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Scott Eranger

Scott Eranger
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  • Why You Shouldn't Believe The Himax-Google Break-Up Rumor [View article]
    I'll just collect the dividend and wait it out...not buying more at these levels, but will when there is absolute blood in the streets.

    Not there yet.
    Jun 2, 2014. 11:04 AM | Likes Like |Link to Comment
  • CYS' And American Capital Agency's 30% Price Upsides Lead June Financial Dogs [View article]
    Why wouldn't tapering be considered good for the mReits? I'm confused.
    Jul 5, 2013. 11:11 AM | 1 Like Like |Link to Comment
  • CYS' And American Capital Agency's 30% Price Upsides Lead June Financial Dogs [View article]
    Truly incredible.
    Jul 5, 2013. 11:08 AM | Likes Like |Link to Comment
  • Commodities Today: 5 Stocks To Avoid Based On Recent News [View article]
    The Nerve Of Barron's....Seriously.

    As oil prices crept higher Wednesday, Stifel lowered its price target on exploration and production company Linn Energy given the uncertain future of an SEC investigation revealed earlier this week.

    Stifel maintained its Buy rating on Linn but lowered its price target from $48 to $33 on the master limited partnership Linn Energy (LINE) and its corporate trading entity LinnCo (LNCO). Linn Energy shares sank 15.75% Wednesday to $22.79, while LinnCo fell 12.5% to $26.91. The price of U.S. crude oil is now hovering above $100 per barrel, and is near the price of the international Brent benchmark. Oil prices are up 19% over the past year, while natural gas prices, while up about 25% in the same period, have fallen roughly 15% in the past month.

    The Securities and Exchange Commission inquiry was revealed Monday* and, Stifel highlights, it “requested the preservation of documents and communications related to LNCO’s proposed merger with Berry Petroleum (BRY) as well as LNCO’s use of non-GAAP financial measures and its hedging strategy.” Berry Petroleum shares rose slightly Wednesday.

    Linn said that it remains committed to the merger with Berry. But the timing and the deal itself are called into question. Stifel advises investors thusly:

    “If the BRY/LNCO deal falls through and the company NEVER makes additional accretive acquisitions (extremely doubtful in our opinion), we believe LINE units are worth approximately $22 using a discounted cash flow analysis. However, if the BRY/LNCO acquisition falls through but company maintains a conservative acquisition program through 2020, we estimate LINE units to be worth $32 to $35. If we assume the BRY deal is completed in 4Q13, we estimate LINE units intrinsic value to be $35-$40 based on a future discounted cash flow analysis and assuming a conservative future acquisition program.”

    Most MLPs are made up of infrastucture assets — pipeline and processing operations — but Linn is part of a new breed of MLP with allowed, but less conventional, assets. Oil and gas fields don’t collect tolls like pipelines do, but are instead more exposed to commodity price fluctations. But Linn has an extensive hedging program to erase much of that risk.

    Barron’s wrote several stories that questioned Linn’s accounting practices in expensing the cost of its derivatives, which are designed to protect against swings in commodity prices. As we noted yesterday, investor Leon Cooperman wrote a long letter to Barron’s in June extolling Linn’s attributes. (The letter and links to Barron’s stories here, subscription required.) Conversely, at the recent Sohn Investing Conference, investor Jonathon Jacobson, founder of Highfields Capital Management, warned that Linn is among the companies he’d list with yield risk, as we noted here.

    Could Linn’s yield go down? Yes, there is risk to its distributable cash flow, Stifel writes:

    “While selling the put portfolio would shed some controversy, it would expose the company to the potential of falling natural gas prices. Therefore, we believe the company could enter into costless swaps to cover the sold put volumes. If this occurred, the company’s EBITDA and distribution cash would be under pressure and the company’s distributable cash flow would most certainly decline.”

    *Update: Linn revealed the SEC investigation on July 1; Linn’s press release here.
    Jul 4, 2013. 06:11 PM | 2 Likes Like |Link to Comment
  • Linn Energy: How Low Can It Go? [View article]
    Thanks..I hope you're right.
    Jul 4, 2013. 03:01 PM | Likes Like |Link to Comment
  • Linn Energy: How Low Can It Go? [View article]
    @Preferred Researh..I don't know if it will happen or not. I only know how my questions were answered. The BRY deal will depend I think, on the SEC findings...if they are cleared, the stock price will go back up. The deal might have to be restructured. Neither one of us is privy to the relationship between LINE and BRY management.

