Why Chesapeake, ITI Inc, Pier 1, BP, and Chevron are in the Spotlight

After two long and painful years, there might be some light at the end of the tunnel for long-term energy investors after OPEC agreed to cut production for the first time since the financial crisis. Although the organization will leave the details of how it will actually be executed until November, the agreement is still a big surprise.

Not surprisingly, several energy stocks are trending today on the back of yesterday’s announcement. In this article, we’ll take a closer look at three of them, Chesapeake Energy Corporation (NYSE:CHK), BP plc (ADR) (NYSE:BP), and Chevron Corporation (NYSE:CVX), as well as two other stocks, Pier 1 Imports Inc (NYSE:PIR), ITI Inc (NASDAQ:ITCI), which are also trending today. We’ll also dig deep into SEC filings to determine how the smart money was positioned in each stock at the end of the second quarter.

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Pier 1 Imports Inc (NYSE:PIR) shares are nearly 9% in the green after the company reported its fiscal 2017 second quarter results. For the period, Pier 1 lost $0.05 per share, which was in-line with the average analyst estimate. Revenue for the three months was $405.82 million, down by 6.7% year-over-year, and $1.14 million below the consensus estimate, due to a 4.3% decline in comparable-store sales. As for guidance, Pier 1 anticipates delivering full fiscal year earnings of between $0.24 and $0.32 per share, versus analyst estimates of $0.26. 22 funds that we track were long Pier 1 Imports Inc (NYSE:PIR) at the end of the second quarter, up by nine funds from the end of the first quarter.

ITI Inc (NASDAQ:ITCI) has cratered by over 67% in extended market trading after the company reported that a Phase 3 clinical trial showed that its lead product candidate, ITI-007, failed to separate itself from/beat a placebo in terms of the change from baseline on the PANSS total score, and thus failing to meeting the study’s primary endpoint. On the other hand, the active control, risperidone, which is an already-approved schizophrenia treatment, did separate from/beat the placebo, as one would expect. ITI CEO Dr. Sharon Mates said the following:

“Based on the strength of the clinical data generated in this program to date, including two positive studies, supportive evidence from Study ‘302 and a consistent, well-tolerated and placebo-like safety profile across all studies, we continue to believe ITI-007 will be an important treatment for patients suffering from schizophrenia. We remain committed to the development of ITI-007 for the treatment of schizophrenia, bipolar depression, agitation associated with dementia, including Alzheimer’s disease and other neuropsychiatric indications.”

25 funds tracked by Insider Monkey owned $273.34 million worth of ITI Inc (NASDAQ:ITCI) shares at the end of the second quarter, which accounted for 16.30% of ITI’s float.

On the next page, we’ll find out why Chesapeake Energy, BP, and Chevron are trending right now.

Traders are watching Chesapeake Energy Corporation (NYSE:CHK), BP plc (ADR) (NYSE:BP), and Chevron Corporation (NYSE:CVX) after OPEC reversed its policy of increasing production on Wednesday. Energy futures surged by around 5% yesterday on the news that the cartel has agreed to cut production to 32.5 million-to-33 million barrels per day from the current mark of 33.4 million. The production cut indicates that Saudi Arabia is rather set on having better sentiment and potentially higher prices when its national jewel, Saudi Aramco, IPOs next year. The cut also indicates that Iran is willing to play ball as well. News of the cut follows a bullish EIA report released on Wednesday in which it was reported that inventories in the U.S. once again fell more than expected.

If sentiment can remain positive and crude prices rally, Chevron and BP’s dividends become much safer. Chesapeake, meanwhile, becomes a very interesting play despite Carl Icahn of Icahn Capital’s recent ‘tax planning’ moves in the stock.

Of the 749 top funds that we track which filed 13Fs for the June quarter, 31 were long Chesapeake Energy Corporation (NYSE:CHK) on June 30, while 40 were shareholders of BP plc (ADR) (NYSE:BP), and 47 were invested in Chevron Corporation (NYSE:CVX).

Disclosure: None