Why Magnum Hunter Resources' Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of independent oil and gas company Magnum Hunter Resources jumped 10% on an analyst rating.

So what: UBS initiated coverage on the stock with a buy rating and a $6 price target. That gave investors enough to jump in today even though there wasn't any significant news from the company.

Now what: We don't take analyst ratings too seriously at The Motley Fool, but the market often will for a short period of time. The analyst pointed to potential asset sales and other methods of increasing value that are speculative, and unless the company indeed sells assets, the stock will fall back to earth. I don't see a reason to buy today's pop on this analyst rating and wouldn't change your long-term investment thesis because of this news.

Interested in more info on Magnum Hunter Resources? Add it to your watchlist by clicking here.

The article Why Magnum Hunter Resources' Shares Popped originally appeared on Fool.com.

Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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