With
the recent fall in oil and gas prices, many investors are looking for bargains
in the industry. One company that has drawn interest is Southwestern Energy
(SWN).
For
an oil and gas company such as Southwestern to be a good investment right now,
I think it must answer two questions:
- Is it cheap?
- Is it likely to survive the current downturn, especially without diluting investors?
Answering
the first question tells an investor if they might earn above average returns by
investing in the company. Answering the second tells an investor how likely it
is they will earn those returns, rather than losing most or all of their money.
To
answer the first question for Southwestern, we will compare the company’s enterprise value to the value of
its underground oil and gas reserves. (Read More)
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