Here's Why Swift Energy may see a Bounce in it's Stock Price

Swift Energy Company SFY, has been in a slow but steady decline to the downside. The equity has lost 50% of its value, on a year to date basis; and, lost 60% relative to its sector and approximately 70% relative to the S&P500.

This, of course, is in an environment where the energy sector has been on a tear to the upside.

ENTER the ACTIVISTS

On the 16th of October, Barker Street Capital, LLC, a 9.99% owner of the outstanding shares in SFY, released a letter in which they make a rather bullish case; and, at the same time, reprimands current management on destroying  Swift Energy’s market valuation.

The letter stated:  “...We believe that the market price of Swift shares fails to reflect the intrinsic value of the Company’s assets, which we estimate to be over $15 per share…”

Baker Street, further chided the company for creating an environment where there has been a loss of credibility in the company’s management.  “This loss of credibility is evidenced by the fact that Swift trades at approximately 1/3 of its tangible book value and at one of the largest discounts to stated PV-10 in the Oil & Gas sector.”

Baker want’s a seat on the board; a renewed; a focus on shareholder values; and evaluate or entertain a possible sale of the entire company.

DealReporter feels that a sale of the entity is now at risk--as an activist manager may push for a sale of assets and piecemeal parts of the business rather than a complete sale.  This remains to be seen; though, keep in mind: Zacks is reporting that   34.46% of the float is sold short--any news with a positive bent will push the equity to the upside.

*****