"Despite its dirty image, coal accounts for more than half of US power generation," says Elliott Gue, editor of the industry leading The Energy Strategist.

The advisor explains, "Although crude oil consistently makes the headlines, few realize that US coal prices recently surged to a fresh high." Here, he reviews a new portfolio holding, Peabody Energy (NYSE: BTU).

"In addition to rising domestic demand, we are also seeing foreign demand. Indeed, coal accounts for about 50% of Germany's electricity production, 34% in the UK, 17% in Italy and a whopping 93% in Poland.

"Europe doesn't have enough coal production locally to satisfy demand. And now, the problem is that traditional sources of European coal imports aren't readily available.

"South Africa's coal production has been hampered this year by a series of power outages. Meanwhile, many coal exporters are turning their attention toward Asia and, in particular, China and India. European coal prices have soared even higher than prices in the US.

"China and India each get roughly three-quarters of their electricity from coal. India has been an important coal importer for years, and last year China became a net importer for the first time in its history. With a new coal plant opening every seven to 10 days, Chinese imports are set to rise steadily.

"The bottom line: For the first time in nearly 20 years, European utilities are approaching US coal miners to secure long-term coal export supply. Deals are being signed at significant premiums to prices in the US.

"Peabody Energy, the world's largest independent coal miner, is the premier play on these trends. The price of Powder River Basin (PRB) coal is soaring, and PRB supplies are in high demand along the East Coast. PRB coal is filling the gap created by surging coal exports to Europe from the East Coast.

"In addition, Peabody participates in the coal export market directly. The company is exporting PRB coal from the GulfCoast to Europe. And there are negotiations underway to export western coal from the West Coast to meet Asia's soaring demand.

"Peabody purchased Australia-based Excel Coal back in 2006. Excel has traditionally exported the vast majority of the coal it produces. And because of a shortage of coal supplies available for export, coal prices in Asia are surging. We're adding Peabody Energy to our 'Advantage Portfolio' as a buy under 63."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.