Thursday, January 16, 2014

Comments from Rich Kinder - KMI, KMP

From the Wall Street Journal, a few comments from Rich Kinder.  The Chump IRA is long KMI, and I own KMP in my taxable account.

Why Oil Tycoon Rich Kinder Feels Undervalued

Reuters
Oil and natural gas pipeline magnate Rich Kinder feels undervalued.
Kinder Morgan Energy PartnersKMP +1.24%’ profit more than doubled in 2013. And it’s controlling partner, Kinder Morgan Inc.KMI +0.17%, had a six-fold increase in net income last year. But the companies’ stock prices have underperformed the market by a wide margin, Mr. Kinder lamented to investors and analysts this week while discussing earnings.
The last time Kinder Morgan felt so unloved by Wall Street was 2006, prompting Mr. Kinder to take it private a year later in a $22 billion deal.
Despite solid results from pipeline, crude-by-rail, and coal export units – not to mention $15 billion worth of projects in development – one of the bigger buyers of Kinder Morgan Inc. stock these days appears to be the chairman himself. Mr. Kinder picked up 828,000 shares in December alone, spending an estimated $27.6 million.
“I look out there and I see this huge damn footprint across North America and every time we turn around we see more ability to extract value out of it,” he said of the company’s extensive network of pipes, rail terminals, export facilities and ships used to shuttle energy around the U.S. and Canada.
“I guess I haven’t been successful in convincing the rest of the world of that, because a lot of people don’t see it,” Mr. Kinder said.
Naysayers point to Kinder Morgan’s size, claiming it’s too big to meaningfully grow any more, either by acquisition or through new projects of its own. The billionaire running it says that’s a refrain he’s heard for years, but Kinder Morgan keeps expanding, buying rivals and building new energy infrastructure.
Even so, the company recently issued earnings guidance for 2014 that disappointed a lot of analysts. Profits are projected to grow, not skyrocket.
Market sentiment started to turn against Kinder Morgan last September, when HedgeEye Risk Management LLC – a research shop that’s been strongly suggesting investors sell their shares – raised questions about Kinder Morgan’s maintenance spending, asserting corners were being cut in order to gin up a fatter cash payout for Mr. Kinder and other shareholders. At one point the war of words between HedgeEye analyst Kevin Kaiser and the company shaved $3 billion off Kinder Morgan Inc.’s market cap.
Compared to this time last year, Kinder Morgan Inc. stock is down 2.8% while that for Kinder Morgan Energy Partners has slumped 7.6%.
“We proved the doubters wrong the first time around and I anticipate the same result this time,” Mr. Kinder said on Wednesday. “You sell. I’ll buy. And we see who comes out best in the long run.”

Friday, January 10, 2014

1st Trades of 2014 - Adding more PM today

Trimmed MSFT and MDT today;  both have grown pretty large in the portfolio, and added shares of PM @ $82.52.  PM is down 1% today, and looks like a good value to me at these levels.

Here is a snapshot of PM via FAST Graphs:


@$82.50 today, it's entering undervaluation range.  Dividend yield is above 4.5%, and earnings growth has been averaging 11%;  I like this stock for the next few years.  Here is a 5 year projection for EPS growth:


PM sells tobacco products internationally (MO is the domestic version).  I can personally attest to the fact that smoking is a growth industry in Europe, South America, and Asia.  The numbers of smokers in these countries is staggering, and growing (for now).  Based on what I see when traveling to these regions, I wouldn't be surprised if smoking becomes an olympic sport soon ;-)

That's all for now.

Chump

P.S., your comments are welcome, please post one, and let me know what you're eyeing for your portfolios, suggestions encouraged!

Saturday, January 4, 2014

McDonalds - a good PR story


This is a very interesting experiment performed by a high school science teacher.  McDonald's needs to fight back and use these type of data to improve their image (and sales).  The Chump IRA is long MCD.  As Mr. Cisna says in the article, "...it's our choices that make us fat, not McDonalds."  Amen


Forget Super Size Me: Man loses 37lbs and lowers his cholesterol by a third after eating only McDonald's for three months

