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Global Hunter sees little upside left in Linn Energy (LINE), downgrading shares to Neutral from...

Global Hunter sees little upside left in Linn Energy (LINE), downgrading shares to Neutral from Accumulate after rising 7.2% YTD. The firm sees risks in LINE's relatively high enterprise-wide decline rate and relying on acquisitions to grow; "management will need to execute very well" to continue its distribution growth sustainably.
Comments (13)
  • VeroMike
    , contributor
    Comments (237) | Send Message
     
    They are not taking into consideration the Berry acquisition.
    Management has continued to execute very well, especially using hedges.
    This is another example of a company knocking a stock so they can accumulate at a lower price.
    9 Apr 2013, 11:34 AM Reply Like
  • elliot_mllr
    , contributor
    Comments (1164) | Send Message
     
    Either that or they are short the units, along with some NY hedge funds which are disseminating negative comments about LINE.
    9 Apr 2013, 12:26 PM Reply Like
  • CaptKorn
    , contributor
    Comments (145) | Send Message
     
    There is currently a dividend increase in the pipeline for the 3rd quarter because of Global Hunter. I hate to have to deal with traders in my dividend/income stocks but I do make a few extra dollars because of them to ease the pain. Just bought and sold some LINE on the last silly move down. But I consider that work and I don't like to work. When the dividend increase is announced the stock will go up to like to $40/$41. My position is maxed out so I will just watch from the sidelines.
    9 Apr 2013, 11:48 AM Reply Like
  • TwistTie
    , contributor
    Comments (2477) | Send Message
     
    I am trying to learn about LINE since I serendipitously bought the stock about a year ago.

     

    It seems like they have a business model that "requires" them to make acquisitions since their acquisitions are ones that are depleting somewhat or relatively rapidly.

     

    If my understanding is correct, then the only concern is that there are acquisitions that can be made and that LINE has to money to make them.

     

    Acquisitions can be good, no?
    9 Apr 2013, 12:05 PM Reply Like
  • User 64398
    , contributor
    Comments (119) | Send Message
     
    For 2014, Zacks is predicting 40+% EPS Growth....

     

    With several trillion cubic ft of natural gas, it would be nice to buy some more Line shares at $35. As I'm long at $36.40.

     

    Tell Global I will buy all the shares they want to sell me at $35 because natural gas price will be $5 per cubic this coming fall.
    9 Apr 2013, 01:32 PM Reply Like
  • Pablomike
    , contributor
    Comments (1269) | Send Message
     
    $5 gas means absolutely nothing to LINE as they already sold all their production through 2017.
    9 Apr 2013, 05:32 PM Reply Like
  • elliot_mllr
    , contributor
    Comments (1164) | Send Message
     
    Pablomike:
    Linn hasn't sold it. They don't hedge by futures. They deal in swaps and puts.
    Elliot Miller
    10 Apr 2013, 10:46 AM Reply Like
  • Pablomike
    , contributor
    Comments (1269) | Send Message
     
    I know. Tried to shortcut my point which is their revenue is predetermined. Fluctuations in the price of oil and gas have very little effect on LINE
    11 Apr 2013, 11:28 AM Reply Like
  • User 64398
    , contributor
    Comments (119) | Send Message
     
    I will point out that Berry is pumping oil and not so much natural gas. It is estimated that LNCO/LINE will make $60 per barrel in PROFITs from Berry's oil production.

     

    Linco/Line current production is hedged. That said, any upside can quickly be capitalized by turn on a few more natural gas wells.

     

    So you have no point.

     

    11 Apr 2013, 02:35 PM Reply Like
  • Pablomike
    , contributor
    Comments (1269) | Send Message
     
    And as soon as they announced the deal they immediately began hedging all that production years in advance. So if oil goes to $150 they will still make $60 per BBL for the most part. The point remains fluctuations in the prices of oil and gas have very little effect on LINE.
    12 Apr 2013, 10:05 AM Reply Like
  • User 64398
    , contributor
    Comments (119) | Send Message
     
    Thanks for making my point for me!

     

    The hedge is only for current production. Any up side production will improve their profit margin because it does not have to be hedged.

     

    The hedge is critical for protecting current profit levels if/when the economy stalls.

     

    So actually you have no point.
    12 Apr 2013, 03:39 PM Reply Like
  • jerrywengler
    , contributor
    Comments (402) | Send Message
     
    LINE's acquisitions seem more like just more frosting on the cake to me. I've also watched the news of them expanding through horizontal drilling, their own efforts. I also have some lifetime familiarity with the Hugoton gas field through decades of news from home, and their purchase of BP's interests there was a big upper. Are Chevron, Exon and Conoco Phillips still reliable when they make acquisitions? Then why not Linn. Growth is growth, and growth is good.
    9 Apr 2013, 03:29 PM Reply Like
  • BROBRO1
    , contributor
    Comments (30) | Send Message
     
    I have been lucky enough to own line for five years.Just about every year there has been a dividend increase. Just this year I sold some but only to buy Lnco .As far as I am concerned this stock is a winner, and
    as one of the previous commenters stated with the Berry aquisition
    things will be immediately accretive and up goes both line and Lnco dividends
    to $3.08 looks like a looser----NOT
    9 Apr 2013, 03:41 PM Reply Like
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