Swift Energy (SFY) Marked As A Dead Cat Bounce Stock

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 "dead cat bounce" (down big yesterday but up 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 $15.8 million.
  • SFY has traded 57,834 shares today.
  • SFY is up 4.7% today.
  • SFY was down 5.2% 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 2 analysts that rate Swift Energy a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Swift Energy has been 1.5 million shares per day over the past 30 days. Swift Energy has a market cap of $569.9 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.25 and a short float of 37.5% with 12.77 days to cover. Shares are down 5.9% year-to-date as of the close of trading on Monday.

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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. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
  • 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.
  • In its most recent trading session, SFY has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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 29.4% 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 -$0.44 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus -$0.44).

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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