3 Reasons Why Kinder Morgan Inc.’s Stock Could Have Further to Fall

BWP Net Financial Debt (Quarterly) Chart
BWP Net Financial Debt (Quarterly) Chart

BWP Net Financial Debt (Quarterly) data by YCharts .

However, while Boardwalk's plan has worked to grow its asset base while keeping its debt from rising, it hasn't lifted any weight off its unit price. In fact, units are lower now than after the initial drop following the distribution cut. Kinder Morgan could face a similar fate of stagnation, especially with as much table pounding as its CEO has done on the dividend this year . Suffice it to say, the company's reputation with investors has been severely tarnished and it might not be able to win them back until it has resumed dividend growth.

3. Tax-loss selling

Another weight that could push the stock down over the next few weeks is tax-loss selling by investors. With the stock down more than 60% year to date, investors with a higher cost basis could decide to sell the stock at a loss and either move on or buy it back a month later in hopes of catching a future rebound. And with no near-term positive catalysts on the horizon, investors might see that as a safe bet.

A recent note put out by Barron's hinted at this, which pointed out that in a bear market the end doesn't come until 50% to 80% of the value of an asset has been wiped out. With MLPs as a whole having lost 46% of their value as of earlier last week, it suggests that there could be more downside on the way, especially with the year-end tax deadline looming.

Investor takeaway

Kinder Morgan's stock price slide might not be done because it still has quite a number of catalysts that could drive it lower. Suffice it to say, December could be a volatile month for investors.

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The article 3 Reasons Why Kinder Morgan Inc.'s Stock Could Have Further to Fall originally appeared on

Matt DiLallo owns shares of Kinder Morgan and has the following options: short January 2018 $30 puts on Kinder Morgan and long January 2018 $30 calls on Kinder Morgan. The Motley Fool owns shares of and recommends Kinder Morgan. Try any of our Foolish newsletter services free for 30 days . 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 .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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