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"To achieve satisfactory investment results is easier than most people realize. The typical individual investor has a great advantage over large institutions." Benjamin Graham--1894-1976

If Ben Graham was alive today I believe he'd be scolding those of us who are still long shares of Linn Energy (NASDAQ:LINE) without a hedge. He and his most famous student (Warren Buffett) demand transparency and a business model that doesn't take a PhD in accounting to understand.

As I opined on August 9th article if you are determined to hold LINE in your portfolio you'd be wise to consider putting on some option "insurance" just in case the SEC inquiry turns into something worse.

Remember, the SEC conducts inquiries privately and reviews findings before determining whether to take any enforcement actions, if any. In the SEC inquiry concerning Herbalife (NYSE:HLF) the timeline is a long one.

To the best of my knowledge HLF initiated its latest SEC inquiry at the beginning of 2013. That inquiry is complex and is still ongoing.

Its interesting to note that within the year of the latest SEC inquiry HLF shares have risen from $24.24 to $68.82 as of Tuesday Sept.10, 2013. May the same good fortune happen to LINE shares.

So far though LINE floats lifeless in a sea of uncertainty. The good news is that most major holders of LINE appear to be hanging on to most of their shares. That could change suddenly and without warning.

The other piece of good news is that LINE continues to pay out a generous monthly distribution to shareholders, close to 12%. But it keeps paying out more than its distributable cash flow (DCF).

Some analysts have said publicly LINE shares are only worth $18. The market has temporarily capped the downside share price of $20.35, the intraday low on July 5, 2013.

Those of us who have been riveted to the Linn Energy saga might ask ourselves some important questions. What good does frequent speculation about Linn Energy's fate do? What harm can it cause?

It distracts us from other opportunities and can drain focused energy from more vital opportunities in the energy sector. One way or another maybe it's time to move on.

As one analyst commented recently, "Linn Energy's long-term prospects do not excite me and I have mentally eliminated the possibility of adding Linn to my portfolio."

The same analyst rationally asked, "Why would I invest in Linn, with all its issues, when I could invest in [other] fantastic [companies]..."

If You Want Reasonable Risk-Reward Consider These Gushers

For starters take a look at Sanchez Energy Corporation (NYSE:SN), an independent exploration and production company which focuses on the acquisition, exploration, and development of unconventional oil and natural gas resources.

SN purchased Hess Corp's (NYSE:HES) Eagle Ford assets when Hess decided to shift its focus on the Bakken Oil Formation. SN paid $265 million in March of this year to HES.

Then SN on Monday Sept. 9th made yet another smart buy of properties referred to as the "Wycross assets" which are nearly 100% oil.

SN's press release included that Wycross is "... in the Eagle Ford Shale consisting of approximately 11 MMBOE of proved reserves and 2,000 BOE/D of current production on approximately 3,600 net acres in McMullen County, Texas for approximately $220 million in cash, subject to customary adjustments."

It was an accretive purchase and it immediately boosted Sanchez's production a meaningful amount. SN is a very promising company that has focused on the acquisition and development of unconventional oil resources in the onshore U.S. Gulf Coast, with a current focus on the Eagle Ford Shale.

The company has assembled approximately 140,000 net acres in the Eagle Ford. It also has approximately 40,000 net acres targeting the Tuscaloosa Marine Shale.

SN has carefully and cleverly made these purchases without borrowing money. These deals have all been done with equity. As of June 30, 2013 SN's year-over-year quarterly revenue growth was up 835%.

That's one of the reasons its shares trade at a forward (1-year) PE ratio of slightly higher than 10. Carefully examine the company by checking out its user-friendly website.

Another promising and transparent energy company is Noble Energy (NYSE:NBL). Tuesday, Sept.10th, UBS analysts selected NBL as one of the four top energy picks for the year ahead.

Others on the UBS list of four included Anadarko Petroleum (NYSE:APC), Continental Resources (NYSE:CLR) and EOG Resources (NYSE:EOG). "Each company delivers a combination of above-average cash flow per share growth, deep inventories, and attractive pricing," UBS said.

If you're looking for an energy company with a sustainable dividend and attractive growth consider another UBS pick, France's Total SA (NYSE:TOT). It has perhaps the most potential for earnings and share upgrades based on its high dividend yield and UBS's "conservative expectations" for the company.

Other Speculative Energy Companies Worthy of Consideration

Focus some research and attention on these producing exploration companies. I'll begin with Concho Resources (NYSE:CXO) which has been a high-flyer of late.

CXO describes itself at its website this way; "We are an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties.

"Our operations are primarily focused in the Permian Basin of Southeast New Mexico and West Texas. We intend to grow our reserves and production through development drilling and exploration activities on our multi-year project inventory and through acquisitions that meet our strategic and financial objectives."

The company trades at high PE ratios, both current and forward, and one firms gives it a $111 twelve month price target. At its current share price of $100 it doesn't offer enough upside for my taste.

It is, in my opinion, worthy of being on a watch list and should first be looked at as a candidate for due diligence, as should all the smaller energy companies mentioned in this article.

I'm long shares of Kodiak Oil & Gas (NYSE:KOG) because it owns an interest in approximately 228,200 gross acres in the Williston Basin of North Dakota (think "the Bakken!) and has oil and natural gas reserves and operations in the Green River Basin of Wyoming and Colorado as well.

KOG is ramping up production and that's why its forward PE is only 11. It hit a new 52-week high Tuesday of $11.02 on volume of over 6 million shares.

You can study its latest quarterly earnings results and see for yourself how it's been doubling its quarterly revenue and continues to increase its production.

It's important to point out that KOG has a large amount of debt and needs to increase its total cash and EPS.

The consensus estimate of analysts who cover KOG is for sales growth and revenue for 2013 to increase by more than 121%. The same analysts are looking for annual EPS to grow by 34% in 2013.

One small promising "dark horse" in the race to capture investors' attention and become the next KOG or CXO is Miller Energy (NYSE:MILL). This small explorer-producer is pumping both oil and natural gas mainly at its facilities on the Cook Inlet in Alaska.

I personally had an opportunity to inspect its Alaskan operations and was especially impressed by its nearly completed Sword Drilling Rig. The Sword along with MILL's Osprey offshore platform is adjacent to its Kustatan Production Facility which expedites processing and delivery.

On Monday Sept. 9th MILL released its financial results for the first quarter of fiscal 2014, which ended July 31, 2013. Revenues for the quarter were $13.0 million compared to $8.3 million in the first quarter of the prior fiscal year, which is a 57% year-over-year increase.

Join me in keeping MILL on a watch list of energy companies with exceptional potential. I encourage you to peruse its exciting and eye-friendly website to learn all you can about it.

If you invest in any of the energy companies mentioned, do what I wish I'd done with my shares of LINE. Place a stealth, mechanical trailing stop alert with the resolve to limit your risk exposure.

If I'd used a 20% trailing stop discipline when I purchased my shares of LINN I would have sold them just under $30-a-share. Plus I wouldn't have had to pay for my options hedge which was costly.

It's neither too late or too early to take action if you're exposed to LINE. Perhaps its time to "cut bait" and prudently put that money to work with companies that aren't an LP or an MLP and don't use complex accounting and business strategies to make ends meet.

The point of this article is that you have a lot of good choices to study and carefully consider. If the stress of being long shares of LINE is getting to you, "soon" may be the best time to set yourself free.

It's not an easy decision, but if it helps you sleep better at night and improves your chances of investing in better structured energy companies, the answer may be self-evident. Good luck to us all!

Source: Forget Linn Energy And Try These Gushers