Stock To Watch: Swift Energy (SFY) In Perilous Reversal

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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

  • SFY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.2 million.
  • SFY has traded 400,706 shares today.
  • SFY is down 3% today.
  • SFY was up 8.7% yesterday.

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More details on SFY:

Swift Energy Company is engaged in acquiring, exploring, developing, and operating oil and natural gas properties. It focuses on oil and natural gas reserves in Texas, as well as onshore and in the inland waters of Louisiana. Currently there are 3 analysts that rate Swift Energy a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Swift Energy has been 1.7 million shares per day over the past 30 days. Swift Energy has a market cap of $479.3 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.24 and a short float of 39.4% with 7.12 days to cover. Shares are down 11.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Swift Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SWIFT ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SFY has underperformed the S&P 500 Index, declining 12.83% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 24.9% when compared to the same quarter one year ago, dropping from $7.21 million to $5.41 million.
  • SWIFT ENERGY CO's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SWIFT ENERGY CO swung to a loss, reporting -$0.45 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$0.45).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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