Sathya Ganesan on Chesapeake Energy Corporation (CHK) until May 29, 2013

Analyst Actions
Analyst Actions
100% (3 of 3) are convinced
A $1000 long position taken on May 29, 2012 and closed May 29, 2013 would yield:
$407.38 of gains, or a return of 40.74% over the 11 months this idea was active.
This idea is currently: Open to the public 
Sathya Ganesan recommended buying CHK  
To a target price of 24.8000
This idea expired May 29, 2013
Chesapeake Energy (NYSE)
Range16.23 - 16.71Previous16.68
52 week16.23 - 29.92Open16.70
Volume27736088Mrk Cap11.011B
3/2/2015 4:00pm

Investment Thesis

  • 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


Insider buying

  • Company insiders have been steady buyers from March 2011 – March 2012
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Sathya Ganesan is an analyst who has published 1 trade idea, of which 0 are active. They have authored ideas on the following ticker symbols:CHK

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