Linn Energy, LL (LINE) beat analyst expectations and continues to trend higher while making new acquisitions.

Company Description

Linn Energy is in the business of developing and acquiring oil and gas assets in the U.S.

Topping Expectations

On Aug 6 the company reported net income of 45 cents per unit, 4 cents higher than the Zacks Consensus Estimate. This was the second consecutive earnings surprise for Linn.

Earnings came in above expectations on production at the high end of guidance and expenses at the low end. Additionally, Linn announced the acquisition of 2 certain properties in West Texas and New Mexico for $118 million.

Estimates Climbing

Following the report the full-year Zacks Consensus Estimate has jumped. Forecasts for this year average $2.07, up from $1.73. The consensus for next year is $2.04, up from $1.49.

While the growth rate for next year is a down slightly, this year’s earnings are expected to be 35% higher than last year’s.


Units are trading at decent valuations. One unit will run you just over 11 times forward earnings. However, the PEG ratio is a bit inflated at 1.6 times.

Income Too?

This is not the typical aggressive growth play as it does pay nearly 11% in dividends.

The Chart

LINE has hit a pause at its current levels, but should continue its bullish trend high after breaching the resistance level. Take a look at the chart below.

1255463145.JPGZacks Investment Research