Analyst Mr Mark Levin at BB&T Capital Markets has a buy rating on shares of Alliance Resource Partners.

Mr Wilbur Ross got out coal when he sold International Coal Group to Arch Coal Inc for USD 3.4 billion in 2011. But the billionaire told Bloomberg this week that he is in no hurry to get back in, even though coal stocks have dropped to levels not seen for at least a decade.

The Oracle of Omaha Warren Buffett of Berkshire Hathaway Inc has some exposure to coal through his ownership of Burlington Northern Santa Fe railroad, but the carrier's profit has been hurt as coal traffic drops in favor of cheaper and cleaner natural gas for power plants.

Meanwhile, Wall Street has turned even colder on coal stocks after Patriot Coal filed for bankruptcy on July 9th 2012 on top of weakness in the group all year on tempered economic growth prospects around the globe.

Mr Mark Levin, a coal and natural resources analyst for BB&T Capital Markets, is well aware of coal's woes, but he still rates Alliance Resource Partners a buy partly because of its structure as a master limited partnership that pays out consistent dividends to its unit holders.

The Tulsa based company operates nine mines in Illinois, Indiana, Kentucky, Maryland and West Virginia as the leading coal producer in the Illinois basin.

Mr Levin said that investors in Alliance Resource Partners get a yield while they wait for the thermal coal market to recover. He is not sure when that uptick will come, since coal inventory levels remain elevated. But sometimes market perception recovers more quickly than the physical markets.

While few fund managers or billionaires are bullish on coal nowadays, someone has to be on the other side of the trades as coal stocks fall. They are just not making a lot of noise right now.

Source - The Tell

(www.coalguru.com)