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Why the New Hope share price is at a 52-week low

Beaten down ASX shares

The New Hope Corporation Limited (ASX: NHC) share price crashed 3.40% lower yesterday to a new 52-week low and has continued its downward slide this morning, falling another 0.25% in early trade.

The Aussie coal miner’s shares have slumped to $1.98 per share and are down more than 50% since mid-March 2019.

Here’s what’s causing the New Hope share price to fall lower in 2020.

Why the New Hope share price is at a 52-week low

ASX coal mining shares have been in the spotlight in recent weeks as the climate change debate heats up. A devastating bushfire season and intense hailstorms across south-eastern Australia have put the issue in the national spotlight.

The New Hope share price has been under pressure for quite some time, but it isn’t alone. Shares in fellow ASX coal miners Yancoal Ltd (ASX: YAL) and Whitehaven Coal Ltd (ASX: WHC) have also struggled in recent times.

The decision by BlackRock, the world’s largest asset manager, to divest its thermal coal holdings hasn’t helped. With $7 trillion in funds under management, BlackRock’s decision in recent weeks has turned heads in global markets.

The New Hope share price is down 4% this year but had a tough year in 2019. Shares in the ASX coal miner crashed lower after its half-year results in March 2019.

New Hope posted strong underlying numbers but that wasn’t enough for shareholders. Underlying earnings before interest, tax, depreciation and amortisation rose 31% on the prior corresponding period to $285 million, while management also increased the dividend by 33% to 8 cents per share. However, the miner’s statutory numbers were weak and that sent shareholders heading for the exit.

Is there New Hope for investors in 2020?

Given last year’s share price crash, I think shareholders will be holding out for the group’s February half-year results.

While the headwinds are building for ASX coal miners, there is still the potential for earnings in the short to medium-term. In fact, New Hope shares have been sold down so much that it now yields 8.56% and is among the top ASX dividend shares.

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Motley Fool contributor Kenneth Hall 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 Scott Phillips.

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