CONE Midstream Partners LP, trading under the ticker CNNX on the NYSE, is a fee‑based master limited partnership (MLP) formed in 2014 by CONSOL Energy (CNX) and Noble Energy (NBL). It owns and operates natural gas gathering pipelines, compression, dehydration, and condensate assets serving core Marcellus Shale acreage in Pennsylvania and West Virginia. It was designed to provide stable cash flow, insulated from commodity price fluctuations through long‑term fixed‑fee contracts with its Sponsors Reddit+15Equities+15Renaissance Capital+15.
CONE Gathering LLC contributed large initial systems—Anchor, Growth, and Additional Systems—to the partnership. Anchor Systems included over 125 miles of pipeline and 650 MMcf/d compression capacity and generated a majority of CNNX’s revenues post‑IPO in 2014 Nasdaq+5Sambuz+5worldpipelines.com+5.
Key Structural Moves
- 2016–2017 dropdowns: Sponsors sold remaining interests in Anchor Systems to CNNX (~$248M), consolidating CNNX ownership of core assets GlobeNewswireworldpipelines.comOil & Gas 360.
- CNX Resources acquisition: In Dec 2017, CNX Resources acquired Noble’s 50% interest in CONE Gathering for $305 million in cash, giving CNX full sponsorship control and aligning incentives for drop‑downs and system growth Renaissance Capital+4Oil & Gas 360+4Sambuz+4.
2. Historical IPO & Initial Valuation
CNNX went public on September 25, 2014, pricing 17.5 million units at $22 each—above its expected IPO range—raising $385 million and giving it an implied market cap of ~$1.18 billion Equities+3Hart Energy+3Nasdaq+3.
Analysts at the time valued CNNX at roughly 2.7× book value, offering a 4.25% yield based on expected distributions of $0.2125 quarterly (annual $0.85) at the $20 midpoint Equities.
3. Business Model & Operations
CNNX operates under long‑term fixed‑fee gathering agreements with its Sponsors (primarily CNX), reducing direct commodity‐price exposure. These contracts typically include acreage dedications—spanning over 496,000 net acres as of 2014, with CNNX holding rights of first offer on remaining acreage Reddit+7Equities+7Sambuz+7.
Strategically located in low‑cost, core Marcellus wet and dry gas acreage, CNNX benefits from both organic growth and dropdown opportunities as CNX drops midstream assets into the partnership Nasdaq+8Sambuz+8Oil & Gas 360+8.
4. Financial Snapshot & Key Metrics
According to Barchart and public sources:
- Market cap: ~$590 million
- Shares outstanding: ~34.43 million
- Annual sales: ~$239 million
- Net income: ~$96 million
- Dividend yield: ~7.08% (annualized $1.21)
- EPS (TTM): ~$1.70
- P/E ratio (trailing): ~10.05×
- Forward P/E: ~9.36×
- P/S: ~2.57×
- P/B: ~0.80×
- ROE: ~15.2%
- Profit margin: ~40.3%
- Debt/equity: ~N/A / low
- Beta (60m): ~1.64 Hart Energy+2Barchart.com+2Reddit+2.
Other sources show P/E of ~4.2×, reflecting low historical valuations and possibly underreported EPS or interim declines Public.
5. Stock Price History & Recent Performance
CNNX shares have faced headwinds over recent years:
- 1‑year return: –28.6%
- 3‑year return: –22.9%
- 5‑year return: flat
- Share price range: ~$15.25 to ~$25.56 over past year Barchart.com+1Equities+1.
Its stock price remains relatively low and underutilized, trading near historical lows amid weak midstream sentiment and energy market dynamics.
6. Technical & Analyst Sentiment
Technical Indicators (from HelloSafe commentary, though conflating another CNNX—it seems misclassified as cannabis company, so treat with caution):
- RSI ~37 (oversold zone, historically associated with possible bottoming)
- MACD modestly negative, signaling compression and potential inflection
- Consolidating near structural support (~$15.6–17.3 zone) with average daily trading volume in hundreds of thousands or millions, suggesting liquidity HelloSafe.
