I bought 1000 shares of CHK at a price of $21.65. The stock pays a dividend of about 1.7% and it has a 52 week low of $16.69 and a high of $29.92. I am getting the stock toward the low end of that range which is something I like, especially in a market that is so volatile.
Chesapeake Is Starting To Get Their Act Together
One reason Chesapeake Energy is/was trading near its lows is that they have been having trouble with debt which is never a good thing. But several weeks ago they sold off some of their non essential assets for $5.375 billion dollars (you can read about that here) which will go a long way toward reducing that debt. Importantly, investors thought CHK got a good price for those assets and it also shows that the new CEO is serious about tightening costs, lowering debt, and operating in more efficient manner.
You can read another article here that details more about Chesapeake’s financial situation and what they have been doing recently to better it. If they get an investment grade rating as detailed in that article, it should help to decrease Chesapeake’s cost of borrowing in years to come.
Investing For The Future
Investing in stocks is almost always about what happens in the future. It is about taking risks that you think are worth taking. If you wait for company XYZ to totally turn things around, it will be too late to buy the stock as the price will have already gone up. You must think ahead and find companies that have good futures ahead of them and ones that are doing the right things to make that happen.
I think Chesapeake is a good example of a company that is turning things around. They are a solid energy exploration and production company that can become a better one with the moves they are making. Additionally, winter is also almost here and is predicted to be a cold one which might help their bottom line. Two last things, insiders have been buying the stock at these low levels and most analysts have a target price around $30 for the stock which would be a nice gain should the stock go up that much.
I think the upside is greater than the downside for this stock and so I bought it yesterday.