Richard Kinder Spends US$15m On Kinder Morgan Stock
Kinder Morgan, Inc. (NYSE:KMI) shareholders (or potential shareholders) will be happy to see that the Executive Chairman of the Board, Richard Kinder, recently bought a whopping US$15m worth of stock, at a price of US$29.99. While that only increased their holding size by 0.2%, it is still a big swing by our standards.
The Last 12 Months Of Insider Transactions At Kinder Morgan
In fact, the recent purchase by Richard Kinder was the biggest purchase of Kinder Morgan shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$29.96 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid US$15m for 503.00k shares. But they sold 8.00k shares for US$256k. In total, Kinder Morgan insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Kinder Morgan
Kinder Morgan is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Kinder Morgan insiders own about US$8.4b worth of shares (which is 13% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Kinder Morgan Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Kinder Morgan insiders are well aligned, and quite possibly think the share price is too low. Looks promising! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with Kinder Morgan and understanding them should be part of your investment process.
But note: Kinder Morgan may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.