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Linn Co, LLC Message Board

  • robin0635 Jun 18, 2013 1:10 PM Flag

    LINN rated as "strong buy"

    This was a post on LINE's Board from diet_coke_1x: A Good Read:
    titled: Long Of the Year
    LINE Under Attack but Thesis Has Not Changed; SB1 Rating
    Recommendation:While we are admittedly surprised by the length of the bear raid on LINN
    Energy, in our view, we are in the last inning which is likely to result in a large short covering
    rally. Given the significant accretion that we expect from its pending Berry Petroleum (BRY)
    acquisition, LINN’s newly implemented monthly distribution policy (which should limit short
    selling speculation), the pending 6% sequential distribution increase in 3Q13, and encouraging
    early results on the company’s Hogshooter acreage in Oklahoma, in our view LINN is a
    compelling growth stock. As such, we reiterate our Strong Buy rating.
    ♦ Barrons Takes Another Swing at LINN’s Business Model:On Saturday, Barrons wrote its
    third negative article on LINN Energy. Once again claiming the partnership’s cash flow was
    overstated and that LINN does not cover its distribution. The surprising new claim was
    that LinnCo has a large tax liability that becomes due in 2016. While it is unfortunate the
    article does not take the time to deeply go through these issues, and seems to be backing a
    negative agenda, we will once again try to correct the misinformation in the marketplace.
    ♦ Put Derivatives – Nothing New but Happy to Revisit It: We have already written
    numerous research reports about this issue. As we describe in detail on the following
    page, LINN’s hedging strategy has been essentially in place since the partnership went
    public in 2006. LINN has historically viewedputs as a capital costs associated with
    acquisitions. It is important to remember the discussion is about non-cash charges that
    have no future impediment on LINN’s ability to pay its distribution. Also that management
    has stated they no longer intend to buy puts given the frustration in the market place.

    Thought some stockholders might be interested...

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