Tristan R. Brown
Alternative energy, long/short equity, commodities, energy

The Share Price Of Chesapeake Utilities Is Quickly Pulling Away From Its Earnings Estimates

Energy distributor Chesapeake Utilities (NYSE:CPK) has been one of the top performers in the utilities sector since September 2015, easily surpassing both the Dow Jones Utility Average and the broader S&P 500 index (see figure). The company benefited strongly near the end of the year from a combination of an unexpectedly large accretive earnings contribution from a recent acquisition as well as a rapidly declining natural gas price. Back in July, when the company's shares were trading for $54.48, I outlined Chesapeake's growth prospects, concluding that:

I do not recommend that potential investors initiate long investments in Chesapeake Utilities at this time, but that's only because its shares are overvalued relative to future earnings growth. That said, the

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