Thoughts on Whitehaven (WHC) after recent fall?

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Question asked 26/08/2023

Thoughts on Whitehaven (WHC) after recent fall?

Hi guys Your thoughts on whitehaven coal it seems that there are rumours that the govt might put an extra tax on the coal and gas industry Do you think this is a problem fo whc as i thought their report was very good including a 42c dividend which is about 7% fully franked and they are also sitting on alot of cash Since the shares have dropped over 10% do you think this is a good buying opportunity Thanks Tony

Answer

Hi Tony,

The short-term issue is WHC have suspended their buyback and although they are still paying a healthy 42c fully franked dividend on Monday the implication is they are in likely to buy BHP’s coal assets. Unlike many at MM we regard this as a positive assuming they don’t pay too much.

We continue to believe that fossil fuels have a major role to play as the transition to a clean energy world is likely to prove harder/longer than many believe hence we are considering increasing our exposure into current weakness.
Future government taxes are always a risk but its unlikely to be too onerous if the country needs the fuel.

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Whitehaven Coal Ltd (WHC)

LAST UPDATED 25/08/2023 11:18

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