James River Coal Shares Plunged: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of James River Coal (NAS: JRCC) fell 10% in intraday trading today after an analyst downgraded the company.

So what: Yesterday before the bell, James River Coal announced mixed earnings for the second quarter. Revenue was $352 million, crushing expectations, but adjusted earnings per share were only $0.31, behind the $0.46 analysts expected. That led to a downgrade today from Brean Murray today, which is helping push shares south.

Now what: The market is down big today, so the move is exaggerated more than it probably should be. Yesterday's earnings miss is concerning, but the company is picking up production and expects to ship 11.6 million to 12.2 million tons this year. With shares trading below a 7 P/E multiple for both trailing and forward earnings estimates, I think this is a great time to buy in.

Interested in more info on James River Coal? Add it to your watchlist.

At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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