This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Low Can Chesapeake Energy Go? Try Under $15

NEW YORK (TheStreet) -- Chesapeake Energy (CHK) may be one of the greatest short-term trades an investor can make, but that's because it continues to be such a frustrating idea as a long-term investment.

Chesapeake Energy does so much wrong -- at least as far as Wall Street and investors are concerned -- that any time it makes good on a promise or an unexpected catalyst emerges -- the stock rallies. Those pops usually come right after the shares have hit a low-water mark, making Chesapeake Energy shares ripe for a quick profit. Any more than a quick hit, though, and an investor is asking for a lot out of a stock that continues to bounce around and seems to always come back to at least the low-$20s.

Chesapeake Energy has been a dry hole for long-term shareholders.

Consider these three recent examples.

In 2010, longstanding balance sheet concerns about Chesapeake -- its appetite for land acquisitions relative to a mounting debt pile -- kept the company's shares in the low $20s. In December 2010, activist investor Carl Icahn came out of nowhere to disclose a significant stake in the company. In the three months after that news broke, Chesapeake shares rose as high as $35, as the market bet the Icahn would finally get Chesapeake Energy CEO Aubrey McClendon "into line."

Hardly. Icahn took his short-term payday and got out of Chesapeake. Chesapeake did announce a plan to significantly reduce debt after Icahn's investment, a plan it says it is sticking to this year. However, shares ran from the $35 mark right back down to the low $20s.

In July 2011, Chesapeake shares returned to $35 or so after the company said it valued its Utica acreage -- which it planned to find a joint venture partner for - at $15 billion to $20 billion. That spike didn't last long either: Shares went the way of all Chesapeake Energy trading spikes and back to the low-$20s by November.

Chesapeake shares began trading 2012 in the low-$20s, and already this year the stock has experienced two mini-rallies, though nothing like the "heyday" of its $35 share price.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs