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CONSOL Energy Hits 52-Week High

Zacks Equity Research

During the intraday trading on March 24, 2014, share prices of fuel producer CONSOL Energy Inc. (CNX) reached a 52-week high of $41.34 per share finally closing a notch lower at $40.53.

During the past month, CONSOL Energy shares have traded in a volatile range, increasing 2.43%. The company has a market cap of roughly $9.3 billion and the average volume traded over the last three months is around 2.2 million.

Of late, the company has been trying to revamp its focus and long-term goals by way of divesting its coal assets. The company might continue to shed a few more of its coal assets while retaining some high-quality low cost-mines to capitalize on the benefits of low-cost production offered by coal.

CONSOL Energy is transitioning to an Exploration & Production company by expanding its gas and liquids production volumes. The company projects first quarter 2014 gas production in the range of 47–49 billion cubic feet (Bcf) and 2014 production in the band of 215–235 Bcf.

However, the Zacks Rank #3 (Hold) company came out with lower-than-expected earnings in the fourth quarter of 2013 primarily due to huge coal transition-related costs. Other factors that led to the earnings downtrend were softer coal prices and lower benefits realized from the overhead reduction strategy.

It is notable that the company targets a compounded growth rate of 30% in its Gas segment over the next three years. A part of this is expected to come from the 87% growth in Marcellus production. Moreover, the acquisition of gas drilling rights for 90,000 acres from Dominion Transmission, a unit of Dominion Resources (D), will complement the expansion strategy.

The company looks forward to create value from its refocused expansion initiatives and cost cutting strategies. We expect the activities undertaken by the company last year will begin to bear fruits starting this year.

Other Stocks to Consider

Other better ranked stocks in this space include Rhino Resource Partners LP (RNO), sporting a Zacks Rank #1 (Strong Buy) and Oxford Resource Partners, L.P. (OXF), with a Zacks Rank #2 (Buy).

Read the Full Research Report on CNX
Read the Full Research Report on D
Read the Full Research Report on RNO
Read the Full Research Report on OXF


Zacks Investment Research