WHC was a dividend cash cow until it paid $US3.2bn for BHP’s Blackwater and Daunia coal mines. The move didn’t go down well with some investors who were getting used to their more than 10% fully-franked yield. It is understandable in the short term as its yield plunged from over 10% to around 2%. However, we believe these good times could eventually return as WHC pays down debt and benefits from increased global energy demand – as we keep saying, remember AI. We have been bullish on WHC throughout 2024, and over recent weeks, we’ve been looking for the miner to make fresh 12-month highs; this time, our “Gut Feel” has been on point.
- We like how WHC has positioned itself for growth moving forward – we are long WHC in our Active Growth Portfolio.
- Our initial target for WHC is ~$9.50, but we wouldn’t be surprised to see a more bullish re-rating on the upside.
MM is long and bullish WHC
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