Just go buy Linn Energy (LINE) and AmeriGas Partners (APU)? What else can I say? We have had endless cold days here in the U.S, and the big rap against Linn was that it had too much natural gas and not enough oil. Suddenly, with the Berry Petroleum buyout, it has both. The big rap against AmeriGas was it had too much propane.
Now we are scrambling for natural gas, and there is a 33-state shortage of propane, with lots of contracts up that will be let at very good prices.
Sure, you can buy Devon Energy (DVN), as this company never lost its natural gas roots. You can pick up Range Resources (RRC) and Cabot (CBT) and EQT (EQT). They all make sense. But the issue with all of them is dividend yield: They don't have it.
I like Linn and I like AmeriGas, the latter having been knocked down by a recent secondary offering by holder Energy Transfer Partners (ETP).
Why AmeriGas? Because it yields at almost 8% and it is the pure play.
Why Linn? Because of the fabulous stuff that Hedgeye did to knock the stock down and call attention to the regulators of issues that almost prevented the company from completing the Berry deal.
I am not crazy about raids. When I talk about them, I don't mean to condone them, despite what my critics say. I have never done them, and that's clear from my record, as I have spoken about how they are conducted.
That said, the raid by Hedgeye was magnificent if you were involved. At the same time, it was deeply rooted in option strategies that have since been stopped, and in too much "natural gas vs. oil."
Now the Linn's accounting issues are pretty much over with (you never get a clean bill of health from the Securities and Exchange Commission -- that's just the way it is). Also, the yield is now at almost 9%, and there's a good chance the distribution will be raised because of natural gas. What's not to like?
Random musings: Many of you have asked when the next signing is for Get Rich Carefully. It'll be on Tuesday, Feb. 4 at 7:30 p.m., at the Union Square Barnes & Noble in Manhattan.