chk

Chesapeake Energy (NYSE: CHK) is the largest independent and third-largest overall producer of natural gas in the U.S.

Bloomberg reports Natural Gas Futures are up 0.20% to 11.621.

CHK option implied volatility of 40 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

NASDAQ 100-QQQQ overall implied volatility at 24; 26-week average is 28

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

TheStreet.com's Jim Cramer says natural gas producers are having a great year, and Anadarko may be the best of the bunch.

Marcellus Shale. Ghana. Brazil. Wherever the oil and gas is. Wherever the chances to boost output.

That's Anadarko (NYSE: APC) (Cramer's Take).

Fifteen percent growth or higher for many years. That's Anadarko.

Creating value for shareholders. That's Anadarko.

IPO of Western Gas. That's Anadarko.

And more important, it is not ExxonMobil (NYSE: XOM) (Cramer's Take).

Anadarko is one of six companies, including Apache (NYSE: APA) (Cramer's Take), Southwestern (NYSE: SWN) (Cramer's Take), XTO Energy (NYSE: XTO) (Cramer's Take), Chesapeake (NYSE: CHK) (Cramer's Take) and Devon (NYSE: DVN) (Cramer's Take) (El Paso (NYSE: EP) (Cramer's Take) is threatening to join them!) that are believers.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Archer Daniels Midland Co. (NYSE: ADM) Q3 profits soared, beating analysts' expectations.
• Buffalo Wild Wings Inc. (NASDAQ: BWLD) strong Q1 results met analysts' expectations.
• Burger King Holdings Inc. (NYSE: BKC) reported solid Q3 results that beat Wall Street estimates.
• Chesapeake Energy Corp. (NYSE: CHK) beat expectations for the first quarter, sending shares up.
• Colgate-Palmolive Co. (NYSE: CL) posted better-than-expected Q1 results on the weak dollar.
• Corning Inc. (NYSE: GLW) beat earnings expectations and raised its guidance.
• Corn Products International (NYSE: CPO) posted record sales for the ninth consecutive quarter.
• Duke Energy Corp. (NYSE: DUK) Q1 profits met expectations but revenues beat them.
• ExxonMobil Corp. (NYSE: XOM) missed Q1 expectations due to narrower margins.
• Garmin Ltd. (NYSE: GRMN) reported lower-than-expected earnings due to slowed demand.
• General Motors Corp. (NYSE: GM) posted a smaller-than-expected loss for the first quarter.
• Herbalife Ltd. (NASDAQ: HLF) posted Q1 results and announced the resignation of the president and COO.
• Kellogg Co. (NYSE: K) beat Q1 expectations and announced a 10% dividend increase.
• Kraft Foods Inc. (NYSE: KFT) Q1 profits declined but beat analysts' expectations.
• Procter & Gamble Co. (NYSE: PG) reported better-than-expected Q1 results and raised its 2008 outlook.

Chesapeake Energy (NYSE: CHK) shares are trading higher after CHK reported a first-quarter loss of $132 million, or 29 cents per share, last night. However, CHK shares are rising today, as the company's adjusted profit came to $561 million, or $1.09 per share, beating analyst estimates of 93 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CHK.

After hitting a one-year low of $31.38 in August, the stock hit a one-year high of $55.00 last week. CHK opened this morning at $51.82. So far today the stock has hit a low of $50.70 and a high of $52.82. As of 12:35, CHK is trading at $52.67, up $1.73 (3.4%). The chart for CHK looks bullish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) buy rating.

TheStreet.com's Jim Cramer says it's not a strong-dollar sell -- the story here is still too good.

Why did natural gas go down last week? What was that? Inventories were down. The commodity price was up. The fuel itself is green. It is better than ethanol and it is being used to fuel an increasing numbers of cars and trucks.

The whole move down had to have been triggered by something, right? Yeah, how about the fact that the stocks were up a lot and were due for some profit-taking.

Recall that the real "reason" they went down is that the dollar "got strong," and that was supposed to trigger commodity deflation; natural gas is a commodity and is therefore going to go down. (Barron's made this very case this weekend, oblivious to the facts, but loving the theory.)

This kind of thinking is just so stupid that it shows you can get chance after chance after chance to own the fuel that can take care of the nation if we just let it. Of course, the stocks began to come back later in the week as threats of supply cut-offs of crude -- they came true this weekend -- made natural gas declines virtually impossible, despite the "sense" that it peaked. So the money has came back and I believe will continue to come back.

"After coal, natural gas is the No. 2 source for power generation; and the largest source of gas production in the US is now unconventional reserves," explains Neil George.

In his Personal Finance newsletter, the advisor looks at two favorites plays on this trend: Chesapeake Energy (NYSE: CHK) and XTO Energy (NYSE: XTO). Here is his review.

"Unconventional reserves now account for close to 40% of all domestic gas production. In addition, with the possible exception of deepwater fields, unconventional production is the only domestic source of gas that's likely to show real growth in coming years.

"The term 'unconventional' refers to any gas field that can't be produced economically using traditional well technologies. But, using a combination of new techniques, wells drilled in unconventional fields are prolific producers. US natural gas producers remain on a 17%-plus tear in gains so far this year.

It's been a big day for Chesapeake Energy Corp. (NYSE: CHK). The company said that it has made a big gas discovery in Shreveport, Louisiana, which could have material impact on its output. The reserves could amount to 20 trillion cubic feet, and Chesapeake is pumping up its capital expenditures by $275 million this year and $675 million in 2009.

No doubt, the expectation is that there will be some serious needs for energy, despite the recent slowdown in the US economy. It certainly helps that natural gas prices have been particularly strong. And, for the most part, natural gas is critical for basic needs, such as electricity and heating. Oh, and it tends to be cleaner.

On CNBC today, energy tycoon T. Boone Pickens said that he owns Chesapeake's stock (and yes, he had some nice things to say about the company). He also thinks that oil will remain above $100 per barrel for the second half of the year.

In today's trading, Chesapeake's stock price is up 3% to $46.45.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

MOST NOTEWORTHY: E-Trade, Sterling Bancshares and Research in Motion and were today's noteworthy downgrades:

• Bank of America downgraded shares of E-Trade (NASDAQ: ETFC) to Sell from Neutral, as they no longer believe the value of the company's retail brokerage business can offset negative value at the bank.
  
• Sterling Bancshares (NASDAQ: SBIB) was downgraded to Neutral from Outperform at Baird on valuation.
  
• Morgan Keegan lowered its rating on Research in Motion (NASDAQ: RIMM) to Market Perform from Outperform, and believes the 8000 series upgrade cycle will likely slow and that share performance will be impacted by expectations of a slowing economy..

OTHER DOWNGRADES:

• UAL Corp. (NASDAQ: UAUA) and Johnson Controls (NYSE: JCI) were downgraded to Equal Weight from Overweight at Lehman.
  
• Chesapeake (NYSE: CHK) was lowered to Equal Weight from Overweight at Morgan Stanley.

Eight for 2008:
Still on the short list:

Stocks that did not make the cut:

• Lockheed Martin (NYSE: LMT) has a low P/S but a high price to book of 6, which I will have to explore. However, if you need a satellite or a fighter, who are you going to call? This is a very profitable company on a lot of peoples list of quality stocks. However, it seems that all the good news is priced into the stock. It has an average P/E and I have a hard time swallowing the price to book. I also think world wide, government spending is going to favor helicopters more than fighters going forward. I really have nothing bad to say about Lockheed, it's just not a standout and I think that Raytheon will have better prospects. Perhaps I would feel different if I anticipated greater spending on space exploration but that too has been cut over the years.
• BHP Billiton Limited (ADR) (NYSE: BHP) made an unsolicited offer to buy Rio Tinto plc (ADR) (NYSE: RTP) earlier in the week, and is looking to grow more dominant in mining and raw materials. What it is thinking about the global opportunity is the same reason I have included it on my shopping list. I think the M&A story makes me want to put this one on hold. There are too many ways this could be played out and too much is happening behind the scenes for me to consider it as a value play at this time.
• Chesapeake Energy Corporation (NYSE: CHK) is a big player in the North American gas exploration and production market. It is floating about halfway between its 52-week high and low. Gas prices are significantly down from the highs of a couple of years ago. Another mild winter seems to be shaping up, but any chilling in the temperature or increases in demand from electric utilities could send this stock back to its highs and beyond. From where I sit the mild winter is here, oil prices will soften, demand will level off for a while and there does not seem to be any shortages of natural gas. The stock had a great run in 2007. I do not know if it is sustainable. Most of its metrics say it is still a value but I favor the predictability of the utilities next year over the explorers.

Somewhere along the journey I am sure to gather some "egg on my face" but for now we boldly go forward and with the addition of two stocks and the deletion of three we stand at 15 possibilities. The process will continue with further updates throughout the shopping season until there are only eight for 2008. I view all 15 of these companies worthy of consideration, so I expect it will come down to the greatest value on the given day... as it should.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

DISCLOSURE: I currently own shares of BRK.A, ISRG, HNP, DOW, DUK, VLO, GD, APC, and AAUK.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

This is going to be a journey ending with eight stock picks for 2008, on December 28, 2007. It is my intention to use the closing prices on that day for those eight stocks as the point of departure to publicly track the results and see if I can beat the market again. This year, as measured through October I have done so. I have also been tracking James Cramer's picks and he too has beaten the market to date, but lags behind me (sorry, couldn't resist). While we made some great picks, we both had some dogs as well. Furthermore, I will be the first one to admit that there is some luck involved in the short run.

Last year I beat the market, earning 29%, and it was my fifth straight year doing so after going down in flames with the rest of you when the tech bubble burst. At that time I also had the pleasure of being an Enron investor as well, so I have made plenty of blunders. But I have learned a lot from my mistakes, and hopefully others can learn from them as well as I share my investing adventures and how I turned things around.

Oklahoma turns 100 years old this year, and I wrote a bit about its business climate in my recent Investing in Oklahoma post. That post featured some growth companies based in Oklahoma: Arena Resources Inc. (NYSE: ARD), Helmerich & Payne Inc. (NYSE: HP), Unit Corp. (NYSE: UNT), Chesapeake Energy Corp. (NYSE: CHK), ONEOK Inc. (NYSE: OKE), Devon Energy Corp. (NYSE: DVN), and the Williams Companies (NYSE: WMB).

Earlier this year, the Motley Fool also took at look at Oklahoma companies, and focused on some of the same energy sector companies that I did. Its search also included two non-energy companies as well: drive-in burger chain Sonic Corp. (NASDAQ: SONC) for its growth potential, and Tulsa-based Dollar Thrifty Automotive (NYSE: DTG).

Sonic recently announced 21 consecutive years of positive same-store sales performance, and reaffirmed its 33 cents earnings per share earnings expectations for the fourth quarter. For fiscal 2008, Sonic expects earnings growth of 15% to 17%. The consensus of analysts surveyed by Thomson Financial is that Sonic is a buy. The share price was $23.40 at the close on Friday, up from a 52-week low of $20.02 in late July, not yet quite back to its 52-week high of $25.09 in May, but still up from its stumble at the end of August after an analyst's downgrade based on labor and dairy costs. That was before the announcement and reaffirmed expectations mentioned above. Also, Sonic made the Forbes list of 100 best mid cap stocks in America.

Oklahoma celebrates its centennial in November -- Happy Birthday, Oklahoma!

Today, Oklahoma is known as one of the most business-friendly states, due in part to low tax rates. Oklahoma's economy is based largely on the energy, aviation, and food processing sectors. From 2000 to 2006, Oklahoma's gross domestic product increased 50 percent. The GDP per capita grew almost 10 percent between 2005 and 2006, one of the highest rates in the nation.

Fortune magazine's 2007 list of the fastest growing companies in the U.S. included six from Oklahoma. At number three on the list was Tulsa-based Arena Resources Inc. (NYSE: ARD), a seven-year old oil and gas firm with a three-year annual growth rate of 165 percent. Back in August, Arena announced strong second quarter 2007 financial and operating results. Arena is also a major holding in the Bruce Fund, which recently made the 2007 Forbes Honor Roll.

Tulsa-based oil and gas driller Helmerich & Payne Inc. (NYSE: HP) had a three-year annual growth rate of 37 percent, which beat the S&P 500. In August, H&P announced strong second quarter 2007 results, as well as two new contracts. The Motley Fool sees expansion in other sectors as good news for drillers such as H&P.

