Which Is the Better Short: Penn Virginia vs. Swift Energy?

Short interest in Penn Virginia and Swift Energy is more than 30%.

Matthew DiLallo
Matthew DiLallo
Jul 18, 2014 at 11:15AM
Energy, Materials, and Utilities

Swift Energy (NYSE:SBOW) and Penn Virginia (NASDAQOTH:PVAHQ) are two of the most heavily shorted stocks in the energy sector. Currently 34.2% of Swift Energy's shares have been sold short while 34.1% of Penn Virginia's shares have been shorted by investors. Needless to say investors expect big drops in both stocks. 

What's intriguing about these two short ideas is the fact that both Swift Energy and Penn Virginia are focused on the Eagle Ford Shale to fuel growth. While the Eagle Ford Shale is the probably the hottest drilling play in America, investors don't think it can fuel gains for these two stocks.

One of the reasons investors are cautious on both companies is due to the aggressive use of debt to fuel drilling. However, that's not the main reason investors are betting against Swift Energy or Penn Virginia. So, to help investors better understand why these stocks are so heavily shorted I created the following slideshow presentation. It suggests which stock might be the better short candidate as well as which one could incinerate short-sellers while also providing an interesting bonus idea to keep an eye on.