Trade-Ideas: Chesapeake Energy (CHK) Is Today's Post-Market Leader Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
(
) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Chesapeake Energy as such a stock due to the following factors:
- CHK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $368.1 million.
- CHK is up 2.1% today from today's close.
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More details on CHK:
Chesapeake Energy Corporation engages in the acquisition, exploration, and development of properties for the production of oil, natural gas and natural gas liquids (NGL) from underground reservoirs in the United States. The stock currently has a dividend yield of 2.5%. CHK has a PE ratio of 7.5. Currently there are 4 analysts that rate Chesapeake Energy a buy, 4 analysts rate it a sell, and 11 rate it a hold.
The average volume for Chesapeake Energy has been 19.1 million shares per day over the past 30 days. Chesapeake Energy has a market cap of $9.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.99 and a short float of 18.7% with 4.34 days to cover. Shares are down 28.6% year-to-date as of the close of trading on Monday.
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Analysis:
rates Chesapeake Energy as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 11.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
- CHESAPEAKE ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CHESAPEAKE ENERGY CORP increased its bottom line by earning $1.83 versus $0.68 in the prior year. For the next year, the market is expecting a contraction of 97.8% in earnings ($0.04 versus $1.83).
- CHK's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 39.42%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Net operating cash flow has decreased to $829.00 million or 21.27% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CHESAPEAKE ENERGY CORP has marginally lower results.
- You can view the full Chesapeake Energy Ratings Report.
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