Sunday, April 23, 2017

Observations and Sample of Recent Trades: 4/23/17 (BDGE, AKBA, SGY:CA )

The U.S. stock futures are reacting positively to France's election, viewing the centrist candidate Macron as easily beating Le Pen in the runoff election: 

E-Mini S&P 500 Future Jun 2017 Price= 2,368.75 +21 or .89% as of 6:04 C.S.T on 4/23/17.   

The Euro is gaining ground against the USD as EU disintegration fears subside. 


EUR/USD  1.0877 0.0152 1.42% 


Euro Gaps Sharply Higher as Le Pen, Macron Advance in French Vote


This sigh of relief may not last long.

A partial U.S. government shutdown is looming by week's end.

The White House Seems Excited to Shut Down the Government - The New Yorker

11 Quick Facts About A Potential Government Shutdown: Forbes

Government shutdown? Here's who keeps working and who doesn't: CNBC

Trump and his aides take hard line on border wall, as threat of government shutdown looms - The Washington Post

I suspect that a continuing resolution will be passed extending the deadline to 9/30/17, the end of the government's current fiscal year.

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1. Intermediate Term Bond Ladder Basket Strategy

A. Bought 1 Shell International 1.875% Senior Unsecured Bond Maturing on 5/10/21



FINRA Page: Bond Detail (prospectus linked)
Credit Ratings: 

YTM at Total Cost (98.074 )= 2.37%

B. Bought 2 Microsoft 2% Senior Unsecured Bonds Maturing on 8/8/23:

This bond was bought in a Roth IRA account. This bond was sold to the public back in August 2016.




Issuer: Microsoft Corp. (MSFT)

MSFT Microsoft Corp Page at Morningstar
Finra Page: Bond Detail (prospectus is not linked)
Prospectus
Credit Ratings:
Moody's at AAA
S & P at AAA

YTM at Total Cost (96.305) = 2.636%


Earnings Report for the Q/E 12/31/16

MSFT SEC Filings
MSFT Analyst Estimates

Microsoft sold $17B in senior unsecured notes last January:


Prospectus

C. Bought 1 Public Service of Colorado 2.9% First Mortgage Bond Maturing on 5/15/25:


Issuer: Wholly Owned Subsidiary of Xcel Energy Inc.  (XEL:NYSE)

Finra Page: Bond Detail (prospectus linked)
XEL Xcel Energy Inc Page at Morningstar
Credit Ratings:
Moody's at A1
S & P at A
Fitch Rates Public Service Co. of Colorado's FMBs 'A+'
Moody's affirms Public Service Company of Colorado
Credit Ratings | Xcel Energy

YTM at Total Cost (99.697) = 2.942%


XEL 2016 Annual Report


D. Bought 1 Public Service E & G 2% First Mortgage Bond Maturing 8/15/2019-ROTH IRA Account:




Issuer: Operating Electric Utility wholly owned by Public Service Enterprise Group Inc (PEG)

PEG Public Service Enterprise Group Inc Page at Morningstar
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A1
S & P at A
Fitch at A+

YTM at Total Cost (100.138 ) = 1.938%


PEG 2016 Annual Report (Public Service Electric and Gas "distributes electric energy and gas to customers within a designated service territory running diagonally across New Jersey where approximately 6.2 million people, or about 70% of New Jersey’s population resides.")


E. Bought 2 Corporate Office Properties 3.6% Senior Unsecured Bonds Maturing on 5/15/23:




Issuer: Corporate Office Properties Trust (OFC:NYSE)-A REIT

OFC Corporate Office Properties Trust Page at Morningstar
FINRA Page:  Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Baa3
Moody's affirms the ratings of Corporate Office Properties; outlook stable
S & P at BBB-

YTM at Total Cost (98.264) = 3.922%


OFC SEC Filings

OFC Analyst Estimates
2016 Annual Report (debt summary starts at page F-41)
2016 4th Quarter Report
Corporate Office Properties Trust website

I have never owned the OFC common stock. I did rent one of its equity preferred stocks for a brief period:  Bought: 50 FPOPRA at $24.25, 50 OFCPRL at $24.04, 50 STK at $14.38 /Added to Vanguard Wellington (VWELX) and the Permanent Portfolio (PRPFX)/Added 50 KWN at $23.79 -Roth IRA (1/6/14 Post)


2. Continued to Pare Non-REIT Stock Allocation:


A. Sold 50+ BDGE Shares at $35.03:




Profit Snapshot: +$372.06




Quote: Bridge Bancorp Inc. (BDGE)

