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Third Point LLC Sold a Major Position in Southwestern Energy

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Sep. 13 2018, Updated 9:01 a.m. ET

Recent institutional activity in SWN

Third Point LLC sold a major position in Southwestern Energy Company (SWN) during the second quarter—15.0 million shares of SWN valued at $64.9 million. Third Point LLC was followed by Balyasny Asset Management, which sold 10.3 million shares of SWN stock.

BlackRock Institutional Trust Company and Citadel LLC were the stock’s biggest buyers, purchasing 13.9 million and 9.3 million shares, respectively. Net 6.8 million positions were sold among the top five buyers and sellers of SWN stock, which indicates a bearish sentiment in the stock.

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Why are institutional investors bearish on SWN?

Institutional investors’ bearishness toward SWN could be attributed to the following factors:

  • SWN had low crude oil exposure.
  • Natural gas prices have been weak. The average natural gas price was $2.83 per MMBtu during the second quarter compared to $3.14 per MMBtu in the second quarter of 2017.
  • There is a low ROCE (return on capital employed) due to weak margins and high capital spending requirements

Top five holders

BlackRock Institutional Trust Company, the Vanguard Group, Capital Research Global Investors, State Street Global Advisors, and Stelliam Investment Management are the top five institutional holders in SWN. BlackRock Institutional Trust Company became the largest institutional holder in SWN with an addition of 13.9 million shares during the recent quarter. BlackRock Institutional Trust Company held 9.6% of the company’s stock by the end of the second quarter.

In the final article in this series, we’ll see what analysts recommend for Southwestern Energy stock.

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