4-Star Stocks Poised to Pop: Peabody Energy

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Based on the aggregated intelligence of 115,000 investors participating in Motley Fool CAPS, the Fool's free investing community, private-sector coal king Peabody Energy (NYSE: BTU) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Peabody Energy's business, and see what CAPS investors are saying about the stock right now.

PeabodyEnergy facts 

Headquarters (Founded)	St. Louis (1883)
Market Cap	$16.00 billion
Industry	Coal & Consumable Fuels
TTM Revenue	$5.20 billion
Management	CEO Gregory Boyce (since January 2006); CFO Michael Crews (since June 2008)
Return on Equity (avg. last three years)	21.7%
CAPS members bullish on BTU also bullish on	Transocean (NYSE: RIG), Vale (NYSE: RIO), Freeport-McMoRan Copper & Gold (NYSE: FCX)
CAPS members bearish on BTU also bearish on	Arch Coal (NYSE: ACI), Potash Corp. of Saskatchewan (NYSE: POT), Google (Nasdaq: GOOG)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, some 96% of the 431 All-Star members who have rated Peabody Energy believe the stock will outperform the S&P 500 going forward. These All-Star bulls include BankOnJesus and the Fool's own TMFSinchiruna, both of whom are ranked in the top 15% of our community.

In June 2007, BankOnJesus reminded Fools that Peabody is:

Largest coal producer in the world. ... When oil is gone coal will still be burning. Coal to Gas is going to be a play and BTU will be there to supply the coal.

A more recent pitch from TMFSinchiruna in March of this year echoed that bullish belief, highlighting Peabody as an attractive long-term play:

BTU is the best play in the coal sector by far, because of its geographic scope and strategic focus on international sales. Coal prices are going up right alongside oil, and I expect BTU to continue rising for several years. In real life, I've bought in and out of this one more times than I can count. But every time I play that game, the stock breaks out of a channel and leaves [me] wishing i owned more. These are the stocks you want to stop channel trading and start holding for the long haul. I'd be very surprised if BTU doesn't reach $100 by the end of the decade.

What do you think about Peabody Energy, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.