If you are investing in the economic gain to come from our having a world wide head start on the development of natural gas, the main risk is people stop expecting the light to go on instantly when they flick the switch.
Kmr shares are not split. For each share that you own the Partnership (KMP) gives you .017610 new fully paid up capital shares in Kmr.
That is why Kinder developed KMR, no k-1, no 1099s, and you will not be taxed on the distributions until you sell.
You cannot assume a constant yield with Kinder Morgan. The nature of the game is increasing distributions.
Do a Google search on prospectus KMR. When you get that, search on available cash. KMR must pay out all available cash.
Half of the available cash above a certain point goes the KMP shareholders. The other half goes the KMI. KMI has to pay corporate tax on what they get, shareholders’s taxes are deferred. KMI is not required to pay any of it out. KMP must pay all of it out.
KMR should trade at a premium, but the facts are it usually trades at a 10% discount, giving better value for the money if you are going to hold overnight.
Plenty to know..
Fidelity will hold fractional shares if you ask them. Fidelity I think goes out about 4 where Kinder gives up about 6. They are consistent according to people who care over on Seeking Alpha.
Foreign exchanges have a different fee structure than US exchanges, and different tax. The fees will not be the same.
Tell them you want dividends reinvested on KMR. They will receive and hold fractional shares for you. Fidelity is OK. On the pay out day you will see your cost basis per share adjusted and more shares in your account. Call them tonight don't wait.
** the daily fluctuations in the price of natural gas **
Kinder Morgan is mostly fee based so these factors have little effect.
** interest rates affect the daily share price fluctuations of KMR.**
People think interest rate have more effect on KM than they really do. Kramer said last week that people should look beyond its value as a bond, and see it for what it is. A play on the Natgas explosion that is changing the way North America views energy.
**Obviously the number of buyers and sellers determines the price. **
Yes, short-term demand for the shares has an effect.
**but what outside factors contribute to buyers and sellers interest? **
One thing that has been depressing prices is Km has to sell tons of securities to fund growth. These new shares absorb demand and stop the price from taking off as fast as it might.
**Is KMR boosted when WTI is up because they are a producer? **
Not much. When we get a commitment to use our pipes we build them. They agree to pay for twenty years whether they use the pipe or not. KM is paid a negotiated fee. What does WTI have to do with that?
** The same questions for natural gas and other KMR products.**
The answer is if you want us to take your company over, you had better turn fee based first.
**Clearly rising interest rates hurt **
It is not clear to me, not as much as the market reacts. Listen to the conference calls and stop guessing.
**as does a falling stock market.**
A falling stock market lets us get more shares from reinvestment. It has little or no effect on what the company does, or our payout from fees.
**Why do KMR and KMP often trade in the opposite direction of KMI?**
Why should they trade the same, do you think there market price is based on economic value?
If that were true the price would only move quarterly. Do you think someone is outside MacDonald's counting the people going in and out, and this makes the stock go up and down?
If I buy shares in KMR, why would you think KMi
the daily fluctuations in the price of natural gas, interest rates affect the daily share price fluctuations of KMR. Obviously the price is determined by the number of buyers and sellers. but what outside factors contribute to buyers and sellers interest? Is KMR boosted when WTI is up because they are a producer? The same questions for natural gas and other KMR products. Clearly rising interest rates hurt as does a falling stock market. Why do KMR and KMP often trade in the opposite direction of KMI?
That makes sense nowclouds, KMI is already ordinary income so you will not lose anything being in an IRA. But KMR is capital gain outside of a sheltered retirement trust, but it turns to ordinary income when you take it out of an IRA.
Having 8.1Billion invested in the stock is not the same as owning 8.1 Billion dollars worth of stock. How much did he pay for the stock is how much he has invested in it. Do you know hat stock options are?
Usually runs up till EX Dividend date. Seasonal cycle starts about a month out. Pressure should be up into Ground Hog day.
When the profit is split 50/50 between the two companies the only way one company can get more, is if the other gets more.
KMI does not have to maintain a distribution. It can retain earnings at KMI. KMP cannot retain earnings, it must pay out all available cash.