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$16.52 -1.19 (-6.72%)
10/10/2008 4:06 PM

Chesapeake Energy Corp (CHK)

CAPS Rating:
*****

An oil and natural gas exploration and production company engaged in the acquisition, exploration and development of properties for the production of crude oil and natural gas from underground reservoirs and the marketing of natural gas and oil.

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Avatar OttoBismarck (< 20) Submitted: 1/03/08 11:28 AM : Outperform Start Price: $39.11 CHK Score: -17.34

What a lovely stock with a lovely CEO!

This company owns among the largest Gas reserves in the US. While gas prices might not go up in the next year, they will go up in the next decades. Why? It is with diesel the first alternative for oil. And, although in the US costumers still don't pay stellar prices for gasoline (in northern-Europe, it's almost twice the price), I think customers will seek alternative ways of fueling. Aside from the discussion of gas prices, let's look really into the company:

The CEO keeps buying their stock, with total amount of near $30,000,000.
p/b: 1,89 (!)
p/e: 12
p/fe: 13
Estimated growth rate: 15% annually
ROE: 17%
Net profit margin: 22%
Debt/Equity:0.8 (from 3.0 in 2000)

Did I mention that they sold 2% of their gasreserves to Deutsche Bank for $1,1B yesterday?
And that they seek to sell another $2B in 2008 and 2009?
That's a total of 15% of their current market capitalization.. This company is going to star for the next decade!

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