WDS traded up almost $2 early yesterday morning before surrendering over half of the gains to close up just +2.7%, not a great performance considering the surge by oil. We believe oil will ultimately test the $US90/barrel area which should provide a healthy tailwind for the Australian Energy Sector and with WDS’s whopping dividend due for shareholders in August we aren’t planning on taking profit yet. A +4.9% surge by the US Energy Sector overnight should help the local names today with brent crude ultimately closing up over 6% this morning while Coal Futures added ~12%!
- We hold 3% of our Flagship Growth Portfolio in WDS with the $35 area being fair value in our opinion – the market agrees with the level having acted like a magnet for the stock over the last 12 months.
MM remains a buyer of WDS around the $30 area and a seller on a break/test of 2022 highs
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