LINE is bumping above $33.40 this morning. Yet, by buying LNCO you get exactly the same assets and an even better yield at $1.70 discounnt.. Makes no sense to me but I sure do love it. Makes me feel very comfortable in my LNCO position. GLTA
This should level out the discount. From this AM press release " LinnCo Tax Update
Due to the significant estimated shield provided by LINN to LinnCo, LinnCo's cash tax liability is estimated to be zero through 2018, assuming current estimates for taxable income and capital spending." Previously, they were projecting that LNCO would have tax liability, and thus a reduced dividend, in 2015.
Yeah, I feel like a cheesy info-mercial saying it, but surely it's true that "these discounts won't last long." The PPS of both LINE and LNCO will undoubtedly go up this year. As if the high dividend isn't attractive enough in and of itself -- the growth potential in LNCO means a possible 30+% upside for the whole year. Maybe more. Typically with that much up-side potential, there is also significant risk. However, because of the slash in PPS and beating LNCO took in 2013, and the PPS hasn't yet fully recovered from its lashing, and since Linn has turned so many good corners (closing BRY, upgrades), I still think LNCO is a huge discount right now. I'm definitely overweighted in LNCO currently, and I only wish I had a little more reserves to buy more shares. The benefit of having most of your eggs in one basket is that you don't have to study every basket out there in the world (this is Warren Buffet's advise). You really only need to know one well! And in selecting the one, you know which basket to keep a close eye on and you choose your one basket with caution, wisdom, and gusto. Since (at least currently) my largest basket is LNCO -- I rest easy, wait patiently, and watch my money slug-out each work day, holding its ground, gaining inch by inch.