Penn Virginia (PVA) stock has gained 16% since the company announced its acquisition of Magnum Hunter's (MHR) Eagle Ford properties and highly successful $775 million debt refinancing (the stock closed at $4.64 on June 17, up $0.64 from the closing price of $4.00 on April 9). However, the move translates to only a small change in the company's enterprise value (less than 3%), leaving the stock's risk/reward profile and valuation thesis largely intact.
(click to enlarge)
(Source: Yahoo Finance)
The Magnum Hunter transaction was indeed a transformational - and very daring - strategic move by Penn Virginia that redefined the company's operational complexion and valuation. Penn Virginia has emerged as a focused Eagle Ford...