Coal prices have been rising for the past several weeks, as trading pretty much went sideways in the fall. Many coal industry observers are crediting higher demand from Asia, though the rising need for power from China and India is nothing new. Oil could also be playing a role by making coal look more attractive from a cost standpoint.

Regardless of the reason, the higher prices led a couple of brokerage analysts to raise their 2008 profit forecasts recently on multiple coal companies. Among the beneficiaries of the optimism are Zacks #2 Rank ("buy") stocks Arch Coal ( ACI - Analyst Report ) , International Coal Group (ICO), James River ( JRCC - Snapshot Report ) and Massey Energy (MEE).

Higher coal prices are generally a good thing for railroad companies and one brokerage analyst did raise his 2008 forecast on Burlington National (BNI) and CSX (CSX). Overall, however, there remains a downward trend in earnings estimate revisions on both companies because of the drag from the slowing economy.

Shares of Countrywide Financial (CFC) plunged yesterday by more than 28% on bankruptcy fears. The company told several media outlets that it is not filing for bankruptcy, but that did little to help the stock recover any of its gains.

This morning, CFC announced that December loan fundings totaled $24 billion, an increase of 1% from November. The stock rebounded in pre-market trading following the release of the number, but investors would be prudent to take a look at another number, average daily mortgage volume.

Average daily mortgage volume dropped 21% last month to $1.5 billion, from $1.9 billion in November. CEO David Sambol claimed the drop in the mortgage volume "reflected a seasonal decline typically seen this time of year", yet a review of the numbers available on the company's web site shows that this was the biggest November to December drop in over five years by a very large margin.

As of yesterday, the consensus earnings estimate called for the company to return to profitability this year with profits of $1.55 per share. This might sound positive, until one considers that it is 30 cents below the average forecast of a month ago and 55 cents below the average forecast of three months ago. Brokerage analysts have been routinely lowering their projections. Furthermore the company has missed expectations for five consecutive quarters.

Bluntly put, brokerage analysts have been too optimistic on the stock and even with downward earnings estimate revisions. Not surprisingly, CFC is a Zacks #5 Rank ("strong sell") stock.

So how low can Countrywide go? Technically, it could go down to zero. Even an additional price drop of just $1.25 would equate to an approximate loss of 20%.

I don't know what a fair valuation for Countrywide should be and neither do most market observers. Rising default rights, the slowing economy and CFC's material exposure to subprime loans make it very difficult to say how much the stock should be worth. Adding to the uncertainty is the high probability that more write-offs from the financial sector are forthcoming. Countrywide might be very well stay afloat, but would-be contrarian investors should ask themselves if the stock is really worth the risk, especially since there are so many better investments out there.

CFC is classified in Finance-Mortgage & Related Services. This group contains two other Zacks #5 Rank stocks: Fannie Mae (FNM) and Triad Guaranty (TGIC).

The majority of the estimate revisions factored into the table below are for 2008 earnings. A small proportion of estimates are for companies with fiscal years ending in January 2008 (mostly retailers). Effective Feb 1, all estimate revision data displayed in the Industry Rank tables will be for full-year 2008 or fiscal 2009 earnings.

Zacks Premium and ZacksElite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com