Sharp drop in worldwide oil price to a five-year low has impacted a lot of stocks that relied on oil and gas apart from exploration companies. In the process, sometimes, the hammering got thicker than expected for some of the shares. Similarly, sometimes, such a situation provides opportunity to buy the stocks that got hammered and mauled very badly like LinnCo LLC (NASDAQ:LNCO).
In the last one-year period, shares of LinnCo reached a high of $33.12 and hit a low of $8.58 on Tuesday. It meant that the stock suffered a loss of 74% compared to the 52-week high price. It probably prompted Goldman Sachs Group Inc (NYSE:GS) analyst to think that the time has come to indulge in buying the shares.
Whenever a stock gets into the hands of bears, it was tough to remove from the clutches. LinnCo seemed to have faced such a situation on the back of a fall in oil prices. However, the negative sentiments got changed suddenly by one advice from Goldman Sachs on Tuesday.
Even as the bears started hammering to a yearly-low price, the brokerage’s recommendations put the stock firmly under the bulls grip altogether. As a result, its shares surged nearly 27% from the intraday’s low. Goldman Sachs thinks that the drop in stock prices presented buying opportunities. It said that there were six energy-based master limited partnerships including LinnCo with a potential to deliver returns of as high as 200% in the next one-year period.
Most importantly, the brokerage picked LinnCo as its top pick and kept a one-year price objective of $26. It meant that there is still potential of nearly 140% upside from Tuesday’s closing.
Though Goldman Sachs has not disclosed anything as far as bottoming of oil price or the stock price of LinnCo, it indicated a big turnaround finally. The brokerage believes that LinnCo would be able to deliver a yield of over 26%.