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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (52521)	10/18/2013 1:38:43 AM
From: Spekulatius	Read Replies (1) of 78748

KMI - some interesting bits from the CC: 1) the backlog of new projects has increased from 14B$ to 14.4B$ despite bringing 0.3B$ worth of projects online during the quarter. That is good news for KMI, because these projects will essentially be financed with EPB, KMR or KMP units and KMI will get the IDR's for these new units without spending anything itself, 2) KMI is buying the warrants at a pretty good clip. These warrants are essentially 2017 40$ calls and currently go for ~5$. So KMI's management obviously believe that these warrants are a good value, which also means that they expect the stock to be above 45$ By 2017. FWIW, these warrants resulted from the EP merger (equity kicker) and KMI is spending quite a bit to get rid of this source if future dilution. Overall, KMI looks pretty good to me and i think they can execute on their plan to generated mid teens distribution growth for the next couple if years, given the dropdown assets still owned by KMI directly as well as the 14.4B$ in growth projects in the pipeline. seekingalpha.com

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