When you hear the term "takeover target," you typically think of a small biotech or technology company - but that's not the case here.
I've found a company that logged $1.4 billion of adjusted EBIDTA and $1.2 billion of operating cash flow. And it just happens to be the second-largest natural gas producer in the United States.
I'm talking about Chesapeake Energy Corp. (NYSE: CHK) - a company that has increased production for 21 consecutive years.
In addition to being the second largest U.S. gas company, Chesapeake is the No. 1 horizontal-well driller in the world, and the most active new-well driller in the United States. The company holds a large portfolio of shale properties, and it plans to triple profitable liquids production.
Even aside from the fact that the company is an attractive takeover target, Chesapeake has enough going for it that it deserves a place in our portfolio.
So it's time to buy Chesapeake Energy Corp. (**).