Mason Hawkins Has Gone Activist On CONSOL Energy Inc. (CNX) With 21.1% Stake

Just recently, CONSOL Energy announced a preliminary update on its second quarter performance, in advance of its scheduled release on July 28, 2015. To start with, the company announced that it expects to report a loss from operations for its second quarter, which has been mainly caused by lower commodity prices. Nevertheless, CONSOL expects to reach the total production guidance for both the E&P and Coal divisions. In addition to the aforementioned operating loss, the company is expected to record a substantial impairment charge due to the reduction in the carrying value of its conventional shallow oil and natural gas assets. However, since these impairment charges are non-cash items, the company’s reserves, Marcellus and Utica Shale segment, or its net asset value will not be affected.

It might be the case that the company’s expected poor financial results for the second quarter have already been priced-in, which implies that there is not much downside for the stock. It also seems that CONSOL’s shares have already hit their bottom, which might signal that the stock has turned into a great buying opportunity. Even though the second quarter financials appear headed towards worse-than-expected results, the intrinsic value of the company appears strong. With Mason Hawkins having gone activist on CONSOL, the stock might achieve its much needed turnaround in the upcoming months and years.  Within our database, David Einhorn’s Greenlight Capital is the second-largest investor in CONSOL Energy Inc. (NYSE:CNX) with 20.58 million shares, right behind Southeastern.

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