Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, coking coal producer Walter Energy (NYSE: WLT) has earned a respected four-star ranking.

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

Walter facts

Headquarters (Founded)

Tampa, Fla. (1946)

Market Cap

$3.85 billion


Diversified metals and mining

Trailing-12-Month Revenue

$1.2 billion


Interim CEO Joseph Leonard (since March, 2010)

Interim CFO Lisa Honnold (since March, 2010)

Return on Capital (Average, Past 3 Years)



$96 million / $187 million



Westmoreland Coal (NYSE: WLB)

Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.

On CAPS, 94% of the 1,402 members who have rated Walter Energy believe the stock will outperform the S&P 500 going forward. These bulls include pniz and All-Star btown819, who is ranked in the top 3% of our community.

Late last month, pniz touched on Walter as a rather cheap way to go for growth: "Great stock that is selling at steal. The [quarterly] earnings are consistently rising. Solid company."

In fact, Walter managed to post record operating income in the most recent quarter, driven by a 70% surge in coking coal prices and a 62% rise in sales volumes. More importantly, management expects no letup in those positive trends -- consistent with the slow-and-steady steel recovery being experienced by U.S. Steel and ArcelorMittal. With returns on capital substantially higher than those of rivals CONSOL and Westmoreland, Walter seems like a relatively solid bet, as well.

CAPS All-Star btown819 elaborates:

This pick is based on a belief that [Walter Energy's] coal business will remain relatively strong over the next year as domestic steel producers in the U.S. stabilize and start to recover which should offset slowdowns elsewhere in the global steel industry. This should drive stronger sales in the U.S. and in Asia (even with potential slowing growth) in 2010 vs 2009. Walter Energy has a high percentage of its production tied to the global steel industry. As a whole, if the global steel industry does well, [Walter] should do well. [Walter] also has a management team that has done an excellent job at creating shareholder value over the last few years by spinning off business to shareholders such as Mueller Water Products, the mortgage financing business, and divesting the home building business. 2010 should demonstrate strong operating results for [Walter] which should show up positively in the stock price.

What do you think about Walter, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Mueller Water is a Motley Fool Hidden Gems pick. The Fool's disclosure policy always gets a perfect score.