Trade-Ideas LLC identified

Southwestern Energy

(

SWN

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Southwestern Energy as such a stock due to the following factors:

  • SWN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.9 million.
  • SWN has traded 5.6 million shares today.
  • SWN is down 3.4% today.
  • SWN was up 6.7% yesterday.

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More details on SWN:

Southwestern Energy Company, an independent natural gas and oil company, explores for, develops, and produces natural gas and oil primarily in the United States. It operates through two segments, Exploration and Production and Midstream Services. Currently there are 3 analysts that rate Southwestern Energy a buy, 5 analysts rate it a sell, and 13 rate it a hold.

The average volume for Southwestern Energy has been 21.8 million shares per day over the past 30 days. Southwestern Energy has a market cap of $2.9 billion and is part of the basic materials sector and energy industry. Shares are up 12.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Southwestern Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 775.3% when compared to the same quarter one year ago, falling from $312.00 million to -$2,107.00 million.
  • The debt-to-equity ratio is very high at 2.07 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.48, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SOUTHWESTERN ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SOUTHWESTERN ENERGY CO is currently lower than what is desirable, coming in at 32.46%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -306.69% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $353.00 million or 37.07% when compared to the same quarter last year. Despite a decrease in cash flow of 37.07%, SOUTHWESTERN ENERGY CO is in line with the industry average cash flow growth rate of -39.33%.

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