum. So with that In mind, I want to introduce a couple of coal companies that I like and have also traded. In addition I want to also show you some machinery companies that make the tools necessary for the coal companies to excavate their mines. The List is, CNX, FDG, BTU, ACI, MEE, ARLP and JOYG. Coal companies belong to the Energy-Other industry group. All of the mentioned coal stocks trade on the NYSE, with the exception of ARLP which trades on the NASDAQ

Hands down, Consol Energy (CNX) is my favorite coal company.

Consol Energy (CNX) 1yr chart



CNX is one of the largest coal mining and processing company's in the U.S. CNX has about 4.5 billion tons of proven and probably reserves in the north and central Appalachian region. CNX produces 60 million tons of coal a year. CNX has customers in the steel and electric utility industries. CNX also has a natural gas exploration and production subsidiary which it is spinning off as a separate company (stupid move, nonetheless).

Looking at the chart we can see the huge recent run-up that CNX has had. The dip in late August was the perfect buying opportunity for anyone who wanted to buy shares under 65 bucks.

Approach: I think a buy here is ok, maybe it will dip to 63-65 again before shooting back up. In my opinion 65 and under is a great buy. EDIT: This was written a few days ago. Since the recommendation, CNX has gone to 69/68

Time Frame: I like CNX as a Mid- To-Long-Term Investment.

Target: 1st target is 70.58 . Once it hits 70 and can maintain it, I believe $75 is around the corner.


Coal Stock No. 2 is Peabody Energy (BTU). BTU is a long-term coal stock winner that had a nice run-up last year before the split. Even now after the split, the stock has run up again to 70
bucks. This goes to show you, how hot Coal really is, right now. BTU has approximately over 30 mines in the U.S. and produced 225 million tons of coal, annually. In addition, it has about 9 billion tons in reserve (wow!).


Peabody Energy (BTU) 1yr chart


BTU is currently testing the 70 dollar range. If it can hold, it will be trading higher.

Approach: I do not believe BTU is a good Trading stock, unless you carefully buy on Technically sound dips. Lets say it dips a few dollars down in the course of a few days and it is showing strength slightly above the 50day MA- that would be the signal of a good trade, as you can buy on the dip and sell on the bullish reversal for a few dollars gain. FOR NOW, I would treat any profit-taking dips as an opportunity to build a long-term investment position.


Time Frame: BTU is a sound investment that can be implemented in intermediate to mid-term investment and even a long-term investment.


Target: 1st Target is 76.00 2nd Target is 83.00



Another Coal Stock following close behind CNX and BTU, is Arch Coal (ACI). ACI processes and mines coal in the western U.S. and the central Appalachian region. ACI produces 125 million tons of coal a year. ACI has over 27 mines in its stable. In addition, the company has near 4 billion in tons of coal in proven and probable reserves.


ACI (ARCH COAL) 1yr Chart

Approach: I would wait for a small dip in Arch Coal's price before buying. Most coal stocks are at their 52wk highs today (8/30/05). So wait for a small dip, possible to low 62 or high 61 and then buy.

Time Frame: ACI is of course a Long-Term investment that is meant to give investors maximum capital appreciation over a long period of time. Nimble traders can probably make a quick buck or two off the dips but it is not worth the hassle because of its high stock price.


Target: 1st target is 66.50. 2nd Target is 69.56.


I'm not done yet! Next Coal stock up to bat is... Massey Energy (MEE). This is yet another coal play that I really like and one that I am also playing right now as well. I was fortunate enough to sneak in at high 44/low 45's. The stock is now currently trading at 50.23 (8/30/05). MEE seems like a smaller version of the CNX's, and BTU's. It has about 20 mining complexes in the Appalachian region (which encompasses West Virginia, Virginia and Kentucky). MEE produces 40 million tons of coal annually. MEE owns about 2.3 billion tons of proven and probable reserves. Massey Energy is also considering repurchasing its shares in 2006. That is a bullish sign because a company wouldn't want to buy its own stock unless it knew it was profitable in the future.


