Tuesday, September 6, 2011

New Week, New Play: JRCC


The bears are unfortunately back, and I, for one, would like to declare them overdone. I reckon they won't be around for long as ISM Non-manufacturing PMI was better than expected.

I had set a $9.99 buy order yesterday night in anticipation of today's open and caught the open price of $9.60 on James River Coal Company (JRCC). Lucky I didn't do Friday's close of $10.01, but still I didn't get the best price.

Why coal instead of gold?

Sure, gold is shiny, but coal fuels about 40% of the world's electricity output. In a true double pip recession, I think coal can hold its own and the Glencore Traders recently decided to raise its investment in another coal company called Optimum. This could be turn out to be huge for other coal companies.

Coal is already the worst performing energy segment YTD - and in particular, JRCC is already selling at P/S and P/B levels that are well, well below 1.



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