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Linn Energy, LLC (LINE) Message Board

  • porciuscato porciuscato May 6, 2008 8:55 AM Flag

    My latest MLP calcs

    I posted these on the EVEP board. You might be interested too. These are based on yesterday's close.

    I prioritized on company estimates and then on estimates from Lehman, Wachovia, et al. I'm too lazy to format for you. They are ordered as follows:
    BBEP
    CEP
    EVEP
    LGCY
    LINE
    QELP


    Debt/Equity
    0.26
    0.40
    0.95
    0.43
    0.75
    0.42

    Price/book
    0.91
    0.75
    1.13
    2.55
    1.22
    1.44

    Enterprise Value/EBITDA (I think this one is key)
    6.92
    6.13
    4.22
    6.91
    7.59
    5.66

    Price/Distributable Cash flow (nearly as important)
    8.08
    6.71
    6.35
    8.81
    7.41
    7.79

    Enterprise Value/Standardized Measure (Present value of proven reserves)
    0.88
    1.17
    0.87
    1.10
    1.02
    1.20

    Price/Calculated NAV (from brokers proved reserves valuations - in theory it should be close to std. measure)
    0.72
    0.79
    0.73
    1.00
    #DIV/0!
    #DIV/0!

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    • fourme@sbcglobal.net fourme May 10, 2008 9:46 AM Flag

      as a new investor can you recommend a good book on analizing stocks.thanks

      • 1 Reply to fourme
      • Anyone who writes a book about analyzing stocks couldn't be too good at it. I'd suggest reading this board and try to get your arms around the insightful and factual posters.. there are more than a couple, but don't expect to understand them all.

        Start following the price of LINE, EVEP, CEP, and other companies in this group the way you follow the box score of your favorite baseball team. Know the daily price of crude and NG within a few pennies. When you're out to dinner and you can tell a friend LINE's closing price for that day without thinking too much, you may be ready to plunk down some of your cash
        common sense and luck are very helpful

    • "BTW, I was looking to park some short-term cash today and bought 500 ATN at $42.55 and sold June $40 calls at $3.90."

      I have stayed away from ATN because of my "Cramer Rule" (if Cramer recommends it don't touch it until it declines at least 10%). However, that option strategy seems sound enough.

    • Referring to EVEP your problem is in your answer :yoou use wachovia's numbers" or "your brokers numbers". It's not there money, never trust them rely on yourself.

      You obviously have not read the detailed s1 filed with the sec when they which public and crunched the numbers and read the terms to there fixed swap contracts.

      Its not a bad company it a good one but with limited upside and favors management over unit holders.

      I am trying to offer you a different view pt, and save you from somw disappointment. prove me wrong with your own homework. read the s1.

    • Your point is?

    • Thanks for all the information and analysis.

      EVEP does look a bit on the undervalued side and I will be looking at that closely in the next couple of days as I have just returned from Asia.

      BTW, I was looking to park some short-term cash today and bought 500 ATN at $42.55 and sold June $40 calls at $3.90. Assuming shares stay above $40, I will net $1.35 a share (about $675), an APR of 28.53% on my net investment. I had the cash from a sale of 500 shares of ERF -- interestingly, the ERF shares yielded only $210 gross (before Canadian 15% withholding) per month. This seemed like a nice short-term income move even though it is pretty small potatoes. What do you think?

    • "Better look over NAV, hedging price fixed volumes on evep and managements incentives before you jump into evep"

      Do you have any specifics in mind?

      If you use std. measure for NAV, EVEP is currently at a 13% discount (versus a 4% premium for LINE). Using Wachovia's numbers, I get a 27% (!) discount for EVEP.

      '08 Gas prices hedges have a ceiling of $8.90 (vs. 8.48 for Linn) and are higher than Linn's for every year but '09 ($0.10 lower). They have 24% upside in '08 and 33% in '09 (vs. 18% and 20% for Linn)

      Max IDR split is 25% - same as ATN, but higher than CEP (15%) or BBEB (2%).

    • Better look over NAV, hedging price fixed volumes on evep and managements incentives before you jump into evep

    • How do you use this info

      • 1 Reply to lfeinsm
      • Price/book: price of the stock versus the net price of its assets. Not necessarily meaningful. For example, EVEP got their assets cheap, whereas CEP probably overpaid.

        EV/EBITDA & Price/DCF: how much of the company's value it takes to generate $1 of cash. The lower the better. The inverse of Price/DCF should be larger than the distribution yield.

        EV/Std. Measure: Market valuation of all the company's assets divided by the present value of the assets' income (discounted at a 10% rate). A number under 1 means the company would probably liquidate for more than its current price.

 
LINE
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