07/02/13: Linn Energy

By Igor Greenwald • July 2, 2013

We’re downgrading Linn Energy (NSDQ: LINE) to SELL after the partnership today announced an informal Securities and Exchange Commission probe of its accounting. The probe endangers Linn’s pending acquisition of Berry Petroleum (NYSE: BRY), the linchpin of its growth strategy.

Factoring today’s drop, LINE units have provided total returns of 73.6%, 113.4% and 102.1%, respectively in the Personal Finance, MLP Profits and The Energy Strategist portfolios. But now that the SEC has, at least for the time being, legitimized recent complaints about Linn’s financials, cashing out is the most prudent course of action. Sell Linn Energy.

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John Blegen

07/02/13 ‐ 4:30pm ET July 2, 2013 at 4:30pm ET

I’ve only been a subscriber for six months, I’ve been buying at your recommendation to buy below 40.
So my total return is -22%.

Igor Greenwald

07/02/13 ‐ 9:44pm ET July 2, 2013 at 9:44pm ET

John,
I’m sincerely sorry for your loss. Please see my reply to Steven in this thread for more on my thoughts.

Steven Rose

07/02/13 ‐ 6:26pm ET July 2, 2013 at 6:26pm ET

For the last two months in both the utility forecaster and energy strategist you have been touting tne merits of linn energy,now at 3 in the afternoon the stock is a sell on a SEC exam on items that you deemed insignifcant in the last update.

Igor Greenwald

07/02/13 ‐ 9:42pm ET July 2, 2013 at 9:42pm ET

Linn Energy was a portfolio fixture here long before I came along, but yes, I did recommend it even while acknowledging some of the potential pitfalls. Too often in investing, for anyone, things don’t go as expected. The thing to do in those instances is to make the best decision you can on the new information, without undue bias based on what went on before. If you don’t like the advice you acted on in this instance, that’s certainly understandable. But good investors master their emotions, take responsibility for their decisions and learn from them.

Stephen Reiser

07/03/13 ‐ 12:10pm ET July 3, 2013 at 12:10pm ET

HI Igor. I wanted to ask you about TSO and HFC. A recent issue of the energy strategist asked us to buy them for the Growth Portfolio. I did buy them — however, I see they are not listed on the site.

Additionally, there was an issue which discussed buying EQT a few weeks ago — but the decision to buy EQT was not clearly labelled. Very quickly, within hours — it rose above the target price.

I am happy with the service. We just need clearer guidance in these issues. Can you please advise what is the situation behind TSO and HFC. Are they part of the growth portfolio. Thanks…

Igor Greenwald

07/04/13 ‐ 10:32am ET July 4, 2013 at 10:32am ET

Stephen,
Yes, TSO and HFC are part of the portfolio, but are likely to be downgraded from Buy to Hold next week as we’re growing concerned about the trading action in refiners as the Brent/WTI spread continues to evaporate. I wouldn’t be establishing a new position just yet at this point.

Stephen Reiser

07/05/13 ‐ 5:32am ET July 5, 2013 at 5:32am ET

Igor,

Thanks. Appreciate it if your team could please add TSO and HFC to the growth portfolio tracker then just so we can easily track all of our holdings. They are not shown on the current list. If they are currently holds, that is fine. Will wait before adding.

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