Shares of Consol Energy surged nearly 8 percent Monday, apparently getting a boost from hedge fund manager David Einhorn's bullish commentary about the name.
At the Robin Hood Investors Conference in New York, Greenlight Capital's Einhorn gave a speech calling his current "best idea" Consol Energy. Those shares consequently jumped in early trading, opening much higher and rising throughout the day.
The stock move may be a bit odd, given that Einhorn's enthusiasm for the name is no secret. The famous fund manager first took a stake in the company in the third quarter of 2014, and has steadily increased his holdings since then, including in the most recent quarter.
Meanwhile, the shares have fallen dramatically. Actually, Consol is the worst-performing stock in the S&P 500 over the past six months and the past year. So while the paperwork does not tell investors precisely when Einhorn got in, even if his fund bought the stock at the single lowest tick seen in the quarter, he has still watched it drop by 75 percent. This as coal, natural gas and oil prices have been creamed.
But Erin Gibbs, equity chief investment officer of S&P Investment Advisory Services, finds reason to agree with Einhorn's current take on the company.
"They've really been diversifying themselves — getting out of their coal assets [and] transferring over more into natural gas, and they hedge over 55 percent of their natural gas exposure," Gibbs said in a Monday "Trading Nation" segment.
Given that Consol is expected to see earnings growth of 40 percent and 60 percent in the next two years, respectively, "we really do see this as a transition, turnaround company with some potential," Gibbs said.