Two Stocks That Could Become Dan Loeb, Third Point’s Next Activist Targets

Southwestern Energy Company (NYSE:SWN) is another fresh bet initiated by Dan Loeb and his team. During the fourth quarter, Third Point accumulated 15 million shares according to its latest regulatory filing. Cliff Asness and AQR Capital Management are also bullish on Southwestern, having reported a massive increase in their holding of the stock to 20.2 million shares. Insider Monkey data shows that hedge funds’ interest in Southwestern Energy Company picked up during the 2017 fourth quarter, with the number of funds holding the stock having jumped to 35 from 31 registered at the end of September.

In comparison to its competitors, Southwestern Energy Company (NYSE:SWN) stock performance has been rather poor. During the past twelve months, Southwestern shares have lost 54% of their value, while competitor Marathon Oil Corporation (NYSE:MRO) stock is down by just 1%. ConocoPhillips (NYSE:COP), one of the industry leader, is actually in green territory, having increased by 21% during the same period of time.

Ever since the crash of oil and natural gas prices in 2014, Southwestern Energy Company (NYSE:SWN) has been under pressure to realign its portfolio and adapt to life with lower energy prices. The company has cut down considerably on drilling and has divested some non-core assets. Southwestern Energy has also completed a secondary offering in 2016 and raised $1.25 billion in the process. It then used that cash to reduce its debt burden and resumed drilling in the second half of 2016.

Southwestern Energy’s financial reports from 2017 show a cumulative revenue of $2.39 billion for the first nine months, just shy of the $2.43 billion in revenue reported for the whole of 2016. So, it’s safe to assume that 2017 full-year revenue will surpass that of 2016 when the company issues the next financial report on March 1. Since Southwestern’s revenue depends a lot on natural gas prices, it is very important to pay close attention to performance measures as well. Should the company fail to register meaningful progress in that department, it could become an activist target for Third Point.

Disclosure: none.