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Linn Energy, LLC (LINE) Message Board

  • goskiing99 goskiing99 May 26, 2014 3:45 PM Flag

    What shorts would stay month afer month

    And keep forking over that distribution? I don't get it. Anyone? I mean you must have some serious conviction to stay short knowing each month you have to fork over the distribution. What I missing here that makes this logical??

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    • Only stupid ones. Besides short interest is going lower each day….

    • A few points to consider.
      First, A good investor should be able to make both a good long case and a good short case and then weigh the two and decide which makes more sense. Just calling shorts nuts doesn't help you be a good, informed, analytical investor.
      Second, I suspect that NASDAQ's reports of short positions (which is always two or more weeks behind) might include short term shorts --That is to say it might include shorts who are only short for a few days or hours, but NASDAQ captures those positions when it reports. A lot of money can be made getting in and out of a stock in the short term if you have very good software and a quick trigger finger. gains of 1-2% every day or two is easy if you know what you're doing.
      Third, one short case is that Linn absolutely must have a good value in the LNCO shares to use them for acquisitions and mergers. Right now, the dividend yield on LNCO at well over 10% makes them very expensive currency for doing accretive mergers and acquisitions.
      On the long case, Linn still sits on a lot of value in the Permian basin that it can exchange for more low-decline assets. Linn also has a ton of reserves that it can manage for sustained and consistent production -- it doesn't have to pump to max capacity 24/7/365. Linn also has access to debt at favorable terms. Rates are still very low and any good bank will lend money against producing oil (and gas) fields (excellent collateral). (Although many e&ps are getting in trouble using big debt to drill and frac...a much riskier use of debt than to finance purchase of producing assets and developed fields.)
      Disclosure: I am very long LNCO---probably irrationally so. Am expecting a very good Q-2 and more good news on Permian strategy along with a couple of good acquisitions this year.

    • Do these fools just like throwing money away every month??

    • you're missing nothing... anyone shorting this stock is crazy. Worst case is it stays flat.

 
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