Kinder Morgan Inc (NYSE:KMI): Underperformer

Kinder Morgan Inc (NYSE:KMI) suffered from a bout of profit booking in NYSE after the announcement of securing the approval of the investors for a $44 billion merger deal. The company will acquire all outstanding shares of Kinder Morgan Management LLC (KMR), Kinder Morgan Energy Partners, L.P. (KMP) and El Paso Pipeline Partners, L.P. (EPB) with the last trading day of all these stocks coming on November 26.

Why are analyst so optimistic about KMI?

A glance at the longer term chart of Kinder Morgan Inc (NYSE:KMI) shows a very nice rise from the low of $23.51 in mid-2011 to a high of $40.25 by April 2012. That was the most significant rise for the stock as that turned out to be the only phase of wealth creation for the investors in the last few years.

The stock price of Kinder Morgan Inc (NYSE:KMI) saw a sharp correction in 2012 and retraced nearly 60% of the previous rise to hit a low at $30.50. Eventually the entire loss was recovered and a new life was made in 2013 but the rally was a labored one, really taking its time and the new high came just a dollar higher at $41.49 before the next big correction materialized.

The 2014 low of $30.81 has been the lowest point of the stock for the year and in the next few days, that low is not expected to be tested. Interestingly, the 2014 high of $42.49 again came just a dollar higher than the 2013 top. So the main question would be if the merged entity would be able to create real synergy and consequentially, wealth.

With the broader markets hitting new life highs quite regularly, any stock that underperforms would be a suspect. Kinder Morgan Inc (NYSE:KMI) is going nowhere for the last 3 years, almost for the whole duration of the entire bull market. So it could be prudent for the investors to pick something else.


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Getting into the intricacies of the stock information, delving into the company’s financial statements is my passion and have a great deal of understanding of Economy their impact on the Market and individual stocks.

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