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Swift Energy Co. Message Board

  • investorseeker investorseeker Nov 2, 2013 7:50 AM Flag

    Stock Looks Fully Valued

    Earning est for next year is .65, a decrease/flat compared to this year. Stock trading around a 20 p/e. Great LITTLE company but hard to pay up, no divy.

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    • I never could understand why people worry about a divvy ..... big deal , 3 cents per share a quarter , you can make that in a day on a stock ...... divvys are for bloated blue chips with tons of money but no growth that can't move the pps more than 2% .... WMT XOM ....... If you make a 12 cent profit trade , you just made a whole year's worth of dividends , and the company can put their cash to work

    • That earnings projection does not take into account new frac techniques which are just now resulting in expanded oil production and earnings. The projection also does not take into account ramped up drilling as Louisiana sale supplies buildout of more oil holes, and it also does not take into account actual company realized value which is why a PE multiple of 25 is just scratching the surface. I believe stock price will move into the upper teens in the next 6 months. Into the 20's by this time next year. If you don't know what you have, better do more homework. I certainly have. Market is only now catching on. Really early in the move up.


    • An energy company isn't valued on eps alone. Example ..... all available money goes to drilling a new lease area for a year --- lots of oil found but no earnings per sh...the next year all available money including $ generated from the oil found in first year goes to more drilling, new gathering lines, more lease area, etc and proven oil reserves jump 500% and the field(oil asset) is now worth $100/sh but no earnings per sh and so on. Don't spend a lot of time worrying about erngs/sh ...... look at asset and reserve growth for stock price gains, especially on smaller cos. JMHO!

      • 1 Reply to bassingman
      • Agree. Here are some numbers/measures that matter for energy companies:

        1. Price to cashflow. Fwd price to cashflow is less than 2X. Crazy cheap. Most EFS players are 4+

        2. Market cap per flowing boe. SFY around $21K. Most EFS players are over 100K/flowing boe.

        3. Reserves per share. SFY has 4.4 boe of reserves for every share. Reserves in the ground aren't worth as much as a boe produced but at $50/boe, SFY has over $200 in reserves for every share.

        Why is it so cheap?

        SFY was slow to concentrate on liquids rich parts of it's drilling inventory. Currently 53% oil/gas ratio. Needs to be higher in current environment.

        Debt is substantial. Over a billion in debt vs 650million market cap.

        Production growth has been stagnant. This is ok as long as gas production is allowed to dwindle while oil/liquids growth is solid. This will allow revs/cashflow to grow while production slowly increases.

        As CEO stated in conference call, SWIFT is focused on fixing the balance sheet versus production growth. Why? They are taking the long view and ensuring the sustainability of the company versus immediate gratification and excitement of high growth. Investors who scream for higher growth are the first to flee if the banks stop lending because debt ratios are too high. With amazing increases in US production and slow worldwide economies, oil prices could slide. This is not the time to bet the company on high oil prices.

        Sentiment: Buy