New York (HedgeCo.net) – David Einhorn is standing behind his bullish position on coal and natural gas producer Consol Energy (NYSE: CNX). Einhorn touted the company as his single “best idea” at the annual Robin Hood Investors Conference in New York on Monday.
Einhorn and his fund Greenlight Capital have been shareholders in Consol for over a year and over the course of the last year, the price of the stock has fallen from over $40 per share to under $7 per share at its low. That is an 82.5% loss in the last 52-weeks. According to a recent report from Business Insider, Greenlight owns 22.8 million shares.
In the same report from Business Insider, they shared a clip from Greenlight’s third-quarter letter to investors that addressed the stake in Consol.
“The company went through a significant cost-cutting effort and cut its capital spending budget aggressively,” the letter said. “In July it reported fantastic drilling results and a significant success at a test well in the Utica Shale. Ordinarily, the market responds favorably to positive drilling news. In the current environment, it has responded more like a child receiving socks as a birthday present, ‘Gee, just what I always wanted … more, cheap natural gas.’
“We believe the market has undue concern about the near-term prospects for Appalachian coal and natural gas, leading it to discount the company’s long-term resource value far beyond anything we anticipated,” the letter said.