TSC Ratings' Updates: Linn Energy

The following ratings changes were generated on Thursday, Jan. 15.

We've upgraded Linn Energy(LINE Quote), which engages in the development and acquisition of gas and oil properties, from sell to hold. Strengths include its robust revenue growth, compelling growth in net income and good cash flow from operations. However, we find that the company's return on equity has been disappointing.

Revenue since the year-ago quarter leaped by a very impressive 536,863.5%, and net income increased by 1,520.3%, to $1,082.6 million. Current return on equity, however, is lower than its ROE from the same quarter one year prior, a clear sign of weakness within the company. Linn reported significant earnings per share improvement in the most recent quarter compared with the same quarter a year ago. This company has reported somewhat volatile earnings recently, but we feel it is poised for EPS growth in the coming year. ...