Cold winter causes profits to double for CNX
CNX Gas (NYSE:CXG) on Thursday announced it nearly doubled its fourth-quarter profit, to $57.5 million or 38 cents per share, compared with $29.9 million or 20 cents per share for the same period a year ago.
The gas producer, a majority-owned subsidiary of CONSOL Energy Inc., finished the year with a new record net income of $239 million or $1.58 per share, compared to the year-end 2007 number of $158.7 million, or 20 cents per share..
CNX Gas will strive to produce 85 billion cubic feet of natural gas this year, the company said.
Over $5 eps and trading at a recession price of $29+, I got in early at $34 but it was $100+ in a non recession environment. Nothing has changed for this company fundamentally, people will always need gas to heat their homes. Going back to $100+ is certain for this stock. All you have to do is wait a little. One of the best IBD value plays I found using IBD scan.
Add into the fact that we have had the coldest winter in a decade, yesterday CNX proved its recession proof.
Live In Play
07:47 CNX CONSOL Energy: Production lock in with margin expansion - FBR (28.63 )
F.B.R. notes that yesterday, CNX reported 4Q08 EPS/EBITDA of $0.97/$360 mln, well above consensus estimates of $0.63/$289 mln and F.B.R's estimates of $0.76/$314 mln. In addition to the solid earnings results, the firm was also pleased to hear the mgmt team's emphasis on production and capital spending discipline (reducing 2008 capex by 35% in 2009). With nearly 100% of production locked in at attractive average realizations, they believe that CNX can generate approximately $700 mln in free cash flow. Currently, they say the stock is trading at an attractive valuation of 2.9x and 3.2x of 2009E and 2010E EV/EBITDA, respectively.
Today 3 upgrades:
30-Jan-09 Up/Down CNX: Jefferies & Co reits Buy
30-Jan-09 In Play CONSOL Energy: Production lock in with margin expansion - FBR (CNX) 28.63 : F.B.R.
30-Jan-09 Up/Down CNX: Citigroup ups to Buy