It was only just over a year ago that ASX coal shares were on the nose with investors.
With the world transitioning to a zero-carbon future, the dirty fossil fuel was increasingly given the cold shoulder by energy buyers and investors alike.
But after Russia invaded Ukraine in February 2022, there has been a sheepish shift in attitude.
Energy security was all of a sudden paramount for many countries, and renewable energy infrastructure would not be built fast enough to meet immediate demand.
Coal was instantly back in favour again.
This turn in sentiment was seen perfectly in one particular S&P/ASX 200 Index (ASX: XJO) stock.
After halving over the preceding four years, the Whitehaven Coal Ltd (ASX: WHC) share price quadrupled in just a few months over 2022.
By October, the stock had hit the $11 mark.
Image source: Getty Images
'Long and bullish'
However, with Europe getting through its winter better than anticipated, the energy market has cooled off somewhat in recent months.
As of Wednesday, the Whitehaven coal price was back below $7.
One on-the-ball punter recently asked Shaw and Partners portfolio manager James Gerrish whether he would buy the stock at that price.
The answer was a resounding yes.
"We remain long and bullish Whitehaven Coal, and if we had no position we would be accumulating into current weakness in the $7 region," he said on a Market Matters Q&A.
Not only is there upside in the share price, according to Gerrish, the dividend yield would remain massive.
"We believe Whitehaven Coal's average price through the remainder of 2023 will be significantly above $7 while the stock yields ~10% fully franked."
He's not the only one bullish on Whitehaven. Morgans analysts this week expressed their enthusiasm for the coal stock.
"Morgans has an add rating and $10.35 price target," reported The Motley Fool's James Mickleboro.
"This suggests [a] potential upside of 53% for investors. Its analysts expect this to be complemented with a 10% dividend yield."
And as for the energy sector in general, the supply-demand equation is expected to continue to favour investors.
"We think the outlook for energy stocks is attractive because there's just not a lot of supply coming in," Schroders portfolio manager Ray David told The Motley Fool in January.
"No one really wants to invest in fossil fuels or LNG or gas without the high prices to justify the returns, because everyone's quite worried about renewables and the ESG factors."
