Blackwattle Investment Partners has identified two ASX 200 coal stocks that it says are among the best buys in the market.
The fundie said ASX coal stocks were sold off recently due to fears a trade war may hit Aussie exports.
But not all coal stocks are alike. Some are positioned to weather the tariff impact better than others, Blackwattle says.
Let's investigate.
2 ASX 200 coal stocks to buy now
'One of the highest quality mining companies on the ASX': Fundie
Blackwattle holds mid-cap coal stock, Whitehaven Coal Ltd (ASX: WHC), in its Mid Cap Quality Fund.
In a new update, portfolio managers Tim Riordan and Michael Teran said Whitehaven shares fell 9% in April.
This was due to fears that a trade war would significantly impact an already weakening Chinese economy.
They said:
Commodity prices in general were soft in April, and thermal coal was one of the weakest commodities after oil, falling 9% in April.
However, WHC has greater exposure to metallurgical coal, which one was one of the few commodities that rallied in April, increasing 13%.
WHC is tracking at the upper end of production guidance and lower end of cost guidance for FY25.
We continue to see material long-term upside for WHC as an 'improving / enduring quality' business.
The Whitehaven share price is $5.35, down 0.47%, on Tuesday.
The managers said:
We view WHC as one of the highest quality mining companies on the ASX, with strong financials and a capital disciplined management team.
While coal prices have been volatile in recent months, the longer-term supply/demand dynamics remain favourable, and WHC continues to generate free cash flow at current coal prices with a net cash balance sheet.
We back WHC to execute on numerous multi-year internal levers to maintain and improve the business quality beyond commodity prices …
This ASX 200 coal stock is 'extremely cheap': Fundie
Blackwattle holds Stanmore Resources Ltd (ASX: SMR) in its Small Cap Quality Fund.
In a newsletter, portfolio managers Robert Hawkesford and Daniel Broeren said:
Stanmore Resources dropped 8.4% in April, reflecting the introduction of tariffs to many Asian countries that consume Australian metallurgical coal, and a view that they might experience some economic softness.
The Stanmore Resources share price is $1.94, up 0.52% on Tuesday.
The managers said:
The company continues to operate strongly having delivered a strong production result for the March quarter.
Shares in SMR are extremely cheap, and a great entry point as the best resources investments are counter-cyclical.
There has been very little new coal supply coming to the market for many years now, so deficits are likely to be a feature of the market in coming years.
