The Random Nature of James River Coal

I don't know what is going on with this stock; its movements are of completely random nature of late. It's up 35% today, so I'm going to sell most of the position into this rally; this will take it down from a 0.9% stake to 0.1%, selling here in the $10.30s. It made a similar huge move last Wednesday out of the blue [Nov 19: Strange Action in James River Coal]

I'll put the same speculations I put out there a week ago - either completely random casino action or potential buyout bid. There is some activity in the December call options area along with January $12.50s - this is the 2nd time in two weeks we are seeing this type of activity.

If you bought at the close 3 days ago, you are up over 100%. That's reasonable.

So we had one stock up 50% today and another 35%. Looks like we went to the correct one armed bandit today.

Disclosure: Long James River Coal in fund; no personal position

Comments

[me3tv:]

Everything was oversold three days ago. Energy was especially way way oversold. Look at your chart there.. way way under the trend lines. James River was a rocket last summer and took a nosedive with oil and all energy. Obviously they dove way under ...too deep. You were wise to pick it up when you did and probably wise to take the money now. In two years energy will again be a darling but probably erratic for awhile. imho.

2008 Nov 25 06:59 PM

[Doc 224899:]

Dear Mark,

The ANR deal with CLF is now dead in the water, with Cliff paying Alpha $70M to settle the bruhaha (which I haven't seen discussed on Seeking Alpha yet, so I'll take credit for the scoop). That $70,000,000 ought to look good on a quarterly report, huh? Why piddle around with JRCC when you can buy a profit monster like ANR? ANR is selling for ~1/7th of its 52-week high. ANR may climb a bit in the mini-rally for a month or two, then tank with everything else in H1 of 2009, then defy "The Obama Coal Curse" and profit from international coal sales and cheap dry bulk shipping rates for several years since the rest of the world doesn't care about dirty power plant exhausts and craves high quality Appalachian coal.

Regards,

Doc Tater

2008 Dec 01 03:41 PM