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Chesapeake and Natural Gas on a Roll!

23 April 2008 One Comment

What a roll Chesapeake Energy (CHK) and other natural gas stocks have been on. I absolutely love this stock because of the following reasons:

Natural Gas is Hot

The price of natural gas has risen steadily recently and could go even higher. Historically the price of crude oil has traded at a 7-8 multiple of natural gas. In the run up of oil prices, natural gas has lagged behind considerably. Even at its higher levels currently, natural gas is over 10 times discount to crude oil prices.

Most believe high oil prices are here to stay, so look for natural gas to remain higher as well. Natural gas is cleaner and we have significant amounts of it here in North America.

The Best Vote of Confidence

One of my favorite characteristics of this stock is the continual insider buying of Chesapeake stock by its CEO, Aubrey McClendon. Since January of this year, McClendon has purchased over 2 million shares. He has purchased over 20 million shares since 2003. He is a great example of an executive putting his money where his mouth is.

Chesapeake is a fantastic candidate for one of your pillar investments. Solid management, insider buying, and a bright future for natural gas are a few of the positive factors that warrant serious consideration for building a position in Chesapeake. I have been building a position since the stock was at $19 a share and am still building.

For more information on the pillar investment strategy, click here.

One Comment »

  • Luke Ashley said:

    Frack off you mindless fools. Do not invest. WARNING. Do not invest. Global ban is on the way.