Coal stocks have exploded higher this week, with WHC already up over 16% after Anglo-American suspended operations at its Grosvenor plant in Queensland due to a fire. The company said it would take several months to return online, but many pundits think it will take longer if it ever does return to operation. We discussed Coal stocks on Tuesday morning, and although WHC has rallied over 40% from its late March low, we have no intention of grabbing a quick +20% profit, believing this is the start of a re-evaluation of the sector. It was encouraging to see the WHC internals remain strong after opening lower on Wednesday; the stock reversed early losses and traded higher all day.
- We have been looking for ASX coal stocks to rally through 2024, and Grosvenor appears to be the required catalyst in an already tightening coking coal market.
- We remain bullish on WHC, now targeting the $10 area. MM is long WHC in our Active Growth Portfolio and New Hope (NHC) in our Active Income Portfolio.
MM is long and bullish WHC
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