Portfolio Changes Part 2
- Chesapeake Energy Corporation (CHK) - Their "principal activities are to acquire, explore & develop properties for the production of crude oil & natural gas." (Marketwatch.com). Although natural gas prices are off of their highs, you should expect winter demand to drive the prices up a bit more. Very recently, analysts have recommended CHK as a potential buy for 2006. MSN Money's Jim Jubak has also included CHK in his recommendations.
Another case for CHK is their recent insider transactions. In the past month, CHK executives purchased 2,222,600 shares, valued at $70,605,526.00. If executives know enough to plunk down $70 million back into their company, I see no reason why investors shouldn't follow.
While the mean analyst recommendation for CHK is a moderate buy (9 strong buys, 3 moderate buys, and 2 holds), CHK was recently downgraded (on Dec. 21) by S&P's Equity Research from a strong buy down to just a buy - citing valuation concerns, and reiterated a price target of $37. True, trading at 18 times earnings, it is a hair overvalued. But I don't think the pricing is too unreasonable to make a purchase. CHK ended trading today at 32.10, down $0.95.
Another case for CHK is their recent insider transactions. In the past month, CHK executives purchased 2,222,600 shares, valued at $70,605,526.00. If executives know enough to plunk down $70 million back into their company, I see no reason why investors shouldn't follow.
While the mean analyst recommendation for CHK is a moderate buy (9 strong buys, 3 moderate buys, and 2 holds), CHK was recently downgraded (on Dec. 21) by S&P's Equity Research from a strong buy down to just a buy - citing valuation concerns, and reiterated a price target of $37. True, trading at 18 times earnings, it is a hair overvalued. But I don't think the pricing is too unreasonable to make a purchase. CHK ended trading today at 32.10, down $0.95.
posted by L.Su at 1:45 PM
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