U.S. Markets closed

Southeastern Asset Management Reduces CNX Resources Stake

Mason Hawkins (Trades, Portfolio)' (Trades, Portfolio) Southeastern Asset Management revealed a 22.84% reduction in its holding of CNX Resources Corp. (NYSE:CNX).


The firm, led by Hawkins since 1975, takes a value-focused approach to investing. It seeks to achieve superior long-term performance by acquiring equity securities in understandable businesses with strong balance sheets, run by capable management and are trading at less than intrinsic value.

According to Real-Time Picks, a Premium GuruFocus feature, the firm sold 11.03 million shares of the company on June 10. At the time of the sale, the stock was trading at an average price of $11.94 and the sale represented a -3.13% overall impact on the equity portfolio.

6a9e6a186b71f295d60008502bf6e31d.png

CNX is an independent oil and natural gas company. It primarily focuses on the exploration, development, production, gathering, processing and acquisition of natural gas properties in the Appalachian Basin. The company's operations are centered on unconventional shale formations, primarily on the Marcellus Shale and Utica Shale. In addition, it offers gas gathering and water delivery solutions, as well as land services to third parties.

The firm has been consistently selling the stock in single-digit percentages since the third quarter of 2019. Overall, sales of CNX have been completed at an average price of $13.22 per share for a total estimated loss of 44.70%.

As of June 11, the company was trading at $10.44 per share with a market cap of $1.95 billion. According to the Peter Lynch chart, the company was trading well below its intrinsic value at the end of 2019, suggesting that it was underpriced.

941016d260134a74b1c4f8d97be67b7e.png

GuruFocus gives the company a financial strength rating of 3 out of 10, a profitability rank of 5 out of 10 and a valuation rank of 5 out of 10. A cash-to-debt ratio of 0.01 places it lower than 93.44% of the industry. The price-book ratio of 0.51 places it above 65.01% of the industry and it has a strong three-year revenue growth rate of 30.1%.

42ee366b1f97c4d5b85a5a805c2e01ed.png

Hawkins' firm is currently the top shareholder with 19.93% of shares outstanding. Other top investors include BlackRock Inc. (Trades, Portfolio), Dimensional Fund Advisors LP (Trades, Portfolio), Vanguard Group Inc. (Trades, Portfolio), State Street Corp. (Trades, Portfolio) and David Einhorn (Trades, Portfolio).

Portfolio overview

Overall, the firm is invested in 34 stocks, including five new holdings. By weight, it is most invested in the communications services (32.03%), industrials (21.66%) and consumer cyclical (11.46%) sectors.

7f92d25f8c16f48003dfbcc58ebdf5f4.png

New holdings include Hyatt Hotels Corp. (NYSE:H), DuPont de Nemours Inc. (NYSE:DD), Empire State Reality Trust Inc. (NYSE:ESRT), Univar Solutions Inc. (NYSE:UNVR) and Berkshire Hathaway Inc. (NYSE:BRK.B).

Disclaimer: No positions mentioned.

Read more here:

  • Recent Airline Resurgence Shows Potential Profits
  • Bill Ackman Sells Howard Hughes Shares After Big 1st-Quarter Buy
  • Oakmark International Small Cap Fund's 1st-Quarter New Buys



Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

This article first appeared on GuruFocus.