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 Penn Virginia (OTC:PVAHQ) jumped 10% today after getting an upgrade from an analyst.
So what: Howard Weil analysts Brian Corales and David Amoss raised their price target for Penn Virginia to $12 on a bullish view of the company's assets. They said the stock, despite the recent run-up, is undervalued, trading for 55% of its net asset value calculation and 3.7 times its 2014 EBITDA prediction.
Now what: When analysts move stocks like this it's important to take a step back and look at what has really changed today, which is nothing. The business isn't fundamentally any better than it was yesterday; it was just upgraded by someone who thinks the stock is undervalued. These upgrade pops will often fizzle over time as day traders leave the stock. So if you're interested in shares, the next few weeks will likely offer better opportunities than today. The bottom line is that Penn Virginia is the same company as it was yesterday, so investors don't need to fundamentally change their thesis today.
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