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CNX Resources Updates 1 Key Risk Factor
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CNX Resources Updates 1 Key Risk Factor

Shares of independent natural gas and midstream company CNX Resources, Corp. (CNX) have surged 14.2% so far this year. Recently, CNX delivered a better-than-expected fourth-quarter performance on the top-line front.

Revenue jumped 106% year-over-year to $1.29 billion, outperforming estimates by $780.6 million. Earnings per share at $0.31, on the other hand, fell short of estimates by $0.23. Notably, average daily production during this period jumped to 1,719.4 million cubic feet equivalent (Mmcfe) from 1,592.5 Mmcfe a year ago.

Further, as of December 31, the company had proved reserves of 9.63 trillion cubic feet equivalent (Tcfe). Management noted that CNX’s strategy is to maintain a flat to slightly growing production profile as the company’s focus remains on generating free cash flow and maintaining efficient capital allocation.

With these developments in mind, let us take a look at the changes in CNX’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, CNX Resources’ top risk category is Finance & Corporate, contributing 17 of the total 40 risks identified for the stock.

In its recent report, the company has added one key risk factor under the Legal & Regulatory risk category. Compared to a sector average of 7 Legal & Regulatory risk factors, CNX has 8.

CNX highlighted the potential risks stemming from higher attention to environmental, social, and governance (ESG) matters. Organizations providing information associated with corporate governance and related matters have come up with rating processes to evaluate companies on their ESG approach. These ratings are not standardized or fully transparent, but are used by some investors to make investment and voting decisions.

Consequently, unfavorable ratings may mean negative investor sentiment, a possible impact on the share price of the company as well as its ability to access capital.

Hedge Fund Activity

According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in CNX Resources by 692.3 thousand shares in the last quarter, indicating a negative hedge fund confidence signal in the stock based on activities of 8 hedge funds. Notably, David Einhorn’s Greenlight Capital has a holding worth about $3 million in CNX.

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