For a few weeks now I’ve been looking into LINN Energy (NASDAQ: LINE), trying to figure out if this double digit yielding company who’s stock took a serious beat a few months ago and hasn’t recovered since. While I’m no expert, it became very evident based on the few reports I got my hands on that this is a name worth getting into.
As general practice, I’d like to lay out the negatives first, because there are always negatives… The stock took a serious hit back in July 2013 after an SEC inquiry regarding LINE’s accounting practices. As a response, LINE Energy filed a S-4/A disclosing some major accounting irregularities around September 2013. Curiously enough, the fact that the SEC was looking into the company caused a serious dip, but the actual disclosure of some irregularities didn’t have as big of an effect. The SEC hasn’t disclosed anything about their investigation as of now. On top of this, LINN Energy announced in February the attempted acquisition of Berry Petroleum (NYSE: BRY) but hasn’t started the merger mainly because the SEC is taking its time with the paperwork of the deal, which is all tied into this investigation.