Despite Low Operating Margins Sterne Agee Maintains Buy for James River Coal

In a recent report, Sterne Agee reduced their 2013 estimates but maintained 2014 estimates for James River Coal JRCC, thus reaffirming a buy rating and $8.00 price target. Regarding Valuation, Sterne Agee pointed out: "We believe current liquidity access should allow time for market dynamics to take hold. The shares reflect optionality upon a recovery in U.S. thermal and global metallurgical coal markets during 2013... In our equity valuation for JRCC, we have also taken into account JRCC's current market value of debt and potential for debt valuation upside over the next 12-18 months." Shares of James River Coal are up 6.30% almost two hours into trading.