We're starting to get portfolio bloat with 60 long positions so I'm cutting the coal basket by 1 name - and Arch Coal (ACI) will be the one to go. I like *every* name in this space, but for now those who are identified more strongly with metallurgical coal are getting the attention, rightly so. The top 3 exporters of American metallurgical coal are Alpha Natural Resources (ANR), Massey Energy (MEE), and ironically Cleveland Cliffs (CLF). These are up 8%, 7%, and 20%ish respectively today. Arch is up 2% :) (no, that is not the reason I am selling)
Thermal coal is seeing all the same dynamics as metallurgical coal in terms of "direction" but simply not quite as sharp of a magnitude, and Arch is more of a thermal coal producer. Since I've added 2 new coal names of late to the portfolio - Walter Industries (WLT) and James River Coal (JRCC) we're still keeping a nice allocation to this sector. I've added a bit to all 4 of the remaining names to compensate for the loss of ACI.
Arch Coal (ACI) has been very good to us with a $8,200 gain since the original purchase back in mid February. We are selling our 1.2% stake right at $65. Again, this is not in any way a negative commentary on Arch Coal as I believe it will be much higher in the quarters to come, since it has a lot of unhedged production in 2009 - for all I know it could be the best performer in the sector in the coming 12 months. Simply some streamlining of the portfolio.
As an aside, this market still looks pukey. Absolutely no follow up to what should of been yet another nice reversal yesterday. What sold off yesterday is blessed today and vice versa. Bah - this market is only good for daytraders.
Long all names mentioned except Arch Coal in fund; long Alpha Natural Resources, Massey Energy, Cleveland Cliffs in personal account
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