10 Best Stocks to Buy According to Billionaire David Einhorn

2. CONSOL Energy Inc. (NYSE:CEIX)

Greenlight Capital’s Stake Value: $171.70 Million

Number of Hedge Fund Holders: 31

CONSOL Energy Inc. (NYSE:CEIX) is an energy company that produces and sells bituminous coal. Its PAMC segment engages in the mining, preparing, and marketing of bituminous coal to power generators, industrial end-users, and metallurgical end-users. The stock is up by 11% for the year as investors react to robust financial results and strategic initiatives that affirm long-term prospects.

CONSOL Energy Inc. (NYSE:CEIX) delivered robust third-quarter results on November 5, 2024. Net income rose to $96 million with adjusted EBITDA of $179 million. The better-than-expected results came as coal production in the quarter totaled 7.2 million tons amid shutdowns in the quarter for maintenance. CEIX has already moved to strengthen its long-term prospects by acquiring Arch Resources. The acquisition should enhance its coal reserves.

In addition, CONSOL Energy Inc. (NYSE:CEIX) is targeting operational efficiency cost reductions and sales expansion to bolster its profit margins. The push should align with the company’s push to service the 18 million tons of coal already contracted. Its long-term outlook also remains solid amid reduced forecasts for coal plant retirements. The fossil fuel industry is once again a buzz of activities in the aftermath of Donald Trump winning the hotly contested election. The president-elect has always been a fossil fuel advocate in a bid to safeguard and enhance Americans’ energy needs.

Black Bear Value Partners stated the following regarding CONSOL Energy Inc. (NYSE:CEIX) in its Q3 2024 investor letter:

“ARCH and Warrior are 2 of the leading U.S. producers of high-quality metallurgical coal (“met coal”). This is the kind of coal used for steelmaking. ARCH also has a small thermal coal business that contributes ~20% of their earnings. CONSOL Energy Inc. (NYSE:CEIX) is a leading producer of thermal coal. During the 3rd quarter ARCH and CONSOL announced a merger which should close in the first half of 2025. I am generally constructive on the merger as the Companies should be able to realize some modest synergies. My sense is more mergers will be coming to this sector given the depressed prices of the securities.

Met coal demand is projected to climb for the next 25 years, driven by the economic development and urbanization in India and the rest of Southeast Asia. ~60% of the world’s population lives in Asia, where met coal demand is centered and where local sources are limited. Over the coming years demand will likely outstrip supply, leading to higher prices. There has been a severe lack of investment in met coal due to ESG concerns with investment peaking in 2014.”