Why This Chesapeake Energy Corporation (NYSE: CHK) A Volatile Stock?June 2, 2020
Chesapeake Energy Corporation is one of the exploration and production company. The CHKstock at https://www.webull.com/quote/nyse-chk company is produced by oil, natural gas, and natural gas liquids (NGL) from underground reservoirs. It is operating in one segment that is including Exploration and Production, engaged in finding and producing oil, natural gas, and NGL. It has a diverse resource base of onshore the United States and it has unconventional natural gas and liquids assets. The CHKstock company has interests in approximately 13,500 oil and natural gas wells. It is plays of the Eagle Ford Shale in South Texas, the stacked pay in the Powder River Basin in Wyoming, and the Anadarko Basin in northwestern Oklahoma. These natural gas resource plays are the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana.
CHK’s beta value tells investors
Chesapeake Energy has a beta of 1.89 and this is well above 1 indicates that its share price movements have shown sensitivity to overall market volatility. If the past is any guide, they would expect that Chesapeake Energy shares will be raised quicker than the markets in times of optimism, but fall faster in times of pessimism. Share price volatility is well worth considering, but most long term investors are considered the history of revenue and earnings growth to be more important. You can take a look at how Chesapeake Energy fares in that regard.
How does CHK’s size impact its beta?
Chesapeake Energy is a rather small company. It has a market capitalization of US$137m, which means it is probably under the radar of most investors. It is taking less money to influence the share price of a very small company. This may be explained the excess volatility implied by this beta value. Ultimately, beta is an interesting metric, but there is plenty more to learn. This is the goal to educate investors about beta values, but it is well worth looking at important company-specific fundamentals. These are including Chesapeake Energy’s financial health and performance track record. You can dive deeper by considering the following:
- Future Outlook: Take a look at our CHK’s outlook.
- Past Track Record: Go into more detail in the past performance analysis and take a look at for more clarity.
- Other Interesting Stocks: It is worth checking to CHK measures up against other companies on valuation. You are starting with this.
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