Electronic Arts Inc. (EA), Juniper Networks, Inc. (JNPR): Today’s 3 Worst Stocks

The rationale behind the downgrade has to do with Chesapeake’s hedging strategy. That is, by formally locking in the price on a portion of its natural gas sales for the current year, the energy giant cannot “fully reap the benefit of strengthening natural-gas prices,” according to MarketWatch.com‘s reporting of the analysis. If this is indeed the case, and if its competitors didn’t similarly do so to an analogous degree, the move could cause Chesapeake to underperform.

While 2012 was a tough year for the company, during which its shares dropped by roughly 20%, the current year is turning out much better. Shares have rallied by 27% since the beginning of January. It’s for this reason that the Sterne Agee downgrade couldn’t come at a worse time. Either way, however, Chesapeake still has a long road ahead before it reclaims its 2011 highs.

The article Today’s 3 Worst Stocks originally appeared on Fool.com and is written by John Maxfield.

John Maxfield has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Activision Blizzard. It has the following options on Chesapeake Energy: long Jan. 2014 $20 calls, long Jan. 2014 $30 calls, and short Jan. 2014 $15 puts.

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