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In the last year, many Kinder Morgan, Inc. (NYSE:KMI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Kinder Morgan
Kinder Morgan Insider Transactions Over The Last Year
The Independent Director, C. Shaper, made the biggest insider sale in the last 12 months. That single transaction was for US$22m worth of shares at a price of US$24.75 each. That means that an insider was selling shares at slightly below the current price (US$26.41). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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 9.5% of C. Shaper's holding.
In total, Kinder Morgan insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insiders At Kinder Morgan Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Kinder Morgan. Specifically, insiders ditched US$3.6m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Kinder Morgan insiders own about US$7.3b 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.
So What Does This Data Suggest About Kinder Morgan Insiders?
Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Kinder Morgan makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for Kinder Morgan (of which 1 is concerning!) you should know about.