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Mandel More Than Quadruples His Stake of Kinder Morgan Inc.

October 20, 2012 | About:
Lone Pine Capital founder, Steve Mandel, has purchased more than 54 million shares of Kinder Morgan Inc. (KMI), reported Oct. 17 on GuruFocus Real Time Picks.

The transaction was a 307 percent increase to his current holding. Mandel reported to having about 17.6 million shares of Kinder Morgan at the end of this year’s second quarter; he is now at more than 71 million shares, and is 9.1 percent owner of the company.



Mandel first added Kinder Morgan to his portfolio in the last quarter of 2011. Starting off with more than 1.8 million shares, Mandel then purchased about 2.4 million shares in the following quarter.

Other Gurus who also have relatively new holdings of Kinder Morgan include: Passport Capital’s John Burbank, who bought his first shares of KMI in the second quarter at more than 2 million shares; GAMCO Investors’ Mario Gabelli who has owned almost 600,000 KMI shares since the second quarter; and Omega Advisors’ Leon Cooperman who just added KMI to his portfolio in the first quarter of this year, and who currently has 4.6 million KMI shares.

Houston-based Kinder Morgan is an energy company that owns and operates thousands of miles worth of pipelines that transport natural gas, gasoline, crude oil, carbon dioxide and other products. Additionally, it operates 180 terminals that store and handle products such as ethanol, coal, petroleum products and other chemicals. Besides (KMI), Kinder Morgan Inc. also trades under the publicly traded companies, Kinder Morgan Management LLC, (KMR) and El Paso Pipeline Partners LP (EPB).

In June, Kinder Morgan announced a secondary public offering of 63 million of its common shares at $31.88 per share.

The offering closed on June 11, and neither the company nor the company’s management sold any shares of common stock in the offering, according to a Kinder Morgan press release. The company also did not receive any of the proceeds from the shares offered by the selling stockholders.

On Wednesday, Kinder Morgan announced a dividend amount of $362 million for the third quarter, a 93 percent jump from the $188 million dividend distributed in the third quarter of 2011.

Shareholders will be paid the cash dividend in November at a rate of $0.36 per share.

“I’m very proud of this transformational transaction, which we successfully completed as a result of the dedication and hard work of many people,” Kinder Morgan Chairman and CEO Richard Kinder said in a release. “As the largest natural gas transporter and operator in North America, the Kinder Morgan companies are well positioned to play leading and integral roles as demand for natural gas continues to rise.”

In addition to the increase in dividend, KMR also increased its quarterly cash distribution for the third quarter; Kinder Morgan will pay $1.26 per common stock unit in November to unitholders, which is a 9 percent increase from last year’s second quarter.

Kinder Morgan’s third quarter earnings webcast expressed appealing quarter-end numbers in all of KMI’s companies.

Due to the company’s growth, more than $11 billion worth of expansion projects are in the works. The factors that contributed to its growth include strong demand for carbon dioxide usage, natural gas, drilling and coal exports.

Some of its limp aspects include a weakened demand for refined products, domestic coal shipments and drilling in dry gas locations.

Kinder Morgan is currently trading at $35.92. It has a market cap of $39.09 billion, a P/E (ttm) ratio of 47.9, a P/S ratio of 4.7 and a P/B ratio of 1.2.

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About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

Visit Dianne Tordillo's Website


Rating: 3.8/5 (12 votes)

Comments

vgm
Vgm - 1 year ago
According to Yahoo Finance, Lone Pine already reported holding 17.6M shares as of June 2012.

And, in fact, if you look in the section entitled Major Direct Holders, it states that Lone Pine owned 17.6M shares as of May 2012.

So what's new here?

Caveat emptor?

Please leave your comment:


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