CNX Resources Corp

CNX Resources reported another solid quarter and continues to focus on steadily growing FCF per share and value per share. While it was mildly disappointing that CNX did not get a fuller runup earlier in the year like some of its less conservatively financed energy stock peers yet still traded off this quarter, we take comfort knowing that the company has been one of our best share repurchasers over the last several years. This means that stock pullbacks are buying opportunities for the company and for us. We had trimmed our position when energy stocks were riding highest in the wake of the Iran War, but we added back to CNX at better prices recently.

CNX Resources continues to focus on steadily growing free cash flow (FCF) per share and value per share. Despite a mild disappointment in not experiencing a fuller runup earlier in the year compared to some of its less conservatively financed peers, the company has been one of our best share repurchasers over the last several years. This consistent buyback activity means that stock pullbacks present buying opportunities for both the company and us. We recently added back to our position at better prices after trimming it when energy stocks were at their peak.

CNX has a more hedged earnings stream compared to other lower-quality energy companies, which positions it favorably in the current market. Despite only a 5% increase in stock price this quarter, we believe the long-term value of safe, USA natural gas has increased more significantly. This reflects our confidence in CNX's ability to generate stable earnings and its strategic positioning within the energy sector.

CNX, with its more hedged earnings stream vs. other, lower-quality energy companies, only saw its stock price go up 5% in the quarter, but we think the long-term value of safe, USA natural gas went up more than that. This reflects our belief in the stability and growth potential of CNX's business model in the natural gas sector, which is increasingly recognized for its quality and reliability.

As the company’s hedges mature, share repurchases continue and its Deep Utica resource potential becomes more apparent, the company should trade at a premium 10-15x FCF multiple. This, combined with higher-than-expected FCF per share from its integrated, low-cost approach, could drive the stock price well over $50 per share.

As the company’s hedges mature, share repurchases continue and its Deep Utica resource potential becomes more apparent, the company should trade at a premium 10-15x FCF multiple. This, combined with higher-than-expected FCF per share from its integrated, low-cost approach, could drive the stock price well over $50 per share.

CNX Resources was a detractor for the quarter, primarily due to disappointing government incentives for its coal mine methane gas capture program, which were below our expectations. However, this setback allowed us to purchase more shares at a price that does not fully reflect the company's strengths. CNX is focused on leveraging its low-cost structure and disciplined hedging strategy to generate free cash flow across various price environments, indicating a resilient business model. We believe the company has significant upside potential despite the recent challenges.

CNX Resources was a detractor for the quarter, primarily due to disappointing government incentives for its coal mine methane gas capture program, which were below our expectations. However, this setback allowed us to acquire more shares at a price that does not reflect the company's overall strengths. CNX is focused on leveraging its low-cost structure and disciplined hedging strategy to generate free cash flow across various price environments, indicating a strong operational foundation despite short-term challenges.

CNX Resources was a detractor for the quarter due to disappointing government incentives for its coal mine methane gas capture program, which were below our unrisked upside case. However, the market's overreaction allowed us to buy more shares at a price that does not fully appreciate the company's strengths. CNX remains focused on leveraging its low-cost structure and disciplined hedging strategy to generate free cash flow in various price environments, indicating a strong potential for future performance.