Why did shares in coal stock New Hope (NHC) rally today?
NHC +8.57%: Rallied today after reporting 1H net profit of $668m vs. $330m this time last year while they announced an interim dividend of 30c fully franked plus a special dividend of 10c fully franked, putting it on a 7.5% yield for the half (15% annualised) plus franking. This equates to a ~10% grossed-up return for the half, which is the reason we hold a (4%) position in the Market Matters Income Portfolio. While the result was a record pretty much across the board, the commentary was more important with the company confirming its long-term strategy is to remain focused on coal, both through its existing thermal portfolio and in new opportunities in either metallurgical or thermal coal production. They said demand is continuing to outstrip supply, with future growth expected from South-East Asia. They restarted their $300m on market share buy-back and like all companies, said they think their shares are undervalued!
