Bios

Chesapeake Energy’s (CHK) stock price has been hammered over the past few months due to the bursting of the energy and commodities bubble. Also, some investors have voiced concern over CHK’s high debt level. However, we see this sell-off as a great buying opportunity for patient investors. CHK has hedged itself to offer some protection against the recent slide in natural gas prices and has assets significant enough (including rights in the Marcellus Shale field in Appalachia) to give it a book value in excess of its current market value. To Ockham, these considerations make CHK a stock worthy of the attention of long-term investors.

Chevron is the fourth largest oil company in the world based on proven reserves, has impeccable financial strength, has been buying back its own shares aggressively of late and pays a generous cash dividend (recently increased by 12%) of $2.60 per share per year—a 3.1% yield based on its current price. While continued weakness in the price of oil will not benefit the shares, they have now reached an entry level that is justifiable for long-term investors based on our analysis.

Sky-rocketing oil prices have become a proverbial “hot-button” issue in this election year. The average cost of a barrel of oil was over $100 in the first quarter compared to just $58 in the first quarter of 2007. Consumers are frustrated by the prices at the pump, and businesses are feeling the pain too with […]