On Oct 16, 2013, Zacks Investment Research upgraded
independent oil and gas operator
Linn Energy, LLC
) 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
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
Berry Petroleum Company
) 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
Bonanza Creek Energy, Inc.
BONANZA CREEK (BCEI): Free Stock Analysis
BERRY PETROLEUM (BRY): Free Stock Analysis
LINN ENERGY LLC (LINE): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
To read this article on Zacks.com click here.