Short Term Entry for LinnCo LLC
Today I am recommending a buy entry for LinnCo LLC (Nasdaq:LNCO). LinnCo shares are the 1099 version of the upstream MLP Linn Energy LLC (Nasdaq:LINE) limited partner units.
At the start of the year, Linn slashed its distribution rate, making sure the new monthly payout was highly secure for 2015. Since then, the unit price has fluctuated with changes in the price of crude, even though the monthly distribution/dividend will be steady throughout the year. Today LNCO went ex-dividend, and the share price is stable, in spite of a big down day in the market and crude off another 50 cents. The current share price of about $10.20 is 30% below where the price was 3 1/2 weeks ago after the last monthly ex-dividend date. LNCO currently yields 12.25%.
From here, I am looking for a price gain up to $11.75 per share, which would be a 15% gain plus any dividends earned if it takes more than one month to reach the target price.
As 30 Day Dividends subscribers, you may realize that I have an outstanding open position in LNCO dating from when crude was at $80, the dividend was twice as high and the share price was above $21. That badly failed position was the reason I started to separate the 30 Day Dividends recommendations into short term opportunities and expected longer term positions. I do need to get that old recommendation off the books, so when this new trade hits its goal, I will also close out the old, longer term position in LNCO. At this point I am viewing the old losing trade and this new one today as separate recommendations and positions.
Recommendation: Buy LNCO today, March 10 at about $10.20 per share.