Our first podcast on Kinder Morgan (KMI) two weeks ago was not super well-received, so we brought on one of our critics, Seeking Alpha author and current KMI bull Kirk Spano, to discuss the company further. We get into some of the criticisms we had of the company - its use of non-GAAP metrics and the underrating of its commodity pricing exposure - as well as some of the criticisms readers had of us. Kirk also lays out his bull case for the company, and we get into the incentives and potential hidden value on Kinder's side.
Topics covered:
3:00 minute mark - the rearview mirror for Kinder Morgan, and understanding what happened to the pipeline industry 11:20 - Where do commodity prices fit in? 18:30 - Breaking down KMI's business model, and their spin-off potential 25:20 - The future of nat gas vs. alternatives 30:30 - Using distributable cash flow vs. other metrics 35:00 - Is capex going to come down in the future? 45:00 - Drilling into DD&A vs. sustaining capex 50:00 - The pivot of KMI to realizing the 'toll-road' thesis and Richard Kinder's incentives 56:30 - How do we get to a price target in the $30s? 1:00:30 - The risk to REITs and other dividend stocks in the years to come 1:10:00 - Is it worth coming to an industry totally fresh?