Contrary to popular belief, following a diet of exclusively fast food does not necessarily lead to weight gain, as one man recently discovered.
John Cisna, a high school biology teacher from Ankeny, Iowa, told KCCI that he documented the changes his body underwent throughout the three months that he ate nothing but McDonald's - with very surprising results.
Rather than his body deteriorating like the star of 2004 documentary Super Size Me, Mr Cisna lost an impressive 37lbs and saw his cholesterol drop from 249 to 170, improving his health significantly.
Scroll down for video
Super Shrink Me: John Cisna, a science teacher from Ankeny, Iowa, lost 37lbs and saw his cholesterol drop by a third in the three months that he ate nothing but McDonald's
Super Shrink Me: John Cisna, a science teacher from Ankeny, Iowa, lost 37lbs and saw his cholesterol drop by a third in the three months that he ate nothing but McDonald's
Super Shrink Me: John Cisna, a science teacher from Ankeny, Iowa, lost 37lbs and saw his cholesterol drop by a third in the three months that he ate nothing but McDonald's
Experiment: Mr Cisna embarked on the diet to show how we can eat anything as long as we stick to 2,000 calories per day and stay close to the recommended dietary allowances for nutrients
Experiment: Mr Cisna embarked on the diet to show how we can eat anything as long as we stick to 2,000 calories per day and stay close to the recommended dietary allowances for nutrients
He also saw his low-density lipoprotein, also known as 'bad cholesterol', drop from 173 to 113.
Mr Cisna embarked on the diet as an experiment to show how we can eat anything as long as we stick to a limit of 2,000 calories per day and stay close to the recommended dietary allowances for nutrients.
 
As such, he had his students plan out each of his meals using the fast food franchise's online nutritional information, requiring that they follow the dietary restrictions he set out.
During the three months, Mr Cisna - who admits that he didn't exercise or watch his calorie intake before the diet - also began walking for 45 minutes a day, a factor which no doubt contributed to the results. 
Fast food favorites: On a typical day, Mr Cisna ate two egg white delights, a bowl of maple oatmeal and one percent milk for breakfast, a salad for lunchand a value meal for dinner
Fast food favorites: On a typical day, Mr Cisna ate two egg white delights, a bowl of maple oatmeal and one percent milk for breakfast, a salad for lunchand a value meal for dinner
Thinking ahead: He had his students plan out his meals using the fast food franchise's online nutritional information, requiring that they follow the dietary restrictions he set out
Thinking ahead: He had his students plan out his meals using the fast food franchise's online nutritional information, requiring that they follow the dietary restrictions he set out
And when he approached his local McDonald's franchise about the experiment, the manager was so interested to see what happened that he agreed to provide 90 days of meals at no charge.
'The point behind this documentary is it's our choices that make us fat, not McDonald's'
On a typical day, Mr Cisna ate two egg white delights, a bowl of maple oatmeal and one percent milk for breakfast, and lunch would normally be a salad.
But it wasn't just 'healthy' fast food that he ate; for dinner he would indulge in a value meal like a Big Mac or a quarter pounder with cheese, and he'd also sometimes snack on ice cream sundaes.
Despite his all-fast food diet, Mr Cisna was in significantly better health by the 90th day.
Getting active: During the three months, Mr Cisna - who admits that he didn't exercise or watch his calorie intake before- also walked for 45 minutes a day, which no doubt contributed to the results
Getting active: During the three months, Mr Cisna - who admits that he didn't exercise or watch his calorie intake before- also walked for 45 minutes a day, which no doubt contributed to the results
Healthier overall: Not only did he lose weight, but he also saw his low-density lipoprotein, also known as 'bad cholesterol', drop from 173 to 113
Healthier overall: Not only did he lose weight, but he also saw his low-density lipoprotein, also known as 'bad cholesterol', drop from 173 to 113
Novel outlook: 'The point behind this documentary is - it's choice. We all have choices,' he said, explaining: 'It's our choices that make us fat, not McDonald's'
Novel outlook: 'The point behind this documentary is - it's choice. We all have choices,' he said, explaining: 'It's our choices that make us fat, not McDonald's'
'I tell people not only can I see my shoes now but I can actually tie them,' he said.
What's more, his experiment verified his theory that many people have the wrong idea when it comes to how to be healthy.
'The point behind this documentary is - it's choice. We all have choices,' he said, explaining: 'It's our choices that make us fat, not McDonald's.'
Opposite effect: In 2004 documentary Super Size Me, Morgan Spurlock eats only McDonald's for 30 days. He gains 24lbs, his cholesterol rises to 230 and he experiences a fat accumulation in his liver
Opposite effect: In 2004 documentary Super Size Me, Morgan Spurlock eats only McDonald's for 30 days. He gains 24lbs, his cholesterol rises to 230 and he experiences a fat accumulation in his liver