Black Bear Value Partners, an investment management firm, published its fourth quarter 2023 investor letter, a copy of which can be downloaded here. Black Bear Value Fund returned -1.1% in December and +17.7% in 2023 and the S&P 500 returned +4.5% in December and +26.3% in 2023. HFRI Value Index returned +4.4% and +13.8%, respectively for the same periods. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Black Bear Value Partners featured stocks such as CONSOL Energy Inc. (NYSE:CEIX) in the fourth quarter 2023 investor letter. Headquartered in Canonsburg, Pennsylvania, CONSOL Energy Inc. (NYSE:CEIX) engages in the production of bituminous coal. On January 31, 2024, CONSOL Energy Inc. (NYSE:CEIX) stock closed at $94.60 per share. One-month return of CONSOL Energy Inc. (NYSE:CEIX) was -9.56%, and its shares gained 63.08% of their value over the last 52 weeks. CONSOL Energy Inc. (NYSE:CEIX) has a market capitalization of $2.934 billion.
Black Bear Value Partners stated the following regarding CONSOL Energy Inc. (NYSE:CEIX) in its fourth quarter 2023 investor letter:
“We have a large investment across the energy & commodity spaces. We have not developed enough energy or commodity resources to satisfy the near- and medium-term needs of the world as well as provide for a renewable/less-carbon intensive future.
CONSOL Energy Inc. (NYSE:CEIX) is an American energy company focused on the coal sector. The business has undergone a shift from being a majority producer of coal for domestic energy purposes to an export-driven producer of coal for non-power generation purposes.
While there is a negative stigma associated with coal (and some deserved) there are parts of the world that have limited energy alternatives and will require coal supply over the coming years. I expect the company to commit a large amount of the free-cash-flow to buying in cheap stock and the per share intrinsic value to grow substantially over the next 3 years.
Rough valuation thoughts on CONSOL…. Over the coming 2 years CEIX should generate $20-$40 in per share FCF. They own a marine terminal which is conservatively worth $15-$30 in per share value. Over the long-term the business should generate $300MM+ of annual FCF. At reasonable multiples this comes out to $60-$100 per share. Add these related pieces up and you will arrive at a price of $95-$170 vs. a $100 year-end stock price. Clearly in the short term, volumes and prices could be worse but over the medium-long term our downside seems limited given the lack of financial leverage.”
An aerial view of an open cut coal mine, showing the vastness of the company’s mining operations.
CONSOL Energy Inc. (NYSE:CEIX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held CONSOL Energy Inc. (NYSE:CEIX) at the end of third quarter which was 28 in the previous quarter.
We discussed CONSOL Energy Inc. (NYSE:CEIX) in another article and shared Greenlight Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
