LLEN upside 38-52%; 4% off bottom;
Those are good odds for the upcoming winter coal season:
Comparing YTD charts of LLEN versus CHGY, LLEN has almost as high of upside based on previous YTD highs, yet less downside risk as it is much closer to the YTD bottom.
LLEN -
Current PPS $8.00; for roughly a period of 1.5 months in 2010 LLEN closing prices were at or above 1.375 x $8.00 = $11.00 PPS, for 3 weeks it was above 1.52 x $8.00 = $12.15 (38% to 52 percent upside from current price).
LLEN has VERY little downside risk; in late summer the closing prices were averaging at or below 7.7, which means PPS is within 4% of the bottom of the YTD low (almost no downside risk).
To get any better upside chance in China coal US-listed stocks, you'd have to consider a much smaller company, such as CHGY (much more thinly traded and therefore harder to be nimble and quickly exit a large position at an optimum time).
CHGY -
Current PPS $1.75; for roughly a period of 1 month in 2010 CHGY closing prices were at or above 1.71 x $1.75 = $3.00 PPS, for 1 week it was above 2.06 x $1.75 = $3.60 (71% to 106 percent upside from current price).
BUT CHGY has higher YTD downside risk; in late summer the closing price hovered for a month in a range at or below 1.31 (average of 1.20-1.42), which means PPS is already 31% above the bottom of the YTD low. So there is a potential 31 percent short term downside risk, which is added to the additional medium term risk of a very small coal company like CHGY having a single-mine accident or government-forced closeout of a critically important mine (the latter is an issue since China is pressuring their provinces to eliminate the smallest coal mines by merger and acquistion).
So LLEN has the best upside potential for this winter but meanwhile the lowest downside risk from where it's at right now.
AI
