What Stopped Chesapeake Energy Stock from Rising Last Week?



Chesapeake Energy stock

So far in 2017, Chesapeake Energy (CHK) has had a rough patch, giving flat returns since the beginning of January. It did see its share of ups and downs, following natural gas prices (UNG). However, natural gas prices recuperated from their losses, giving a month-to-date return of ~2%. So, Chesapeake Energy underperformed natural gas prices.

CHK overperformed the Energy Select Sector SPDR ETF (XLE), which returned approximately -2.6% month-to-date. The S&P 500 ETF (SPY) returned ~1.7% in the same period.

Chesapeake Energy (CHK) stock had a good run in 2016, given the crucible it had gone through. It ended 2016 on a positive note, following its Haynesville divestiture news in December 2016 and its debt management efforts deployed throughout the year.

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Natural gas prices

The weakness it has seen recently was due to natural gas prices. While natural gas prices seemed to have recovered, CHK was on its way to a recovery until it dropped on Friday, January 27, 2017. This could be a result of Friday’s 1.1% drop in crude oil prices (USO).

On January 20, 2017, CHK announced that it would be reinstating dividends on its preferred stock.

Year-over-year, however, CHK had an ~110% return compared to XLE’s ~35% return. This return could be due to CHK’s debt management efforts, including asset sales.

You can read more about Chesapeake Energy in CHK Survived the Odds in 2016, But Can Investors Relax Now?


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