James River Coal Soars On Pure Faith

Shares of James River Coal JRCC.q have gained over 55 percent in the last five trading days. Trade volume is six times its three-month average. After posting year to date losses of over 62 percent through October 1, this recent rally is a welcome break for a stock that dipped below $2 in July. Shares closed up another 23.2 percent on October 15.

Other coal stocks have shared in the recent surge, but not to the same extent. Alpha Natural Resources ANR.nyse closed up 7.61 percent, and have gained over 20 percent in the last five trading days. Arch Coal ACI.nyse has posted much more modest gains, only closing 2.23 percent on the same day, but is still up over 16 percent over the last five days.

The coal industry has taken a widely publicized — and criticized — beating over the past few years. Regulation regarding mining practices and emissions have been particularly rough, and the advent of apparently infinite natural gas reserves in North America have driven prices into the ground. However, natural gas prices have hit a new high recently, and word on the street is that international demand for coal will remain strong, or increase.

Peabody Energy BTU.nyse, up over 11 percent in the last 5 trading days, closed slightly down on October 15. Coal stocks got their first cross-board bump on October 3 when candidate Mitt Romney addressed the industry in the first presidential debate. A Republican victory could mean enhanced clean coal initiatives but many companies are saddled with debt and face steep competition from the natural gas industry, which is powered by giants like Exxon Mobil XOM.nyse.

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