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Kinder Morgan Energy Partners, L.P. Message Board

  • datamatters2003 datamatters2003 Dec 8, 2011 12:56 PM Flag

    KMP, KMR, insider buying and tax advantages

    It is nice that there has been no insider selling in either KMR or KMP, according to Yahoo Finance, since May 2011. In contrast, Richard Kinder bought KMR in August significantly, at a level between $60 and $61 per share. His buying would seem an excellent signal, in my opinion, as he is CEO. So far, his purchase has appreciated nicely compared with SPY or total stock market proxies like VTSMX, with less volatility IMO. Why sell now, when the insiders aren't (unless you are strapped for cash)?

    Also bullish for the KMP, KMR, and the rest of the MLP sector, IMO, is the fact that the congressional "supercommittee" adjourned without proposing any reduction in MLP tax advantages.

    Finally, if the "Bush" tax cuts, a nice boon for investments by Americans (primarily in American assets, since US investors place well more than half their distribution-producing investments in American assets), expire, that will increase the importance of KMR's tax advantages. As we all hopefully understand, those tax advantages exceed KMP's (and almost all other MLPs) because KMR pays dividends in stock rather than cash. As long as you retain the stock, you pay no tax.

    I added modestly (another $4000 or so) to our KMR position on the dip yesterday. If you succeed with KMR or KMP investing, please consider donating some to charity.

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