Trade-Ideas: Chesapeake Energy (CHK) Is Today's Pre-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 or Stephanie Link.

Trade-Ideas LLC identified Chesapeake Energy ( CHK) as a pre-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 $219.4 million.
  • CHK traded 100,367 shares today in the pre-market hours as of 7:44 AM.
  • CHK is up 2.2% today from Friday's close.

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More details on CHK:

Chesapeake Energy Corporation engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States. The company also offers marketing, midstream, drilling, and other oilfield services. The stock currently has a dividend yield of 1.3%. Currently there are 7 analysts that rate Chesapeake Energy a buy, no analysts rate it a sell, and 17 rate it a hold.

The average volume for Chesapeake Energy has been 9.6 million shares per day over the past 30 days. Chesapeake Energy has a market cap of $17.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.68 and a short float of 12.2% with 9.04 days to cover. Shares are up 58.7% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Chesapeake Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 38.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, CHK's share price has jumped by 35.85%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 40.48% is the gross profit margin for CHESAPEAKE ENERGY CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CHK's net profit margin of 12.43% compares favorably to the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHESAPEAKE ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 40.2% when compared to the same quarter one year ago, falling from $972.00 million to $581.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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