Friday, November 18

CHK - Chesapeake Energy

I havent done a recommendation in quite a while and discovered its actually fun to do one. Here's a recommendation to consider.

Chesapeake Energy (CHK) has pulled back from its recent highs. The run up for the year has been over 70% (the stock doubling at one point). While this may seem like astronomical performance, my opinion is that this is an opportunity to buy. Natural gas stocks are currently under pressure due to unexpectedly warm Fall weather in the cold regions, thus lowering expectations on natural gas usage in the winter. First of all, the weather is as predictable as the markets direction.

Chesapeake in particular has come under pressure primarily because of profit taking. Insiders in the meanwhile have purchased in large quantities in September. The company has strong fundamentals and the long term technical trend remains bullish, with stock price still riding barely above 100 day and 200 day moving averages. The price did flirt with the 100 day trendline and dipped below it slightly during the recent pullback, but as mentioned earlier, insiders have been buying on these dips. Options based sentiment (contrarian indicator) suggests bullish action, the volume put-call ratio seems to be making a turn off a recent high indicating a bullish move. The Open interest put-call ratio is showing similar short-term high.





I would suggest adding this to your watch list and looking for opening a position on the first positive sign on natural gas. Compared to other stocks in the sector, CHK has a stronger growth potential with proven earnings, at an affordable price.

Thursday, November 10

The real loser in the NFL - no its not TO

The coverage of Terell Owens' debacle has been rife in the sports media all of last week. While T.O. may have really come across as a loser in the whole ordeal, there is a bigger loser in the NFL. His name is Tom Benson.

Mr Benson is the owner of the New Orleans Saints. After the pummelling of New Orleans and the Saints Super Dome by hurricane Katrina, the city has not witnessed a game by the Saints. While the team struggles losing its "foster home games", revenues from ticket sales have dried up for Mr. Benson. But before we all feel, oh so sorry, for this multi-millionaire septagenerian, we must all remember that Mr Benson has long enjoyed the benefits of a super sweet deal in which the state of Louisiana, upon Mr Bensons whining, built the Super Dome using tax dollars, and let Benson reap the benefits. While the city limps up and tries to stand on its feet, this southern gentleman chooses to kick it in the shins by demanding for a more state of the art super dome and threatening to take the team outside the state otherwise. The Saints have been in New Orleans and in Louisiana since 1967.

The success of sports leagues and teams could be attributed to the process of capitalistic enterprise, but in this endeavour, somewhere somehow, hearts and minds of fans get captured and the beauty of a team's identity can only be attributed to a sense of belonging - belonging to a people. It is a sad state of affairs when the owner of a franchise forgets that the franchise is also a team, with fans. Fans who paid for the stadium which generated income for him, fans who have lost everything in the wake of the biggest hurricane to hit their city, and who are at risk of losing whats remains as a shard of their identity. As one fan succinctly put it "we lost everything in the hurricane, the Saints, they're all we have left".