Does MM prefer NHC or WHC in the coal space?
If you guys had $10k to invest in coal would you invest it in NHC or WHC or other coal stock. I appreciate you don’t give advice - just interested in what you would do
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Answer
Hi Paul,
Its Thursday afternoon and as I’m answering this question Whitehaven Coal (WHC) is down -5.5% after the announcement that the CEO sold 900,000 shares but New Hope Corp (NHC) is down -6.9% suggesting the days moves are all about the coal price and sector – WHC has bounced over +19% this month illustrating how volatile that stock can be and hence why we only allocated 3% of our Flagship Growth Portfolio to the company less than a fortnight ago.
Similarly we bought NHC for our Active Income Portfolio this week, also allocating 3% – i.e. we are clearly sitting on the fence here. If the focus is growth in price, WHC is the better option due to a more aggressive on-market share buy-back. NHC we think will pay higher dividends.
I tend to prefer WHC, but only just.
