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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (169330)	12/5/2008 2:04:38 PM
From: ItsAllCyclical	Read Replies (2) \| Respond to of 306849

CHK is suffering from: 1) Sector overall is down 2) Oil/natural gas continue to fall 3) Secondary offering intent, but no details yet 4) Perception about debt Not much can be done about the first 2. Given that their debt doesn't come due for a long time and their ability to control cap ex I didn't think they'd do a secondary at these levels. Obviously I was wrong. I avoided the drop from $20 as I was out at the time, but did buy back today. So far doesn't look too smart (10.5 to 10.16 buys). Mostly a trading position as is everything in this market. Back in 97 CHK had more debt relative to cash flows, less assets, it was not the top NG producer and natural gas prices were around $3. Today just 1 of CHK's major shale assets should justify the market cap. They are more or less hedged for the next 3 years and again no major amount of debt comes due till 2012. However the stock continues to drop so what do I know. Thought there would be more support 10 to 10.5 range. Again there's really no comparison to '97 imho. But shorts have free reign right now. Next support area is 8.5 to 9. Below that 5-6 again? I figured market would go lower today, but I also thought CHK would bounce w/it. Wrong. Tempted to stop myself will have to wait and see. Within a week or less I think we'll be higher, but do I want to ride it lower first? That's why in this environment XOP is a better vehicle, but I'm sucker for value at times. Rode CHK nicely last time from 12 to 24. Was really just hoping for 1-3 pts here at 10. Still like it LT, but ST I'm willing to keep ringing the register. If you have time review their latest presentation, specifically debt, cash flows, cap ex. Seems like a lot of flexibility w/debt not coming due starting some in 2012 (current flow covers) and more in 2017. They've been able to make some asset sales of late as well, but obviously not all the one's they wanted hence the secondary. Guessing the firm they're using is shorting the hell out of it. Easy money.

To: Perspective who wrote (169330)	12/5/2008 4:18:00 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

It's got solid support at zero.... Seriously, they have a great portfolio, but their debt situation just keeps dragging them down, especially with Natty selling below 6. And you're aware their CEO had his entire, ginormous stake sold out from under him in a margin call (that one STILL boggles my mind!). At some point they'll be a good value, but that point probably has a single digit designation. ARD has zero debt. That one looks more attractive to me today. Others to consider are XTO, APC, DVN. They'll all make it to the next cycle.