This value investing site offers stock screeners and valuation tools. My expectations and assumptions when I invested in Chesapeake Energy were :Ībout GuruFocus: tracks the stocks picks and portfolio holdings of the world's best investors. Doug Lawler had started to bring spending discipline and focus the company on it's core business. Aubrey ran into financial and ethical trouble and was ousted by the board of directorsĬhesapeake Energy was going through a change in management with the appointment of Doug Lawler as CEO and election of Carl Icon and Lou Simpson (Trades, Portfolio) to the board. Ĭhesapeake Energy 's stock price had hit a low under the leadership of Aubrey McClendon due to unsustainable expansion and spending. depressing price levels and fear premium for the global crude oil prices. However in the recent years the price of oil typically had traded 8-12x that of natural gas due to a combination of rising domestic production from unconventional shale gas and regulation of natural gas export from U.S. Historically based on an energy equivalent basis, crude oil and natural gas prices should have a 6 to 1 ratio.
( Q ) Why did you invest in Chesapeake Energy and what were your reasons to exit ? Dhandho will provide a non-institutional environment, which is important for success in insurance business.Environment where the focus is on under writing discipline and not growth.Single investor ( Mohnish Pabrai (Trades, Portfolio) himself ) managing investments for Stone Trust ( Clone of Buffet's model for Berkshire ).Boost's Stone Trust's credit rating from B+ to A- post acquisition.Dhandho's cash surplus and backing will allow Stone Trust Insurance to grow without capital constraints.Dandho Holdings will infuse a capital of $30 million after acquiring Stone Trust Insurance for $35 million.Expect combined ratio of 95 or lower over long term.Earned $70 million in annual premium ( compared to $20 million in premiums in 2009 and $10 million in premiums 2004 ).Serving five starts in U.S in 2014 ( expected to expand to ten or fifteen stats in ten years ).Mutual insurance company with 5000+ policy holders.First acquisition : Stone Trust Insurance.Headquartered in Porte Rico - for tax benefits.Time limit (sunset) to invest funds raised from investors in proposed investment (Stone Trust Insurance ).Flexible vehicle - Ability to buy and hold fully owned subsidiaries for long term and portfolio of stocks.Setup as a SPAC ( Special purpose acquisition vehicle ).Institutional Distribution Intelligence.Non-Traditional Exchanges & New Markets.Directors’ and Officers’ Questionnaires.