5-Star Stocks Poised to Pop: Chesapeake Energy

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, natural gas producer Chesapeake Energy (NYS: CHK) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Chesapeake's business and see what CAPS investors are saying about the stock right now.

Chesapeake facts

Headquarters (Founded)Oklahoma City (1989)
Market Cap$16.3 billion
IndustryOil and gas exploration and production
Trailing-12-Month Revenue$10.9 billion
ManagementCo-Founder/Chairman/CEO Aubrey McClendon
CFO Domenic Dell'Osso
Return on Capital (Average, Past 3 Years)6.6%
Cash/Debt$111.0 million / $11.8 billion
Dividend Yield1.4%
CompetitorsAnadarko Petroleum (NYS: APC)
BP (NYS: BP)
ConocoPhillips (NYS: COP)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 7,553 CAPS members who have rated Chesapeake believe the stock will outperform the S&P 500 going forward. These bulls include meeyatch69 and callumturcan.

Just last month, meeyatch60 tapped Chesapeake as a cheap opportunity: "[S]eems like a good bargain for a leader in the sector. Natural Gas will usage will increase as consumers continue to be receptive to alternatives to petroleum."

In fact, Chesapeake trades at a particularly paltry price-to-cash flow of 3.9. That represents a discount to competitors like Anadarko (6.8), BP (8.1), and Conoco (5.1).

CAPS member callumturcan elaborates on the Chesapeake bull case:

More and more of our electricity will be from natural gas, and the current political climate is pushing for more natural gas usage and production, primarily from the Republicans. In 2005, 20% of the USA electricity market was from natural gas, now it is just over 24% in 2011. Chesapeake has prime real estate to benefit from this surge, with plays in various shale areas. It should outperform the market and continue to go up.

What do you think about Chesapeake, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackChesapeake?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Chesapeake. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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