Potential Mover: Vanguard Natural Resources, LLC (VNR)

Company Profile:

Vanguard Natural Resources, LLC, through its subsidiaries, acquires and develops oil and natural gas properties in the United States. It owns properties, and oil and natural gas reserves primarily located in nine operating basins, including the Arkoma Basin in Arkansas and Oklahoma; the Permian Basin in West Texas and New Mexico; the Big Horn Basin in Wyoming and Montana; the Piceance Basin in Colorado; the Gulf Coast Basin in Texas, Louisiana, and Mississippi; the Wind River Basin in Wyoming; the Williston Basin in North Dakota and Montana; the Green River Basin in Wyoming; and the Powder River Basin in Wyoming. As of December 31, 2014, the company had total estimated proved reserves of 2,031.3 million barrels of oil equivalent, as well as owned working interests in 9,759 gross productive wells and approximately 870,140 gross undeveloped acres. Vanguard Natural Resources, LLC was founded in 2006 and is headquartered in Houston, Texas.

Recent News:

On May 22, 1015, VNR agreed to acquire Eagle Rock Energy Partners, L.P. (NASDAQ: EROC) in a deal valued at $614 million. Eagle shareholders will receive $474 common Vanguard units in a tax-free exchange and Vanguard will take on Eagle’s debt of $140 million in the deal.

On May 19, 2015, VNR has declared a cash distribution attributable to the month of April 2015 of $0.1175 per unit ($1.41 on an annual basis) payable on June 12, 2015 to unitholders of record on June 1, 2015.

For the quarter ended March 31, 2015, adjusted Net Income Attributable to Common and Class B Unitholders was $18.0 million for the first three months of 2015, or $0.21 per basic unit, as compared to $24.6 million, or $0.31 per basic unit, in the comparable period of 2014.

 
 
 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

VNR’s strengths can be seen in its better growth, better profitability and better solvency. Its revenue has increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 56.20. The P/BV ratio indicates it is undervalued compared to the average P/BV ratio of the sector. We rate Vanguard Natural Resources, LLC (VNR) a Strong BUY.

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