Below please find an update on the total number of shares and units sold short across the four Kinder Morgan entities (as an indicator of how much traction Hedgeye’s short thesis is achieving in the market place). The following chart shows the total number of units or shares sold short for each name since September of 2012. The data is somewhat delayed and the data for September 30 was released late on October 9 (my update is also rather late so I’ve added reminders in Outlook to prompt me for future updates).
(Click to view)
The vertical black dashed lines under the “X’s” mark the Ex-Dividend or Ex-Distribution dates for the entities. You may notice that some of the short positions tend to get covered prior to the Ex dates so they do not have to pay the dividends/distributions. Technically the data is as of the close on the date shown and not continuous data for every day, so the entire short position could be covered by the Ex date and then put back on the following day.
Here are the total values of the current short positions:
(Click to view)
While all of those amounts are still more than I have in my bank account, here’s how the short positions compare to the total outstanding market value of each entity:
- KMI: ~1%
- KMP: ~1%
- KMR: ~2%
- EPB: ~1%
The short positions remain relatively small across the names and only KMI seems to be showing a clear increasing trend. KMI’s current short position in number of shares is still slightly below the peak reached on July 15, 2013.
I also noticed the following chart in the Barron’s article “Raking in Returns” over the weekend:
(Click to view) Source: Barron’s
The data in the article comes from a survey of “Big Money” managers (current report included responses from 135 institutional investors). While the table contains a large amount of interesting data, the relevant part for this post is the “Name your favorite stock for the next six to 12 months” since Kinder Morgan (KMI) appears in that list of 8 names. I find it interesting since it seems some large-ish segment of the Big Money managers continue to like KMI even after the Hedgeye analysis and report. My view is that the large money managers are the real “price makers” in the market so it seems possible that their widespread favorable view of KMI could support the price going forwards (especially if there is some herding instinct across the Big Money managers).
I’ll try and post another set of updated Kinder Morgan Group charts this Friday after the next data is released on October 24.
Thanks for reading and commenting.
Nice article. Interesting to see how the short positions all cover before ex date. Short KMI puts at 35 but wanting the shares. Keep up the good work