BDGE Analyst Estimates
BDGE Bridge Bancorp Inc page at Morningstar
2016 Annual Report 
2016 4th Quarter Earnings Report (core efficiency ratio at 53.57%; NPL Ratio at .05%; NPA Ratio at .03%; Total Capital Ratio at 15%; Operating expense as a percentage of average assets at 1.88%; NIM at 3.41%; ROTE at 13.6%; coverage ratio at 2,087.35%; net charge-offs for 2016 at $400,000)

This 50 share lot was purchased at $27.65, using a commission free trade, on 10/26/16.  I briefly mentioned that purchase here and discussed the bank in more detail shortly after that discussion.


I am selling regional bank stocks that have rallied after the election based on the herd opinion that Trump would cause inflation through liberal doses of stimulus. For awhile, the Bond Ghouls bought into that narrative and I mentioned the narrative as a catalyst for regional banks on 11/9/16:  South Gent's Comment Blog # 4: 


The consensus narrative was in vogue until mid-March, when the 10 year treasury yield closed at a 2.62% yield. The trend since that time has been for lower intermediate and long term rates as short term interest rates rise in response to the FED increasing the FF rate. The consensus opinion that net interest margin would expand under a Trump Presidency was met with the hard reality that the yield was not expanding, but was contracting again. 


The SPDR S&P Regional Banking ETF (KRE) closed at $43.97 on 11/8/16 and at $59.36 on 3/1/17, a gain of 35% unadjusted by dividend payments. After intermediate and long term interest rates turn back down, so did KRE. Reality was undermining the consensus opinion. 


I have a favorable view of this bank and will continue to hold a 109+ share stake with an average cost per share basis of $19.05. 





I will consider buying back shares somewhere south of $27.65.  


Stocks, Bonds & Politics: REGIONAL BANK BASKET STRATEGY GATEWAY POST


Realized BDGE Gains To Date: $729.91 (see snapshots in Gateway Post for this topic)


One major problem for me is that the quarterly dividend has remained at $.23 per share since 2005 (payout ratio shown at 46%).


The shares are also pricey IMO at over $30 based on the consensus analyst E.P.S. estimates of $2.02 and $2.29 for 2017 and 2018 respectively. BDGE Analyst Estimates 


3. Small Cap Biotech Lottery Ticket Basket Strategy:


A. Bought 30 AKBA at $9.17-Used Commission Free Trade:




Quote:  Akebia Therapeutics Inc. (AKBA)


To emphasize again, I am flying by the seat of my pants and acting with my gut when selecting Lotto Tickets in the small cap biotech area. I have zero training in medicine and science. 


The furthest along compound is called Vadadustat, "an oral hypoxia-inducible factor (HIF) stabilizer currently in Phase 3 development for the treatment of anemia related to chronic kidney disease. Vadadustat exploits the same mechanism of action used by the body to adapt naturally to lower oxygen availability associated with a moderate increase in altitude. At higher altitudes, the body responds to lower oxygen availability with increased production of HIF, which coordinates the interdependent processes of iron mobilization and erythropoietin production to increase red blood cell production and, ultimately, improve oxygen delivery." I had to quote that information since I would not be capable of explaining it better. 


Pipeline: 





So this stock will succeed or fail based on this compound.   

AKBA_Presentation at the_Needham_Conference: April_2017.pdf


Akebia Announces Fourth Quarter and Full-Year 2016 Financial Results ("The company ended 2016 with cash, cash equivalents and available for sale securities of $260.3 million. The company expects cash resources, together with the timing of amounts expected to be received from collaborators, including a $33.8 million payment from Otsuka received in March of 2017, to fund the current operating plan into mid-2018.")


Akebia Announces Publication of Phase 2a Results for Vadadustat in Patients with Anemia Related to Chronic Kidney Disease (3/28/17 Press Release)


Akebia and Otsuka Pharmaceutical Announce Collaboration to Develop and Commercialize Vadadustat in the U.S. (December 20, 2016 Press Release)("Akebia will receive $265 million in committed funds plus development and commercial milestones, representing a total transaction value that could exceed $1 billion. The companies intend to contribute equally to commercialization efforts and share equally all costs and revenue in the U.S., where sales of erythropoiesis stimulating agents (ESAs), the current standard of care, are estimated to be $3.5 billion. Akebia will continue to lead the ongoing global Phase 3 development program for vadadustat."