Analyst Ratings
Public commentators generally rate CNNX as a Moderate Buy, though institutional coverage appears limited. There are no widely published price targets, reflecting its small‑cap MLP status Reddit+13Renaissance Capital+13Equities+13.
7. Forecast & Future Outlook
Valuation Upside
With forward P/E around 9× and P/B under 1, CNNX appears undervalued relative to midstream peers. Its strong profit margin (~40%) and stable fee-based contracts position it to benefit from moderate volume/demand recovery.
Growth Catalysts
- Sponsor dropdowns: Future midstream asset contributions from CNX could increase cash flow and raise distributions.
- Organic throughput growth: Rising well completions and gas production in Marcellus area should increase volumes across pipelines/compression.
- Steady distributions: Rapidly deployed capital may sustain or enhance quarterly distribution—currently ~7% yield.
Risks & Headwinds
- Commodity price influence: Though contracts are fee‑based, sustained downturn in gas production or rig counts could reduce volumes and income.
- Distribution compression: Rising maintenance capex or weaker throughput could pressure available cash.
- Limited analyst coverage: Less visibility and higher risk premium compared to larger peers.
Forecast Range
No formal price targets are published. But potential scenarios:
- Base case: stabilization near $17–18 with steady distributions.
- Bull case: renewed energy demand or dropdown growth pushes $20 +, offering modest upside.
- Bear case: production decline or sponsor hesitancy keeps price under $16.
8. Investment Drivers & Strategy
Why Investors Might Favor CNNX
- High Yield: ~7% distribution provides income to yield-focused portfolios.
- Low Valuation: P/E and P/B well below midstream averages.
- Fee-Based Model: Less commodity risk gives attractive stability.
- Sponsor Integration: Vertical alignment with CNX Resources enhances growth optionality.
What Could Go Wrong
- Drop‑through risk: If CNX reduces drop‑downs or slows production, CNNX growth may stall.
- Volatility of mid‑cap MLPs: Liquidity risk and lower analyst visibility can deter institutional flows.
- Capital structure shifts: Any rise in leverage or capex requirements could impact distribution coverage.
9. Community Sentiment & Commentary
Interestingly, Reddit offers little direct discussion specific to CNNX. Most references concern “CNN Money” or unrelated tickers (CNXN, CNNE, etc.) rather than CNNX itself. One quote highlights caution in trusting analyst forecasts from generalized financial platforms:
“Analyst recommendations are a good indication of sentiment and should only be interpreted as such…” Wikipedia+14Sambuz+14Reddit+14Renaissance Capital+8Oil & Gas 360+8Equities+8Reddit+4Reddit+4Reddit+4
And skepticism about CNN (“CNN Money”) as a financial source:
“CNN is a joke when it comes to financial news.” Reddit
This underscores the importance of deeper due diligence beyond superficial ratings.
10. Summary & Takeaway
- Ticker: CNNX
- Business: Fee‑based midstream MLP serving the Marcellus Shale (gathering, compression, dewats)
- Sponsors: CNX Resources (100%) post‑2017
- Stable cash flow: Supported via long‑term agreements mitigating commodity risk
- Valuation: Low—trailing/forward P/E ~9–10×, P/B ~0.8×, robust margins (~40%)
- Dividend yield: ~7%, paid quarterly
- Recent returns: Negative long‑term price performance, consolidation around $15–18
- Outlook: Moderate upside if energy/capex environment improves; downside if throughput stagnates
Investment Perspective: For income‑focused investors comfortable with energy infrastructure risk and seeking yield, CNNX offers a potentially attractive entry in the $15–17 range. Growth or re-rating could push it toward $20+, though risks include sponsor alignment and market sentiment shifts.
Let me know if you’d like me to break down sponsor CNX Resources’ role, compare CNNX to other midstream peers, or model dividend coverage across potential throughput scenarios.https://blogvista.co.uk/
