Why Northern Tier Energy, CONSOL Energy, and Peabody Energy Made Huge Moves This Week

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Why Northern Tier Energy, CONSOL Energy, and Peabody Energy Made Huge Moves This Week

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This was another busy week for the market, with earnings season overflowing a seemingly unending torrent of news to digest. That earnings news was a key fuel behind the biggest stock moves in the energy sector. The biggest movers, according to S&P Capital IQ data, were Northern Tier Energy (NYSE: NTI), CONSOL Energy (NYSE: CNX), and Peabody Energy (NYSE: BTU). 

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What: Refining MLP Norther Tier Energy (NYSE: NTI) leapt more than 11% this week.

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So What: Key driver: Western Refining offered to buy all of the outstanding units of Northern Tier Energy that it doesn’t already own in a $2.5 billion deal Western Refining currently owns 38% of NTI’s common units and 100% of its General Partner

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Now What: Western Refining sees the deal simplifying its corporate structure while also enhancing value for investors in both companies Key takeaway: Given that Western Refining already owns a large stake in NTI, this deal is likely as good as done

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What: Natural gas and coal producer CONSOL Energy (NYSE: CNX) slumped more than 30% this week.

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So What: Key driver: CONSOL reported a much wider-than-expected loss of $0.28 per share, missing the consensus estimate by $0.23 per share CONSOL’s natural gas business struggled amid low gas prices

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Now What: The company’s coal business didn’t fare much better, with weak demand for coal persisting Key takeaway: With both of its key commodities under pressure, investors had no reason to stick around

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What: Coal producer Peabody Energy (NYSE: BTU) plunged more than 47% this week.

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So What: Key driver: Peabody reported an abysmal quarter, losing $8.13 per share On top of that, the company now anticipates an even weaker outlook for the coal market

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Now What: Making matters even worse, a rival coal producer terminated its debt swap deal, likely sending it into bankruptcy Key takeaway: Investors are beginning to realize that Peabody’s only way out might be through bankruptcy, rendering its stock worthless

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