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Three Ideas for Energy Investors to Look Into

By Dan Dicker | Fri, 22 February 2013 19:58 | 0

I have three quick ideas for today’s column, with the hope that one of them will resonate with you.  Next week is my vacation week, so I hope that you will stay out of trouble until I can be with you again in the week of March 2nd. (We have a very interesting guest writer lined up for you though.)

First, Linn Energy (LINE), a core holding of mine, today bought Berry Energy (BRY) in an all stock deal, paying a 19% premium and more than the Reuters estimate of intrinsic value for the company.  In spite of all this, Linn shares are UP almost 5% this morning, not what you’d expect for a company that is supposedly overpaying for a target.  That’s how you know that Linn has been massively undervalued by the Street and deserves investment, even more so now. 

With the purchase Linn adds 30% of proven reserves where it counts, in liquids and crude production in California but particularly in the Permian basin, where Linn has already terrific infrastructure and Berry’s assets are a terrific fit.  Go on, add that to their very healthy and I believe extremely safe 8% dividend.  You want more?  Ok, I think Linn remains one of the best take-out targets in the patch – and anything under $40 is a gift.  Even with the jump today, it’s a buy.

SM energy proved today that the Eagle Ford and the Bakken are easily number one and number two in hot hot hot plays in domestic liquids and crude oil. …

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