Jennifer Schonberger with SmallCapInvestor.com likes Richmond-based James River Coal Company as a play on the long-term strength of the coal industry. Demand for coal is increasing faster than producers can increase supplies, she writes. Just as the price of oil hits new highs – reaching $125 per barrel – so is the price of coal. Just this week, a ton of coal on spot markets reached $100. That compares to an average spot price of $55 in 2007.

While James River lost $16.7 million during the last quarter, Schonberger attributes the poor performance to mostly one-time factors and outside forces like unusually severe rain, new regulations and commodity-related inflation. But the company is paying down debt and streamlining costs by shifting production from underground mines to more efficient surface mines. And it's locking up more business in long-term contracts at higher prices.

Analysts have upwardly revised estimates for fiscal 2008 and 2009 in the expectation that sales will grow 19 percent in 2008 and 22 percent in 2009. UBS has upgraded James River to a "buy" from "neutral," while Raymond James has upgraded it to "outperform."