LINE

[dan_s]

I believe LINE will quickly move back to the mid-$30s after they close their acquisition of BRY, which I think will happen by year-end. - Dan
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Linn Energy (LINE, LNCO) recently amended its S-4. I found four important points in that document which I've enumerated and described below.

The most important change is that Linn will use a new method for calculating cash flow for distributions starting in the third quarter. The market, as well as this recent article, seems to have assumed that these changes will hurt Linn. On the contrary, a simple look at year-to-date 2013 numbers shows that their new metric of operating cash flow will show substantially higher coverage for their distribution.

Earlier I wrote an article suggesting that Linn might need to take a 20% distribution cut. The new S-4 suggests they can sustain their present distribution rate of $2.90 with or without the Berry acquisition closing. This implies a fair value of $32 (at a 9% distribution yield) plus $2.90 in distributions, for a total return of about 33% in one year.

Full Article: http://seekingalpha.com/article/1704762 ... urce=yahoo

Make sure you read the very last sentence.

[dan_s]

Here is a well written piece that concludes that LINE is worth $32/unit. I agree. Regardless, of how the merger with BRY turns out (I think it will close), LINE is selling at a steep discount. At Friday's closing price, LINE's annual yield is 11.2%. - Dan

http://seekingalpha.com/article/1718462 ... urce=yahoo