Wilson Asset Management has been buying ASX 200 coal share Whitehaven Ltd (ASX: WHC) amid the coal price recovery.
Portfolio managers of listed investment company (LIC) WAM Leaders Ltd (ASX: WLE) revealed their purchase in an update this month.
Whitehaven is a thermal and metallurgical coal producer with six mines in the Gunnedah Basin of NSW and Bowen Basin of Queensland.
Wilson described Whitehaven Coal as a leading Australian producer with high quality assets and a robust balance sheet.
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Why this fundie bought more Whitehaven shares
The portfolio managers explained their decision:
We increased our holding in Whitehaven Coal as coal prices began to firm after bottoming earlier in the year.
The company continues to deliver sound operational results despite a challenging backdrop and is executing cost out initiatives, with increased volumes at Blackwater and Daunia mines expected to drive unit cost reductions from FY2027.
Whitehaven Coal also maintains strong capital management flexibility, supporting shareholder returns through buybacks and dividends.
Recovering coal prices are a tailwind for Whitehaven shares.
Demand from China is ramping up, with the government intending to open more than 100 coal-fired power generators this year to supply electricity domestically and via export.
China is the world's largest coal producer, importer, and consumer.
Despite China's moves to adopt nuclear power as part of the green energy transition, coal continues to provide more than 50% of the nation's energy requirements.
China's coal production reached a record last year at 4.83 billion tonnes, but they still needed imported coal to keep the lights on.
Analysts at Trading Economics said:
China, by far the world's largest coal consumer, producer, and importer, continues to rely on the fuel to power its economy alongside the ongoing expansion of renewable energy.
However, Beijing has pledged to begin phasing down coal use before 2030.
What's happening with coal prices?
The coking (metallurgical) coal price is US$240.75 per tonne, up 1.5% over the past month and up 26% year over year.
Met coal has risen from a 12-month low of about US$169.70 per tonne in March.
The thermal coal price is US$109.35 per tonne, up 1% for the month and down 6% over 12 months.
It has risen from a 12-month low of US$93.70 per tonne in April.
This chart shows that Whitehaven shares have risen over the same period, rebounding strongly after the US tariff-inspired rout.
Should you buy this ASX 200 coal share, too?
The Whitehaven share price is $9.01 on Thursday, down 0.39%.
On the CommSec trading platform, 15 professional analysts offer a rating on Whitehaven shares.
The consensus rating is a hold. Four analysts say the ASX 200 coal share is a buy, and two say it's a moderate buy.
Six say hold, and three think Whitehaven shares are a strong sell following a 42% rally over 12 months.
This week, UBS reiterated its sell rating on Whitehaven and raised its 12-month share price target from $7.15 to $8.45.
Bell Potter kept its hold rating but also increased its price target from $7 to $8.40.
Ord Minnett reiterated its buy rating with a price target of $9.50.
