Up 240% in 2022, is it time to cash in the chips on Whitehaven shares?

It’s been a ripper year for the Whitehaven Coal Ltd (ASX: WHC) share price.

The market has been bidding the thermal coal giant’s stock higher amid soaring demand for the black rock, driving the company to post record financial year 2022 earnings.

Right now, the Whitehaven share price is trading at $9.43. That marks a whopping 242% return in 2022, before considering dividends.

The stock paid out 48 cents per share in that time – bringing its total return for the last 11 months to nearly 260%.  

For comparison, the S&P/ASX 200 Index (ASX: XJO) has dumped nearly 5% this year.

So, with all those gains under its belt, is now a good time for Whitehaven shareholders to cash out of the stock? That’s what one fundie thinks.

Fundie tips Whitehaven shares as a sell

While financial year 2022 was largely brilliant for Whitehaven, the new fiscal year has brought new challenges. Notably, flooding has seen the company reduce its run of mine (ROM) production guidance.

It now expects to declare between 19 million tonnes and 20.4 million tonnes of managed ROM production in financial year 2023 – down from previous guidance of between 20 million tonnes and 22 million tonnes.

Whiles its Narrabri mine’s expected output was lifted, that of its Maules Creek and Gunnedah mines were dropped.

That’s one reason Seneca investment advisor Arthur Garipoli tips the stock as a sell, as per The Bull.

Another reason behind Garipoli’s bearishness is the risk of softening coal prices amid a mild European winter. Garipoli continues:

The share price has risen from $2.76 on January 4 to trade at $8.895 on November 24. Investors may want to consider locking in some profits.

Garipoli isn’t the only expert seemingly cautious of the coal giant lately.

Though, QVG Capital portfolio manager Josh Clark is more hopeful, recently tipping Whitehaven shares to be a hold. He said, courtesy of Livewire:

[T]he thermal coal price … looks incredibly expensive on long-term forecasts or longer-term historic prices. And then it looks ridiculously cheap on spot thermal coal prices.

One thing we know is that thermal coal prices have got to come down at some point.

So, the game you’re trying to play is to get paid back on a really cheap multiple before that commodity price starts moving down.

Meanwhile, Katana Asset Management co-founder Romano Sala Tenna outlines a bullish view on coal prices, telling my Fool colleague Bernd Struben:

I definitely see coal being stronger for longer. Is it US$350 per tonne? Probably not. Is it US$250 or US$200 per tonne for thermal, possibly. But that’s still incredible prices for thermal coal. I think we’ve got some runway on some of the thermal coal plays.

No doubt all eyes will be on the Whitehaven share price in coming months and years after its meteoric 2022 rise.  

The post Up 240% in 2022, is it time to cash in the chips on Whitehaven shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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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