Coal Stocks Getting a Boost Today
November 30, 2012 by Paul Ausick
There’s nothing like an acquisition rumor to pump some life into an otherwise moribund stock. And when the company that’s the subject of the rumor is a coal miner, the whole coal mining sector gets a push.
Today’s rumor involved a potential acquisition of Walter Energy Inc. (NYSE: WLT) by BHP Billiton plc (NYSE: BHP), the world’s largest natural resources company. Walter owns significant reserves of metallurgical coal, the kind used in steelmaking that sells for a substantial premium to thermal coal used in power generation.
This wouldn’t be the first time that BHP was identified as a potential buyer for Walter. The first reports of such $6 billion offer for Walter came more than a year ago, and lasted through May of this year. While it could still happen, a healthy skepticism seems in order.
Nonetheless, coal mining stocks are getting a boost today. Walter is up 6% at $30.25 in a 52-week range of $28.01 to $76.95. And Walter’s market cap at today’s stock price is less than $2 billion.
Peabody Energy Corp. (NYSE: BTU) is up 1% at $25.29 in a 52-week range of $18.78 to $39.74.
Arch Coal Inc. (NYSE: ACI) is up more than 2% at $6.70 in a 52-week range of $5.16 to $16.88.
Alpha Natural Resources Inc. (NYSE: ANR) is up 2.7% at $7.37 in a 52-week range of $5.28 to $25.48. Alpha also has large reserves of met coal thanks to its acquisition of Massey Energy.
James River Coal Co. (NASDAQ: JRCC) is up 7.9% at $3.82 in a 52-week range of $1.68 to $8.67.
The Market Vectors Coal ETF (NYSEMKT: KOL) is up 0.2% at $23.65 in a 52-week range of $21.49 to $37.39.
Paul Ausick
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