Magnum Hunter Resources (NYSE:MHR) might be a good buy

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By Jacob Maslow

MHR - Magnum Hunter Resources LogoI’ve always been a big fan of buy on bad news sell on good news. Magnum Hunter Resources (NYSE:MHR), this piece of advice definitely is in play when it come to Magnum Hunter Resources. This company is an oil and gas exploration company. It’s in the business of acquiring and drilling and producing oil and natural gas in the United States. There’s a couple of things going for this company. First, it’s been beaten up quite a bit due to the collapse in oil prices. Currently, the stock is not doing too well. It’s below $5 and considering how the oil market is faring, it doesn’t look like it will be going past $5 anytime soon. Of course, anything can happen, but based on industry trends it seems to be locked at below $5. In fact, its most recent price is $2 and 70 cents.

The reason why I am quite interested in this stock is because it recently got a Wells Notice from the U.S. Securities and Exchange Commission. Wells Notice is a form of notice sent by the government if they’re going to be taking enforcement action against a company. Apparently, this Wells Notice is related to the company’s late filing of its 2012 annual report. The reason for the late filing, according to online records, is due to the company dismissing its previous registered public accounting firm.

From the looks of it, it appears that this Wells Notice is a late in coming and it appears that the company has already resolved these issues. Regardless, it was good enough that this development was bad enough for the market to penalize the company and its stock dropped by 10%. Although since this issue has been resolved, this may be a good stock to pick up, especially considering the fact that it is so cheap right now.

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