Sell-Off is Over – Buy LNCO For a 25% Bounce
We have made money in the past trading LinnCo LLC (Nasdaq: LNCO) and the recent sell-off of energy stocks has set up another opportunity to pick up a nice gain as the unit price moves back to its normal trading range.
Each LNCO unit is backed by one unit of Linn Energy LLC (Nasdaq: LINE) which is the largest upstream oil and gas producing MLP. LINE and LNCO pay identical monthly distributions, with the LNCO payments reported by Form 1099.
At the current distribution level, LNCO has a unit price ceiling of around $30. However, in the recent correction in the energy sector stocks, the price dropped all the way below $21. Today looks like the start of the recovery rally, so for 30 Day Dividends, a trade recommendation goes out today to buy LNCO units.
Buy up to $22.80, with a target gain of 25%, which at the target price would be $28.50. As noted, distributions are paid monthly, which will boost the profit or get us to the target return quicker.
We will enter this trade with today’s market close of $21.34.