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Oil and Gas Plays to Energize Your Portfolio

Stocks in this article: LINEHES

As the company's Web site states, "Linn Energy's mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets."

That's why it can offer shareholders a current dividend yield that is a likeable 7.77% (especially nice if 7 is your lucky number).


As of Dec. 31, 2011, it had proved reserves of 3,370 billion cubic feet equivalent of oil and gas, and natural gas liquids, as well as operated 7,759 gross productive wells. It's no secret that investment educator and CNBC entertainer extraordinaire Jim Cramer has liked LINE for a long time.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust -- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

Why, just the other day in a mighty interesting article titled "Four Deals in the Oil Patch?" Cramer waxed eloquent on his latest take on LINE:

Linn's been a leader in developing properties cash off by others, including BP and then quickly bringing great returns to shareholders. I love that Linn offered Linn Co, with its bountiful 7% plus yield for non-taxable accounts. The company's growing its holdings like weeds, yet it stays at a ridiculously low $7 billion valuation.

On Thursday, LINE's shares rose to $37.33 on a huge spike in volume, bringing the market cap up to $7.45 billion. As the five-year chart below illustrates for our viewing pleasure, LINE has come a long way, and with the one-year analysts' consensus estimate price target of over $44, has even more room to rise.

LINE Chart LINE data by YCharts

As you can see from the chart above, the last reported quarter saw a drop in revenue per share, so when LINE steps into the earnings confessional on Feb. 21 it better show improvements and guide well. In fact, the analyst consensus estimate for sales growth and revenue for this latest quarter is for an increase of almost 72%. The company will also have a fourth-quarter earnings conference call at 11 a.m. ET on Feb. 21.

The average estimated revenue for 2012 is for a total of $1.72 billion, an impressive 48% increase over revenue in 2011. In 2013 analysts are anticipating more sales growth with annual revenue expected to increase yet another 40%.

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