The hedge funds have started to release their new holdings in Q2. One notable investment is that of Icahn’s buying spree of Chesapeake Energy Corporation CHK stocks. Icahn has increased his holdings by 5 times resulting in 2% ownership of CHK.
Investors are excited over this as the adage to follow the BIG BOYS has never been wrong so far. The big boys always do it right.
What is good about CHK? CHK is almost fully invested in Natural Gas stuff, Natural Gas price has been declining resulting in the massive sell off of CHK and its peers.
The right chart shows the decline of Natural Gas price.
Some investors think that Icahn greater control over CHK would allow him to motivate CHK to move into Oil stuff quicker as that is where the real money lies.
Noteworthy investors of CHK includes Singapore’s Temasek Holdings ($500mln investment in Chesapeake) vs Icahns $260mln..
This is an Energy Play. If Oil price climb to $100, then CHK is a steal at this price.
Technically, CHK is sitting on a good support. I would only invest less than 3% of my Portfolio in CHK. This is because if Oil price remains at this level, CHK will continue its cruel descent.
If you want to follow the BIG BOYS, invest in this stock.
Disclosure: No position
opinion
Too much risk, I would rather invest in AA, BAC… FAS.
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