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CNX Resources (CNX) Has Risen 26% in Last One Year, Outperforms Market

Alex Smith
·3 min read

If you are looking for the best ideas for your portfolio you may want to consider some of Longleaf Partners top stock picks. Longleaf Partners, an investment management firm, is bullish on CNX Resources Corp (NYSE:CNX) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on CNX Resources Corp (NYSE:CNX) stock. CNX Resources Corp (NYSE:CNX) is a natural gas company.

On July 9, 2019, Longleaf Partners had released its Q2 2019 investor letter. The investment firm said that CNX Resources Corp (NYSE:CNX) stock was the fund's largest detractor in the second quarter of 2019. The stock has posted a return of 26.1% in the trailing one year period, outperforming fund's benchmark the S&P 500 Index which returned 14.2% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, CNX Resources Corp (NYSE:CNX) stock has risen by 16.3%.

Longleaf Partners fund posted a return of -2.9% in the second quarter of 2019, underperforming fund's benchmark the S&P 500 Index which returned 4.3% in the same period. Let’s take a look at comments made by Longleaf Partners about CNX Resources Corp (NYSE:CNX) stock in the Q2 2019 investor letter.

"CNX (-32%, -1.77%), the Appalachian natural gas company, was the Fund’s largest detractor after reporting an increase in capital expenditures and missing sell-side quarterly earnings before interest, taxes, depreciation, and amortization (EBITDA) expectations by 10%. Lower natural gas prices and a few one-off factors were the primary reasons for the EBITDA miss. The capital expenditure change reflected a timing shift rather than a cost increase - CNX will invest more this year to begin production at three new wells but spend less in 2020 than previously planned. The business is on track to generate $500 million of free cash flow (FCF) in 2020, while the market value of the company is below $1.5 billion. Our appraisal of CNX moderately increased on solid results from CNX Midstream and the decision of the board and CEO Nick DeIuliis to repurchase the extremely discounted shares at an 8% annualized pace. Multiple directors also bought the stock personally."

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In Q1 2020, the number of bullish hedge fund positions on CNX Resources Corp (NYSE:CNX) stock increased by about 33% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with CNX's growth potential. Our calculations showed that CNX Resources Corp (NYSE:CNX) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.