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Last year was a difficult year for coal stocks. On the macro front investors worried about a double dip recession and the unknown fallout to come from the European sovereign debt crises. Additionally, there were concerns about rising production costs and falling coal prices. The net result was that most leading coal stock prices fell by over 50% during 2011.Estimates for earnings and in some cases production continue to fall.

This year, with the U.S. economy showing steady, if slow, progress, the likelihood of China reaching a soft landing and with the possibility that the EU might be able to “ring fence” Greece we feel coal stocks are likely due for a substantial bounce. Additionally, we predict a continuation of the trend for consolidation within the industry. With that thought in mind we have decided to profile seven leading coal stocks:

Alpha Natural Resources, Inc. (NYSE:ANR)

Alpha has a market cap of $4.5 billion and trades an average of 9 million shares per day. Alpha (based on proforma incorporating their Massey Energy takeover) is the 2nd largest U.S. based coal company based on revenue. Alpha Natural is weighted toward met coal. The company sells for just 55% of book. The company is estimated to earn $2.08 per share for the year just ended and $1.49 per share this year. The stock is down 68% from its 52 week high of $61.66.

Arch Coal, Inc. (NYSE:ACI)

Arch has a market cap of $3.0 billion and trades an average of 6.3 million shares per day. Arch is the 4th largest U.S. based coal company based on revenue. An efficient operator, their reserves are geographically diversified across the U.S. Arch is estimated to have earned $1.20 per share in the year just ended and estimates for 2012 are $2.37. Arch provides a dividend yield of 3.10%.The stock is down 63% from its 52 week high of $36.99.

CONSOL Energy, Inc. (NYSE:CNX)

CONSOL has a market cap of $7.8 billion and trades an average of 7.6 million shares per day. CONSOL is not a pure play on coal as it has a large natural gas component but along with its Appalachian/Marcellus gas you also get a good bit of exposure to the Utica Shale oil play. CONSOL is the 3rd largest U.S. based coal company based on revenue. CONSOL is estimated to have earned $2.94 per share for the year just ended and $3.42 per share this year. The stock yields 1.50% and is down 39% from its 52 week high of $56.32.

James River Coal Company (JRCC)

James River has a market cap of $ 231 million and trades an average of 4.4 million shares per day. James River is the 7th largest U.S. based coal company based on revenue. The company completed their acquisition of International Resources on April 18th of last year. Cash on hand at the end of the last quarter was a healthy $6.01 per share. They are estimated to have earned $0.23 in the year just ended and to lose $1.19 per share this year. The stock is down 74% from its 52 week high of $25.51.

Patriot Coal Corporation (PCX)

Patriot Coal has a market cap of $720 million and trades an average of 6.8 million shares per day. Patriot Coal is the 5th largest U.S. based coal company based on revenue. The company is estimated to have lost $1.50 per share in the year just ended and estimates for 2012 are $0.07 per share. The stock is down 74% from its 52 week high of $29.20.

Peabody Energy Corporation (NYSE:BTU)

Peabody has a market cap of $9.7 billion and trades an average of 6.8 million shares per day. If one wants to buy only one stock but yet get participation in both thermal and met coal (and get Australian exposure to Asian markets) this is your play. Peabody is the largest U.S. based coal company based on revenue. Peabody is estimated to have earned $3.98 for the year just ended and is estimated to make $4.77 per share this year. The stock yields 1.00% and is down 51% from its 52 week high of $73.95.

Walter Energy, Inc. (NYSE:WLT)

Walter Energy has a market cap of $3.7 billion and trades an average of 2.5 million shares per day. Walter Energy is the 6th largest U.S. based coal company based on revenue. With recurrent M&A rumors constantly circulating about Walter with think it very likely that the company gets acquired by year end assuming a healthy economy. The company is estimated to have earned $7.11 per share last year and estimates are for $7.44 this year. The stock yields 0.90% and is down 57% from its 52 week high of $61.73 per share.

Source: Coal Stocks To Buy