Coal Stocks Getting a Boost Today

There’s nothing like an acquisition rumor to pump some life into an otherwise moribund stock. And when the company that’s the subject of the rumor is a coal miner, the whole coal mining sector gets a push.

Today’s rumor involved a potential acquisition of Walter Energy Inc. (NYSE: WLT) by BHP Billiton plc (NYSE: BHP), the world’s largest natural resources company. Walter owns significant reserves of metallurgical coal, the kind used in steelmaking that sells for a substantial premium to thermal coal used in power generation.

This wouldn’t be the first time that BHP was identified as a potential buyer for Walter. The first reports of such $6 billion offer for Walter came more than a year ago, and lasted through May of this year. While it could still happen, a healthy skepticism seems in order.

Nonetheless, coal mining stocks are getting a boost today. Walter is up 6% at $30.25 in a 52-week range of $28.01 to $76.95. And Walter’s market cap at today’s stock price is less than $2 billion.

Peabody Energy Corp. (NYSE: BTU) is up 1% at $25.29 in a 52-week range of $18.78 to $39.74.

Arch Coal Inc. (NYSE: ACI) is up more than 2% at $6.70 in a 52-week range of $5.16 to $16.88.

Alpha Natural Resources Inc. (NYSE: ANR) is up 2.7% at $7.37 in a 52-week range of $5.28 to $25.48. Alpha also has large reserves of met coal thanks to its acquisition of Massey Energy.

James River Coal Co. (NASDAQ: JRCC) is up 7.9% at $3.82 in a 52-week range of $1.68 to $8.67.

The Market Vectors Coal ETF (NYSEMKT: KOL) is up 0.2% at $23.65 in a 52-week range of $21.49 to $37.39.

Paul Ausick