WHC bounced nicely on Monday following some downgrades last week after its more than +100% rally in less than 12-months – the analyst moves were based on price/valuation as opposed to internal issues at WHC. However, with the coal miner posting a +13% lift in production in the December quarter and the company saying its coal output and sales are tracking firmly in the upper half of guidance, supported by firming Met coal prices, we believe it’s too early to trim our position. However, as we saw with gold, the performance of miners is largely determined by the underlying commodities, which, in the case of coal, looks solid, especially in the short term.
- We are now targeting the $10 area for WHC in the coming month (s): MM holds WHC in its Active Growth Portfolio.
MM remains long and bullish on WHC around $9
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