re: Oil stocks...are you buying?

Baron's isn't feeling the KMI purchase

quote:

---

Barron's Andrew Bary believes the purchase probably was taken by either Todd Combs or Ted Weschler rather than Buffett himself; Berkshire does not disclose which manager buys which stocks, but smaller holdings generally are initiated by Combs or Weschler, who each run ~$7B of the equity portfolio, while Buffett oversees more than $100B.

Bary also notes that KMI emphasizes distributable cash flow, while Buffett prefers to focus on free cash flow - "something Kinder Morgan doesn’t have a lot of... [KMI] has sizable capital expenditures beyond just the 'sustaining' capital expenditures included in its DCF calculation. As a result, it is not left with much free cash flow.

"Even if Buffett did take the position, Bary says he has not had a good investment record in recent years, and Berkshire may have a loss in KMI if it bought its entire position in Q4, as it fell sharply when the company cut its dividend by 75% in December.

---

Translation- Buffet didn't really buy KMI so it's not good news. And even if he did, he sucks at investing so it's not good news