Swift Energy (SFY)

[dan_s]

Swift Energy (SFY): An updated Net Income & Cash Flow Forecast model has been posted under the Watch List Tab.

My Fair Value Estimate dropped $3.00 to $26.00. Compares to First Call's Price Target of $17.33.

If you still own this one I recommend hanging tough. The stock is oversold and should bounce back when they announce the sale of their Central Louisiana package. HOWEVER, I have to drop it from our Small-Cap Growth Portfolio because they have lowered their production guidance for 2014 and it now appears their production will decline about 4% this year.

Take a look at my forecast model. In 2013 SFY generated $7.13 CFPS and their proven reserves went up. The bad news is that their proven reserves are now only 38% liquids, down from over 50% at the end of last year.

CFPS should be over $5.00 and the company is going to make it. The stock is trading for less than 2X CFPS, which is crazy low. They need to close the sale in Louisiana at a good price, shore up the balance sheet and focus on developing their good acreage in the Eagle Ford. Higher natural gas prices will really help this one.