It can be extremely difficult to buy a stock that has been under-performing the market. However, three big-name activist investors believe that the huge selloffs in CONSOL Energy (CNX), Valeant Pharmaceuticals (VRX) and Hertz Global Holdings (HTZ) are excellent buying opportunities for patient investors.
Let’s take a look at just which bigwigs are buying, and why:
CONSOL Energy (CNX)
If you’re into to buying the dip, dips don’t come much bigger than CNX’s. In fact, CNX stock needed a late-year rally to narrowly avoid being the worst-performing stock in the entire S&P 500 last year, finishing the year down an incredible 76.5%.
In mid-2015, CNX was trading above $45 per share, so you can imagine that activist hedge fund manager David Einhorn probably thought he was buying on the dip when he first started accumulating shares of the stock at around $30 a pop in early 2016. Instead, CNX continued is precipitous fall, breaking below $5 per share earlier this year. In a presentation back in November, Einhorn defended his investment as a simple case of bad timing.
Instead of panicking as the stock declined, Einhorn stood by his analysis of the coal and natural gas company, which values the stock at more than $35 per share. Einhorn continued to buy stock during the fall from $30 down into the single-digits. CNX recently spiked as high as $10.50 on its highest volume day in more than five years, but investors will have to wait until Einhorn’s next quarterly disclosure to see if he played a role in the surge.
Valeant (VRX)
If you think David Einhorn is brave for sticking to his guns on CNX, Bill Ackman takes…
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