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Linn Energy, LLC Message Board

  • johnvon98 johnvon98 Apr 1, 2014 10:49 AM Flag

    LINE/LNCO Pricing

    I've been charting the delta of the LINE/LNCO pricing for the last year or so. Back in mid-October LNCO started dropping from about a 15% premium to a low of a 5.9% discount in late February. The discount at this moment is about 3.1%, and rising. I suspect the Drop in the week or so has been end of the quarter short window dressing, and both stocks are headed up from here. Based on my charting, I would expect LNCO to move up faster than LINE.

    Sentiment: Buy

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    • The premium to discount movement has been interesting to watch johnvon98.

      The market seems to be blowing the dividend/distribution divergence out of proportion, especially since LNCO is projected to have no tax liability thru '17 or '18.

      I view LNCO as an opportunity to buy LINE at a slight discount. Will the delta ever converge? Your guess is as good as the next guys.

      If LNCO closes the delta and trades with a premium, I'll simply sell my LNCO units in my tax deferred accounts and buy LINE and capture that spread.

    • Interesting observation. Hope it has some validity to it and you end up being right not that it matters as long as we continue to get the .2416 dividend monthly and eventually the stock/unit price will take care of itself.

0.3692-0.0227(-5.79%)Feb 11 4:00 PMEST