1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Charles Sizemore
Charles Sizemore
Articles (495)  | Author's Website |

Kinder Morgan Insider Trading: Richard Kinder Drops $70 Million

March 05, 2014 | About:

Last December, I wrote that Kinder Morgan Inc (KMI) was a strong buy, citing the massive scale of insider buying as a bullish indicator. After all, if the people running the company are accumulating shares, chances are good that they know something the rest of us don’t.

Well, little did I know that the Kinder Morgan insider trading had just barely begun.

Consider the recent aggressive insider buying by company founder Richard Kinder. On February 24, Kinder bought nearly 200,000 shares of KMI, just four days after buying 100,000 shares. This was on top of the 828,000 shares he bought in December. In total, since June of last year, he has purchased an almost hard-to-believe 2,127,489 shares worth nearly $70 million at today’s prices.

$70 million dollars. And I should add, those shares were purchased on the open market and prevailing market prices; they weren’t executive stock options or some sort of dodgy inside deal.

Kinder Morgan is not a popular stock today. Barron’s recentlydropped a bomb on the company with an article that questioned the accounting policies of sister company Kinder Morgan Energy Partners (KMP)and the relationship between KMI and KMP.

Is there any truth to the article? Maybe. I’m willing to accept that KMP’s accounting is overly aggressive. But it has used the same accounting standards since the 1990s, and its practices are well disclosed in its partnership agreement. There is no new news here.

At current prices, KMI yields nearly 5%, and it is one of my favorite stock picks for the remainder of 2014 and beyond. Use the recent weakness to follow Richard Kinder’s lead.

  • CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
  • Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
  • Double Buys:: Companies that both Gurus and Insiders are buying
  • Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.

» Take a Free Trial of Premium Membership

About the author:

Charles Sizemore
Charles Lewis Sizemore, CFA is the chief investment officer of Sizemore Capital Management. Please contact our offices today for a portfolio consultation.

Mr. Sizemore has been a repeat guest on Fox Business News, quoted in Barron’s Magazine and the Wall Street Journal, and published in many respected financial websites, including MarketWatch, TheStreet.com, InvestorPlace, MSN Money, Seeking Alpha, Stocks, Futures and Options Magazine, and The Daily Reckoning.

Visit Charles Sizemore's Website


Rating: 5.0/5 (1 vote)

Comments

BowenR
BowenR - 2 years ago    Report SPAM

Are there any other reasons other than insider buying and historically low price that make this one of your favourite stocks?

stevenramsey
Stevenramsey - 2 years ago    Report SPAM

You're leaving out a critical element of this - Richard Kinder takes no stock options, no bonus, and his salary is $1 (or less).

Please leave your comment:


GuruFocus Mobile App


User Generated Screeners


jittyJit - Consumer
OGCAMGAusp low cash
felix1904Low Float, high profit, health
jmeekinsDividend Growth
kingjamesmdnew Fast Growers - James's Pet
rael2222VB ok 60.84
9gebbbLFG Quant Valuation I
rod1z52-Week-Low With Gurus
vinwayPEG
derdavid1
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK