Chesapeake Energy (CHK): The Perfect Mix of Value and Rising Earnings Estimates? - Tale of the Tape
May 20 2014 - 9:00AM
Zacks
Value investing is always a very
popular strategy, and for good reason. After all, who doesn’t want
to find stocks that have low PEs, solid outlooks, and decent
dividends?
Fortunately for investors looking for this combination, we have
identified a strong candidate which may be an impressive value;
Chesapeake Energy Corporation (CHK).
Chesapeake Energy in Focus
CHK may be an interesting play thanks to its forward PE of 14.24,
its P/S ratio of 0.96, and its decent dividend yield of 1.27%.
These factors suggest that Chesapeake Energy is a pretty good value
pick, as investors have to pay a relatively low level for each
dollar of earnings, and that CHK has decent revenue metrics to back
up its earnings.
But before you think that Chesapeake Energy is just a pure value
play, it is important to note that it has been seeing solid
activity on the earnings estimate front as well. For current year
earnings, the consensus has gone up by 1.6% in the past 30 days,
thanks to 11 upward revisions in the past one month compared to 3
lower.
This estimate strength is actually enough to push CHK to a Zacks
Rank #2 (Buy), suggesting it is poised to outperform. So really,
Chesapeake Energy is looking great from a number of angles thanks
to its PE below 20, a P/S ratio below one, and a strong Zacks Rank,
meaning that this company could be a great choice for value
investors at this time.
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