WHC rallied to fresh multi-month highs yesterday before slipping into the close, we’ve discussed taking profit on our WHC position into such a “pop” hence we felt an update was warranted this morning:
- Insiders / directors keep buying WHC with Ray Zage having just bought a 4th tranche, this time a meaningful 200,000 shares – history tells us not to fight the tide of director buying, or selling.
- When we consider the coal price, earnings trend etc the stock remains very cheap under $5 even with many new ESG focused funds forced to remain on the sidelines.
- Short term we may see another dip back towards $2.65 but in our opinion it should be regarded as an attractive buying opportunity.
MM likes WHC at current levels
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NB: Be mindful that as a stock rallies strongly such as WHC has, position sizes increase relative to the portfolio and it may be prudent to trim positions as / when they increase too much. For instance, in WHC, our preference after such a strong run is for a position size nearer ~5% versus the ~8% it is when we include capital gains. For those in the Market Matters SMA, this is the approach we take even though we remain bullish on the stock.
