By The Sizemore Letter<\/u><\/p>\n
Two weeks ago, I highlighted two REITs with large insider buying<\/a>, American Realty Capital Properties (<\/span>ARCP<\/a>)<\/span><\/b> and Annaly Capital (<\/span>NLY<\/a>)<\/span><\/b>.\u00a0 Today, I\u2019m going to continue this theme with a quick discussion of MLP general partner Kinder Morgan Inc (<\/span>KMI<\/a>)<\/span>.<\/b><\/p>\n The \u201cKinder Morgan companies\u201d refer to Kinder Morgan Energy Partner (<\/span>KMP<\/a>)<\/span><\/b>, one of the largest and most popular MLPs among income investors; Kinder Morgan Management (<\/span>KMR<\/a>)<\/span><\/b>, a sister company that pays its dividend in stock;\u00a0El Paso Pipeline Partners (<\/span>EPB<\/a>)<\/span><\/b>, a more recent addition to the Kinder Morgan family; and Kinder Morgan Inc., the general partner responsible for the operations of the whole lot.\u00a0 Collectively, they are worth a hefty $90 billion in market cap.<\/p>\n Richard Kinder started the Kinder Morgan empire with pipeline assets tossed away by Enron, and he\u2019s not your typical CEO.\u00a0 He doesn\u2019t take a lavish salary, and he actually reimburses the company for the cost of his health insurance premiums.\u00a0 His income is based on the dividends he earns through his holdings of KMI.<\/p>\n Oh, and about that: Kinder just spent $18 million of his own money<\/a> buying shares on September 9.<\/p>\n And he wasn\u2019t the only insider buying.\u00a0 On the same day, another officer bought nearly $100,000 in new shares.\u00a0 And in the month of August, Fayez Sarofim, a director and one of the company\u2019s biggest shareholders, bought about $15 million in new shares.<\/p>\n Like most income-oriented investments, KMI got hit hard as the market became fixated on Fed tapering.\u00a0 But I\u2019ll trust the inside knowledge of the company\u2019s directors before I trust the collective \u201cwisdom\u201d of an emotionally-charged market.<\/p>\n Action to take: Buy share of KMI and collect the 4.5% dividend.\u00a0 Plan on holding for 12-18 months or for total returns of 50%-100%.\u00a0 Use a 20% trailing stop as risk management.<\/p>\n This article first appeared on TraderPlanet<\/a>.<\/p>\n Charles Lewis Sizemore, CFA, is the editor of the\u00a0Sizemore Investment Letter<\/a>\u00a0and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he was long ARCP, KMI and WMB.\u00a0Click here<\/a>\u00a0to learn about his top 5 global investing trends and get your copy of \u201cThe Top 5 Million Dollar Trends of 2013.\u201d<\/em><\/p>\n This article first appeared on Sizemore Insights as Kinder Morgan: Insiders Backing Up the Truck<\/a><\/p>\n