Chesapeake Energy (NYSE:CHK)
had a well-earned reputation as the riverboat gambler of the natural
gas world. If there was a hint of meaningful natural gas in an area, you
could usually count on Chesapeake to be among the those bringing out
the biggest checkbook to gobble up acreage. The end result of that
policy was a large reserve base, but also a stretched-out balance sheet
and weak profitability as natural gas prices plunged.
Now the company starts a new period. A new CEO brings at least the hope
of better capital allocation, while an aggressive divestiture program
should help fill the funding gap. While I think Chesapeake's economic
returns are going to be impacted for some time to come by the
aggressiveness of past days, I do believe the shares may offer decent
value today if you believe in the future of natural gas usage in the
U.S.
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