Boston, MA 06\/02\/2014 (wallstreetpr) \u2013 Magnum Hunter Resources Corp (NYSE:MHR)<\/b> is the lucky winner of an unusual investment millions from a hedge fund. The company can now face the future with confidence and shareholders can relax and wait for the benefits to come.<\/p>\n
Activist investor Relational Investors injected $150 million into the oil and gas company Magnum Hunter through a private offering of common stock shares and warrants. Given that hedge funds are always easy to pick up a fight with the management than making financial injection, Relational Investors has made a rare move with its latest deal with MHR. Because of the uniqueness of the transaction, it is worth understanding why Relational Investors took the unpopular move in Magnum Hunter.<\/p>\n
Sound management<\/b><\/p>\n
The number one reason Relational Investors found it reasonable to increase its investment in Magnum Hunter Resources Corp (NYSE:MHR) is because of the sound management team in the company. Under the guidance of Chief Executive Officer Gary C. Evans, Magnum Hunter has registered numerous successes. In addition to the ability to spot rare opportunities, the management at Magnum Hunter has also worked hard to reduce cost and expenses burden in the company.<\/p>\n
The company\u2019s most recent earnings report is testimony to the fact that the management is hard at work to improve performance. The company suffered a smaller net loss than what the analysts estimated. The 1Q2014 net loss was 15 cents per share, beating the consensus estimate of 16 cents per share. Revenue in the quarter soared 98.2 percent on a year-over-year basis to $70.20 million. However, analysts were looking for something bigger at $96.43 million in revenue.<\/p>\n
Attractive opportunities<\/b><\/p>\n
Another reason that attracted Relational Investors to increase investment in Magnum Hunter is the attractive opportunities for the company. According to Relational Investors co-founder Ralph V. Whitworth, MHR has long-term opportunities and the investment should help the company to expand in the oil-rich formations of Marcellus and Utica shale. The money will also help the company to repay debt, drill new rigs and acquire new leases.<\/p>\n
An additional investment of $150 million in Magnum Hunter Resources Corp (NYSE:MHR) makes the activist investor the biggest shareholder with 15 percent stake in the oil and gas company. In recent times, Relational Investors seems to be acting more like a private equity firm than hedge fund. However, the investor\u2019s activism can also be seen in oil companies such as Hess Corp (NYSE:HES) and Occidental Petroleum Corporation (NYSE:OXY).<\/p>\n","protected":false},"excerpt":{"rendered":"
Boston, MA 06\/02\/2014 (wallstreetpr) \u2013 Magnum Hunter Resources Corp (NYSE:MHR) is the lucky winner of an unusual investment millions from a hedge fund. The company […]<\/p>\n","protected":false},"author":32,"featured_media":24248,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"twitter_2902945987_2902945987":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[2236],"tags":[4718,4719],"stock_ticker":[],"class_list":["post-24339","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-magnum-hunter-resources-corp-nysemhr","tag-nysemhr","entry"],"acf":[],"yoast_head":"\n