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Partnering with BP...is a bad thing?
Started Sep 02 at 11:39 ET (By guliamo)
Last time I checked, getting British Petroleum to buy 25% of your gas field (for $1.9 billion)and an option to tag along on your next find was a good thing.. but it doesn't seem to be the case this time.
CHK is dropping almost 5% today..
Of course the decline isn't because of the deal - it's because of robots.
Energy traders on wall streert see nothing before their eyes but the current price of energy. Down a point. Sell it. Up a point - Buy it. Just like programed robots.
Seems like analysts are too busy these days trying to hold on to their jobs and can't see the massive stock piling of gas reserves that Chesapeake have undergone in the last couple of years.
The US is called the Saudi Arabia of nat. gas and Chesapeake is surely establishing itself as the Saudi Arabia of north American gas drillers.
So while my friends are running to buy Airline stocks to try and squeeze another buck from a loosing industry, I'm quite happy chilling with my natural gas reserves for the long term gain.
Top 5%
ContraryOne
Sep 02 at 11:56 ET
I am with you guli. Taking a 1.5% loss on a day when the Dow is up 170 is bitter medicine but I bought some PBR.A today and CHK is looking good for new money later in the month.
Top 1%
beancounter
Sep 02 at 1:37 ET
Nothing wrong with doubling down or standing pat with a solid stock when the macro picture has not changed. In fact, it's exactly right.
Top 1%
guliamo
Sep 02 at 1:41 ET
Yep.. takes a bit of spirituality I admit, but my strategy for the energy part of my portfolio is simple: I pick the best large (CHK, WFR, PWE, FDG) caps and stick with them for years. I think energy should be 25-30% of a portfolio.
Energy is a great play because it's value is certain to increase with demand growing and limited supply.
However, energy has it's own cycles and i haven't managed to find a predictable patern yet. CHK has done well for me over the years and I think it will continue to do so.