I agree about cash flow with MLPs and LLCs. Problem with LINE, though, is that for the past two qtrs. the cash flow hasn't been enough to pay the distribution. That means the shortfall comes from borrowed money, thus increasing the oversized debt which in turn demands more interest costs on that debt. Moreover, the recent receipt of $181 mil for new units was instantly followed by a borrowing of $250 mil. So there's a bit more debt now and an increase in distribution payments. Q2 of 2015 needs to be a big positive surprise, but the market is saying otherwise. Linn, I think, is in a pickle.
Remlore, day trading typically requires stocks with considerable volatility plus the ability to easily short them in non-institutional sizes. LINE/LNCO lack both qualities. Even a flea-sized player as I am has thrown in the towel on trading LINE, which simply shows a dishearteningly steady decline. In any case, the vast majority of retail day traders bet on stocks to climb, so I find your idea pretty odd. But here are two real things I'm curious about. First, could you address the debt to equity ratio, which by any financial standard is awful? And second, what about cash flow falling short of the high distribution? If you don't feel that these two are inhibiting movement upward, could you explain why?
You're right, RJ. Growing deductibles have no relationship to the ACA. Even before Obama ever took office, two of my kids were complaining regularly about their insurance deductibles being too high for their families. The ever-rising costs of health care pre-date Obamacare by decades.
But, Miviewz, with a vast increase in preventative health care and treatment of chronic conditions, the nation's emergency rooms will no longer be flooded with people needing hospitalization at taxpayer expense. The nonpartisan Congressional Budget Office has stated that the ACA will save over 137 Billion dollars over the next decade with all the complexities factored in. (And calling a poster "stupid stupid" is not only uncivil but suggests that you furiously brook no contrary opinion. I regard it as tantamount to confessing that you have an intolerantly closed mind. You seem to have substituted anger for reason. Makes me wonder if this is your usual mode of discourse.)
What you're missing is the part played by luck. Check the price differentials over the past several years. With your current play LINE doesn't necessarily go up. The relationship could change if they both decline with LNCO dropping twice as much as LINE. It's certainly happened before. I suspect that this is the risk you're not seeing.
So, Remi, you don't think that it's the fundamentals of Linn playing a major part? And have you noticed how these small increments of change typically follow the price of WTI? What you're saying, as I read it, is that the cause of LINE's failure to rise is stock trading. But that's what happens on the stock market: fluctuations. Moreover, the stock market is a trading venue. Surely you're not just discovering what's been the case for several hundred years.
Access a site with real-time oil prices and watch LINE on Level II. You'll have a clearer idea about which is the dog and which is the tail.
Wow, if the game were only that easy! I'm playing to make 10 to 15 cents per trade and do it more often than I lose that amount. Remember that lots of traders (assuming that you're right) offer liquidity.
The guy's an undisciplined obsessive who's head is gorged with hate and outrage because the world refuses to conform to his semi-coherent standards and rigid beliefs. I concluded this several years ago when I placed him on Ignore. I don't *ever* read his posts but do think of him as my weird internet stalker.
Considering that the market discounts the future and 2017 is just a year and a half off, I question whether the hedges for 2015 and 2016 are as potent a safety net as you imply, Kirby. Throw in the huge debt with its impact on cash flow, and it's hard to be bullish about distribution maintenance. While the current dist. could continue through 2015, I see it being halved (or worse) in very early 2016, unless oil and NGLs pop about 30%, which is pretty unlikely. (Again, my only activity with LINE/LNCO consists of very short-term trades.)
You're right.Time does speed along. And everything is in a constant state of flux, so Tuesday's solution can quickly become Wednesday's problem. As regards the market, emotionally inflexible investors are doomed to regular losses. (Not that I'm on a pedestal of admirable objectivity. Too many times, to my regret, I've allowed hope to triumph over reason.)
Well, disagreements are what make the market. Everything bought is sold. My concern, as someone who's been on this board since early 2009, is the legion of posters, optimistically confident (but all gone now), who, when LINE began its drop from the 30s, asserted relentlessly that the stock was a buy because the low had already been made. And then there was a new low and another and another, etc. So I'm now immune to declarations that the low has been reached. If Linn has another distribution cut of around 60%, I'd guess that's what could send the units to 4 or 5. Moreover, if cash flow can't handle the DCF as was the case the past two quarters, the company just can't financially keep that up. Finally, I don't think that Linn is going to zero, but there are a lot of numbers between zero and 10. The 12% return is both very high and quite insecure. (I remember when I believed that LINE wouldn't drop below 35. Yikes!)
Can't disagree with anything you say. LINE is looking so bearish that I'm about to throw in the towel on even day trades, which had been my last refuge for this company. I wish that the put premiums weren't so high.
So, Kirby, were you altruistically warning these misguided shorts in the 30s, then in the 20s, and yet again in the teens? Seems to me that LINE's been an easy stock to buy, so it's hard to grasp why shorts are desperate to get out but don't know how to do it. I think that your angst might be better directed at the longs, most of whom are under water.
So much for the bounce. I dropped a couple of cents on the trade. There just seems to be no ducking the dim longer-term prospects of the company. And who can blame folks for wanting to preserve capital while they can? And the usual catcall of "manipulation" (which is typically undefined) is another way, I think, of skirting the realities surrounding Linn. (I don't think I've seen longs complain about manipulation when their stock is rising. Then, of course, it's investors recognizing a company's sterling worth.)
Seems due for a bounce to the upside after so much downside drift. Toward the very end of Friday's market I bought 5K for 10.02 for a very short-term bet. If it works, I'll be out pretty fast, unless the market action (and possibly oil prices) look especially good. Then I'll follow with increasingly invisible stop-losses. In case darker clouds loom and I'm wrong about this, I'll try to limit any losses as usual.