Thursday, March 17, 2011

King Coal!

With the nuclear crisis in Japan, it's become very clear that coal will remain the King fuel of the developed world and maybe even the emerging world as even China delays its nuclear program. Considering the Opportunistic portfolios managed by Stone Fox has a heavy does of coal investments this is good news. Even if the reason for the gain is because of such a horrible tragedy.

Sadly, though nuclear has many benefits it can be a very unstable fuel option. Sure coal has likely killed more people especially in the underground mining and even via the pollution caused by the burning of the material, but it never causes mass panic of a major catastrophe. With coal, the only people that really face daily danger are the miners. People supposedly paid for taking that risk and fulling understanding the danger whether they can find other employment or if that is the only option in the area. With radiation though, whole cities can be destroyed and even though a major catastrophe hasn't happened outside of a less then commercial operation in Chernobyl, the fear is bound to scare off the general public.

This brings us back to the investments that we have in Alpha Natural Resources (ANR) and Massey Energy (MEE). Search this blog and you'll see numerous articles about the two stocks. The combined company will be the 3rd largest met coal miner in the world and a major thermal coal provider. ANR also trades nearly 20% below recent highs making it an ideal investment now.

Cramer favors Peabody Energy (BTU) and Walter Energy (WLT), but ANR has the best value at this point. Check the below video from Cramer where he picks ANR as his 3rd best coal play in light of the nuclear issue in Japan.








Disclosure: Long ANR, MEE. Please review the disclaimer page. 

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