Southeastern Asset Management Sold a Major Position in CHK



Recent institutional activity in CHK

Southeastern Asset Management sold a major position in Chesapeake Energy (CHK) in the second quarter of 2018. It sold 33.1 million shares valued at $99.9 million. It was followed by Encompass Capital Advisors, which sold 7.4 million shares.

Harris Associates and Charles Schwab Investment Management were the biggest buyers of CHK stock. They bought 4.8 million and 4.7 million shares, respectively. Among the top five buyers and sellers, 31.7 million positions were sold. That indicates a bearish sentiment in the stock.

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Why are institutional investors bullish on CHK?

Institutional investors’ bullishness for CHK could be attributed to the following factors:

  • weakness in natural gas prices – The average price of natural gas was $2.83 per MMBtu (million British thermal unit) in the second quarter of 2018 compared to $3.14 per MMBtu in Q2 2017.
  • low operating cash flows compared to capex
  • high leverage despite recent measures

Top five holders

The Vanguard Group, BlackRock Institutional Trust Company, Harris Associates, State Street Global Advisors, and Capital Research Global Investors are among the top five institutional holders in CHK. The Vanguard Group continues to be the largest institutional holder in CHK. It held 8.5% of the company at the end of the second quarter of 2018.

In the next and final part of this series, we’ll look at the recent analyst recommendations for Chesapeake Energy.


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