Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM, I was surprised by the savage sell-off in coal stocks based on a coal price forecast cut by Macquarie. Does Macquarie know any better than other research houses where the coal price will be over the next year? Is the sell-off overdone? Also, do you have an update on expected dividend for NHC when they report in the next week or two? Thanks, Peter
Hi Peter,
We were also surprised by the aggressive move but on reflection its not out of character with todays market although Yancoal’s (YAL) 12.6% plunge may have looked particularly nasty on the surface but the stock traded ex-dividend 52c fully franked.
From a margin of safety perspective if the coal price were to fall to $50 or lower, it could lead to a net loss all three major ASX coal miners but Newcastle Coal contracts were at $104.60 a ton on March 10, rising from $102.50 on Feb. 28, i.e. its not another lithium rout in the making.
In terms of NHC’s dividend, Bloomberg is forecasting an attractive 17c fully franked dividend will be announced late this month.
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