Insiders side with Linn Energy

Short sellers have targeted this energy company, but officers and directors continue to buy.

By TheStockAdvisors Jul 18, 2013 11:46AM

Arrow Up (© Nicholas Monu/iStock Exclusive/Getty Images)By Mark Skousen, High Income Alert


A trading phenomenon I've witnessed over the years appears to be playing itself out in the markets once again. An announcement is made that the Securities and Exchange Commission is investigating a company's financials. The company's stock plunges on the news. Later on, the SEC rules that nothing is seriously amiss. The stock soars again.


You may have seen this happen with Green Mountain Coffee Roasters (GMCR) last year. The stock plummeted on news of an SEC investigation, then subsequently rose more than 300%. I believe something similar is happening with Linn Energy (LINE).


Based in Houston, Linn is an independent oil and gas company with properties in the Mid-Continent, the Hugoton Basin, the Green River Basin, the Permian Basin and the Williston/Power River Basin.


It has more than 4.8-billion cubic feet equivalent oil and natural gas and operates more than 15,800 wells.


Thanks to the company's high-quality management, Linn has grown from its founding in 2003 to become one of the nation's top 15 independent producers.


The company began trading publicly in 2006 and has paid a dividend to shareholders every quarter.


Revenue hit $1.77 billion during the last 12 months with sales soaring 36% in the most recent quarter. Insiders own 16% of the outstanding shares -- and several of them have been piling into the stock lately.


SEC filings show that officers and directors Terrence Jacobs, Arden Walker, Jr. and Mark Ellis all have made recent six-figure purchases.


But the stock plunged recently when the company voluntarily disclosed an SEC investigation into accounting irregularities.


Do you really believe the insiders own and are adding to a fraudulent $6.1-billion enterprise? I don't. That's why I suggest you ride the coattails of these insiders. Buy Linn Energy at market.


More from TheStockAdvisors.com

4Comments
Jul 18, 2013 12:17PM
avatar
 line is a bargain...been picking up shares every chance since the fall...might add that the SEC is making an informal inquiry, not an investigation
Jul 18, 2013 12:15PM
avatar
I think you are missing the "facts" in regard to this insider buying.  Look at the insider history going back a year.  Two of the three  "buyers" have been gifted or granted hundreds of thousands of shares before the investigation started.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

120
120 rated 1
268
268 rated 2
439
439 rated 3
709
709 rated 4
641
641 rated 5
609
609 rated 6
640
640 rated 7
516
516 rated 8
272
272 rated 9
152
152 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
EXCEXELON CORPORATION10
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.