Loading ...Getting involved in commodities outside of gold – CNXC
This is a coal MLP spinoff from Consol Energy. The MLP currently has a 30 percent yield distribution. They can cover it although they may lower that number. David Einhorn owns 50 percent and Michael Bury (he is one of the best value investors of the last 15 years and called the Big Short) had it on his sheets during his last filing. The most important thing to know is this… Consol just sold its Buchanan Mine for 420$ million USD. This particular coal mine has 88 million tons of reserves. Contrast this to the following which outlines CNXC’s share of reserves of Consol’s PA coal mining complex. CNXC shares 20 percent of Consol’s total reserves in the PA mining complex of 785.6 million tons. On a back of the napkin valuation this implies an Enterprise value of 750$ million USD for CNXC compared to its current EV value of 328 million. This is a double at a minimum, folks. These are the best coal mines in the country. So if you think we have hit the commodity bottom, get on board, lock in a big yield and ride this one higher. It’s in a low risk spot right now and basing. I was waiting for a little life and I’m a buyer today.
“As of December 31, 2014, the Pennsylvania mining complex included 785.6 million tons (157.1 million tons net to our 20% interest ) of proven and probable coal reserves with an average gross heat content of approximately 13,000 Btus per pound and an average sulfur content of 2.37%.”
What about natgas Cash,would you buy it now?
One thing I forgot to mention and it is important, is that the Buchanan mine was Met Coal. They are now totally mining thermal coal. As for natgas, I don’t know. I leave that analysis to the TA guys here.
Also there is practically no float. Einhorn owns half of it and Consol energy owns another close to 10 percent.
This is a chart patter similar to either gold last August or gold last December. I think it was the August 2015 pattern that started to turn Peter Brandt more bullish on gold.
Yes, you are correct. It lines up with the Aug ’15 pattern based on my view of it. There was a decent move higher before we set up for the December lows.