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Aug.08
12:50 PM ET
Friday, 8 Aug 2008
Stock Picks: Coal-Fired Investing

With oil prices tumbling, what's happening to coal?  Shneur Gershuni of UBS acknowledges that coal, oil and natural gas prices are closely dependent on each other, and recent price declines in coal stocks make them attractive targets for investors.

"We do think it's a buying opportunity for investors," he told CNBC.  "The physical market continues to remain strong, and, whether GDP slows or not, we still need power, and we still expect the coal thesis to remain strong."

Recommendations:

At the top of his list is Consol Energy [CNX  Loading...      ()   ].

"The reason we like Consol is because of their exposure to the international market," he said.  "A second reason...is because of their low cost...production relative to other Appalachian producers, and then, finally, they also have exposure to natural gas."

Gershuni also likes Peabody Energy [BTU  Loading...      ()   ] and James River Coal [JRCC  Loading...      ()   ].

Disclosures:

James River Coal is an investment banking client of Gershuni's firm.

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