10 investments poised to soar

Fastest-growing rank: 64
Get quote: CHK
3-year average annual return: 34%

We found two natural gas plays that can heat up your portfolio: Chesapeake Energy and Unit.

Chesapeake, an exploration and production (E&P) company based in Oklahoma City, boasts an impressive track record. Under CEO Aubrey McClendon, the company has grown into one of the country's largest suppliers of natural gas, which heats homes and fuels power plants. Through aggressive acquisitions and active drilling, Chesapeake has increased production by about 30% a year.

McClendon has his sights on even greater goals. As he crowed to analysts on a recent conference call, "It seems inevitable that sometime in 2008, Chesapeake will become the largest U.S. producer of natural gas."

That position, of course, means that Chesapeake's shares are inextricably linked to natural gas prices, which are far off their 2005 peak and tumbled sharply in August, undercut by high inventories and milder weather. Given the volatility in prices, the next few months may be choppy, but the long-term outlook should be bright as energy demand continues to mount inexorably.

With shares trading for less than 11 times earnings, even value managers can get excited about the stock. "When we look at the asset base and the potential growth of production, we think the company is significantly undervalued," says Arvind Sachdeva, manager of the Victory Value fund, who has more than 4% of his portfolio's assets in the company. CEO McClendon, among the most respected executives in the business, has himself bought up more than $20 million worth of shares this year. That's the kind of vote of confidence we like, and we think Chesapeake could help power your portfolio for some time to come.

See more Fastest-Growing data for Chesapeake Energy