Just looked at this senior management team: Many exercised their options in Dec, 2013...amazing !!! They all sold options which were issued at $23... for $25-26...only $2-3/share gain !!! (including the CEO !!!). Why not just eat the options. Don't they know how this will appear to their average investor. They knew the stock was going to tank and they knew the results !!! pretty #$%$ performance. They should all be fired !!! Where are the Board of Directors !!!
He exercised 71000 shares of options in Dec,2013 and sold them in 3 days to pocket a few hundred thousand. Why would a CEO have essentially no stock and sell his options. Could he be that he has no faith in the future of this company and his own management leadership? I just checked 5 other MLP pipeline companies and insiders generally hold 25+% of shares. For BWP, insiders holdings are negligible.
Clearly the market sees a lot of risk...earnings are slowing all last year. They missed estimates each quarter and had to reduce projected growth rate this year and future 3 years. Lots of debt and if interests rates start to increase each point is worth $78M in additional charges and lower payout. Coverage although still OK is not as good as EPD. I also think that there are pricing/ contract renewal issues with the gas pipeline business when they bought EP. Finally, not all of their new business capital projects are really solid, like the $5+B Canadian pipeline expansion to Vancouver. There is a lot of political opposition among first nations and the Mayor of Vancouver plus a competing pipeline proposal.
On the plus side, I really like that the fact that this entire management team have all stayed fully invested and continued to buy, especially Rich Kinder. Certainly, a lot better than at BWP, where all the management team bailed on their options in December, before they cut their quarterly dividend and the stock tanked over 50% last month. However, I wish we could get better analyst coverage. I think they all run financial models BUT don't really have a strong insight into the business and competitive challenges.
I am long and will plan to stay long BUT they really need to start making their quarterly business plan numbers this year and not just financial engineer the books.