Chesapeake: Gauging Institutional Investors’ Stance in Q3


Nov. 28 2019, Updated 1:36 p.m. ET

Yesterday, Chesapeake Energy rose 2.8%, while WTI (West Texas Intermediate) crude oil active futures gained 0.7%. The stock has fallen 81.1% on a year-over-year basis. The sharp fall in the stock, compared to a 13.1% rise in oil prices, could worry investors. In this article, we will look at the company’s top institutional investors’ activities in Q3 2019. We will also discuss top institutional sellers and exits.

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Top institutional holder

Franklin Resources is the largest institutional holder of Chesapeake (CHK). Franklin added the stock to its portfolio in Q3 and held around 238 million shares at the end of Q3 2019. CHK constituted around 0.2% of Franklin’s total portfolio of publicly traded securities. Interestingly, soon after Franklin’s addition, CHK stock fell to its lowest level since 1994. To learn more about the factors behind CHK’s decline, read A Way Forward for Chesapeake after Last Week’s Slide?

In the third quarter, Franklin’s other top energy sector buys were Schlumberger Limited (SLB) and Occidental Petroleum (OXY). Franklin increased its stake in SLB and OXY by 162% and 45%, respectively. At the end of Q3 2019, around 6.7% of the total portfolio of Franklin’s publicly traded securities were exposed to the energy sector. Among the top upstream stocks, OXY has been an underperformer. The article Upstream Stocks: The Top Movers of 2019 explains upstream stocks’ performance.

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The third-largest institutional holder of CHK, Carlyle Group LP, kept its holdings unchanged in Q3 2019. Carlyle Group included CHK in Q1 2019. CHK constituted 16.7% of Carlyle’s total portfolio of publicly-traded securities in the third quarter. Carlyle’s only buy was the Permian focused upstream stock Ring Energy (REI).

The Vanguard Group and BlackRock increased holdings in CHK by approximately 1.8 million and 2 million shares, respectively, in the third quarter.

Chesapeake top sellers and exits

Schneider Capital and Westwood Holdings Group were the largest sellers of Chesapeake in the third quarter. They sold around 9.5 million and 8 million CHK shares, respectively.

In Q3 2019, CHK was the top sell of Schneider Capital. Schneider reduced holdings in CHK by 85%. CHK’s peers such as SM Energy Company (SM) and Whiting Petroleum (WLL) were among Schneider’s top five buys in the third quarter.

In the third quarter, Westwood Holdings exited CHK. CHK constituted around 0.2% of Westwood’s total portfolio of publicly traded securities in Q2 2019. Westwood included CHK in Q4 2015. Since Q4 2015, CHK has fallen 87%. The fall in CHK stock could be a great loss for Westwood. Notably, CHK has not paid any dividends to common shareholders in the last four years.

In Q3 2019, Allianz Asset Management was the third-largest seller of CHK. It sold 7.21 million shares. At the end of Q3 2019, Allianz Asset held 8.4 million shares of the company. To find out more about institutional investors’ activities in other energy stocks, read HAL or SLB: Which Are Institutional Investors Buying?


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