Lots of comments about WHC, let me add my 2 cents worth, as a recent new holder buying in at $9.50 and been buy all the way down to $7.55, an average price of $8.25, let me express my opinion on the future of WHC and why I decided to buy in.
IN THE SHORT TERM THE STOCKMARKET IS A VOTING MACHINE,
LONG TERM IT IS A WEIGHING MACHINE
These immortal words are from Ben Grahan the mentor of Warren Buffet, reading some of the comments of disappointed investors regarding the WHC dividend it seems that they are throwing their toys out of their prams, they should think instead on why they invested in WHC in the first place. WHC has hardly any debt, its operating in an environment were new coal mines are impossible to open, Clive Palmer found that out, let alone finance and insure, any bank that announces that it is financing a coal mine will rapidly be besieged by an army of greenies. Contrary to popular propaganda, coal use is increasing in the world. China alone has commissioned 226 new coal power plants in the last 5 years, that's about one a week. Each power station lasts about 50 years so China has no plans to get out of coal. They may say that in another 10 years they will faze out coal but if you believe that you would believe that all politicians are honest and always speak the truth.
Now that the ban on Australian coal has ended by China the demand for Australian coal will only increase. South Africa is collapsing back to a third world economy with their electricity grid, Indonesia is at the limit of its export potential as its population of 273 million begins to modernise and as for Russia the war in the Ukraine will last till the last Ukrainian. An armistice should end hostilities immediately and talks begin to end the conflict but that of course will not happen. South Korea will ban Russian coal imports at the end of the month.
WHC has about 3 Billion in the bank but a market cap of about 6.5 Billion on Fridays share price. To say it is undervauled is an understatement. It is my believe that the share price weakness we have seen over the last few weeks is been driven by the falling coal price, partly caused by Alandi having to sell coal fast to raise cash for its financial problems and the milder winter in Europe. These short term events will end and WHC will still be mining coal. Retaining some profits is some cases is a very good idea, the dividend of 32 cents is an interim dividend, the last is usually bigger. WHC must be thinking that there could be working coal mines available for sale by some woke mining major such as BHP or RIO in the future. Remembering that no Australian bank would give a company finance, meaning it would have to be paid for in cash or a share raising.
Warren Buffet loves share buy backs if the circumstances are correct, look on the Youtube video of Buffet discussing talking to Steve Jobs about share buy backs of Apple. If a companies shares are undervalued by the market, there are no obvious investment opportunities, you can forget opening new coal mines with Labor and Plibersek in charge, then buying back shares if they are very undervalued is a good result for share holders. There is no doubt in my mind that WHC is extremely undervalued at the moment, the share were $9.50 a month ago.
My message to all holders, stop throwing your toys out of your pram's as it is bad for the environment and enjoy your dividends, many more to come in my opinion, of course this just my opinion not financial advice.
Good Luck to all holders
Cheers Wang44
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