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 January 15 was released on January 27.
(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’s how the short positions compare to the total outstanding units/shares of each entity:
- KMI: ~1.3%
- KMP: ~1.6%
- KMR: ~1.4%
- EPB: ~0.7%
The short positions remain relatively small across the names with KMI and KMP showing longer term increasing trends. KMI’s short interest position hit a new high on December 31, 2013 so its uptrend remains firmly intact. KMP’s short interest position just hit a new high on January 15, 2014 so it is also showing an uptrend (just not as strong of an uptrend in comparison to KMI).
Two week change in the amount of units/shares sold short:
- KMI: Down 0.8%
- KMP: Up 10.3% – New High in Number of Units Sold Short
- KMR: Up 5.3%
- EPB: Up 12.7%
MLP Protocol 
LOL on the Bill Gates name.
No real conclusion, I’m just keeping an eye on the short interest in the names. I’m sure there are other MLPs that have a higher short interest and C-Corps are definitely easier to short than MLPs (so it makes sense to me that KMI has the higher short interest trend).
Ah good old underfunded wildcatters, that reminds me of back in the 90s when 3 of us where I worked built a Death Watch list of E&P names, in the commodity price collapse ~75% of them went bankrupt.
“We’re gonna drill our way out!!!” No, no you’re not…
So — what’s the conclusion? How does the trend in short interest compare to the sp500 or peers? Aren’t there better things to short than mlps? Find me an underfunded wildcatter to short and then we’ll talk.