Coal Stocks Still Flying - What a Run

Some news points on the coal sector

Yesterday, some upgrades across the sector in some 2nd tier names

Late yesterday evening, Peabody Energy (BTU) announces it will spin off its coal assets in Appalachia to its shareholders.

• The company also said Chairman Irl Engelhardt has resigned
  to become chairman of its unit, Patriot Coal Corp, which will

• Patriot operates eight mines as well as two joint-ventures
  and numerous contractor-operated mines in Appalachia and the
  Illinois Basin. Last year, Patriot sold 24 million tons and it

• The spin-off, expected to occur at the end of October, will
  allow Peabody to focus on expanding global operations -- it
  already mines coal in Australia and Venezuela -- and increase
  its presence in the western United States and the Illinois

• It will be accomplished through a special dividend of all
  outstanding shares of Patriot Coal Corp, which would then be an
  independent public company traded on the New York Stock

• "With this spin-off, both companies are able to pursue

• "Peabody continues the planned transformation of our
  earnings base as we expand our global operating platform,
  increase our presence in the Western United States and Illinois

• "We are completing a dramatic transformation of the company
  with major new projects at our flagship Powder River Basin
  operations (in Wyoming and Montana), new mines in Australia,
  expanded coal trading around the world and the planned spinoff

Sorry the cut and paste on this article didn't work too well into the blog (click on the link to read the full story) - but essentially Peabody looks to be unlocking value by spinning off a part of its company into a new publicly traded company. (boy Marketocracy is going to have fun with that one, so for every 10 shares of Peabody I get 1 share of Patriot Coal?)

Anyhow Peabody Energy (BTU) and Consol Energy (CNX) both up 3.5% or so this AM. I am going to sell a bit more of each into this news. This has been a tremendous run in this stodgy (boring) sector in 2 weeks - I sold some yesterday as well and I will look to buy back on some pullbacks. I don't really expect this much of a short term rise in this type of sector but I am not complaining.

Long Peabody Energy, Consol Energy in fund; no personal positions