Is Magnum Hunter Resources Corp. (OTCMKTS:MHRC) A Good Investment

Magnum Hunter Resources Corp. (OTCMKTS:MHRC) had a rough tumble after its latest 10-Q hit the web, and has been flying up and down the charts ever since that happened. So – is it a good investment now?

As usual, there’s no easy answer to that question. If one has to be summarized in just a few words, it would probably sound like “it could be, if you’re looking for short term profit, but you’d better keep your eyes peeled”.

Now for a more detailed answer. MHRC is a company that had been having trouble making ends meet even before it was bogged down in the metaphorical tar pit that is today’s oil market. As the situation got progressively worse, investors started abandoning ship, the ticker plummeted and the company ended up on the OTC Markets Pinksheets section, like many other relatively small NYSE companies. The latest disastrous 10-Q was just the last straw that broke the camel’s back and sent the ticker tumbling into single penny land, where it looks like it will remain for some time. Why?

Unfortunately for investors that were waiting for MHRC to create long term value for them, it doesn’t look like that could happen until the current oil situation changes. What’s more, even if it does, the chances of MHRC becoming profitable any time soon after that look pretty slim.

Now, this is not to say that the situation is all bad. The ticker is still making sizable moves up and down the charts, so the possibility that an enterprising investor might make a profit from trading it still exists. Or does it?

Perceptive investors will have noticed by now that although MHRC stock is still traded, its daily dollar volumes are diminishing rapidly. That being said, it is unlikely that it MHRC will become illiquid any time soon, but it is likely that making bigger and more profitable trades will become more difficult as time goes by.

Investors are advised to take this into consideration as they make up their minds about MHRC.