In this article, we discuss 5 cheap coal stocks to buy today. If you wish to read our detailed analysis of the coal industry and the latest market situation, go directly to 10 Cheap Coal Stocks to Buy Today.
5. CONSOL Energy Inc. (NYSE:CEIX)
Number of Hedge Fund Holders: 22
Share Price (as of July 1): $48.12
Record-breaking coal prices mean good news for CONSOL Energy Inc. (NYSE:CEIX), which exports bituminous coal to industrial end-users and other customers across the world. The Pennsylvania-based company was founded in 1860 and owns the Pennsylvania Mining Complex (PAMC), which has several coal mines and possesses roughly 612 million tons of proven and probable coal reserves. The company also provides coal export terminal services. As of July 1, CONSOL Energy Inc. (NYSE:CEIX) has seen its share price surge 187.46% in the last 12 months, and 104.42% this year.
Hedge funds have been eager to buy CONSOL Energy Inc. (NYSE:CEIX) shares. At the end of Q1 2022, 22 hedge funds reported long bets on the company’s shares, up from 15 hedge funds in the preceding quarter. David Einhorn’s Greenlight Capital was the largest Q1 shareholder of CONSOL Energy Inc. (NYSE:CEIX), with a position valued at more than $55 million. CONSOL also featured as one of Greenlight Capital’s top performers during the first quarter.
On May 5, B. Riley analyst Lucas Pipes maintained a ‘Buy’ rating on CONSOL Energy Inc. (NYSE:CEIX) shares and raised the price target to $63 from $46, after the company exceeded Q1 expectations owing to improving margins and strong realizations. The analyst sees an expanding order book for CONSOL in 2023.
Greenlight Capital talked about CONSOL Energy Inc. (NYSE:CEIX) in its Q2 2021 investor letter. Here’s what it said:
“Thermal Coal and Natural Gas
ESG investing is inflationary, as green energy is simply more expensive than hydrocarbons. Hydrocarbon energy companies are starved for capital and are being told to change their ways. The result is less exploration and drilling. Even with benchmark oil prices surging over the last year, companies are loath to drill more. Normally, the cure for high prices is high prices. With ESG in the proverbial driver’s seat, we might need much higher prices still
in order to increase investment to meet demand.
There is almost nothing less popular than thermal coal. From 2011 to 2020, U.S. coal production declined by 51%. U.S. demand has fallen as we’ve shifted to alternative sources of electricity. As unpopular as coal is though, it still makes up about 20% of U.S. electricity generation. Globally, coal demand is growing modestly as China and India add power generation capacity faster than the West is reducing it. Even so, reduced oil and gas drilling has caused natural gas prices to advance and coal prices are following. Seaborne thermal coal prices are up 140% year-over-year and at the highest levels since 2011, and Northern Appalachia thermal coal prices are catching up, rising 23% in the last month alone.
We own CONSOL Energy (CEIX), the lowest cost, most efficient miner in Appalachia, which is poised to benefit from rising coal prices. It trades at 12x consensus earnings estimates that look stale to us, as they do not reflect recent coal price gains.”