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Wednesday, September 27, 2006

Paperstand

Barron's Online discusses Arch Coal (ACI), whose stock is down roughly 30% so far this year. But prices for Arch's coal, concentrated in Wyoming's Powder River Basin, look favorable long term. Western coal is increasingly needed over Appalachian coal for its cleaner-burning qualities and abundance. And as winter comes, and coal-fueled heat kicks in, supplies should moderate, boosting coal prices broadly and Arch's profits. Add to that a cheap valuation and Arch shares look like a compelling energy play. "We believe most of the coal-fired power-plant demand added over the next decade is going to use Powder River Basin coal, and the most leveraged to that is Arch Coal," says Adam Donsky, of Dynamic Focus+ Balanced Fund. "And the stock is very cheap."


"Inside Scoop" section highlights XTO Energy (XTO), whose two insiders have sold $25.1m worth of shares. On Sept. 21, CEO Bob R. Simpson sold 575K shares, pocketing a total of $23.1M in the transaction. On the same day, SEVP Vaughn Vennerberg also sold 50K shares for a total of $2M. Simpson's transaction last week is notable in part b/c it marks the first time in 3 years that his stock sales have not been options-related, says Ben Silverman of InsiderScore.com.

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