Walk the $LINE

Takeaway: We remain bearish on Linn Energy (LINE).

As many of you know, we’re hosting a conference call tomorrow morning outlining Hedgeye’s bearish case on Linn Energy (LINE).  

 

Walk the $LINE - line

 

Incidentally, there was a second story in Barron’s over the weekend highlighting the work of Hedgeye Energy Analyst Kevin Kaiser about what’s going on in LINE. As many of you also know, CNBC Mad Money host Jim Cramer owns LINE in his charitable trust and has been recommending the stock in Action Alerts PLUS.

 

Here’s what he had to say in response to a viewer question this past Friday evening. The video begins at the 3:12 mark. A transcript follows below.

 

“Jim, please respond. What do you see for LINE—that’s Linn Energy—AAP, that means Action Alerts PLUS  recommended but it’s down every day. Help!

 

Okay, now. There’s a firm that is very helpful to, in this particular case, a short story, a short case, against LINN. That firm has been right about the stock. There’s no doubt about it. Action Alerts PLUS has been wrong about the stock. There’s no doubt about it. I never say that I’m doing well on something when I’m not. Okay?

 

That said, I like Linn from when the show began. So I’m not going to change my view on it just because the stock went down. Allright? Do I wish that the stock would go up? Yes. Because I like to make money for charity in my charitable trust.

 

Have the shorts been right about the stock? Yes. Will they stay right? They’re going to have a conference call apparently next week. And remember, after that the shorts are going to have to start paying the distribution, it’s gong to come monthly. And hopefully, there’s a deal for Berry Petroleum. Mark Ellis is the CEO—I trust Mark Ellis.

 

Does that make me a chump? Does that make me an idiot? That’s your call.

 

I know I did my work on it. I've done more work on it than almost anybody because I’ve liked it for many, many years. I like the accounting, you may not. I put it all out there.

 

The shorts have been right. Action alerts has been wrong. But, I take a longer term view as I have since the show began." 


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