Universal Coal is one of the few stocks to defy the impact of extreme negative sentiment towards the coal sector and despite a doubling in its share price since June last year it could be argued the rerating would have been more substantial in a different environment.

This is demonstrated by the fact that the company is trading at a significant discount to the 12 month price target of 28¢ set by analysts at Patersons Securities, and based on the broker’s earnings projections the company appears substantially undervalued.