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Daily Activism Apr. 28: Consol Energy as a prime activist target

Activist frenemies, continued ramp up into this Tuesday. Bit of news, lagging on stories, for April 28 below. Tip us off @activiststocks, sign up for the free daily activist email (more iterations here), and ICYMI the latest newsletter is here.

News-

  • Barington Capital has been a letter penning fool when it comes to Eastern Co., having put out another letter today. Barington is disputing a number of Eastern’s comments in this letter [letter here]

  • JCP Investment went active at Casella Waste, owning 5% and citing corporate governance concerns and chronic underperformance [letter here]

  • The Alliance Trust and Elliott Management shenanigans finally over, the day before the annual meeting. Elliott got two of its nominees put on the board. Look for cost controls and corporate governance changes to be the focus.  

  • River Road is gearing up for a proxy battle at PICO Holdings, slightly upping its stake and filing proxy materials.

  • Elmwood Group continues to buy into TimkenSteel. Now owning 9.6%. The idea is that Elmwood could be making a play for its competitor.

Stories-

  • @mattkrantz at USA Today put together a piece on 19 companies in the S&P 500 where activists own more than 10% of the company. These 19 stocks have outperformed the S&P 500 by 230 basis points YTD. Key takeaways: “Companies wind up being better managed thanks to the pressures of activists...” and “If there’s a company that’s in the sights of activists, it’s Consol. The energy exploration and pipeline company, is nearly 20% owned by Southeastern Asset Management [link]

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Update by Ya Boy Apr. 28 7:30p

Thanks to ‏@DennyCrane550 for pointing out that David Einhorn has also been a fan of USA Today's No.1 activist target, Consol Energy. Dave has about 6.1% of his portfolio (4th largest holding) in the name after nearly tripling his stake during 3Q14. 

Here's Dave and Greenlight's thesis (courtesy of its 3Q14 letter): 

CNX owns significant coal and natural gas reserves. Since its legacy is in coal and CNX is
covered mostly by coal analysts, its stock has languished along with other coal stocks.
However, CNX is transforming itself into a natural gas company. It is investing in shale
gas production, while harvesting cash from its operating coal assets and selling its coal
reserves. CNX’s natural gas production is growing 30% per year, with substantial acreage
in the Marcellus and Utica shale formations and some remaining low-cost domestic
thermal coal assets. We believe that as analysts recognize CNX’s change in asset mix from
coal to gas, the shares should re-rate. Our average entry price is $38.88 and CNX shares
ended the quarter at $37.86.