Going to go balls long this one at some point in the next week or two.
today saw a nice bounce - what is you investment thesis? For now on, it would be cool if people pitch stocks, they should do a quick bullet point style, like what they do, 3 reasons it is a buy, etc. I think we would all benefit from that.
daj224 Wrote: ------------------------------------------------------- > today saw a nice bounce - what is you investment > thesis? For now on, it would be cool if people > pitch stocks, they should do a quick bullet point > style, like what they do, 3 reasons it is a buy, > etc. I think we would all benefit from that. My analysis is nothing more than this is the best equity play in the natural gas sector. Energy markets are completely oversold right now, with oil at 80 bucks? Yeah right. That’s not going to last long.
IronMan Wrote: ------------------------------------------------------- > daj224 Wrote: > -------------------------------------------------- > ----- > > today saw a nice bounce - what is you > investment > > thesis? For now on, it would be cool if people > > pitch stocks, they should do a quick bullet > point > > style, like what they do, 3 reasons it is a > buy, > > etc. I think we would all benefit from that. > > My analysis is nothing more than this is the best > equity play in the natural gas sector. Energy > markets are completely oversold right now, with > oil at 80 bucks? Yeah right. That’s not going to > last long. Is oil oversold because we are used to seeing it at 130? Or should it really be 80 . . . what is a reasonable level for oil?
I don’t follow chk but from memory chk doesn’t have much oil and they’re not a cheap producer of gas.
YEAH, THAT LOOKS LIKE A GUT CALL MORE THAN ANYTHING. that is fine, i have done hundreds of those, but what makes you think 80 is the bottom of oil
I prefer APA or ECA over CHK for a gas play if you’re bullish on natural gas over the longer term. CHK also just announced they were scaling back their development program.
^ CHK is a much better name than ECA and APA, the haynesville is at this point greatly underappreciated. I think the CF concerns are valid. However I do believe that the JV in the Marcellus will go through at guidance price. This should put them in for the next year. I think the concerns over MS as the counterparty risk are stupid. If you want to play that game, everything is related to a financial in some way or another. CHK is 2 bagger.
daj224 Wrote: ------------------------------------------------------- > YEAH, THAT LOOKS LIKE A GUT CALL MORE THAN > ANYTHING. that is fine, i have done hundreds of > those, but what makes you think 80 is the bottom > of oil How long do you think OPEC is going to sit back with Oil at 80? There are already rumors that they are going to cut back production. They want oil at no less than 100.
IronMan Wrote: ------------------------------------------------------- think OPEC is going to sit back > with Oil at 80? There are already rumors that > they are going to cut back production. They want > oil at no less than 100. no we are talking! off to get food, maybe gym. when i come back, i hope the dow is not down 600. wake me up when we hit 7500
I’ve always admired CHK’s press releases. They always announce their scaling back when natural gas prices crash. That helps the market psychologically, but in reality, it’s probably not good capital allocation on their part.
Reread the press release, Aubrey is a shrewd guy, he knew it was what he needed to do so others could start doing it as well, alleviate the “oversupply” concern, and boost prices. Most of their haynesville CapEx ramps up in 2010.
I think their high debt levels (in addition to the obvious fact that nat gas has dropped big) have caused concern and has pushed down the stock down in rapid fashion. That said, the majority of their production in 2009 and 2010 is hedged between $9 and $10/btu. They should have a pretty good grasp of their cash flow. Aubrey McClendon has been a big purchaser of CHK stock. He was talking about how it was a great value in the $50s. Personally, I’d like to see him go out and buy a big slug at these levels before I start dabbling in. Still, pretty crazy that CHK is trading at a 4 P/E.
If you don’t think CHK is the best positioned nat gas player, who is? APA, ECA?
FYI, also going to be loading up on XOM, DVN, HES, APC, and COP pretty soon.
I’ve been in CHK since Aug 2007… still am, now underwater and painfully so. As EquityResearch mentioned, CHK has been heavily leveraged in order to fund leasehold acquisitions and exploration costs. This allowed them to acquire leaseholds on some of the best terriorities in the regions they operate. With the recent drops in Nat Gas many of the producers have cut their budgets including CHK. CHK has also been selling a ton of assets in order to raise cash. I like CHK longterm and will continue to hold onto them.
I bought CHK around 42 initially but I had set my stop loss ~35 so lucky me I guess. I can’t believe its trading @ $14 right now. Unbelievable.
In terms of oil plays, PBR looks awfully intriguing at $25. I don’t know a ton about them but I’m fairly certain they’re replacing production unlike many of the international operators. And they’re home country is pretty stable relative to their peers.
*Sigh*… I also own PBR… out of my oil holdings this is my favorite. Really like the company and have for a long time now.
brianr Wrote: ------------------------------------------------------- > *Sigh*… I also own PBR… out of my oil holdings > this is my favorite. Really like the company and > have for a long time now. Why do you like PBR so much?