$407.38 of gains, or a return of 40.74% over the 11 months this idea was active.
The average forward price ratio of oil to natural gas for equivalent btu energy
is 7:1. Historically this number has been < 1.5:1
Natural gas prices at historic lows, any rebound of natural gas prices will
provide significant upside to CHK ( currently unhedged for 2012 & 2013)
Supply and Demand
- Increased natural gas demand going forward
- Industrials, Electric Power, Transportation (CNG & LNG vehicles)
- Natural gas supply glut expected to taper off
Negative investor sentiment
- Several downgrades of CHK by sell side analysts in April.
- Credit rating was also downgraded by S&P to BB in April.
- These downgrades have resulted in CHK being oversold to extreme levels. From a contrarian view, this is a great opportunity to build long positions in
- Company insiders have been steady buyers from March 2011 – March 2012
This trade idea is the opinion of its author, and does not necessarily represent TheStreetHub.
This trade idea is the opinion of its author and does not necessarily represent TrueAnalyst.