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Why Southwestern Energy Company (SWN) Rallied Today

After being range-bound between $7 and $8 per share due to a fairly disastrous fourth quarter earnings report, Southwestern Energy Company (NYSE:SWN) shares have bounced back. Courtesy of today’s 3.5% rally, shares of the natural gas producer are now trading above the $8 mark. Southwestern Energy Company (NYSE:SWN) received a bid today due to rising natural gas futures, which as of 2 PM are up around 2%. In terms of the commodity, bulls hope that President Trump will loosen regulations enough so that the U.S. can profitably sell its excess natural gas overseas. Investors also hope that the weather plays ball over the coming months and further stimulates energy demand.

Southwestern Energy Company (NYSE:SWN)’s relative strength in the face of the recent news that it will be replaced by Computer Sciences in the S&P 500 beginning April 4 is certainly encouraging.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

The smart money was more optimistic on Southwestern Energy in the fourth quarter than in the third quarter. According to our data, 44 elite funds had a bullish position in Southwestern Energy Company (NYSE:SWN) at the end of December, up 7 funds from the previous quarter. Those numbers are out of the 742 elite funds that we track in total. In terms of individual fund movements, Cliff Asness’ AQR Capital Management raised its holdings by 724% to 7.5 million shares, while Dan Loeb‘s Third Point initiated a new stake of 5 million shares.

The Bottom Line

Southwestern Energy Company (NYSE:SWN) shares are rising due to improved sentiment in the natural gas sector. With natural gas futures now comfortably above $3 and rising, more investors believe Southwestern Energy can beat expectations going forward. For those of you interested, check out this article on the world’s largest natural gas producers.

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