Monday, November 1, 2010

LINN Energy's (Nasdaq:LINE) Hedge Strategy a Winner Says UBS (NYSE:UBS)

Citing their hedging strategy, UBS (NYSE:UBS) raised their price target on LINN Energy (Nasdaq:LINE) while maintaining their "Buy" rating on them.

"Signaling confidence in LINE’s operations and balance sheet strength as well as its ability to capitalize on growth initiatives, mgmt lifted the 3Q distribution -5%, to $0.66, its first increase since 1Q08. In addition, mgmt added to hedge positions and now estimates that -100% of planned natgas production is hedged through 2015, while planned oil production is hedged -100% through 2013 and 70% in 2014-15. We applaud the move to secure price protection and note oil hedges were added well above our forecasts. We also highlight LINE’s extensive use of put contracts," UBS said.

LINN closed Friday at $34.99, gaining $0.56, or 1.63 percent. They raised their price target from $36 to $38.

Concerning EPU for 2010, they cut that from $1.53 to $1.47.

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