MM was caught out by WHC’s poor update last week but after exerting some patience we like the risk / reward below $1.40, we believe that a correction of ~27% is overdone even after another disappointing report, it’s basically factoring in the worst case scenarios plus some. Arguably the biggest short-term issue was the market was caught long but now we’ve experienced a major washout the valuation looks attractive, it maybe 2022 until WHC gets to show some fundamental improvement but markets do tend to look at least 6-months ahead – prior to the update broker upgrades were coming thick and fast e.g. targets for Bell Potter of $2.35 & Goldman Sachs $2.20.
MM is considering increasing our WHC position from 4% to 6 % into current weakness
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