". . . and they will increase divs sometime this year" So you seem to ignore the need to raise the DCF for financial stability. How do you think the market would react to that? And what would S&P, who has stated that Linn is overpaying on its dist., do to Linn's already low-rated bonds?
Soryy, Sail, but LINE isn't tax free. If you're doing your K-1 accurately, around 20% is taxable and the remainder is tax deferred. The amount that's tax deferred is to be subtracted from your cost basis until it reaches zero, at which time distributions will be taxed the same as if they were non-qualified dividends. And when you ultimately sell, that reduced cost basis will translate into a likely large capital gains tax.
Sandra, Linn made pretty clear that they would have virtually no growth this year and their DCF will be barely 101%, well under their guidance. I think the company will be doing good to simply maintain the current distribution. Those who think a dist. raise will be forthcoming in 2014 are allowing their hopes and self-interest to outrun reality. So I believe that everyone who reads the CC transcript as well as their financials will be the somebodies who know something. The overpayment for Berry are the chickens coming home to roost.
Athersys is a story stock. It'll move on positive news, widely read blogs, and brokerage recommendations. But chartists have fun doing their thing, so why not have something of interest to occupy one's time while waiting for what really matters to emerge?
People have been forecasting and predicting based on signs, portents, putative patterns in chicken guts or weather (or whatever) for thousands of years. It's a stay against the unknowable, a kind of psychic comfort blanket, a major tenet of which is to never admit to being in error but simply move on to the next prognostication without really keeping score. And so what? In the case of Athersys everyone realizes that what actually matters is trial results. Of course, *I* know what's going to happen. I used high-quality predictive goat guts.as any Imperial Roman haruspex would have 2000 years ago. I'd share, but goats are expensive and I'm not an altruist.
I made some nice money on Dendreon also, buying cheap and selling in the low teens, but I never considered irovenge a "successful" drug from the efficacy standpoint. Adding three to four months of living to terminal prostate cancer patients strikes me as pretty minimal when the addition for most suffering victims is likely regarded (1) only marginal, and (2) possibly a bad idea. I think DNDN went as high as it did because of the-greater-fool theory of trading, not because of any fundamental reason. This could bode well for Athersys, especially with a P3 FDA approval for anything involving Multistem.
With the incisive reasoning that you've provided I can't see how you can possibly be wrong.
Pipelght wrote, ". . . that is why you see the price getting driven down as the big players load up."
I've been decades in the market and learn something every day. So the obverse of this viewpoint must be that if big players unload a stock the PPS will rise? I suppose we should hope for lots more sellers.
I do wonder why, if a system is so corrupt and rigged, any individual making that assessment would be a willing participant.. Seems to me a form of economic masochism. If I believed that I'd run for the door.
Refusee, I think that LNCO is a real bargain at 1.60 below LINE, especially for income investors, which probably most longs are. But a switch for those who've been in LINE for several years (IRA accounts excepted) can have tax consequences that nullify the advantage. (And a sale means lots of obscure federal and state forms to be filled out which can turn you spiral-eyed.)
You're in no need of correcting. Counselor doesn't seem to see that LNCO is fundamentally LINE but in corporaet rather than partnership clothing. I think that there are several advantages to owning LNCO over LINE, but I don't feel like repreating them.
Typically a company will send brokerages - for those who hold shares in street name - its final ROC determination from early to mid-March (although I've actually had corrections to corrections as late as May, which meant sending the IRS a 1040X). Meanwhile, dividends will be characterized as ordinary or qualified until such final ROC determination is made. I no longer have the reference (the LinnCo prospectus perhaps), but I do recall that for a number of upcoming years LinnCo's dividend will be largely, if not all, ROC. My guess is that any portion that isn't ROC will be mostly qualified. The upshot of all this is that I never file early and do taxes that are subject to change in pencil for easy erasure and recopying in ink around the first week in April.
And for those who use an accountant, I suggest that you not assume that everything is being done correctly and that you learn enough to double-check what's being submitted to the IRS. Past errors (rarely in my favor) have led me to do my own taxes.
The DCF looks to be disappointingly flat for 2014 when you factor in the former Berry holders' 93 million LNCO shares. But I wish you did have it right, Dancing Bear. (Love that tutu.)
There's no need to wait for a CC when the earlier earnings announcement (disappointing) and guidance for 2014 (nothing to write home about) were available in detail. And it wasn't hard to figure that there'd be no dist.increase in 2014. 2015, of course, remains uncertain. But it does appear that Linn will maintain the current high dist., and that should be reasonably satisfying to income investors, except for those who wanted an increase despite financial stability. (All those pesky numbers, ya know.)
I do wonder how many of the overly optimistic posters actually read the detailed earnings announcement from Linn plus the supplemental information that's posted at the Linn Energy website. I suggest that they take the time to do so before giving me a red thumb for this post.
Counselor, I think you need to factor in those 93 million Berry shares for an accurate assessment of where we stand now. Also, I note that the weather, which wasn't supposed to affect production, has siginificantly done so. What was Linn thinking when they announced their immunity when the weather was impacting the other E&P companies?
The financial context has changed considerably since Linn initially announced their intention to raise the distribution a full year ago. Also, Linn stated (I think it was in a CC, but I do remember it) that after raising the BRY offer by a third more shares that the 3.08 distribution was off the table. (After all, it was initiated as an additional incentive for BRY holders to vote for the merger.) Those LNCO shares beyond the 1.25X are providing former Berry holders a lot more than an additional $.18 annually. For folks to continue talking up a dist. increase which may well not occur for a number of months or even this year raises expectations which are then deflated with dist. announcements and are likely reflected in a lower stock price. Surely Linn is too savvy to play once again into the shorters' hands. I think that longs should be as smart as well as patient. When Linn can increase the dist. without dancing on the edge is when they'll do it, regardless of past intentions which are no longer relevant.