Linn Energy Upped to Strong Buy - Analyst Blog


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On Oct 16, 2013, Zacks Investment Research upgraded independent oil and gas operator Linn Energy, LLC ( LINE ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The company delivered earnings surprises in three out of the last four quarters with an average beat of 17.65%. The long-term expected earnings growth of Linn Energy is set at an encouraging 2.00%.

The acquisition of oil and natural gas properties in the Permian Basin in Sep 2013 will offer increased reserve opportunities for Linn Energy in the future. It is a strategic move on the part of Linn Energy as the Permian play has an estimated resource potential of more than one billion barrels of oil and has a production life-span of over 100 years.

The company will witness reserve growth from the current shale explosion in the U.S. In addition, Linn Energy's proposed merger with the Berry Petroleum Company ( BRY ) is expected to boost the company's reserve portfolio.

Linn Energy's effective hedging program will cushion its margins from volatility in commodity prices. Furthermore, Linn Energy's strong cash flow growth of 358.5% to $561.3 million in the first half of 2013 from $122.4 million in the first half of 2012 will allow the company to maintain its healthy dividend yield of 11%, which is significantly higher than the industry average of 1.56%.

Other Stocks to Consider

Other oil and gas counterparts looking attractive at the moment are Zacks Ranked #1 (Strong Buy) Matador Resources Company ( MTDR ) and Bonanza Creek Energy, Inc. ( BCEI ).

BONANZA CREEK (BCEI): Free Stock Analysis Report

BERRY PETROLEUM (BRY): Free Stock Analysis Report

LINN ENERGY LLC (LINE): Free Stock Analysis Report

MATADOR RESOURC (MTDR): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: BCEI , BRY , LINE , MTDR

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