Yanzhou Coal Popped: 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 Chinese coal miner Yanzhou Coal Mining (NYSE: YZC  ) surged 10% in early trading today, as investors cheered the company's quarterly results.

So what: Driven by voracious domestic demand, Yanzhou's third-quarter earnings more than tripled from a year earlier, to $553 million. According to data from the China Coal Transport and Distribution Association, coal prices in China soared 28% percent in the quarter.

Now what: Yanzhou's Chinese exposure has certainly given its stock plenty of pop, but I'd use today's run-up to take some dough off the table. Over the past two years, Yanzhou is up a whopping 500%, while American coal counterparts Peabody (NYSE: BTU  ) , Arch Coal (NYSE: ACI  ) , and CONSOL (NYSE: CNX  ) haven't even doubled. While it might be tempting to keep a big bet on Yanzhou given China's dependency on coal, the stock is just too volatile (beta of 2.5) for the average investor's stomach.

Interested in more info on Yanzhou? Add it to your watchlist here by clicking here.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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