Over the past year, many Kinder Morgan, Inc. (NYSE:KMI) insiders sold a significant stake in the company which may have piqued investors’ interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Kinder Morgan
The Last 12 Months Of Insider Transactions At Kinder Morgan
The President, Thomas Martin, made the biggest insider sale in the last 12 months. That single transaction was for US$2.1m worth of shares at a price of US$21.01 each. That means that even when the share price was slightly below the current price of US$21.14, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. It is worth noting that this sale was only 7.7% of Thomas Martin’s holding.
All up, insiders sold more shares in Kinder Morgan than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Kinder Morgan Insiders Are Selling The Stock
We’ve seen more insider selling than insider buying at Kinder Morgan recently. We note insiders cashed in US$3.2m worth of shares. On the other hand we note Independent Director Amy Chronis bought US$201k worth of shares , as previously mentioned . Generally this level of net selling might be considered a bit bearish.
Does Kinder Morgan Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Kinder Morgan insiders own about US$5.9b worth of shares (which is 13% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Kinder Morgan Tell Us?
The insider sales have outweighed the insider buying, at Kinder Morgan, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Be aware that Kinder Morgan is showing 3 warning signs in our investment analysis, and 2 of those shouldn’t be ignored…
Of course Kinder Morgan may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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