After three weeks of intense competition, we finally have our Stock Madness 2007 Champion.
In the final analysis, Chesapeake Energy
In the end, the tag-team effort from Motley Fool Inside Value advisor Philip Durell and analyst Rich Smith proved to be too much for the other stocks in the field.
So what made Chesapeake the best stock in this year's tournament? As Rich Smith put it in the final round, Chesapeake:
- Sells for approximately $0.60 per dollar of intrinsic value.
- Holds 9 trillion cubic feet-equivalent of proven natural gas reserves, with nearly twice that amount of as-yet unproven reserves.
- Has spent billions of dollars buying up high-quality natural gas assets.
- Is now poised to monetize those investments, creating profits for its current and new investors.
Sasol advocates Motley Fool Global Gains advisor Bill Mann and analyst Joe Magyer based their investment thesis on the following (among other things):
- In 2006, Sasol pulled in roughly $2 billion in net income from continuing operations on roughly $10 billion in revenues.
- The company, which operates in 30 countries and recently opened offices in China and India, sees its patented gas-to-liquid (GTL) and coal-to-liquid (CTL) technologies as a potentially huge driver of long-term growth.
- The CTL technology, in particular, could catch on in the U.S., given our vast coal deposits, growing desire for energy independence, and sustained high energy prices.
- Sasol has been in talks with at least two governors of coal-rich U.S. states, who have expressed an interest in Sasol's patented CTL technologies. Should the technology gain traction in the U.S., Sasol's shareholders would likely be richly rewarded.
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See you next March for Stock Madness 2008!
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