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North Atlantic Drilling Limited Message Board

  • bobdbeck bobdbeck May 6, 2013 8:19 AM Flag

    LINE vs. LNCO

    Today is x/d for the two companies. LINE is down premarket about 1.08 which is about an extra .36, normal for an x/d and will probably change as the day goes on, but LNCO is down almost 3.00 as I type, almost 3X LINE's drop for the same distribution. . Either of you two LNCO proponents have an inkling why?

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    • robin0635 May 8, 2013 1:04 PM Flag

      Bob: LINE and LNCO holding their own... EEP up 3.88%... NCT way way up... Not sure why ALDW is down... NYMT is rolling... Dividend plays did nicely !... Did you add to LINE??? it is in recovery mode now with triple volume... GLTA

    • robin0635 May 7, 2013 10:31 AM Flag

      Bob: Morning. Yesterday was a long day - aside from LNCO and LINE it was X-date on EEP too... Played the dividend on LNCO and that is holding well @ 39.40; LINE was a huge buy under 35.00p/s so I loaded up on that - holding @35.92; saw Cramer to watch CEO of LINE (basically said same thing Wells said - overloaded on LNCO now and will sell off 1/2 once it settles and just fine in re LINE; SDRL is on a roll but that's water under the bridge; - bought NTI @ 25.88 on PM and gambling that AH report is good/better - If you have any info on X-date on NTI drop a post because it should be shortly but with only 2 prior divvys I haven't a clue... turbo's AAPL is REALLY on a roll (just do not like the company)... How did you make out with ALDW which is @ 26.20 right now? My portfolios/IRA's/trusts are really light with only LINE/LNCO, EEP, now NTI, NYMT, and my 'favorite' NATDF (where I sit down $810.00) - Unloaded everything else for the short-term - Otherwise I'm just 'hoarding' on the sidelines - (waiting patiently for NRZ to spin too) - Any suggestions now for the longer-term????
      As always a pleasure and thanks for for thinking of us about LNCO yesterday? GLTA

      • 3 Replies to robin0635
      • Hi Robin.
        I bought back my Apple naked puts yesterday in the $1.6 range (originally sold at $14), so I am out of Apple completely. While I feel pretty confident that Apple isn't going to drop below the $400 strike in June, there was very little $$ left to justify holding the position any further. Better to use the $$ leverage towards a different stock, or just to reduce overall risk and also have added dry powder. Plus I'd like to see how the market reacts later in the year when Apple's next iphone is likely still small-format, I wonder if that is priced into the stock already.

        LNCO I created 2 new naked put positions yesterday, both for June, and I feel pretty good about both. One has a break-even in the high $33's, the other (which has a $37.50 strike) breaks even at low-$35's. I'm not a technical trader so all I can really say to your posts is that we agree on the conclusion -- LNCO going below or even to $35 seems unlikely. Given my interest in holding a long term position, I actually felt the risk on my first play was more to the upside -- that I was being too conservative and could be leaving too much potential profit on the table on a rare opportunity like yesterday seemed to be. Thus I created a 2nd Naked Put play at a higher ($37.50) strike, in a quantity I'd be good with owning long-term should the shares be "Put" to me. I still suspect even that play will end without me owning shares. In which case, I'll keep writing semi-aggressive naked puts to collect premium and eventually get Put into a position at a discounted price. That's my intention anyways. The overall market may have other plans.

        Best wishes

      • How much longer term. I can give you a tip for the next 10-20 years LOL.

      • These refiners (ALDW, NTI, CVVR, etc.) are new with very little history to check back on. ALL my MLPs announce their distributions and go x/d right around this time with a short 2-3 week window before payout. I'd expect NTI any day now.

    • robin0635 May 6, 2013 5:12 PM Flag

      Bob and Turbo: 52 week low of LINE = 34.26; 52 week low of LNCO = 35.15; for either to break these levels would mean every institutional investor would sell LINE and/or LNCO at a loss and eliminate a minimum of 2 quarters of dividends with a remainder pay-out of 3.5+% over the next 6 months... Unless there is a market crash, that is unlikely -- They are pure energy plays and if they go bad you can bet the entire sector will have to fall on their swords too, and last I looked, neither bankers nor institutions were so inclined to do so --- For LNCO to drop to 35p/s, LINE would have to fall to 32+/-p/s... -- Possible but highly unlikely...

    • robin0635 May 6, 2013 4:50 PM Flag

      Bob: Add-on to below post; my SELL price relative to LNCO is anything above 40.29 (keeps divvy on prior purchases and BRY deal will fore-close 44.00 range again for months); Will not sell LINE at current pricing because it was purchased near 52 week lows and the company itself is just too good at what they do... turbo should be fine because LNCO, no matter how bad the BRY deal trades, has an upside of 2.25 to 3.25 relative to LINE... The article posted by turbo below, stating LINE valued at 20.00p/s is BV base, non-inclusive of P/E, nor dividend - and I find that hard to accept at face value...

