Kinder Morgan Inc (KMI) Shares Up After Announcing Acquisition of Natural Gas Pipeline Company of America


Investors have flocked to Kinder Morgan Inc (NYSE:KMI) today after they made a joint announcement with Brookfield Ifrastructure Partners (NYSE:BIP) to acquire the 53% interest in Natural Gas Pipeline Company of America (NGPL) that the companies didn’t already own.

Kinder Morgan, which is the largest energy infrastructure company located in North America, already owns or operates over 84,000 miles of pipelines ranging from petroleum, to crude oil, CO2, natural gas and more.

They will pay around $136 million which will allow them to increase their ownership in NGPL from 20% to 50%.

The stock is down 4.33% or $1.02 hitting $22.55, despite the positive news. About 13.92 million shares traded hands. KMI has declined 45.44% since April 28, 2015 and is downtrending. It has underperformed by 44.55% the S&P500.

“We are delighted to be strengthening our relationship with Kinder Morgan,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. “We look forward to working together to execute NGPL’s growth strategy to achieve its potential.”

Out of 8 analysts covering Kinder Morgan (NYSE:KMI), 6 rate it “Buy”, 0 “Sell”, while 2 “Hold”. This means 75% are positive. $44 is the highest target while $29 is the lowest. The $37 average target is 64.08% above today’s ($22.55) stock price. Kinder Morgan was the topic in 16 analyst reports since July 30, 2015 according to StockzIntelligence Inc. Argus Research maintained the stock on November 10 with “Buy” rating. Bank of America maintained it with “Buy” rating and $44 target price in a September 28 report. RBC Capital Markets maintained the shares of KMI in a report on October 22 with “Outperform” rating. Finally, Credit Suisse downgraded the stock to “Neutral” rating in an October 22 report.

The institutional sentiment decreased to 1.18 in Q2 2015. Its down 0.15, from 1.33 in 2015Q1. The ratio dived, as 86 funds sold all Kinder Morgan Inc shares owned while 413 reduced positions. 106 funds bought stakes while 483 increased positions. They now own 1.17 billion shares or 2.97% less from 1.21 billion shares in 2015Q1.

Highstar Capital Lp holds 100% of its portfolio in Kinder Morgan Inc for 68.87 million shares. Travelers Companies Inc. owns 1.64 million shares or 16.62% of their US portfolio. Moreover, Rare Infrastructure Ltd has 14.64% invested in the company for 9.63 million shares. The New York-based C V Starr & Co Inc has invested 13.21% in the stock. Endurance Wealth Management Inc., a Rhode Island-based fund reported 1.61 million shares.

Kinder Morgan, Inc. is an energy infrastructure and energy firm in North America. The company has a market cap of $50.96 billion. The Firm operates through six divisions: Natural Gas Pipelines, CO2, Terminals, Products Pipelines, Kinder Morgan Canada and Other. It has 43.11 P/E ratio. The Natural Gas Pipelines segment includes interstate and intrastate pipelines and its liquefied natural gas (LNG) terminals.