Monday, October 27, 2014

Update for Equity REIT Common and Preferred Stock Basket Strategy/OHI Earnings Report and Dividend Increase

Housekeeping: Google remains frequently unable to connect visitors to this blog using the correct blog URL.  Instead of using the blog URL, I bookmark a link to the most recent month in the blog archive section to the right. Stocks, Bonds & Politics: October 2014 This solves the access problem, at least for now. 

Google deleted my updates for the regional bank, REIT and Lottery Ticket basket strategies when I attempted to open the draft. 

I do not want to publish these updates as an SA Instablog. What I will do now is limit a post to one basket strategy and haphazardly publish them along with updates on other portfolio strategies including the CEF Portfolio and the Exchange Traded Bonds and Preferred Stock Portfolio. These updates will have no set time period associated with their publication. 

There are several reasons for changing the updating schedule and format. The most important is that I can write and publish the post at one sitting, thereby giving Google fewer opportunities to lose a draft which has occurred twice recently after the draft was saved and when I merely attempted to open it, as I have done since first I first published here back in October 2008.

1.  Update for Equity REIT Common and Preferred Stock Basket Strategy:  

This basket strategy was last updated on 9/29/14

For the reasons discussed in a March 2014, I started a tactical allocation shift into REIT common and preferred stocks starting in September 2013. Equity REIT Common and Preferred Stock Table as of 3/5/14 This particular shift started after prices had significantly corrected in the May to September 2013 time frame. Most of my best buys were made in December 2013 that marked the high point in the correction process. 

I still own three of those: 




I viewed the 2013 correction to have two primary causes. 

First, REIT valuations had hit stretched valuation levels by May 2013 based on historical norms, 

Second, interest rates started to spike in May 2013, making alternative income investments more attractive compared to REITs for some investors. The 10 year treasury closed at a 1.66% yield on 5/1/13 and had risen to 3.04% by 12/31/13. Daily Treasury Yield Curve Rates

Aggregate P/FFO data can be found in Lazard's monthly Real Estate Report

After the bell today, Omega Healthcare reported FFO and AFFO at $.73 per share, beating estimates by either two or three cents per share depending on the service providing the consensus number. Omega recently announced the ninth consecutive dividend increase raising the quarterly payout by 1 cent to $.52. OHI Dividend Date & History 

Closing Prices 10/27/14:




Since the last update, I have not sold any securities. I currently have a total realized gain of $2,967.97 (snapshots at Gateway Post: Equity REIT Common and Preferred Stock Basket) Profits from Canadian REIT sells are reported here in USDs, which is the 1099 tax reporting requirement even though I am using CADs to buy and receiving CADs when I sell. So far, my CAD profit from those sales have been higher. The decline in the CAD vs. the USD results in a lower reported taxable profit.   

I have purchased the following securities since the last update: 


Added 200 DRG:CA at C$8.92 (10/20/14 Post)




The additional 100 share purchase of LXP in a Roth IRA, noted above, is part of an ongoing transitioning of the entire position to the Fidelity ROTH IRA. I discuss the reasons for the repositioning in this SA Instablog: Lexington REIT (LXP) - South Gent | Seeking Alpha

I have an a GTC Limit Order to Sell the LXP shares owned in a taxable account slightly above the closing price today.

Click To Enlarge: 

Equity REIT Basket As of 10/27/14
The worst selection in this grouping is CCG, but I only bought 150 shares. 

I am not tracking reinvested dividends in this table. 

As previously noted, I have pared my Canadian REIT exposure. I buy those securities using my CAD stash on the Toronto exchange. I receive their monthly dividend payments in CADs. I did add 200 shares of Dream Global Real Estate Investment Trust  (DRG.UN:TOR) since my last update. 

Since starting this basket strategy, I have owned one REIT that received a takeover offer within a few weeks after I established a position: Item # 6 SOLD: 300 HLP-UN:CA at C$14.17 (realized gain in CADs=C$1,244.75; reportable U.S. Profit Gain=$1,039.15).   

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