By Bill Gunderson

Pennsylvania is the fourth-largest coal producer in the U.S. Pennsylvania is also an all-important swing state. Gov. Mitt Romney has been courting the coal miners and the coal-producing states, claiming that he will help to create a friendlier Environmental Protection Agency for them.

One of the very best stocks that I ever owned was a coal stock. Remember the run that commodities had from about 2002 to 2008? Coal stocks, copper stock, steel stocks soared as the global economy boomed and cranes in China dotted the land.

That all came to an end in 2008 as the financial crisis hit, the global economy slowed and the U.S. dollar began to strengthen. 

During that commodity boom, the stock of Consol Energy (CNX) surged from $6 per share to $119 per share! Now the stock trades at $34.39. Consol was a $25 billion dollar company, now it is just slightly under $8 billion.

I have been one of the few stock pundits that have been predicting a win for Govermor Romney for quite some time. I believe that Jim Cramer has it wrong. My prediction has been looking better and better lately. Could a win by Romney make this stock soar once again?

Consol Energy is headquartered in Canonsburg, Penn., and the company produces coal and natural gas for energy and raw materials markets.

The stock has delivered some very dicey performance since its peak just over five years ago.

As you can see, the 10-year performance stock is still quite good, but you have to remember those numbers include the company's golden years. The one-year, three-year and five-year performance is another story altogether. It should also be noted that the stock took a 59.8% beating in 2008.

My overall performance grade is based on short-term, intermediate-term and long-term performance. The stock currently earns an overall performance grade of C-. This is not very good. However, my stock selection method combines performance with valuation. Let's take a look and see if the shares offer a compelling valuation right now.

I like to do five-year earnings valuations on stocks. I begin with consensus estimates for next year, extrapolate them out over the next five years, and then apply a multiple that I think is appropriate for the company. Here is what that calculation looks like at the current time.

With the stock currently trading at 22.8 times forward earnings against a growth rate of 12%, the PEG ratio comes in at a very unfavorable 1.90. My five-year target price comes in at $51.65. This give the shares just 54.5% upside potential over the next five years. I like stocks that have more upside potential than that, preferable 80% to 100%.

The bottom line is this: Out of the 3,041 different investments that I have to choose from (l like to own about 25 stocks on my client's portfolios) Consol Energy comes in at number 2,012. While I believe Romney will be our next president and that he will create a more favorable environment for the coal miners, it is still too soon to take a position in this sector.

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