2016 Annual Report (clinical trials described starting at page 4)


The stock traded at over $24 back in 2014, but has been range bound near $10 since 2014: Akebia Therapeutics The market cap is about $352+M at $9 per share.

4. Small Cap Canadian E & P Lottery Ticket Basket Strategy:

A. Added 100 of SGY:CA at C$2.61 (C$1 commission):





Quote: Surge Energy Inc. (SGY:TOR)

Pink Sheet Market Quote Priced in USDs: ZPTAF

I discussed two others Surge Energy stock purchase in Item # 3A: Stocks, Bonds & Politics: Observations and Sample of Recent Trades (SGY:CA-ZPTAF, VWELX, BIREF): 2/24/17/GOP and Healthcare/ Economic Nationalism = Nihilistic Protectionism


I bought the U.S. pink sheet listed ordinary shares at $2.13 using a commission free trade and the CAD priced ordinary shares at C$2.81 using my IB account where I was charged a C$1 commission. 


I am buying a bundle of small cap Canadian energy E & P stocks as a speculation. 


Surge does pay a monthly dividend. Surge Energy Inc. Announces Intended 15 Percent Increase to its Dividend - On Growing Production Volumes and Free Funds Flow - Feb 8, 2017


Surge Energy Inc.


Surge March 2017 Corporate Presentation.pdf


Surge Energy Inc. Announces Q4 and Year End 2016 Results; Exceeds 2016 Production Exit Rate Target; Cash Flow Per Share Up 43 Percent; Confirms March 2017 Dividend - Mar 15, 2017


I now own 300 shares. Of that number, 100 shares were bought using USDs on the U.S. pink sheet exchange. The symbol is ZPTAF. The price will generally reflect the ordinary shares price in CADs as converted into USDs. Stocks that have symbols ending in "F" are ordinary shares rather than an ADR. There is no difference between ZPTAF and and SGY:TOR other than the currency in which the shares are bought and sold. SGY will also be far more liquid than the US pink sheet traded shares. 


SGY Stock Interactive Stock Charts 


Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.

Thursday, April 20, 2017

Observations and Sample of Recent Trades: 4/20/17 (GAL, LXP, SPGYF, RDHL)/Trump the Autocrat Want-To-Be

Trump the Autocrat Want-To-Be:

Donald congratulated Turkey's Erdogan for winning a much disputed referendum that expands his powers and erodes Turkey's Democratic institutions: Trump Congratulates Erdogan on Turkey Vote Cementing His Rule - The New York Times The winner of the 2019 election, which will be Erdogan, can dispense with Turkey's Parliament. Both Trump and Erdogan are hostile to any checks on their power including the checks provided by a free press and the courts.

Trump Congratulates Erdogan on Gaining Vast New PowersTrump to Erdogan: Congrats On Your Dictatorship! | The NationDonald Trump criticised for congratulating Recep Tayyip Erdogan on winning Turkish referendum | The Independent

In a November 2015 conversation on Steve Bannon's radio show, Trump admitted that he had a conflict of interest with respect to Turkey:

"I have a little conflict of interest 'cause I have a major, major building in Istanbul. It's a tremendously successful job. It's called Trump Towers—two towers, instead of one, not the usual one, it's two." 

Erdogan presided over the opening ceremonies. How Donald Trump's Business Ties Are Already Jeopardizing U.S. Interests-Newsweek

Trump has the strongest authoritarian tendencies of any President.

Stocks, Bonds & Politics: GOP's Mass Deportation Plan & Economic Disruption/GOP's Problems With the First Amendment

Stocks, Bonds & Politics: Trump The Classless/Trump as the Victim of a Fake News Conspiracy

Stocks, Bonds & Politics: The GOP and First Amendment Conservative Values

Trump is reportedly considering abolishing the White House "We the People" petition website in order to save money. White House Considers Dumping Petition Site

Over 1M people, a new record, signed a petition calling for Donald to release his tax returns.  Petition the White House on the Issues that Matter to You | We the People: Your Voice in Our Government

Is America Still Safe for Democracy? | Foreign Affairs

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Miscellaneous:

A  number of analysts believe that the recent rally in bonds is based on a growing belief that the GOP's tax plan will not pass, which is a plausible theory. The market is beginning to price in the death of Trump’s tax reform - MarketWatch If a plan does pass, it may not mean much to the economy.  

