We recently published a list of Billionaire’s 15 Favorite Oil and Gas Stocks Right Now. In this article, we are going to take a look at where CNX Resources Corporation (NYSE:CNX) stands against other billionaire’s favorite oil and gas stocks right now.
The oil and gas industry is a significant driver of the global economy, influencing industries, transportation, and geopolitical dynamics. However, the past year has been nothing short of a roller coaster for the sector, with high volatility coming from factors such as geopolitical tensions, natural disasters, supply chain disruptions, and a dampening demand due to a global economic slowdown.
READ ALSO: 11 Best Natural Gas Stocks To Buy Now
Brent crude prices have recently hit a 6-month low as US crude oil stockpiles posted a larger-than-expected build, coupled with worries about a looming return of more OPEC+ barrels to the market and President Trump’s tariffs on Canada, Mexico, and China. The global oil and gas majors have already struggled with decreasing prices in 2024 and the recent decline has only added to their troubles. Things could get even worse, as the IEA expects Brent crude prices to fall further to $66 a barrel in 2026.
Meanwhile, as the US oil and gas production hits record highs, President Trump has made calls to “Drill, Baby, Drill” and pump those numbers up even higher, as he seeks to make the country self-sufficient in energy. However, not everyone seems to be on. Instead of continuously increasing supply and hence plunging prices even lower, the oil industry remains focused on achieving efficiency gains and maintaining capital discipline, while also rewarding loyal shareholders through dividends and share repurchase programs. According to a report by Janus Henderson, companies in the energy sector distributed over $49 billion in dividends during the third quarter of 2024, up from $32.2 billion three years ago.
However, the same cannot be said of the natural gas sector. US gas producers, which curbed production last year due to multi-year low prices, are now adding gas rigs and boosting production as the price has crossed the $4.6 mark this week. The slowing output in 2024, a booming LNG industry, and fast-depleting inventories during the coldest winter in years have driven gas prices up by over 150% over the last year.
Another significant growth driver for America’s natural gas industry is the ongoing artificial intelligence boom and the accompanying data centers, which consume 10 to 50 times the amount of energy per square foot of a typical commercial office building. These energy intensive facilities could consume as much as 9% of all energy generated in the US by 2030, and this energy needs to come from a relatively clean, flexible, and reliable source that is abundantly available in the form of natural gas. According to energy data provider Enverus, a total of 80 new gas power plants could be constructed in America by the end of the decade, adding about 46 GW of new capacity – 20% higher than the gas capacity additions in the last five years. Several gas majors are now even bypassing traditional utilities and building power plants to connect directly to data centers, a move that could reshape the industry in the years to come, if it pays off.
Methodology
To collect data for this article, we scanned Insider Monkey’s database of billionaires’ stock holdings and picked the top 15 companies operating in the oil and gas sector with the highest number of billionaire investors in Q4 of 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A long line of heavy-duty trucks transporting natural gas across a rural highway.
CNX Resources Corporation (NYSE:CNX)
Number of Billionaire Holders: 14
CNX Resources Corporation (NYSE:CNX) is a premier ultra-low carbon intensive natural gas development, production, midstream, and technology company in the Appalachian basin. The company owns or operates approximately 2,700 miles of natural gas gathering pipelines and a number of natural gas processing facilities.
CNX Resources Corporation (NYSE:CNX) reported a revenue of $136.58 million in Q4 2024, representing a sharp YoY decline of 86.34%, and below market expectations by over $296.6 million. However, the company’s EPS of $0.57 was above analysts’ estimates. CNX generated $199 million in free cash flow in Q4 2024, bringing its full year 2024 FCF total to $331 million and marking its 20th consecutive quarter of positive free cash flow generation. The company utilized this cash to reduce its net debt by $173 million and buy back $22 million worth of its shares.
CNX Resources Corporation (NYSE:CNX) announced in January that it has closed the $505 million acquisition of the natural gas upstream and associated midstream business of Apex Energy II in the Appalachian basin, allowing it to expand its portfolio in the energy sector.
Longleaf Partners, managed by Southern Asset Management, stated the following regarding CNX Resources Corporation (NYSE:CNX) in its Q4 2024 investor letter:
“CNX Resources Corporation (NYSE:CNX) – Natural gas company CNX Resources was a top performer for both the quarter and the year. The company consistently delivered solid operational results throughout the year, maintaining continued focus on growing value per share. CNX came into 2024 more hedged than peers and with a strong balance sheet that has funded continued share repurchases at a double-digit annualized pace. The company continues to focus on what is within their control, leveraging its low-cost structure and disciplined hedging strategy to deliver free cash flow (FCF) in a variety of price environments. The company also announced an asset purchase in the fourth quarter that both strategically helps its existing assets in the Deep Utica and grows the company’s value per share. CNX remains discounted and one of our stronger value growers over the last few years. Our partners CEO Nick DeIuliis and Chairman Will Thorndike continue focusing on growing long term FCF and value per share. If you would like to learn more about CNX, we hosted a podcast in September with CEO Nick DeIuliis that covers a range of topics.”
Overall, CNX ranks 9th on our list of billionaire’s favorite oil and gas stocks right now. While we acknowledge the potential for CNX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CNX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
