Why Vanguard Natural Resources LLC's Shares Skyrocketed 12% for the 2nd Straight Day

By Markets Fool.com

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.

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What?: Shares of Vanguard Natural Resources popped more than 12% today thanks to the rebound in oil prices. The price for a barrel of West Texas Intermediate crude rose to $57 per barrel, and for a little added sweetener, the NYMEX price for natural gas increased 2.5% to $3.70 per million BTU.

So what?: I guess this is what happens when oil prices give the slightest hint that they are done dropping, because there was no other tangible event that related to Vanguard's prospects. While investors will certainly welcome that12% pop, it is only a small silver lining for the punishment that has been doled out in recent months to Vanguard shareholders.

VNR Chart

VNR data by YCharts.

If you are wondering if this signals that oil prices have found the floor, I'm sorry to saythere is simply too much happening in the oil markets to be sure whether this is the end of the slump.

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Now what: This stock spike and the roughly 13% jump on Tuesdayare likely just a bunch of noise in the market. Looking at the longer term, keep in mind that 68% of Vanguard's production comes from natural gas, and 70% of its oil production is hedged at $91 per barrel for all of 2015. So even though shares have climbed quite a bit this week, it could still be a good time to get in on a relatively well-protected upstream MLP that might be gettingunnecessarilybeaten down because ithas the word "energy" in the industry description.

The article Why Vanguard Natural Resources LLC's Shares Skyrocketed 12% for the 2nd Straight Day originally appeared on Fool.com.

Tyler Crowe has no position in any stocks mentioned.You can follow him at Fool.com under the handle TMFDirtyBird, onGoogle+,or on Twitter@TylerCroweFool. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.