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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

5/2/12

Chesapeake Energy Corporation (CHK)

Chesapeake Energy got drilled today, down 13.13% at $17.02. The company saw its Tuesday gains disappear based on poor earnings and a conflict with the CEO Aubrey McClendon. Chesapeake reported a net loss of $71 million, or around $0.11 per share, for the first quarter. Hurting the company further was the report that CEO Aubrey McClendon was making decisions that might have been influenced by his other career. For at least four years, McClendon ran a hedge fund that traded contracts for oil and natural gas; both of which are commodities that Chesapeake produces. Running this hedge fund could have influenced the decisions made at Chesapeake. According to Chris Kahn, writer for AP Energy, "The revelation follows the disclosure of personal loans McClendon had taken out to cover his investments in the company's wells. Some of those loans came from a group that was also planning to buy Chesapeake assets."

American Eagle Outfitters Inc. (AEO)

American Eagle soared high today, up 15.54% at $20.67. The company went higher today based on increasing first quarter profit guidance. American Eagle released that it expected to post profits of $0.18 to $0.20 per share, up from its previous expectation of $0.08 to $0.10 per share. Revenue for the company was also up 18% at $719 million, beating analysts' estimates of $655.3 million. The increases in earnings were attributed to stronger sales, less spring promotions, and the warmer weather. Yes, American Eagle stated that warmer weather propelled their earnings because people desired the spring clothing for the nice weather. The company surpassed its previous 52-week high of $18.61, and the stock is trading 17.7% above its 50-day moving average and 26.3% above its 200-day moving average. American Eagle is doing great today, trading at highs it hasn't seen in more than four years.
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