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Chesapeake Rallies as CFO Dell'Osso Ups His Stock Holdings

Zacks Equity Research

Chesapeake Energy Corporation CHK rallied more than 5% following the news that CFO Domenic Dell'Osso boosted his stake holdings in the company.

The latest SEC (Securities and Exchange Commission) filing showed that Domenic J. Dell'Osso, Jr. has purchased additional 589,226 stocks of Chesapeake Energy on Mar 7, 2019, thus lifting his total direct holdings in the company to 2,058,317 shares. Other insiders of the upstream energy firm comprising executive Vice Presidents Jason Pigott and James R. Webb along with senior Vice President William M. Buergler also bought shares.

Overall, the share purchase by the management reflects Chesapeake Energy’s robust business potentials. Being a leading oil and natural gas explorer and producer, the company holds a leading position in prolific U.S. resources including shale plays like Eagle Ford, Haynesville and Marcellus. Moreover, Chesapeake Energy has a strong presence in Powder River Basin and Mid-Continent regions.

The company’s strong positions in the core acres of multiple basins will likely provide a support to achieve a solid year-over-year earnings projection for 2019. Notably, Chesapeake Energy anticipates its adjusted earnings before interest, tax, depreciations and amortizations (EBITDA)/ barrel of oil equivalent (BoE) in 2019 at $14.50, significantly higher than $12.81 in 2018 and $10.83 in 2017, respectively.  

Notably, on the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing oil and gas explorers and producers, the company is currently trading at 5.7X, lower than one-year median and high marks of 6.7X and 7.7X, respectively. This, in turn, reflects the stock’s healthy upside prospects.

Chesapeake Energy Corporation Price

Chesapeake Energy Corporation Price | Chesapeake Energy Corporation Quote

Headquartered in Oklahoma City,Chesapeake Energy currently carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy space include Antero Resources Corporation AR, Jones Energy Inc. JONE and SemGroup Corporation SEMG. While Antero Resources sports a Zacks Rank #1 (Strong Buy), Jones Energy and SemGroup carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources’ earnings beat the Zacks Consensus Estimate in two straight quarters.

Jones Energy expects 2019 earnings growth of 19% year over year.

SemGroup delivered average positive surprise of 85.4% for the preceding four quarters.

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