Black Bear Value Partners, an investment management firm, published its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned +0.8% in March and -1.3% YTD and the S&P 500 returned -5.7% in March and -4.3% YTD. HFRI Value Index returned -2.0% in March and -0.5% YTD. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, Black Bear Value Fund emphasized stocks such as Core Natural Resources, Inc. (NYSE:CNR). Core Natural Resources, Inc. (NYSE:CNR) was established through a merger between Arch Resources and CONSOL Energy in January 2025. Core Natural Resources, Inc. (NYSE:CNR) engages in the production and distribution of bituminous coal. The one-month return of Core Natural Resources, Inc. (NYSE:CNR) was -2.67%, and its shares lost 17.72% of their value over the last 52 weeks. On April 8, 2025, Core Natural Resources, Inc. (NYSE:CNR) stock closed at $69.16 per share with a market capitalization of $3.696 billion.
Black Bear Value Fund stated the following regarding Core Natural Resources, Inc. (NYSE:CNR) in its Q1 2025 investor letter:
“Core Natural Resources, Inc. (NYSE:CNR) is the result of the merger between Consol and Arch Resources. As a combined entity they are one of the leading producers of metallurgical coal (steel) and thermal coal (energy). The Company is heavily dependent on exports so retaliatory tariffs would be damaging. At the same time, there has been a reduction in global capacity so many countries may not have much choice, especially if they need higher quality coal.
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.
I will disclose my updated valuation thoughts at a later date as I find the investment extremely compelling and am hoping the Company can buy back ever cheaper stock. As a reminder this is a Company with a fortress balance sheet and is one of the cheapest producers in the market. While short-term pain hurts all Companies, they can be major long-term beneficiaries.”
A large coal mining complex on a sunny day, with heavy machinery moving vast amounts of earth.
Core Natural Resources, Inc. (NYSE:CNR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Core Natural Resources, Inc. (NYSE:CNR) at the end of the fourth quarter compared to 31 in the third quarter. While we acknowledge the potential of Core Natural Resources, Inc. (NYSE:CNR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered Core Natural Resources, Inc. (NYSE:CNR) in another article, where we shared the list of best stocks to buy according to billionaire David Einhorn. In its Q4 2024 investor letter Black Bear Value Fund expressed optimism about post-merger synergies and anticipated further consolidation in the sector due to depressed security prices. In addition, please check out our hedge fund investor letters Q1 2025 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.