David Baskin Alpha Natural Resources ANR-N BUY Aug 07, 2012

(Market Call Minute.) Coal company and has suffered as coal prices have gone down. Much too cheap.

David Baskin

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Stock price when the opinion was issued

Mining

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TOP PICK

One of the largest coal companies in the US. Has done very well for him. They bought Foundation Coal and Massey Energy. Met coal and thermal coal for exports (power generation).

PAST TOP PICK

(A Top Pick May 12/10. Up 29.87%.) Met and thermal coal. Have been quite acquisitive and recently purchased 2 companies. Coal prices are firming up and inventories are dropping.

BUY

Coal. Just recently acquired a couple of companies. Building through acquisitions. Recent drop in the stock price is probably not company specific. Materials and commodities have tended to fall in this environment. Great entry point.

BUY

Just acquired a coal producer. He thinks it is a good time to take a long-term view of coal. There is a thesis that will support good companies like this one. There are a lot of reasons to own coal.

COMMENT

Since we are seeing such cheap natural gas, some people are switching from thermal coal. Alpha also does met. Coal. He has been wrong on this one and it has hurt him.

COMMENT

The coal industry is one that he wouldn't overweight in a portfolio. Somewhat speculative at this point. There is a lot of pressure on thermal coal and some pressure on metallurgical coal. Feels that coal prices may have found a base so you could take a small position but highly volatile.

SELL

This is the worst performing group of all the basic materials. He would pick an exit point. There are risks in these stocks.

COMMENT

Trading at a quarter of its BV. It could be a slow turnaround for a lot of these types is stocks. They’ve had production issues as well as the fact that the price of coal has fallen pretty dramatically. With these guys, you get higher production costs, mine problems as well as lower prices and the valuations have all imploded as well. However, he has been accumulating some of these names such as Peabody (BTU-N) and Cliffs Natural (CLF-N), which makes a lot of sense. Very cheap.

WATCH

Not eager about the coal space. Suspects most coal stock have to come back and re-test lows from the summer months. Too early to rush into them. See if support levels hold.

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David Baskin Alpha Natural Resources ANR-N BUY Aug 07, 2012

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