Nonverbal Lessons from Richard Kinder
Kinder Morgan, operating out of Houston, Texas, is the largest energy infrastructure company in North American with more than 84,000 miles of pipelines and 165 terminals.
Richard Kinder, the founder of the company, has an estimated net worth (2015) of 11.8 billion dollars according to Forbes.
Insider Monkey reported:
Last month, we told you about two 100,000-each purchases of Kinder Morgan stock by company founder Richard Kinder, and a smaller purchase by the company’s CEO. Last week, we learned that insiders are still scooping up stock for their own accounts. Specifically, on July 24, a pair of Form 4 filings with the SEC described purchases of:
– 100,000 shares of Kinder Morgan stock, bought by company Chairman Richard D. Kinder on July 24 at an average purchase price of $34.97 per share. (100,000 share blocks appear to be his preferred way to invest in Kinder Morgan stock).
– and 500,000 shares bought by director Fayez Sarofim on July 22, at an even higher price — $35.33.
Together, that’s more than $21 million worth of Kinder Morgan stock bought by insiders in just three days of trading.
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Mr. Kinder owns over 233 million KMI shares. What we want to note is that he is buying his own company’s stock. Of all people, he should have the most knowledge of Kinder Morgan’s value. His actions are especially interesting in light of the fact that the petroleum markets are not doing very well and neither is Kinder Morgan’s stock.
Fayez Sarofim is a Kinder Morgan director and fund manager at Dreyfus. His holding are valued close to one billion dollars. These two men own twelve percent of the company.
On July 15, the board raised the quarterly cash dividend to 49 cents, a 14% increase over the same period last year. When was the last time you received a 14% raise? KMI currently yields 5.6%.
We will never have a complete picture of any given opportunity. But we can observe indicators that may tilt opportunity in our favor:
- Billionaires have achieved their success because of the decisions they have made, so their decisions tend to be both good and valuable.
- Insiders such as owners, directors, and officers are privy to information that is not readily available to the public. When they invest in their own company, it should get our attention, especially when the market conditions do not appear to favor the business.
- Increasing the dividend payout. Dividends are a piece of the company’s earnings. Directors tend to raise dividends when they are optimistic about the future.
Richard Kinder’s most recent dividend, also known as passive income, will exceed 114.6 million dollars. How much work did he invest up front to get that check?
Let me ask you a couple of personal questions. When do you invest in yourself or your business? Do you have the faith to lay down the cash when the future appears uncertain … regardless of what you have already invested?
Let me encourage you to build a business around the gift that has been entrusted to you, the gift that you can give the world.
Disclaimer: we do not make investment recommendations; our conversations are for growth and educational purposes only.
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