Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Chesapeake Energy CHK -- Ignore unavailable to you. Want to Upgrade?

To: Gabor who wrote (465)	3/22/1999 6:35:00 AM
From: Ed Ajootian	Read Replies (1) \| Respond to of 726

Gabor, Nice call on this stock. Looks like its on the comeback trail. Using operating cash flow as a measure of stock valuation they are still way undervalued, even after the recent 70% runup. They generated $115 mm of cash from operations last year, or about $1.20 per share. And that was a year where their ave. oil price received was $11 and gas was $1.80. For every $.10 that the average price of gas increases, they make another $.13 a share in operating cash flow. They are well-poised to participate in the likely increase in gas prices that is on the intermediate-term horizon. Most healthy E&P companies are selling at no less than 3 -- 4 times operating cash flow, even in these hard times. I'm not saying CHK should be at those levels right now since its still not "healthy", with all that debt. But if they can pull through the next couple of quarters they should be back in a position where the cash flow will allow them to put their production back on an upward curve. Maybe Aubrey's call for a $5 stock price over the next few years is not so crazy after all.