Saudi Arabia, Kuwait signal likely extension of oil supply cuts | Reuters


Number of people collecting unemployment checks hits 17-year low, jobless claims show - MarketWatch


Philadelphia Fed factory gauge slides again from 33-year high, but remains elevated - MarketWatch

The FED's Beige Book report was positive: The Fed - April 19, 2017

Reuters ran this story last Wednesday. Exclusive: Putin-linked think tank drew up plan to sway 2016 U.S. election - documents | Reuters This story is yet another confirmation of Russia's presidential election meddling. Since Russia thought that Clinton would win, notwithstanding Russia interference on behalf of Trump, the second prong of Russia's attack was to intensify "its messaging about voter fraud to undermine the U.S. electoral system’s legitimacy and damage Clinton’s reputation in an effort to undermine her presidency, the seven officials said." Trump was working along the same lines, claiming repeatedly that a Clinton victory would be due to massive voter fraud. Putin and Trump were in sync on that effort. Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression


Possible conflict of interest involves Ivanka Trump-CBS News ("China gave her business potentially lucrative trademark approvals on the day that she and President Trump were having dinner with the Chinese president at the Trump estate in South Florida.")

Trump’s claim that ‘no administration has accomplished more in the first 90 days’ - The Washington Post


White House misspells UK prime minister's name in official memo

Trump claims immunity as President in lawsuit-CNN (the one where he is charged with inciting an assault and battery of a protester)

I certainly believed, based on statements made by Trump and his Defense Secretary, that a fleet had been dispatched to North Korea's shores in the event Kim Jong Un detonated a nuclear bomb in celebration of his grandfather's birthday last Sunday. The fleet was actually sailing south to rendezvous with the Australian navy for exercises. I wonder if any North Koreans have commented on the Dear Leader's funky hairdo saying something like, "you need to quit using a blind barber".




Despite talk of a military strike, Trump’s ‘armada’ actually sailed away from Korea - The Washington Post (contrary to statements made by Defense Secretary and Trump)

Nothing to see here: US carrier still thousands of miles from KoreaAircraft Carrier Wasn’t Sailing to Deter North Korea, as U.S. Suggested - The New York Times

Trump-O-Meter: Sue his accusers of sexual misconduct | PolitiFact

++++++++

1. Intermediate Term Bond/CD Ladder Basket Strategy 


A. Bought 1 Dow Chemical 3.5% Senior Unsecured Bond Maturing on 8/15/24


FINRA Page:  Bond Detail
DOW Dow Chemical Page at Morningstar/ E.I. du Pont de Nemours Page at Morningstar
Credit Ratings:
Moody's at Baa2
S & P at BBB


This bond can now be called at par value plus accrued and unpaid interest without penalty:


Dow Chemical and Dupont are in later stages of securing approval for their combination. Asset sales plan secures EU backing for $130B  Dow, DuPont merger-ReutersDuPont expects Dow merger to close later than expected-ReutersDuPont - DuPont and Dow to Combine in Merger of Equals

In 18-24 months after the merger is consummated, the combined entity currently plans to split into three companies: Agriculture, Specialty Materials, and Specialty Products. I do not know how the debt will be divided among those three companies.  

Dupont's bonds have a higher credit rating. Moody's affirms DuPont's A3 ratings; changes outlook to negative 

YTM at Total Cost (99.35) = 3.601%

B. Bought 2 Essex Property LP 3.25% Senior Unsecured Bonds Maturing on 5/1/23




Issuer: Essex Property LP-Operating Entity for and guaranteed by Essex Property Trust Inc. (ESS)

ESS Essex Property Trust  Page at Morningstar
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Baa1
Moody's upgrades Essex Property's senior debt to Baa1; outlook stable
S & P at BBB

YTM at Total Cost (99.628) = 3.318%

ESS Analyst Estimates 
Essex Apartment Homes | Apartment Home Communities

Essex recently sold $350M of 3.65% senior notes maturing in 2027. 


C. Added 1 JNJ 2.45% Senior Unsecured Bonds Maturing on 3/1/26



Issuer:  Johnson & Johnson (JNJ)

FINRA Page: Bond Detail (prospectus not linked)
JNJ Johnson & Johnson Page at Morningstar
Credit Ratings:
Moody's at Aaa
Moody's rated J&J's notes Aaa; stable outlook
S & P at AAA

YTM at Total Cost (96.09) = 2.952%

JNJ Analyst Estimates
JNJ 2017 1st Quarter Report (response on 4/18/17: JNJ $121.82 -$3.90 -3.10%)
Johnson & Johnson Maintains Top Moody’s, S&P Credit Ratings - Bloomberg
JNJ SEC Filings
JNJ 2016 Annual Report

