HI Ditch,
I've added to KMI by a bit over 10%. It now is my largest number of shares holding.
I see the EU's need for our LNG as a great long term growth driver for all LNG ports.
KMI's guidance of plus 5% in H2 is a good sign of more to come.
Kinder is a sand bagger and his management under promises and over delivers on the edge of things.
His prelim to the earnings transcript said it well.
We have strong cash flow. We only invest our cash in high grade projects and spend the rest rewarding investors with now buying back shares and paying a high yield dividend that is growing. He also stated the the entire sector is undervalued and not sure why the market is missing a higher valuation.
As pipelines continue to be harder to get approved, the existing pipelines will gain in value. Even if they musyt be converted to renewable diesel, gas or jet fuel.
I've been selling puts on KMI's dips all these last 2 years. 14's , 15's, 16's. As they expire to 00.00,I'll accumulate the monies and then sell a short term out 17, with the hope of assignment. Last month I was assigned 1500 at 17.00, with 2732 in premium that expired.
On a cash flow basis my cost on the 1500 assigned shares is at $17.00 $15.17 (after the 14's, 15's, and 16's expired) and a dividend yield of 7.31%.
Once KMI hit 20 earlier this year, I thought I could no longer employ that technique, but it gave me at least one more dip. I've sold out into September, December and January with 14's, 15's, and 16's. A few 16's a lot of 15's and double down on the 14's. Sell the puts when KMI dips to 16 or below.
I thinking the higher guidance will get price into the 20's again. That will stop my approach.
I was looking at doing a similar approach to XRX 14's, 15's and INTC 30's to 35's.
The Midstream sector is just the only valuation that can sport a 7% to 8 % dividend yield on stable revenue and margins that I'm comfortable with.
Note to file it must be a C Corp and not a K1 for tax rate reasons.
Good to hear from you Ditch. Stay Cool.
Mornings here in Wisconsin have been very pleasant and cool.
Daytona. I've been to the Nascar races there and always wanted to do Bike Week.
Best of trades to you!
Bob |
