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Why the Whitehaven Coal Ltd share price dropped today 

Whitehaven Coal Ltd (ASX: WHC) was sitting near the top of the declines on the S&P/ASX 200 today, slipping by about 4% to $4.55. 

Whitehaven Coal is a coal producer with projects in the Gunnedah basin in New South Wales and interests in Werris Creek Mine, Narrabri and the Maules Creek Project. 

Whitehaven Coal shareholders are not used to many price drops with the stock moving consistently upwards since mid-2017 despite volatility in global coal pricing. 

Whitehaven and coal peer Stanmore Coal Limited (ASX: SMR) have been chasing acquisitions to continue to drive growth, with Whitehaven buoyed by a favourable balance sheet in the past 18 months and net debt dropping to $65 million. 

Whitehaven’s December quarterly report revealed it had cut its FY18 output and saw the share price plunge to $4.33 in mid-January, but it is now back around $5. 

But Whitehaven’s slip hasn’t shaken its overall position much, with the company still at a 5-year trading high. 

Second-half results are expected to be stronger with Whitehaven set to reopen its Sunnyside open cut mine. 

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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