LinnCo (LNCO) Marked As A Dead Cat Bounce Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified LinnCo ( LNCO) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified LinnCo as such a stock due to the following factors:

  • LNCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.6 million.
  • LNCO has traded 101,544 shares today.
  • LNCO is up 3.6% today.
  • LNCO was down 7.6% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in LNCO with the Ticky from Trade-Ideas. See the FREE profile for LNCO NOW at Trade-Ideas

More details on LNCO:

LinnCo, LLC, through its limited liability company interests in Linn Energy, LLC, focuses on the acquisition and development of oil and natural gas properties in the United States. The company was founded in 2012 and is headquartered in Houston, Texas. The stock currently has a dividend yield of 26.7%. Currently there are 5 analysts that rate LinnCo a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for LinnCo has been 3.2 million shares per day over the past 30 days. LinnCo has a market cap of $1.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.02 and a short float of 7.3% with 1.47 days to cover. Shares are down 60.4% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates LinnCo as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, LINNCO LLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LNCO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 61.47%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • LINNCO LLC reported significant earnings per share improvement in the most recent quarter compared to 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. During the past fiscal year, LINNCO LLC swung to a loss, reporting -$17.73 versus $0.60 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus -$17.73).
  • The gross profit margin for LINNCO LLC is currently very high, coming in at 100.00%. LNCO has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, LNCO's net profit margin of 68.29% significantly outperformed against the industry.
  • Net operating cash flow has significantly increased by 267.62% to $92.69 million when compared to the same quarter last year. In addition, LINNCO LLC has also vastly surpassed the industry average cash flow growth rate of -1.58%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Stocks Lose Steam as Yields Hover Near 3% Threshold

Stocks Lose Steam as Yields Hover Near 3% Threshold

Video: Stop Using Student Loan Money to Buy Bitcoin

Video: Stop Using Student Loan Money to Buy Bitcoin

Let the Najarian Brothers Crash-Proof Portfolio

Let the Najarian Brothers Crash-Proof Portfolio

Facebook Sends Facial Recognition Notification in Error

Facebook Sends Facial Recognition Notification in Error

3 Hot Reads From TheStreet's Top Premium Columnists

3 Hot Reads From TheStreet's Top Premium Columnists