Legacy Reserves (NASDAQ: LGCY) continued its torrid run on Wednesday, rising another 20% by 12:45 p.m. EDT after one of the company's largest investors revealed the purchase of additional units. That brings the oil and gas producer's year-to-date rally up over 250% as fears concerning its future have quickly faded alongside higher oil prices.
Bain Creek Capital disclosed that it had purchased another 80,000 units in Legacy Reserves for about $445,000. That adds to Bain Creek's position, which is currently more than 10% of the company's outstanding units after it has bought more than 550,000 units since late March. These purchases seem to indicate that Bain Creek sees more upside ahead as Legacy Reserves converts from a master limited partnership to a C-Corp.
Bain Creek Capital isn't the only one that sees upside in Legacy Reserves as UBS recently upgraded the company from sell to hold. While that might not seem all that bullish, UBS also raised its price target from $1.50 to $8 per unit, which implies 37% upside even after today's 20% pop.
While some investors and analysts see more upside ahead for Legacy Reserves, this is still a very risky oil stock. It's a small company that has an elevated level of debt. Because of that, shares could be quite volatile going forward, especially if oil prices give back some of their recent gains. That's why investors might want to consider one of these top-tier oil stocks instead.
10 stocks we like better than Legacy ReservesWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Legacy Reserves wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of May 8, 2018