    • robin0635 May 6, 2013 4:38 PM Flag

      Bob: Just finished playing with my LNCO and LINE stocks - (didn't know you were looking at them, sorry for the delay) ..PM was the time to buy LINE and/or LNCO, which is up over .75/p/s from my added purchase this morning - (Added to both, too) - After-hours today, you could pick-up a deal if so inclined - The Barrons article was the same regurgitated statements made previously in February... The Well's Fargo article challenged by stating it was a BUY and would easily surpass its current market p/s... LINE is within a few cents of its 52 week low; LNCO still about $3.00/p/s over LINE's pricing... The predominant problem regarding both is the BRY deal - what the price will be in JUNE... Technically LNCO @ 39.30 is at the RSI support level - upward RSI is 40.25, with 38.75 being RSI downward (and retrenchment to a low 35p/s just is not going to happen); LINE is a tough one with a 34.93 RSI bottom and a high of 38.50 RSI, and then 40.00 for the next sequence - (The 52 week bottom also being the base RSI bottom is 'maximum drop anticipated' regarding LINE); upward RSI breaks-down above 40/p/s... Buying LINE at or near base 52 week level is the better alternative (that's why I added today as well as Friday) -- LNCO will fluctuate and it all depends on on BRY deal, but LNCO technically CANNOT fall below 35, because LINE itself would have to fall a reciprocal 3.00p/s of its 52 week low, based on their reciprocal trading ranges... Do you understand what I'm saying or have I just confused you???

    • Hopefully I'm not catching a falling knife, but I'll take a gamble that LNCO is not going to fall below its $35 52-week low (aka all-time low since inception)... Just sold some LNCO June $35 naked puts at $1.25/sh. This means that after 6/21, if LNCO is above $35, I keep $1.25/sh and the play is over. If it's below $35, then I will be forced to buy LNCO shares at $35 - 1.25 = $33.75 cost.

      • 2 Replies to turbofever
      • robin0635 May 6, 2013 7:45 PM Flag

        Turbo: Relax relative to LNCO... AH sitting @ 38.88 to 39.90; previous lower bids got nowhere 1 hr. after trading stopped... Put 3+ posts regarding LNCO/ LINE and 1 under Bob's post - won't top again @44 but no problem relative to 35.00 bottom - If it holds tomorrow morning I'll unload excess LNCO to get back to 10k threshold and happily collect my dividends from the aggregate (love the X-date play but this one was cutting it closee); bought more LINE (which is the better 'pure play' today too... You are not catching a falling knife because to many hedge-funds and investment houses have too much to loose... Still want to buy BRY for LNCO???? GLTA

      • WF defended LINE this morning and reiterated it's "outperform" rating. I think it's overblown too. Barron's can make that case with many other gas and oil MLPs. You're right, probably a "blue horseshoe loves Anacott Steel" type of report. :~)

    • Not that I can access it but Barron's had a negative article on LINE this weekend. Perhaps that's the catalyst for the decline.

      • 1 Reply to bobdbeck
      • Yes (Barron's). Wondering if there is truly any merit to this article. Guessing it's a short/slam piece. But the big Q is when to potentially pull the trigger on buying. Article snippets can be found in the LINE forum, here's one I found there:

        "Linn Energy may be the country's most overpriced large energy producer. The controversial domestic oil-and-gas company, which is structured as a publicly traded partnership, has for years used aggressive accounting to prettify its financial statements, and serial acquisitions to shore up its reserves. Signs now suggest that those strategies, which are legal, may no longer be working.

        The firm's partnership units, which trade at $38.50, may be worth less than half of their current quote, based on a range of financial measures, including book value, cash flow, and the value of energy reserves. Linn's distributable cash flow looks significantly overstated. For starters, it doesn't reflect the cost of financial derivatives, mainly in-the-money put options on natural gas.

        Barron's is revisiting Linn because a bigger problem is now apparent. The company's energy production has flattened, despite heavy capital expenditures. The first-quarter financial report released on April 25 showed total energy production averaging 796 million cubic feet per day, with oil and other liquids production converted to an energy equivalent amount of natural gas. That was down from 800 million cubic feet a day in 2012's fourth quarter and little changed from the 782 million cubic feet in last year's third quarter.

        The first-quarter production was below prior Linn guidance of about 827 million cubic feet per day. It attributed the shortfall mainly to a series of one-time events, including bad weather. Linn, however, expects little change in second-quarter energy output. And the company looks for improvement in the second half of 2013.

        Based on Linn's estimated value of its proved reserves and other assets, its units are worth less than $20"

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