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Premarket gainers: CBMX +8%. YRCW +7%. APO +7%. CTIC +6%. Losers: PAL -12%. LNCO -7%. LINE...

Premarket gainers: CBMX +8%. YRCW +7%. APO +7%. CTIC +6%.
Losers: PAL -12%. LNCO -7%. LINE -6%
Comments (12)
  • smurf
    , contributor
    Comments (3970) | Send Message
     
    Negative article in Barron's re LINE/LNCO. Ouch!
    6 May 2013, 09:23 AM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2668) | Send Message
     
    Think I'm looking to get out. Just think what would happen if they ever do cut the distribution. I shudder to think.
    6 May 2013, 09:26 AM Reply Like
  • freebra
    , contributor
    Comments (256) | Send Message
     
    Dividend cut.......value of stock declines..........BUY more @ cheaper price ($4-$5). 50% dividend cut, still a good Div (IMHO). Market Cap too high to go 'belly-up'.

     

    Long on LINN.

     

    Freedom Bravo
    6 May 2013, 11:00 AM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2668) | Send Message
     
    If they cut the dividend, which I am not expecting at this point, I would anticipate the stock to tank, not $4 or $5, but $10 or more. It's down 7%, $3 today on nothing but hot air. IT would take you years to recover. No thanks.

     

    A lot of the increase in share price has been investors bidding up the stock chasing yield, not inherent value of the company. LINE is a pig with lipstick. No substance, all fluff.
    6 May 2013, 11:36 AM Reply Like
  • go-4-it
    , contributor
    Comments (555) | Send Message
     
    I am already out, sold too soon, but did get the double dividend at years end. May buy back in, after some clarity going forward. I think the stock has made a great run with the rest of the market, but the secrets might reveal a less than rosy picture for LYNN.
    6 May 2013, 09:34 AM Reply Like
  • ceedee
    , contributor
    Comments (2) | Send Message
     
    Where is Cramer when you need him?!
    OH!, in front of the camera, cnbc, yuking it up.
    Hey! I'lm dying here!!
    Oh well ...
    6 May 2013, 10:04 AM Reply Like
  • TwistTie
    , contributor
    Comments (2476) | Send Message
     
    Somebody is confused.
    6 May 2013, 11:01 AM Reply Like
  • MICHARLIE
    , contributor
    Comments (9) | Send Message
     
    Huge question for all the insightful comments. What security would not tank if its dividend were to be cut in half. I have been missing out on the most wonderful security in the world apparently.
    6 May 2013, 01:09 PM Reply Like
  • melfsh
    , contributor
    Comments (19) | Send Message
     
    Why all the negativity?? The company has performed in an outstanding manner for nearly ten years; it has steadily increased its disbursements and added to its proven reserve base with very opportunistic acquisitions; the coming merger with BRY will add to the company's oil reserves; two-thirds of the analysts that follow the company rate it a buy; its hedge position if probably the best in the industry. What am I missing??

     

    Puzzled
    6 May 2013, 01:15 PM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2668) | Send Message
     
    With all the growth, where is the growth in earnings and cash flow from earnings? The growth in cash flow is coming primarily from debt and equity, not earnings. If these acquisitions were so profitable, cash flow from earnings would be growing significantly, but it's not. Adjusted EBITDA is not earnings. It leaves out cash costs to the company in the form of depreciation/depletion... and interest expense. These are real cash outlays the company makes to acquire new oil/gas reserves. But with EBITDA, those costs are never accounted for or considered. True? So, how do they acquire them? With what? Internal funding from earnings or external through debt and equity? Answer: the latter.

     

    I looked at Fidelity's rating on it yesterday. True, more analysts rate it a buy than hold or sell, but overall Fidelity has it evaluated as strongly bearish.

     

    IMO, the company has been able to obtain external financing to fund acquisitions and increase the distributions. The share price has been up and up due to ever increasing distributions, not from growth based on growth in earnings. Investors are looking at yield and not looking at the fundamentals.

     

    How do you pay down or pay off debt if earnings are not sufficient to go towards paying any of it off? You don't, you keep accumulating more debt. Look at LINE's debt accumulation since it went public.
    6 May 2013, 01:24 PM Reply Like
  • melfsh
    , contributor
    Comments (19) | Send Message
     
    Byce, you're confusing a normal business model for tax-paying companies with the model used by MLPs. Acquisitions are funded primarily by selling more shares. As the company grows, the overall debt has become larger but not in proportion to the overall value of the company. The key factor in distributions is, of course, the amount of distributable cash flow per share available on a yearly basis. That amount has been consistently increasing for LINE.

     

    I suppose one could make the argument that a company cannot keep growing and accumulating more debt forever. Probably at some point in time the world will not need 90 million barrels of oil per day and companies like LINE may have to stop growing, cut back or eliminate disbursements and pay off their debts. But not in my life time.
    7 May 2013, 01:04 PM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2668) | Send Message
     
    "The key factor in distributions is, of course, the amount of distributable cash flow per share available on a yearly basis. That amount has been consistently increasing for LINE. "

     

    If you believe LINE's adjusted EBITDA is valid, yes. But, actual cash flows from operations, since LINE went public, are 37% of adjusted EBITDA, and not sufficient ($1.695 billion) to fund the distributions ($2.208 billion through 2012). The actual earnings/net income is less than the cash flows. Take all the 10-Ks and see for yourself. Because the adjusted EBITDA is so far off from actual cash flows from operations, I don't buy it is valid. How could it be?

     

    I'm not confusing the model, I don't understand it or like it. From my understanding, the only thing that benefits all shareholders in the end is earnings, profit. LINE has not grown cash flow from earnings significantly inspite of the growth. Some of the distributions, and all of the growth has come from equity and debt. I stand by what I stated before. Whether it's cash flow or earnings, they are not sufficient to fund the distributions. That just doesn't look healthy to me.

     

    Because the model is what it is, a cut in the distribution, or inability to cover the distribution with sufficient cash flow over more than one quarter in a row could cause major havoc with the stock price, it seems to me. I don't care for that much risk.
    7 May 2013, 01:59 PM Reply Like
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