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Editor's Note: Below is an excerpt from a note written last night by Hedgeye Energy analyst Kevin Kaiser to institutional subscribers. For the record, Kinder Morgan (KMI) has fallen another 7.5% today.

"The market has suddenly come to appreciate many of the risks and issues with Kinder Morgan, Inc. (KMI) that we have discussed for more than two years.  KMI was down 30% last week and is now down 60% YTD on heightened concerns surrounding its debt leverage, dividend sustainability, business model, and valuation.  And because KMI is a bellwether in the North American midstream sector, the recent declines of its stock and bond prices are reverberating through its peer group, as evidenced by the Alerian MLP Index falling 11% last week.


While some investors will be tempted to catch the KMI falling knife, we continue to strongly advise against it.  In our view, there is still substantial downside to fair value, which we believe is less than $10/share.


We will host a conference call presentation this Friday, December 11th at 11am EST to discuss the latest KMI developments and give our updated views on KMI’s businesses, financials, and valuation." 


(For more info on how you can access his call send an email to sales@hedgeye.com.)

*Here is the Fox Business interview between Kaiser and Charlie Gasparino on KMI almost 2 years ago.  

Must reads on Kaiser's Kinder Morgan call:

*UPDATE: Since Cramer's buy recommendation last week (see last link above), KMI shares have fallen another 30%.