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Consol Energy - Update

This is the follow up on my alert during market hours.

This is a correction in a strong long-term uptrend.

Today's volume was 4x the average daily volume. The stock gapped down hard, but note how well it held after the initial panic.

The bottom put in on Feb 20th held as well. Arch Resources (ARCH), another coal miner, also fell around 3% but not on materially higher volume.

In terms of valuation, CEIX trades at 4x 2023 earnings. Last year, the company repurchased 5.2M shares at an average price of $75.69/sh, for $393.59M. 2023 net income was $655.9M. Consol understands coal stocks are unloved, and the only way to reward shareholders is by returning capital in the form of buybacks and shrinking the float.

Q4 2023 press release:

"From the beginning of December 2022 through January 31, 2024, CEIX has repurchased 5.7M shares of its common stock, or approximately 16% of its public float as of year-end 2022, at a weighted average price of $76.63 per share. Consistent with the Company's previously announced plan to return value to CEIX shareholders through repurchases of CEIX common stock rather than dividends, the Company is not declaring a quarterly dividend at this time"

Pennsylvania mining complex stats

*mid-point of guidance

Note that the company expects lower selling prices this year, so the forward PE is closer to 7x than 4x.

Cheap stock in a strong uptrend, likely seller exhaustion today on high volume (with strong bids arresting the algos in their tracks), in a sector that directly benefits from inflation, everything lined up well for buying today.

Hope you managed to get in.

Good Trading!

Kashyap Sriram

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