Last March, JNJ sold the following senior unsecured bonds:


Prospectus

D. Added 1 American Water Works Capital 3% Senior Unsecured Bond Maturing on 12/1/26:


Issuer: American Water Capital, guaranteed by American Water Works Co. (AWK)
AWK American Water Works Co Inc  Page at Morningstar
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A3
Moody's Upgrades American Water to A3

YTM at Total Cost (98.036) = 3.238%

AWK 2016 Annual Report
AWK Analyst Estimates

E. Bought 2 Precision Castparts 2.5% Senior Unsecured Bond Maturing on 1/15/23:



FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A2
Moody's affirms Precision Castparts' A2 senior unsecured ratings (December 2016)
S & P at AA-

YTM at Total Cost (99.058) = 2.676%

Precision Castparts was acquired by Berkshire Hathaway. Berkshire does not guarantee this debt.



2.  Equity REIT Common and Preferred Stock Basket Strategy:

A. Added 100 LXP at $10.05- IB Trading Account:



LXP Stock Quote 

I bought the day before the ex dividend date, hoping to capture one or two quarterly dividends and to sell the shares for a 5+% profit. This is small ball. The stock has been trending down since late February when it was trading at over $11.25. LXP Stock Chart (shows possible double bottom with support near $9.75).


Buying the stock just prior to an ex dividend can make some sense depending on the circumstances when there was a decline materially greater than the dividend amount shortly before that date which did happen with LXP.

I recently discussed LXP when I bought its 2024 senior unsecured bond. Item # 1.D.: Stocks, Bonds & Politics: Observations and Sample of Recent Trades: 3/25/17 (SGZA, FFBC)/Trumpcare Kaput


I am generally not willing to press my luck with this stock and will certainly consider selling when the price goes over $11.

I also own 175+ Shares in two Roth IRA Accounts (snapshots intra-day 4/20/17): 





The open market lot purchase referenced in the first snapshot was discussed in this posts: 

Item # 2. ADDED 50 LXP AT $7.73 ROTH IRA and 100 in IB account at $7.8: Update For Equity REIT Basket Strategy As Of 1/11/16 - South Gent | Seeking Alpha


3. Continued to Pare Non-REIT Stock Allocation:

A. Eliminated GAL: Sold 60+ at $34.63+:



Profit Snapshot: +$46.93  




Quote: SPDR SSgA Global Allocation ETF

I am dumping a variety of small ETF positions that have not performed that well.

GAL  Page at Morningstar (currently rated 4 stars)

Sponsor's Webpage: GAL: SPDR SSGA Global Allocation ETF, Active ETFs (expense ratio=.35%)

GAL Holdings

4. Small Cap Biotech Lottery Ticket Basket Strategy:

A. Bough 30 RDHL at $9.56:



Thirty shares was the maximum amount of enthusiasm that I could muster.

Quote: RedHill Biopharma Ltd. ADR (RDHL)

Subsequent to my purchase, RDHL issued this press release: RedHill Biopharma Receives FDA Orphan Drug Designation for YELIVA® for the Treatment of Cholangiocarcinoma

Pipeline:


Company Website: Home | RedHill

In November 2015, RIZAPORT® was approved for marking in Germany. So far, the FDA has not approved the drug for the U.S. Another NDA is expected to be submitted in the 2007 first half. The FDA gave a Complete Response Letter in February 2014. "The FDA letter raised no questions or deficiencies relating to RIZAPORT®’s safety and bio-equivalence data, and did not require additional clinical trials. The questions raised by the FDA primarily relate to third party CMC and to the packaging and labeling of the product."

I am buying these small cap lottery tickets for entertainment purposes. The bond buying spree is not providing much in the way of excitement and that is an extreme overstatement. 



5. Small Cap Canadian E & P Lottery Ticket Basket Strategy:

A. Added 50 Whitecap Resources at USD $ 7.80 (Grey Market Listing):



US Grey Market Quote Priced in USDs: Whitecap Resources Inc.  (SPGYF:OTC)
Toronto Quote Priced in CADs: Whitecap Resources Inc.  (WCP:TOR)
Home - Whitecap Resources 
Whitecap Resources confirms monthly dividend for march of $0.0233 per share
Whitecap Resource announces continued reserves per share growth and record low reserve addition costs across all categories (2/27/17 Press Release)

I have nothing to add to my prior discussion found in Item # 3A.

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.