Cramer Says Move Back into Nat Gas with Chesapeake Energy (CHK)

Following last week's sell-off in natural gas, Jim Cramer, host of CNBC's Mad Money, believes it is now a good time to get back into this segment of energy. Specifically, Cramer said he still likes Chesapeake Energy (NYSE: CHK) and would be a buyer of the stock despite a 6.7% single-day jump yesterday. In fact, Cramer calls yesterday's move in Chesapeake "the all clear signal we've been waiting for", given that yesterday also marked the completion of a 25 million share equity offering by Chesapeake.

Secondary offerings make existing stockholders shares less valuable, and so stocks usually fall on an equity offering. As evidenced by yesterday's move, however, this was not the case at Chesapeake, as investors are apparently confident that management will use the extra capital to increase drilling.

Doing a little research, Cramer pointed out five different occasions when Chesapeake "made money" from a public offering: most recently, for example, Chesapeake offered shares on March 27, 2008, and its stock price is now 26% higher than at those levels, according to Cramer.

Lastly, Cramer called Chesapeake's CEO, Aubrey McClendon, "the most bankable CEO in America." So far in 2008, McClendon has purchased about one and a half million shares of his company's stock, certainly showing a vote of confidence for Chesapeake shareholders. Check out StreetInsider's real-time coverage of Chesapeake's Insider Trades here.

Chesapeake Energy Corporation, an oil and natural gas exploration and production company, engages in the acquisition, exploration, and development of properties for the production of crude oil and natural gas from underground reservoirs.

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