Chesapeake: A $14 Bet For Risk Seekers Only

Chesapeake Energy1 Chesapeake: A $14 Bet For Risk Seekers Only Chesapeake Energy (CHK) is the second-largest producer of natural gas in America today. It owns over 15 million acres of oil fields in the country.

Financial Stats

The stock price of Chesapeake is hovering around $14. This is close to its 52-week low, which is a benchmark that was actually set recently with the news of the company’s delayed sale of assets. The company reported a loss for the first quarter of 2012, although it was not as much as the company lost in the first quarter of 2011. The firm had a net loss of $71 million for the quarter, -$0.11/share, vs. its loss of $205 million, or -$0.32 per share in 2011. The revenue was 50% higher from 2011, at $2.4 billion. It also issued a $0.35 dividend for the first quarter, which is only 2% of the firm’s total stock price.

The results were still not as good as analysts expected. Most were anticipating profits of around $0.29 per share and revenue of $2.75 billion. So these results were still disappointing to Wall Street, despite the improvement from last year. The price-to-sales ratio is .89. This is comparable to two of the company’s main competitors, Exxon Mobil (XOM) and Chevron (CVX). These firms have ratios of .86 and .87, respectively. Chesapeake did have a 15.08% profit margin for 2011. This is significantly better than three of its’ main competitors, BP (BP), Total SA (TOT) and ConocoPhillips (COP). However, even though this number was high, the firm’s net income has been very inconsistent over the past eight years.To continue reading, click here.

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