Recommendation: Buy Chesapeake Energy (CHK). Green&Gold Fund. Energy/Utilities Holdings. Macro Summary. Fracking technology and low prices, increasing the appeal for consumers going forward. Gas is a big step toward energy independence; US is world’s largest producer
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Fracking technology and low prices, increasing the appeal for consumers going forward.
Gas is a big step toward energy independence; US is world’s largest producer
Interest growing for utilities, transportation, and industry.
LNG infrastructure beginning development.
Higher oil prices inducing demand.
Target price calculated by taking the top 20 peers by market cap and weighted averaging their P/E’s, excluding P/E’s >25% the peer average.
Multiplied the result (14.66) times 2010 earnings plus ½ the projected growth rate of 18%.
Chesapeake is positioned well between their current production of natural gas and the ability to transfer the technology to oil to benefit from rising prices.
Natural gas fulfills desires for a cleaner burning fuel and energy independence for the U.S. As well, the proven stability of its price lends itself to industry and utility usage.
CHK has outlined strategy to reduce their debt burden while increasing production growth. Their ability to raise cash by selling assets has been proven by over 6B in recent sales.