Two Insiders and Mason Hawkins Increase Their Bets on CONSOL Energy Inc. (CNX)

Yesterday, Feb. 10th, two insiders at CONSOL Energy Inc. (NYSE:CNX) acquired stock of the company. Alvin Carpenter, Director of The Board purchased 30,000 shares of Common Stock at an average price of $36.71 per share.* Mr. Carpenter now owns more than 34,000 shares**, worth more than $1.2 million.

On the same date as his colleague, David Khani, Executive Vice President and Chief Financial Officer, bought 2,800 CONSOL Energy Inc. (NYSE:CNX) shares for a price of $36.67*** per share. He now holds 43,354**** shares of the company.

Finally, Mason Hawkins‘ Southeastern Asset Management, a significant shareholder of CONSOL Energy Inc. (NYSE:CNX), declared a slight increase in its position in the stock yesterday. The fund declared (in a 13G/A filing) that it holds more than 22.69 million shares, which comprises almost 4% of the fund’s Q3 equity portfolio.

Mason Hawkins

 

CONSOL Energy Inc. (NYSE:CNX) is an $8.5 billion market cap, multi-fuel energy producer and energy services provider. Focused mainly on coal and gas, it primarily serves the electric power generation industry in the United States. Trading at 116 times the company’s earnings this stock is certainly not cheat. However, most analysts tend to recommend buying this stock, mainly in account of its above-average (although still razor thin) margins, returns and a small dividend yield, and its amazing long-term EPS growth projections –the average annual EPS growth rate is expected around 32%-33% for the next five years, compared to an industry average of 5%-6%.

Both purchases follow the filing of CONSOL Energy Inc. (NYSE:CNX)’s 2013 annual report, which features record total gas production of 172.4 Bcfe in 2013, 10% higher than 2012; record Marcellus Shale production of 57.8 Bcfe in 2013, 58% higher than in 2012; a realignment of its dividend yield; the completion of important leases, farm-in agreements and sales; and a strong guidance for 2014.

It seems like the stock price premium hasn’t discouraged these insiders, and neither has it had this effect over some of the major hedge funds betting on this company. Previously, during the third quarter, Dinakar Singh’s Tpg-Axon Management Lp has started a position of more than 2.3 million shares in CONSOL Energy Inc. (NYSE:CNX); and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital had upped its stakes by about 52% over the same period, increasing its holdings to 2.28 million shares.

With both insiders and hedge funds showing themselves quite bullish about CONSOL Energy Inc. (NYSE:CNX), should you too?

* “Represents the weighted average of forty seven open-market purchase transactions ranging in price from $36.42 to $37.08. The reporting person agrees to provide full information regarding the number of shares purchased at each separate price paid if requested by the SEC staff, the Company or a security holder of the Company. ” (Sec.gov)

** “Of the 34,584 shares held directly, 3,584 are restricted stock units (including dividend equivalent rights).” (Sec.gov)

*** “Represents the weighted average of six open-market purchase transactions ranging in price from $36.67 to $36.68. The reporting person agrees to provide full information regarding the number of shares purchased at each separate price paid if requested by the SEC staff, the Company or a security holder of the Company.” (Sec.gov)

**** “Of the 43,354 shares owned directly, 36,915 are restricted stock units (including dividend equivalent rights).” (Sec.gov)

Disclosure: Javier Hasse holds no position in any stocks mentioned

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