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!

Stop Dumping on Chesapeake Energy

NEW YORK (TheStreet) -- These days whenever the name Chesapeake Energy (CHK) comes up it causes many to shift in their seats and brace themselves for a pounding.

Good news associated with the stock has not come in sufficient quantities while it has had more than its share of controversy.

While the negativity have come fast and furious it is far from a death sentence and the company should be able to maneuver through it. It is going through some rough times due to some regrettable decisions but its reputation for being in a good business as well as its fundamentals remain intact.

However, many investors don't see it that way.

The stock has suffered a considerable amount of punishment over the past several quarters. While some of it has been self-inflicted, it seems the majority of the concerns centers on the health of the overall sector, and in particular natural gas, which has had some challenges this year due to fallen shale demand.

So Chesapeake has not been alone in its struggles . Some of its rivals have also experienced similar headwinds -- namely EOG Resources (EOG), Range Resources (RRC) as well as Console Energy (CNX). However, Chesapeake has shown an ability to make the best out of a bad situation, as it demonstrated in its most recent earnings report.

The Quarter That Was

For the quarter, Chesapeake reported a net loss of $71 million, or 11 cents a share. The loss was a disappointment because it came after an increase of 50% in revenue for the first quarter, $2.5 billion, but short of analysts' estimates of $2.75 billion. Adjusted earnings were 18 cents a share, missing Street estimates of 29 cents.

On the bright side, it was able to increase daily production to 3.658 billion cubic feet equivalent, or by 18%. Overall, things could have been a lot worse, and this is something investors need to understand. When the company announced plans back in January to help improve the fundamentals of the natural gas market, it said then it would reduce the number of rigs it had operating -- representing a cut of 50% by the second quarter.

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 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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