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$22.40 -4.10 (-15.47%)
10/7/2008 4:04 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 hkalchemy (88.95) Submitted: 12/26/06 8:32 AM : Outperform Start Price: $31.73 CHK Score: -1.78

One of the largest gas producers in the US. Recently completed a large acquisition programme of gas deposits and is now switching its energies to ramping up production. ROE > 20% since 2003. CHK's size and ability to make sensibly priced acquisitions gives it a moat.

Valuation is sensitive to future price of natural gas, currently @ $7, but CHK have hedged against this. Valuation ratios are low, historically and compared to industry averages. PEG 0.7. P/B 1.4. P/E 8.4.

Recently bought by a large number of investment 'gurus' at around $30. Mason Hawkins owns 29 million shares. Significant stock buying by the CEO, who now owns 27 million shares.

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