Cramer Thinks Lumps of Coal Make a Good Gift (ACI, CNX, BTU)

Stock Tickers: ACI, CNX, BTU

Tonight on CNBC’s Mad Money, Jim Cramer said that recent pushes out of Democrats are now backing new coal initiatives for coal and for converting coal to fuel.  Since we are coal rich and it is accessible easily in the US, he’s behind it and the Goldman Sachs downgrade this morning only helped this value for new investors.  His two coal producers in the sector are Arch Coal (ACI-NYSE) and CONSOL Energy (CNX-NYSE).  Archstone is riskier because their coal is somewhat uncommitted in 2008 and 2009. Cramer did say that CONSOL could even try to covert to a Master Limited partnership.

But Cramer’s favorite coal stock is Peabody Energy (BTU-NYSE).  He likes where it is placed and he thinks coal will rise to catch up to oil as far as gains.  Peabody can sell to China and India and its down over $9.00 from its highs.  The company is also going to spin off its Appalachian assets to focus on growth, and that will take the stock higher when it occurs.  He thinks it has 41 years of production in reserves.

Jon C. Ogg
June 18, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.