Chesapeake Energy Corp (CHK)

TMFWBuffettJr (99.71) Submitted: 8/18/06 9:55 PM : Start Price: $30.92 CHK Score: 88.79

There?s nothing much I can say that wouldn?t be stealing from RedneckRolemodel?s wonderful analysis on the Liquid Lounge board, so let?s give credit where it?s due.

This company is pretty cheaply priced given its confirmed and mostly confirmed holdings, and is astonishingly cheap given its MASSIVE potential upside in unproven reserves. I don?t like to refer to a quality value investment as a ?lottery ticket,? because I don?t invest that way, but one could hold this company in that light, in some respects. It?s not as speculative as a lottery ticket because you?re buying assets at a great price (natural gas is already hedged for much of the next three years), but in a way is a lottery ticket because of the potential. Think of it as a quality investment with this great speculative aspect thrown in on the side for free. Don?t price in the speculation, but be pleasantly surprised if it hits. With that said, I bought in at $32 in my real portfolio, and given our hedging, I would pay up to $38.

On top of that, the company is run by a crazy genius named Aubrey McClendon who has been buying up big chunks of his own business.

I only own a few stocks ? and this is one of them.

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