The New Hope Corporation Ltd (ASX: NHC) share price has plummeted 6% lower today as the company completed its 10% stake increase in the Bengalla joint venture (JV).
What caused New Hope's share price to tank?
It's been a bad day for the Aussie market in general, with the S&P/ASX200 Index (ASX: XJO) shedding 74.8 points (-1.2%) to 6,120.4 at the time of writing.
This risk-off move can largely be attributed to the US markets bearish moves on Friday following weak economic data out of Europe and the inversion of the US 10-year to US 3-month T-Bill spread.
With no specific news out for the company today aside from this afternoon's JV announcement, it looks like this morning's share price crash is a continuation of its downward momentum following last week's disappointing earnings release.
What did New Hope report in its half-year earnings?
New Hope's underlying net profit after tax (NPAT) rose 33% on prior corresponding period (pcp) to $160 million on 4.5 million tonnes sold during the half-year.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 31% on pcp to $285 million while management also increased the dividend by 33% to 8 cents per share (cps).
The Aussie coal miner continues to face headwinds arising from uncertainty in energy policy and ongoing environmental concerns facing the coal mining industry.
Is New Hope in the buy zone?
After today's announcement, New Hope now holds an 80% interest in the Bengalla JV with Taipower holding the remaining 20%.
New Hope has been snapping up stakes in the coal mining operator like crazy, beginning with its $860 million buyout of Wesfarmers Limited's (ASX: WES) stake in August 2018 and purchasing a further 10% stake from Mitsui & Co. in November 2018.
With the ongoing uncertainty around the future of coal in this country, I'm not sure that New Hope's Bengalla bet is the smartest long-term move, particularly if a more renewables-friendly Federal Labor government comes into power in the second half of this year.
For those looking to invest for some serious long-term growth potential, this top-rated stock is well-placed to grab market share in a $22 billion industry and could be the perfect portfolio fit.
