Chesapeake Energy Corporation (CHK): Are Hedge Funds Right About This Stock?

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It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Chesapeake Energy Corporation (NYSE:CHK).

Chesapeake Energy Corporation (NYSE:CHK) was in 41 hedge funds’ portfolios at the end of September. CHK investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 31 hedge funds in our database with CHK positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Oceaneering International (NYSE:OII), ENSCO PLC (NYSE:ESV), and National Beverage Corp. (NASDAQ:FIZZ) to gather more data points.

Follow Chesapeake Energy Corp (NYSE:CHK)

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to check out the latest action encompassing Chesapeake Energy Corporation (NYSE:CHK).

What have hedge funds been doing with Chesapeake Energy Corporation (NYSE:CHK)?

At the end of the third quarter, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 32% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Southeastern Asset Management, managed by Mason Hawkins, holds the biggest position in Chesapeake Energy Corporation (NYSE:CHK). Southeastern Asset Management has a $578.2 million position in the stock, comprising 5.5% of its 13F portfolio. On Southeastern Asset Management’s heels is Senator Investment Group, led by Doug Silverman and Alexander Klabin, holding a $125.4 million position; 1.7% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish include Robert Pitts’ Steadfast Capital Management, and John Griffin’s Blue Ridge Capital.

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