Tuesday, May 3, 2011

3 Coal Stocks roaring Full Steam Ahead

Three top coal stocks are on the move today on news of a major sector takeover, roping in significant gains in midday trade.
James River  (NASDAQ: JRCC) surged nearly 5%, lifted by the overall mining industry, trading at $21.41 midday. The Virginia-based mining company recently completed acquisition of International Resource Partners, a West Virginia miner with metallurgical coal assets. It also recently failed to complete an offer for tender over outstanding senior notes due at  9.375% in 2012. The company has instead moved to redeem these notes on June 1, 2011. There is rumor that James River is on the verge of a takeover offer from international players, which has seen a spur in the stock’s growth of late.
Shares of Patriot Coal Corp.  (NYSE: PCX) gained 4% today, trading at $26.20 midday. The company is a spin-off of coal giant Peabody Energy (NYSE: BTU), and is a probable target for takeover in the volatile M&A sector.  It is doubtful whether Peabody will want it back, but speculation is rife of an international takeover. PCX was spun off of Peabody in 2007, and since then has had a good run in the domestic sector while the mother company was looking for international acquisitions.
International Coal Group Inc. (NYSE: ICO) soared 30% today, driving coal stocks higher. The comapny is on top of the news headlines today after its acquisition by Arch Coal (NYSE: ACI) was finalized today at $3.4 billion.   With a market cap of $2.94 billion and a solid stable of mining assets, ICO is a solid takeover target and some industry experts speculate that the price could well have been $2.2 billion had ACI not dithered a few months back about this acquisition. Well, what is bad for ACI certainly looks good for ICO owners.

No comments: