If someone wants coal they will buy PCX . It is the last of the big coal reserves that is not private. They have 1.8 billion with high BTU MET. If you look at the area where the mines are I would say they are at least 45 percent in MET. This year they will double coal production which was 30.9 million tons last year. With the low price and big Reserves PCX is a prime takeover target for ACI ,MT or another producer like WLT which has low coal reserves. Massey has 500 million tons more than PCX and they went for $69.25 a share. ACI looked at MEE because of the high BTU and low sulfur content. PCX can fit that bill and does not have terrible mines like a third of MEE`s. Many of theirs have gas problems and should have been shut down. The worst coal accident in the US was the Monongah Mining disaster. This is also the same area of west Virginaia where the Upper Big Branch Mine disaster was. This area is full of natural gas. The Monongah mines were sealed up with bricks and the other mines became Consol Energy.
2 Dopey analysts (S+P and Credit Suisse)reduced their targets by $6 to the $34-$35 range..These dopes don't get it..ACI has $50 wtitten all over it..They will be a major supplier to Asia and they've secured 2 west coast storage facilities to ensure success..Long in spite of the usual crap from tree huggers and Obama..ACI is a serious competitor with a great CEO....Buy any dips.
First let me caveat, with ACI specifically, I DCA (dollar cost average) on must dips from a mini-peak to $1.50 or more drop.
With profits most likely to come close to doubling this year, but taking into account 50% of that is already figured into the price, a more realistic 1 year target would be $41-$45.
I have no idea what the next downward low or the next highest peak will be. I never hit either, always somewhere in the middle.
ACI in my portfolio is a longer term interest (long-term cap gain). A good company, with a great vision (ports, leases, tonnage contracts, etc.) looking to directly profit on the coal price spikes BESIDES all the "right" things they are doing infrastructure wise.
Mr. Gates and Mr. Buffet see that same thing, and in my opinion, they flew out to see the "right" things and how they could hook-up, supply chain wise, from Powder River to the ports.
So what is a good price for entry? I am in every few dollars from ~$16.50 to $29.90. My DCA average unit cost is sitting at $21.5497 (or so says Scottrade P/L center).
I would consider what do you think of the company, because anything north of here by late fall would be way better than you could get on a money market account. It could go the other way also if all the greenie groups get together and sue to stop all expansion (permits), leasing of ports, and some mining in different regions ... but I highly doubt it.
Yes, the EPA went rouge in WVA on the mountaintop CorpofE approved permit, but now we have Joe out there and "Joe Jobs" will be on them like white on rice.
In short, I don't know, but from current at ~32.50 to 41 in 12 months, it may be a gamble (do your own research), but ask yourself, what is the downside risk versus upside opportunity?