Crude Oil was up today, despite a strengthening dollar. This has kept Chesapeake Energy on a week-long gain streak that seems increasingly likely to continue for the time being. Their fundamental financial situation has not changed in the slightest, but investor confidence is dramatically improved. Tomorrow we’ll take a closer look at the change in P/E ratio over the last week, but it’s safe to say that EPS this quarter would have to drastically beat projections to justify these stock prices at previous P/E consensus. CHK is very obviously more volatile, and too much of it seems based on short term investor sentiment to consider them a safe stock to take a direct position in.
Bond and Treasury yields are continuing to fall, putting increased pressure on the financial sector. The mild gains seen today were largely due to gains in heavy industry – with durable goods deliveries up 1.7% this month.
We’re continuing to watch Ford Motors (F) to assess the possibility of taking a long term position in that issue, but still remain unconfident of prices as high as the consensus estimates for the next twelve months.
In more positive news, Peabody Energy has begun trading again under their old ticker (BTU). Just prior to their bankruptcy filings they had been trading under BTUUQ. In any case, they’ve re-opened at $30.00/share. Daily volume never broke 50k, but it’s looking possible that they may still get back on their feet.