Chesapeake Energy Corporation (CHK) Shares Down Big — Why?


Chesapeake Energy Corporation (NYSE:CHK) shares have dropped substantially in early trading today after the stock rose each of the last two trading days. The move seems to be happening for a number of reasons, both internal and external to the company. First and foremost, OPEC will be making a decision tomorrow, and many traders feel that they will decide to cut production. This could have a negative impact on shares. At the same time though a recent natural gas report was positive which could balance things out a bit. Additionally the company today decided to restructure some of their debt. Finally the selloff of shares of Chesapeake Energy Corporation (NYSE:CHK) could simply be due to profit takers after a couple days of green.

The stock is down 7.25% or $0.4 following the news, hitting $5.12 per share. Approximately 15.97 million shares traded hands. CHK shares have declined 65.00% since April 30, 2015 and are currently downtrending. It has underperformed the S&P500 by 64.80%.

From a total of 13 analysts covering Chesapeake Energy Corporation (NYSE:CHK) stock, 3 rate it a “Buy”, 2 a “Sell”, and 8 a “Hold”. This means that 23% of the ratings are positive. The highest target price is $15 while the lowest target price is $4. The mean of all analyst targets is $9.37 which is 83.01% above today’s ($5.12) stock price. Chesapeake Energy Corporation was the topic of 24 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Sterne Agee CRT downgraded shares on November 17 to a “Neutral” rating. SunTrust maintained CHK stock in a recent report from October 19 with a “Buy” rating. Finally, Citigroup maintained the stock with a “Neutral” rating in a report they issued on a September 14.

The institutional sentiment decreased to 1 in Q2 2015. It’s down 0.17, from 1.17 in 2015Q1. The ratio fall, as 77 funds sold all their Chesapeake Energy Corporation shares they owned while 184 reduced their positions. 60 funds bought stakes while 202 increased their total positions. Institutions now own 603.23 million shares which is 0.57% more than the previous share count of 599.79 million in 2015Q1.

Old West Investment Management Llc holds 6.19% of its total portfolio in Chesapeake Energy Corporation, equating to 796,923 shares. Karamaan Group Llc owns 502,111 shares representing 5.59% of their total US portfolio. Moreover, Schneider Capital Management Corp has 4.52% of their total portfolio invested in the company, equating to 3.15 million shares. The Tennessee-based Southeastern Asset Management Inc Tn has a total of 4.52% of their portfolio invested in the stock. Sterling Investment Management Inc., a Arizona-based fund reported 502,340 shares owned.

Chesapeake Energy Corporation is a producer of natural gas, oil and natural gas liquids in the United States. The company has a market cap of $3.78 billion. The Firm operates in two divisions: Exploration and Production, and Marketing, Gathering and Compression. It currently has negative earnings. The exploration and production segment is responsible for finding and producing oil, natural gas and NGL.