    If you took 50 analysts, and had them look at reserves, balance sheets etc...you will likely get 50 varying opinions.
    Jul 4, 2013. 11:46 AM | 2 Likes Like |Link to Comment
  • Linn Energy: How Low Can It Go? [View article]
    @rlp2451...no, he didn't tell me that, but I didn't ask. If I'm around on Friday, I will ask him about this.

    Ultimately...there may or may not be issues. This is too complicated for my simple mind.

    What is your point? Do you think they are guilty of wrongdoing?
    Jul 4, 2013. 11:39 AM | 1 Like Like |Link to Comment
  • Linn Energy: How Low Can It Go? [View article]
    Good Morming......I have spent the last couple of days reading post after post after post. Apparently, this is a case of me not doing enough due diligence, as usual.

    I own 750 LINE and 800 LNCO. The LNCO is in my IRA. Down about 15K combined.

    On Tuesday I called LINE IR and left a message. I received a return call at 6.07 PM last night. If this company had committed any wrongdoing, why would they bother calling an individual investor back, after hours? This makes no sense.

    I asked as many questions as possible, and I believe the answers were honest. They maintain they have done nothing wrong. They use one of the top three accounting firms (KPMT) and they have gone over their accounting practices with a "fine tooth comb." They claim they can and will continue the dividend, and it will not need to be reduced. They remain committed to the BRY deal. Whether it still happens or not remains to be seen.

    The short term risk is how long it takes the SEC to finish their investigation. The upside is "if and when" they are cleared, the stock goes back up. Even if the BRY deal doesn't happen, LINE remains the same company it was before. Some may say "fine," other may not like it.

    Regardless...I do think the shorts are behind this. It isn't a Conspiracy Theory. People make money when stocks go up, and stocks go down...I have 50K in capital gains this year...so if I need to write off I will.

    Likely, I will commit suicide before then.

    Best of luck to all.
    Jul 4, 2013. 10:00 AM | 8 Likes Like |Link to Comment
  • Linn Energy: How Low Can It Go? [View article]
    I've talked to the company in the past. Never have I talked to any IR person who was as adamant about short sellers trying to destroy this company. They've been investigated before, and nothing came of it.

    I truly believe this is BS..my gut tells me to hold. If there is wrongdoing, then I'll suffer the consequences. I'm down about 8K on 750 LNCO and 800 LINE, combined.
    Jul 2, 2013. 04:49 PM | 8 Likes Like |Link to Comment
  • Linn Energy: How Low Can It Go? [View article]
    What do you think of LNCO? I'm thinking of initiating positions in both....

    Most investors see SEC inquiry and panic.
    Jul 2, 2013. 03:17 PM | 1 Like Like |Link to Comment
  • Have The Short Sellers Taken Down Linn Energy? [View article]
    "Partial"
    Jul 2, 2013. 12:53 PM | 1 Like Like |Link to Comment
  • Have The Short Sellers Taken Down Linn Energy? [View article]
    Just bought a patial position in both...
    Jul 2, 2013. 12:53 PM | 1 Like Like |Link to Comment
  • Far Oversold, 15.1% Dividend Payer Armour Residential REIT Is A Buy [View article]
    @bxcap...which ones do you specifically recommend at these levels?
    Jul 1, 2013. 03:48 PM | Likes Like |Link to Comment
  • Far Oversold, 15.1% Dividend Payer Armour Residential REIT Is A Buy [View article]
    @speclative...I am in no way a "hater." Your opinion is valued, and for the record I'm long 10,000 shares. I'm aware ARR is up 11% from the lows.

    What I'm also aware of is you're predicting the lows are in. Maybe, maybe not. I'm just not convinced. Remember..they have to report earnings. I biggest thing about ARR I don't like is their management...their track-record isn't exactly stellar. A bad report, or one deemed as bad, and $4.25 will be a memory.

    The sell off on all MReits was over done. I agree with this assessment.

    I'm looking into other MReits to replace ARR.
    Jul 1, 2013. 08:12 AM | Likes Like |Link to Comment
  • Far Oversold, 15.1% Dividend Payer Armour Residential REIT Is A Buy [View article]
    @speculative...honestly, how can you say ARR is a screaming buy? Surely, you jest.
    Jun 30, 2013. 03:18 PM | Likes Like |Link to Comment
COMMENTS STATS
115 Comments
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