Why Jones Energy, Inc.'s Shares Dropped Today

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 oil and gas company Jones Energy (NYSE: JONE  ) fell 13% today after the company updated operations.

So what: Jones ended the fourth quarter with reserves of 57.5 MMBoe, up 42% from a year ago. Production for the fourth quarter was just 1.7 MMBoe, due in part to bad weather across the country. For 2014, management expects production to be up about 30% to 22,000 to 23,000 Boe/d.  

Now what: Full results will be released on Wednesday, March 12, but investors clearly weren't pleased with production or growth projections. Until we hear the full numbers I wouldn't be too alarmed and with shares trading at less than 10 times 2014's estimates the stock could be a steal with the amount of growth it has. I'd stay on the sidelines until earnings are out because it's too early to make a final judgment on Jones' future until we get full results.

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