Why is the Whitehaven share price soaring another 5% on Wednesday?

The Whitehaven Coal Ltd (ASX: WHC) share price is shrugging off the broader market weakness to soar another 5% today.

This comes as the S&P/ASX 200 Index (ASX: XJO) is tumbling by 1.5% following losses on Wall Street overnight.

The Dow Jones Industrial Average Index (DJX: .DJI) receded 1.01% along with the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) down 0.85%, and the S&P 500 Index (SP: .INX) losing 1.13%.

At the time of writing, Whitehaven shares are up 5.21% to $9.08 after reaching an all-time high of $9.165 earlier on.

Let’s take a look at why the coal producer’s shares are outperforming the ASX today.

Whitehaven seeks extended buyback program

Investors are bidding up the Whitehaven share price after the company made an announcement regarding its share buyback program.

According to its release, Whitehaven advised it is seeking shareholder approval to extend its $550 million share buyback.

The on-market buyback commenced on 8 March this year, through which Whitehaven set out to acquire up to 10% of shares over 12 months.

The company has bought a total of 93.5 million shares or roughly 9% at an average price of $5.40 per share as of 20 September 2022.

In total, Whitehaven has spent $504.3 million on the buyback and expects to complete it before its annual general meeting. The AGM is scheduled for 26 October.

The company is hoping to get 50% shareholder approval for an on-market buyback, or 75% for an off-market tender buyback.

If the resolutions are passed, this will allow the board to acquire up to 240 million shares (25% of issued shares) under any on-market or off-market tender buyback for a 12-month period to 26 October 2023.

Whitehaven CEO and managing director Paul Flynn said:

The share buyback programme is proving to be an efficient way of returning capital to our shareholders. It supports Whitehaven’s ambition to deliver sustainable benefits for shareholders who continue to hold shares in the Company. With fewer shares on issue, the buyback is improving return on equity, earnings per share and dividends per share at the same time that underlying earnings have grown substantially.

Whitehaven share price summary

Since the start of 2022, Whitehaven shares have rocketed nearly 250% on the back of favourable coal prices.

In comparison, the S&P/ASX 200 Energy Index (ASX: XEJ) is up 35% over the same time period.

Based on today’s price, Whitehaven presides a market capitalisation of approximately $8.25 billion and has around 956.27 million shares outstanding.

The post Why is the Whitehaven share price soaring another 5% on Wednesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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