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
TheStreet Open House

Why Chesapeake Energy (CHK) Is Up Today

NEW YORK (TheStreet) -- Chesapeake Energy  (CHK) was rising 2.63% to $27.27 on Monday after the second-largest natural gas producer in the U.S. announced it is considering selling or spinning off its oilfield services unit, Chesapeake Oilfield Services.

The unit had sales of about $2.2 billion last year and could stand as its own compay, Chesapeake Energy said in a statement. Chesapeake Oilfield Services earns about 35% of its revenue from contracts with companies other than its parent company, Chesapeake Energy.

Chesapeake Oilfield Services "will offer Chesapeake and its shareholders enhanced return opportunities as a stand-alone company," said Chesapeake Energy CEO Doug Lawler in the statement. "A separation of COS is aligned with our strategies of financial discipline and profitable and efficient growth from captured resources."

Chesapeake Energy announced earlier this month that it plans to reduce capital spending by approximately 20% in 2014 and will pursue more asset sales as it deals with a funding gap of approximately $1 billion in 2014.

Chesapeake Oilfield Services owns nine hydraulic fracturing fleets, rents oilfield equipment and operates 260 rig relocation trucks, along with 67 cranes and forklifts and 246 fluid hauling trucks.

Must Read: Chesapeake Energy Corporation Announces It Is Pursuing Strategic Alternatives For Its Oilfield Services Division

TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHESAPEAKE ENERGY CORP (CHK) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, reasonable valuation levels, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CHK's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 63.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 107.52% and other important driving factors, this stock has surged by 31.66% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CHK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 110.0% when compared to the same quarter one year prior, rising from -$2,013.00 million to $201.00 million.
  • Net operating cash flow has increased to $1,356.00 million or 43.94% when compared to the same quarter last year. In addition, CHESAPEAKE ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -51.05%.
  • You can view the full analysis from the report here: CHK Ratings Report

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 17,280.38 +14.39 0.08%
S&P 500 2,013.49 +2.13 0.11%
NASDAQ 4,584.3560 -9.0690 -0.20%

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