For Immediate Release
Chicago, IL - May 15, 2012 - Zacks.com announces the list of
stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include
Chesapeake Energy
(
CHK
),
Range Resources
(
RRC
),
ConocoPhillips
(
COP
),
Green Mountain Coffee Roasters
(
GMCR
) and
Starbucks
(
SBUX
).
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free Profit from the Pros newsletter:
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Here are highlights from Monday's Analyst Blog:
Chesapeake Defers Divestment Plans
Oklahoma-based oil and gas producer
Chesapeake Energy Corporation
(
CHK
) has postponed its planned asset sale to ensure that terms and
conditions set forth by its creditors are not jeopardized.
Per the Fitch Ratings estimate, Chesapeake faces a funding gap
of $10 billion in 2012. In order to reduce its debt, the company
had planned to raise about $14 billion by divesting its assets and
through further deals.
But Chesapeake reasoned that while the monetization of its
assets would ease its funding problems, it would, at the same time,
decrease its cash flow and the worth of security used to back its
debt.
Thus, in compliance of its credit facility, the company plans to
delay its assets sale or choose some other asset for divestment. As
Chesapeake anticipates expenses on its wells and assets to be
around $23.1 billion in 2012 and 2013, it plans to fund the
majority of this expense through asset monetization.
The massive fall in natural gas prices in 2011 has created a
huge funding gap for Chesapeake. To overcome this problem,
Chesapeake like
Range Resources Corporation
(
RRC
) and
ConocoPhillips
(
COP
) is constantly making efforts to shift to oil production from
gas.
Chesapeake had initiated a 25/25 plan to reduce its long-term
debt (through monetizing its assets and a reducing in lease-hold
spending) by 25%, while increasing its natural gas and oil
production by the same percentage for 2012.
Per the Zacks Consensus, Chesapeake's earnings per share for the
year 2012 and 2013 are estimated at $0.75 and $1.92, respectively.
This represents a decline of 73.2% in 2012 and a growth of 155.5%
in 2013.
Chesapeake holds a Zacks #5 Rank, which is equivalent to a
Strong Sell rating for a period of one to three months. Longer
term, we maintain our Neutral recommendation on the stock.
Change on Green Mountain's Board
Green Mountain Coffee Roasters Inc.
(
GMCR
) recently removed two senior members from their positions in the
Board of Directors due to the violation of internal policies.
Robert Stiller, the company's founder and chairman, along with
lead director William Davis were removed from their respective
positions. These board members were sacked after they sold their
shares for margin calls when the trading window was closed as per
the company's internal trading policy.
According to the company, Stiller sold 5 million shares to cover
margin calls and William Davis sold 4,00,000 shares on May 4, 2012,
and another 148,000 on May 7, 2012 when the trading window was
closed due to the company's internal trading policy.
Following the reorganization of the management, the company has
now appointed Michael J. Mardy, who was formerly the head of the
board's audit and finance committee, as interim chairman.
Robert P. Stiller founded Green Mountain in 1981 and served as
its President and Chief Executive Officer until May 2007, after
which he was the company's Chairman of the Board of Directors until
May 2012.
William D. Davis was the President and Chief Executive Officer,
and a Director from July 2002 until September 2010.
After the sell-off, Stiller holds 1,857,031 million shares, and
Davis holds 36,598 shares of Green Mountain stock.
Green Mountain Coffee Roasters is a growing company in an
industry that is expanding fast. The premium coffee industry has
experienced strong growth over the past decade and the company is
targeting the growing consumer demand for the coffee
experience.
Moreover, management's core business model involves the
implementation of a multi-channel geographic penetration strategy,
which entails expanding distribution through multiple channels and
through geographic expansion. The use of multiple distribution
channels increases the presence of the company's coffees.
However, Green Mountain revenue is highly dependent on one-cup
Keurig brew systems and the coffee K-Cup packages that go in them.
However, eventually when the demand for brew systems will slow down
and the explosive growth seen in 2011 will cease.
Moreover, the main patents on the K-Cup will end in September of
2012. Well-known brands and close competitors like
Starbucks
(
SBUX
) will have other alternatives, which would hurt the company's
fundamentals.
Currently, Green Mountain holds a Zacks #4 Rank, which
translates into a short-term Sell rating. Over the long term, we
prefer to rate the stock as Neutral.
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CHESAPEAKE ENGY (CHK): Free Stock Analysis
Report
CONOCOPHILLIPS (COP): Free Stock Analysis
Report
GREEN MTN COFFE (GMCR): Free Stock Analysis
Report
RANGE RESOURCES (RRC): Free Stock Analysis
Report
STARBUCKS CORP (SBUX): Free Stock Analysis
Report
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