The Whitehaven Coal Ltd (ASX: WHC) share price is on fire today. Whitehaven shares are currently up 13.82% at the time of writing to $1.94 a share after closing at $1.84 yesterday and opening at $1.88 this morning. Since Monday morning, Whitehaven shares are now up around 10.7%. They are also up a hefty 53.5% over the past month.
So what’s going so right for Whitehaven?
Haven for coal
Well, there’s one substantial catalyst for this recent run that we can point to – coal prices. Coal is currently fetching close to US$120 a tonne, its highest price in many years, and very close to its all-time high. Coal has risen substantially over the past year or so, and even in the past month. This is likely to be contributing to Whitehaven’s strong run over the past few weeks and months.
As the Fool covered this week, we can thank strong demand from China and some scattered supply squeezes combining to push coal to its current heights. That’s despite China refusing to accept Australian coal at the current time due to the trade animosity and diplomatic disputes that have been afflicting the two countries’ bilateral relationship over the past year or so.
But this refusal of the Chinese government to accept Australian coal is only helping to distort supply chains and push coal prices higher.
Another factor that may be contributing to investors bullishness over Whitehaven could be its directors – namely one director in George Raymond Zage III. Mr Zage has recently been on a buying spree when it comes to Whitehaven shares. According to ASX notices, Mr Zage picked up just over 883,000 Whitehaven shares back in May, and another 350,000 earlier this month. He now holds roughly 10 million Whitehaven shares (worth close to $20 million on today’s pricing).
That’s arguably a pretty strong case of a director ‘putting their money where their mouth is’ when it comes to their company, and this would have likely piqued at least some investor interest. ASX investors typically love to see a company’s management team buy more shares (and hate the opposite situation), and so these actions are also a likely contributing factor to Whitehaven’s recent share price strength.
About the Whitehaven Coal share price
At the current Whitehaven Coal share price, the company has a market capitalisation of $2 billion. Even though Whitehaven has enjoyed some substantial gains in recent weeks, the company remains down around 67% from its all-time high above $7 a share that we saw back in 2011. Even so, Whitehaven is still up around 130% from its 52-week low of 85 cents.