MOST NOTEWORTHY: Knot Inc (KNOT), Cablevision (CVC), Chesapeake Energy Corp (CHK), Green Mountain Coffee (GMCR) and Intermec (IN) were today's noteworthy downgrades:

• Merriman downgraded shares of Knot Inc (NASDAQ: KNOT) to Neutral from Buy following the company's mixed outlook to reflect poor visibility.

• Cablevision (NYSE: CVC) was downgraded to Market Perform from Outperform at Wachovia following its disappointing Q2 report and guidance. The firm does not expect a higher Dolan bid.

• Wachovia also downgraded shares of Chesapeake Energy Corp (NYSE: CHK) to Market Perform from Outperform. The firm said management expects an equity offering in the next 6-9 months, which is in contrast to recent comments regarding capital discipline and funding plans.

• Green Mountain Coffee (NASDAQ: GMRC) was downgraded to Market Perform from Outperform at Piper Jaffray on valuation and tough year/year comparisons.

• Bear Stearns downgraded Intermec (NYSE: IN) to Underperform from Peer Perform on valuation.

OTHER DOWNGRADES:

• Lehman downgraded Novo Nordisk (NYSE: NVO) to Equal Weight from Overweight.

• Davenport downgraded Wm. Wrigley Jr. Co (NYSE: WWY) to Neutral from Buy on valuation.

• Delta Petroleum (NASDAQ: DPTR) was downgraded at Merrill Lynch to Sell from Neutral.

• JMP Securities lowered Kenexa (NASDAQ: KNXA) to Market Perform from Outperform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Chesapeake Energy Corp. (NYSE: CHK) opened at $35.11. So far today the stock has hit a low of $35.10 and a high of $36.25. As of 11:00, CHK is trading at $36.14, up $1.10 (3.1%).

After hitting a one year high of $36.22 in early May, the stock has backed off slightly over the past month, but is staying strong with support around $34. Natural gas futures are climbing today, lifting CHK in early trading. Recent technical indicators for CHK have been bullish and deteriorating slightly, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $30 range. CHK hasn't been below $30 since March and has shown support around $34 recently. This trade could be risky if crude oil prices retreat sharply, but even if that happens, CHK could find support from its 200 day moving average, which is at $31 and rising.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a position in CHK.

Hamptons Ocean-View Estate Tops Sales Record at $103 Million
Ron Baron, founder of the Baron Funds investment company, has paid a record $103 million for a residential property in East Hampton, N.Y. And get this: That price doesn't even include the cost of the house he wants to build. The price tops a record set in 2004, when Revlon Chairman Ronald Perelman sold his estate in Palm Beach, Fla., for $70 million.
Hamptons, ocean view: Sold for a record $103 million - USATODAY.com


Top 10 Stocks With Big Insider Buying
When company executives buy stock in the companies they run that is usually a very good sign. They have a lot of confidence the stock will be rising. Here are ten where insiders currently are investing in. They include BEA Systems, Chesapeake Energy, SunTrust, Intuit and Sun Microsystems.
Top 10 Stocks With Big Insider Buying, Buybacks - TheStreet.com


Be Very Careful at ATMs
These days, ATM cards are multicolored and can be used for debit or credit transactions. As automated teller machines have evolved, though, so have criminals. One in 15,600 ATM and debit point-of-sale transactions is fraudulent. Here are nine steps to help you avoid being an ATM fraud victim.
9 ways to be safe at ATMs - Bankrate


Lego Is Most Respected Company
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World's Most Reputable Companies- Forbes.com


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World's Thinnest Laptop Computer Could Be Game Changer
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Mortgage Brokers: Friends or Foes?
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Best Affordable Suburbs in the South
Many Southern suburbs offer a rarely seen combination of strong job markets and low living costs. No wonder many are moving there.
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What Worries the Rich
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What Worries The Rich? - Forbes.com


Memorial Day Survival Guide
Hitting the highways this weekend? If so, check out these road-trip savings tips.
Highway Companion: Here's Your Ticket to Save - SmartMoney.com


Why 70 Is the New 50
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