Kinder Morgan added to GS Conviction Buy list

[rnsmth]

Kinder Morgan SA article

KMI is on overweight position in my portfolio - 5% of holdings. Very nice dividend delivered this week. Current yield of 5.2%

[Be Here Now]

KMR + KMI = 9.5% of my portfolio. Long term conviction hold. I also have EPD and ETE for the long term.

The 4 combined have been very good to me. Starting in 2011, I now have unrealized capital gains in excess of 100%. They constitute 26% of my portfolio market value, and contribute 17% of my dividends.

Yield on cost numbers also tell me how well these investments have done:

EPD = 6.83%
ETE = 7.86%
KMI = 5.49%
KMR = 9.63%

I reinvest all Kinder dividends / distributions, and accumulate all EPD and ETE distributions for either opportunistic investment in other categories or current spending.

[jcirafic]

I own KMP, ~9% of my portfolio. Just had a put expire on KMI but wish I had just bought KMI outright at 32.00.

[hendi_alex]

I recently doubled my modest KMI position. Is about 4% weighting, at least 2/3 intended as a long term growth and income position.

Jcirafic, how much did you net per share on the put. Seems like going long now would give an effective price of near or under $33. Why not just go long or sell some $32.50 puts. If you are bold enough to go out to October, a month when MLPs are usually depressed, your effective buy price could be near $31, and even if not assigned, you get paid over $1.10 per share for the contract.

[jcirafic]

(05-18-2014, 08:41 AM)hendi_alex Wrote: I recently doubled my modest KMI position. Is about 4% weighting, at least 2/3 intended as a long term growth and income position.

Jcirafic, how much did you net per share on the put. Seems like going long now would give an effective price of near or under $33. Why not just go long or sell some $32.50 puts. If you are bold enough to go out to October, a month when MLPs are usually depressed, your effective buy price could be near $31, and even if not assigned, you get paid over $1.10 per share for the contract.

Hi Hendi_Alex,

here is the quote from my brokerage history;
05/19/2014 EXPIRED as of 05/16/2014
-KMI
140517
P30 PUT (KMI) KINDER MORGAN INC MAY 17 14 $30 (100 SHS)
Cash Contracts: +2.000

I made about $50 on this and I almost always only do puts about 1 month out. If I can make 1% on my money in one month I am happy. More than one month gets me worried because I would not have time to react to a full fledge market pullback without buying back the put contract and of course losing money. But maybe you are right about KMI out to October because it would be a buy at $31. I will think about this. Another thing for me is that I already have a big position (for me) in KMP and don't want to bet that big on Kinder even though I like the comapny and the business.

[hendi_alex]

My comments were in the context of [wish I had bought at $32]. I interpreted that as buy and hold sentiment for an under $32 purchase price. In that case weakening share price would not be a major concern. If you are at full weighting then my suggestion probably would not be appropriate.

[jcirafic]

(05-19-2014, 08:08 AM)hendi_alex Wrote: My comments were in the context of [wish I had bought at $32]. I interpreted that as buy and hold sentiment for an under $32 purchase price. In that case weakening share price would not be a major concern. If you are at full weighting then my suggest probably would not be appropriate.

Picked up 100 shares today at 33.25 on a limit order.