Massey Energy (MEE) 1yr Chart

Approach: My opinion is to wait for a dip. You can buy it low 50's-that's fine. But for the really patient, there may be an opportunity to buy in the mid to high 48/49 region. In any case, it has support at the 48 dollar range.

Time Frame: Again, this is without a doubt, a long-term investment. It should be, especially if you want to feel the effects of the share buy back in 2006. I see great upside potential for MEE in the future.

Target: My first target is 54.32 . 2nd target is 59.89 .




Last but not least are my 2 favorite high priced coal stocks. Although they may seem expensive due to the high stock price, they are still inexpensive. What coal stocks am I talking about? I'm talking about Alliance Resource Partners (ARLP) and Fording Canadian Coal trust (FDG). I want to first start off with ARLP. ARLP is at 89 bucks today (8/30/05). ARLP churns out only 20 million tons of coal annually. Yet, ARLP has over 440 million in reserves. Yeah, I know it doesn't sound as much as the other companies. That's because ARLP is still growing and has room to grow. Maybe that's why Joseph W Craft III owns 44% of the stock.

Alliance Resource Partners LP (ARLP) 6 month Chart


Approach: I like ARLP at 89. It is still off its 52 wk high, but the chart shows that as long as coal continues to act healthy, it should retest its 52wk high easily. I would buy at 89 and possibly 88 if it dips a little more

Time Frame: This is a Long-Term investment.

Target: The first target is 97.01. After that I would have to say, breaking the 100 dollar barrier would be a beautiful thing. Still, it needs to move to the 95 dollar level.


The Last high priced coal stock that I want you too look at is, Fording Canadian Coal trust (FDG). I believe that this is a must own stock. It is both technically and fundamentally a marvel. Still, with a 122.55 price tag, not too many people are buying in, which is a shame. As Canada's premier coal mining and processing company, it actually owns stakes in other coal companies, mostly those native to Canada, but also our state side buddy, CNX. And guess what?! It is still actually really CHEAP! Yes, believe it or not, the company is still cheap. Do not let the price fool you. The good news is that the stock will soon complete a 2 for 1 stock split on 9/6/05. The last buy-in date to take advantage of the split is 9/2/05. My recommendation is to buy 50-100 shares and let them double with the split. If you don't carry around that kind of bank, well then, wait for the split to buy at a lower price.

Fording Canadian Coal Trust (FDG) 6 month chart

Approach: You have two approaches. You can buy NOW at the 120 level and take advantage of the split. Or you can wait after the split and buy at the split adjusted price. The choice is yours! Personally I would buy now, though.

Time Frame: You know this is a Long-Term investment, duh!

Price Target: Hard to Assess at the moment, as I do not know what price it will debut after the split.



Okay! I'm done highlighting the coal companies. I have one more company to leave you with. No, it is not a coal company. It is...Joy Global (JOYG) in the Nasdaq market. JOYG is in the Machinary- Construction/Mining industry. So why did I just throw in JOYG among all these coal companies? I did it because JOYG makes the machinery and equipment that the coal companies use to mine the coal. You see now? JOYG is making a killing as the need for coal soars, as more and more companies need their "products" to retrieve the coal. That's why JOYG has been En Fuego lately, along with all the other coal stocks. If you take a look, other companies that are in the same industry group as JOYG, have been down A LOT lately, while JOYG is still rising. Why? Because JOYG provides service to the coal companies. Others don't. 'Nuff said.

Joy Global (JOYG) 6 month chart

Approach: JOYG is currently at 45.00 . I would wait for a small dip before buying. But besides that, JOYG is good to go!


Time Frame: I like JOYG as a Mid to Long-Term Investment. If you want, you can also play this is a trade as long as it keeps its momentum and occasionally dips.


Target: First target is 50.25 and 2nd target is 56.45 .


And that concludes my 1st Stock Highlight. I do hope you have enjoyed this special Coal Company stock highlight and found it helpful and usefull in making a wise investment decision!