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Suddenly I feel like I do not have enough Massey Energy (MEE) as the stock bursts to new 52 week high. I am going to add about 100 shares here (not a major buy), as this looks impressive and I want to get back to a >1% exposure; I am also adding to Consol Energy (CNX). I traditionally don't buy 52 week highs but it's a very popular investing method and I feel underweight the space. Still waiting for Peabody Energy (BTU) to wake up, but it has some company specific issues which appear to be weighing it down.

Massey Mulls Production Hikes
  • Massey Energy Co. says it's considering additional production increases to meet strong demand for U.S. coal overseas.
  • Massey already announced plans in October to add 8 million tons of production by 2010. Now the company is considering ways to up coal output even more and to do so by 2009, Chief Executive Don Blankenship said during a conference call Friday with Wall Street analysts. Blankenship said his focus has been on producing more metallurgical grade coal, which is used to make coke for steel manufacturers.
  • Blankenship said strong demand for imports to China, India and Eastern Europe will combine with high ocean freight rates and the weak dollar to support strong prices for Central Appalachian coal even if the U.S. economy goes into a recession. "The bottom line is that while we may go through a recession that slows economic growth in the U.S., we don't expect the demand for coal to suffer in 2008."
  • Massey is the nation's fourth-largest coal producer by revenue, and operates 19 mining complexes in West Virginia, Kentucky and Virginia.

I'm a broken record. Pricing power. Cash rich customers. World demand. I see a lot of parallels to the fertilizer group about a year ago - quiet bull market that no one is noticing and the few that do, doubt it. Old conventions about "so goes US economy, so goes coal" are still pervading. The new reality is not yet hitting people. If/when it does, hopefully we get some multiple expansion. I am still waiting for some of that multiple expansion in fertilizer names not named Potash!

Disclosure: Long all names mentioned in fund; long Potash in personal account

Source: Adding More Massey on Production Hikes