I have fully exited the CNX position with a c. 60% gain in two years. The main issue for me was the slowdown in production despite rising capex which reduced sustainable FCF. While it is great to see CNX reduce its share count, the recent buyback has been partially financed with debt. Under current market conditions, the stock offers c. 10% FCF yield with almost zero growth. Given that it is a commodity business and with many other options available, I don’t think CNX offers the best risk-reward opportunity. Besides, I have considerable energy exposure via other stocks already.
DISCLAIMER: this publication is not investment advice. The main purpose of this publication is to keep track of my thought process to better assess future information and improve my decision making process. Readers should do their own research before making decisions. Information provided here may have become outdated by the time you read it. All content in this document is subject to the copyright of Hidden Value Gems. The author held a position in the stock discussed above at the time of writing. Please read the full version of Disclaimer here.
