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Kinder Morgan Energy Partners Takes a Beating Over Old News

By Erin Kennedy and Taylor Muckerman – Feb 24, 2014 at 2:30PM

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A bearish report from Barron's is dragging Kinder Morgan Energy Partners down today, but is the market spooked over old news?

Barron's released a rather bearish report on Kinder Morgan Energy Partners (NYSE: KMP) over the weekend, which raised some questions about the company's relationship with its general partner Kinder Morgan (KMI -0.78%), denting KMP stock today as a result. The report highlighted concerns over the incentive distribution rights Kinder Morgan is charging its limited partner, as well as questions around the company's reporting of its maintenance capital expenditures, which may be artificially inflating the company's distributable cash flow.

In this video, however, Motley Fool energy analyst Taylor Muckerman says that he sees the report as just a reiteration of a report that came out last September, with no real notable new takeaways. With the company having already addressed these issues when the report came out last fall, he sees the market's reaction today as being spooked over the resurfacing of old news, rather than a more meaningful issue. Taylor also takes a closer look at the relationship between Kinder Morgan and its limited partner KMP, and shows why he disagrees with several points from the Barron's report.

He also says he likes the stock today, and could see this pullback as a time to get in. Taylor sees a lot of tailwinds in the industry right now, and with Kinder Morgan being the largest in the space with a lot of diversification in its asset base and a large presence across North America, he's a believer in the company today.

Erin Kennedy and Taylor Muckerman have no position in any stocks mentioned. The Motley Fool recommends and owns shares of Kinder Morgan. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Kinder Morgan Stock Quote
Kinder Morgan
KMI
$19.00 (-0.78%) $0.15

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