Southwestern Energy is in an oil/natural gas sweet spot


Southwestern Energy's (NYSE: SWN) stock has meandered since the June 5, 2009 Buy recommendation at a price of $42.38, but rare is the day you should sell an oil and natural gas play, hence I'm Reiterating the Buy rating.

And the reason is obvious enough: natural gas and oil (which, by the way, was down, but only briefly, and never out) - will represent preferred U.S. energy sources for at least the next decade.


What's more, Southwestern is a cream-of-the-crop play, due to its projected, large increases in production for the immediate years ahead, and its low-cost producer status.

That's why one can overlook what could be a double-top, technically, in SWN's stock chart, at/near $47. Institutional investors bid-up SWN massively this spring, rocketing shares to about $47 from the $25-range. Hence, the pull-back this summer looks like an extended correction, with the stock having since recovered to about $42. The First Call FY2009/FY2010 EPS estimates for SWN are $1.47 to $2.19.

Stock Analysis: Southwestern Energy is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in SWN now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your SWN position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $17.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Symbol Lookup
IndexesChangePrice
DJIA+6.5112,890.46
NASDAQ+11.372,927.23
S&P 500+1.991,351.95

Last updated: February 10, 2012: 07:00 AM

Hot Stocks

General Electric

19.13-0.11(-0.57)

Alcoa

10.64-0.03(-0.28)

Apple Inc

493.17+16.49(+3.46)

Google Inc 'A'

611.46+1.61(+0.26)

Bank of America

8.18+0.05(+0.62)

Wal-Mart Stores

61.96+0.34(+0.55)

Exxon Mobil Corp

84.88-0.44(-0.52)

Ford

12.69-0.15(-1.17)

Citigroup

33.66-0.57(-1.67)

IBM

193.13+0.18(+0.09)

Yahoo

16.00+0.22(+1.39)

Starbucks

49.20+0.48(+0.99)

Microsoft

30.77+0.11(+0.36)

Home Depot

45.27+0.10(+0.22)

DailyFinance Headlines

Benzinga Headlines

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

DailyFinance BlackBerry App

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

BioHealth Investor Headlines

Page Loaded in 1328875237577 ms.