James River Coal: Tomorrow's another day

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Rising fuel costs have grabbed the headlines over the past few years, with consumers feeling the pinch at the gas pump and in heating their homes. Much of the attention has focused on crude oil and natural gas, keeping coal buried deep in the news coverage.

Yet coal prices are rising, too, mostly on increased demand from Europe and Asia, and production shortages overseas. That’s good news for U.S. coal producers of all sizes, including James River Coal Co. (Nasdaq:JRCC). The stock closed Monday at $26, then following a release Tuesday morning that showed a steeper-than-expected first-quarter loss, the stock actually gained 10.31%, closing up $2.68 at $28.68.

That’s not some sort of a weird reverse reaction. Most of those gains followed a midmorning conference call, on which James River Coal’s chairman and chief executive, Peter Socha, offered his take on rising prices, and how his company is likely to benefit.

Coal is hot, with the Dow Jones U.S. Coal Index up 75% in the past year. Ahead of its Q1 report, James River Coal on Monday hit an intraday 52-week high of $27.19 — roughly eight times the 52-week low of $3.56 hit Aug. 16.

Investors have to dig deep into James River Coal Co. for that diamond in the rough. Analysts following the Richmond, Va., mining company offer a favorable outlook, with three calling it a “buy” and two rating it “hold,” according to Thomson Financial.

Founded in 1988 through the combination of smaller operations, with others added over the years, James River Coal overextended itself and entered into bankruptcy protection in 2003. A new James River Coal emerged from the tangles . . .

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