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Meaningful Pullback Continues: Updated Forecast for Chesapeake Energy

By Dr. Steven Bauer | Fri, 25 January 2013 18:45 | 1

The Company – Chesapeake Energy Corporation (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. It holds interests in various natural-gas resources, including the Haynesville and Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin of West Virginia and Pennsylvania; the Barnett Shale in the Fort Worth Basin of north-central Texas; and the Pearsall Shale in South Texas. The company also holds interests in various liquids-rich resource plays located in Oklahoma, the Texas Panhandle, West Texas, southern New Mexico, and Wyoming. As of December 31, 2011, it had interests in approximately 45,700 gross productive wells. The Company’s proved reserves comprise approximately 18.789 trillion cubic feet of natural-gas equivalents.

Forecasts - - F + C = R

Accurate Forecasts (plus) Patience waiting for Conformations (equals) Results.  Results are Consistent Annual Profits for Over 50 Years.  This simple formula F + C = R is how I go about making money for myself and my Clients.  The below Table of Fundamental - Valuation of a great deal of raw data plus many comparative calculations have been both reliable and profitable for many years.  Consistent Annual Profits also requires sophisticated and unique Technical Analysis.  (The Convention - Technical Analysis - Doesn't Work!)  Long hours of hard work and experience to know – the What, the When and the Why I “tweak” the data, should be clear, it is, so I can consistently identify Market and Company Bullish and Bearish Inflection Points.  This is just part of My Methodology for profitable “Investing Wisely.”

Bullish or Bearish Inflection Point

In writing for OilPrice.com I will rotate my Forecasts of the following 13 Companies one per week:  APA, BP, CHK, CVX, HAL, KMP, MRO, PBR, RIG, SDRL, SLB, VLO, XOMThese particular companies are my Bellwether Energy C I use for Guidance and Timing.  You can view my 20-year chart by clicking on any symbol.  Your monitoring the Accuracy of my Forecasts will help you gain abetter understanding about - how I go about consistently making money in the Stock Market.  Over 2,000, Companies are in my "Universe of Companies" that I am constantly doing Fundamental – Valuation and Technical Analysis on.  Seldom, if ever, are - ANY - of the above 13 Companies my choice for making formal recommendations to my Clients or Buying for myself.  It is a fact that there are always lower risk and higher reward companies on my Buy and Short-Sale List.  Remember – CASH is the best hedge for “Investing Wisely.”  I hope you understand and will want to contact me for further information about my work.

To learn more about my Work / Analytics, you might consider reading my article on “Special Notes Supporting My Articles.” You will have to be a serious Investor because this article with its URLs will require much of your time to absorb and understand.  I can assure you that your time will be well spent.

Table I:  Professor’s – Current Valuation for: Chesapeake Energy Corporation  (CHK)

Current Valuation for Chesapeake
Click to enlarge.

Table II: Professor’s - Report Cards for Chesapeake Energy and Selected Peers

Comparing Chesapeake Against Selected Peers
Click to enlarge.

Charts

Two Year Chart for (CHK), S&P (SPY) and above mentioned Peers

Two Year Chart for (CHK), S&P (SPY) and above mentioned Peers
Click to enlarge.

How come EOG is the only one to “out-perform” the S&P (SPY – green)?  Note that CHK is the worst - I can tell you “Why.” Remember:  You have got to have the “What” and the “When” – but without the “Why” you are asking for losses!  Each of these Companies is precisely where they are Ranked in my archive of Fundamental - Valuations and Technical Analysis for each Company. The answer to the Why is simple when you do your homework.

Twenty Year Chart for (CHK) with S&P (SPY) as a Reference

Twenty Year Chart for (CHK) with S&P (SPY) as a Reference
Click to enlarge.

I suggest that you take a long look at this 20-year chart. Having a longer-term perspective of a possible future investment will always give you a more consistent bottom line.

General Market Status

The General Market is currently and remains “Fundamentally'” overvalued and “Technically" overbought, and its “Consensus Opinion” is much too bullish. “Insiders” are selling and “Interest Rates / Dividends” are on the rise.

This does not make for “Investing Wisely.”  This means that you must consider holding Cash or perhaps taking bearish positions in the coming time-frame.  (Taking Bearish positions are for Pro-Active Investors Only!)

My analytic focus and logo are “Investing Wisely,” e.g. taking advantage of the Bullish / Bearish Cycles as they occur within the overall Marketplace. Integrating conservative fundamental analytics within these technical cycles means maintaining a process of the thorough and on-going analytics of many companies, sectors and industry groups.  I have maintained such a Profitable Discipline for over 50 years, and it has been very good to both, me and my Clients.

Professor's Opinion (Currently – Bearish) of Chesapeake Energy Corporation (CHK)

(CHK) has not been a very strong / performing Company (price-wise) over all of these many months.  The current price is down 34% from the highs in September 2011.  May I suggest that Holding through this period is not “Investing Wisely.” I continue forecasting that both (CHK), and my selected peers will be under moderate to severe pressure in the coming weeks and perhaps longer.

Professors Bearish Wrap 1

This is a Warning about Buying or Holding Chesapeake Energy. 

I am also Bearish on the World Economies and the General Markets. I suggest that holding Cash during questionable time frames is a prudent and wise choice. (Folks - This is definitely a "questionable" time frame)!

You may want to “bookmark” this Hyperlink for quick access of my published articles here in OilPrice.com.  Just Click and scroll down past my Biography.  Thanks!

To contact me and begin a personal Email Dialog – just click: senorstevedrmx@yahoo.com

Smile, Have Fun – “Investing Wisely,”

Dr. Steve

Leave a comment

  • Dan on February 18 2013 said:
    According to what I read at http://shalestuff.com/controversy-2/chesapeake-energy-corporation-announces-ceo-succession-plan/article05780 they seem to have a good plan in place to allow some overlapping and help from all members on the board and the current CEO to make the transition as seamless as possible. Of course, anything can happen which makes picking an investment much more difficult when a major position is changes up.

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