Continue To Avoid Linn Energy

By Seeking Profits:

Shares of Linn Energy (NASDAQ:LINE) rallied over 2.3% on Thursday after investors digested the company’s second results. Linn has been a controversial company as analysts like Hedgeye’s Kevin Kaiser have suggested the distribution is too high and that a cut is inevitable. Overall, this quarter was a decent one, and Linn is in no danger of a distribution cut in the immediate future. Still, significant fundamental problems remain, and the company announced a confusing and troubling share buyback program that should give investors pause. I continue to suggest long-term investors sell Linn and invest in other energy companies.

In the quarter, Linn energy earned $0.56 per unit compared to expectations of $0.42 (operating and financial data available here). Rightly or wrongly, most investors don’t focus on GAAP net income because MLPs are owned mainly for the distribution. As a consequence, investors look for distributable cash flow (“DCF”), which is

Complete Story »

---

Follow Arabian Post

Select Arabian Post as your preferred source on Google and MSN News for trusted business news and Arab politics and updates.

---

Notice an issue?

Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.

---