Take Profits on Cloud (NYSE:CLD) Says Brean Murray

Cloud Peak Energy (NYSE:CLD) has made a big move since August, rising 37 percent since that time, and rather than advising to buy on weakness, Brean Murray Carret & Co. recommends taking profits and look at companies like Alpha Natural (NYSE:ANR) or Massey Energy (NYSE:MEE) with exposure to met and eastern thermal coal.

Brean said, "We would NOT use today's weakness as a buying opportunity. Rather we'd look at it this way: CLD is up 37% since Aug. 10. That is the day Powder River Basin (PRB) prices peaked from 2011 at $15.40/ton/ They are currently at $13.65/ton, or a decrease of 11% from the peak. This negative correlation between the price of the underlying commodity and the stock is extremely unusual, and something usually has to give...We'd use this opportunity to suggest clients take profits from CLD and redeploy them on names with eastern thermal and met coal exposure, such as Alpha Natural (BUY) or Massey Energy (BUY)."

Brean Murray Carret & Co. maintains a "Hold" on Cloud Peak Energy which closed Monday at $21.34, down $1.58, or 6.89 percent. Alpha Natural Resources ended the trading session at $52.86, down $0.01, or 0.02 percent. Massey closed at $50.43, down $1.55, or 2.98 percent.