Friday, November 6, 2009

Bought 100 EMO at $25.28/Bought 50 PNY at $22.94/Sold 100 GJS

1. Glimcher Realty (own common and preferred-Lottery Ticket category): Glimcher finally confirmed reports that it signed an agreement with Blackstone to sell an interest in two malls, one in Tampa and the other in Portland. The terms are contained in this SEC filing: grt_8k-110509.htm I would view the transaction as positive in that it reduces the debt of the company.

2. Bought 100 EMO at $25.28 (see Disclaimer): With the Old Geezer in charge of the Trading Desk here at HQ, risk taking is not exactly the soup du jour. Previously, I have mentioned that I would be buying back some of the bonds previously sold even when the bond was selling at a slight premium to par value. EMO is a First Mortgage bond covering most of Entergy Mississippi's property. (see page 1 after page S-8: I sold 100 of EMO, as was then my custom, when it approached par value. Bought 50 DKK in Roth/ SOLD EMO I discussed this bond in a post from December, when I first purchased some shares: Buys of a First Mortgage Bond EMO and a JPM TC PYV The coupon is 7.2%, the par value is $25, and the bond matures on 12/1/2032, when the OG will be a much older OG than now. One of the benefits of this security is its priority, as one of the few publicly traded first mortgage bonds, and interest is paid quarterly which is always preferred over semi-annually. This is a link to the prospectus: Since I have paid a slight premium over par my yield will be less than the coupon, closer to 7.1%. But, that is fine with the OG who is easy to please as long as the word "income" precedes the word security. For anyone from up north or in the hinterlands around San Francisco, and are not exactly sure where Mississippi is located in the U.S., or have chosen to lose that memory, I have provided a convenient link to the website of Entergy Mississippi that shows the geographic territory served by this subsidiary of Entergy (ETR). Entergy Mississippi - Service Area This electric utility serves about 432000 customers in 45 of Mississippi's 82 counties. Entergy Mississippi - About Us

There is another exchange traded first mortgage bond from Entergy Mississippi, which has a 6% coupon, and matures one month earlier than EMO. This one has the symbol EMQ, and it closed Friday at $25.04, so it yields over a per cent less than EMO at that price compared to the price that I paid for EMO. This is a link to the prospectus for EMQ: This bond does have an insurance policy covering it from Ambac (see S-6). Before placing any value on that, which apparently investors are doing given the lower yield for EMQ, one might want to peruse the financial viability of Ambac, and its current ratings: Rating Agency That link is to the AMBAC site which provides information on the ratings by Moody's and S & P. Ambac is rate CC by S & P So, while this is always a matter of personal preference, I will take my chances with EMO and receive that extra 1%. If Ambac was a AAA credit, then I would probably accept a 1/2% less in yield for EMQ. Ambac common stock, symbol ABK, closed Friday at $1.17.

The Entergy subsidiaries file their quarterly reports together in the same 10-K, which I will look at, more of a glance, since I own also an Entergy Louisiana first mortgage bond (EHL).a10-qfinal.htm Entergy Mississippi starts at page 118. Utility plant is listed at over 2 billion after depreciation at page 128. Long term debt is listed at 845.285 million at page 129.

3. Bought 50 Piedmont Natural Gas (PNY) at $22.94 (see disclaimer): I have owned this gas utility in the past, though not recently having sold my shares at a higher level. PNY owns the Nashville Gas Company that is the gas utility in middle Tennessee. It also serves areas in North Carolina. The service area is described in the most recent quarterly report at page 27: e10vq The utility has more than 1 million customers. The dividend yield at the current price is about 4.7%. PNY recently issued earnings per share guidance for its fiscal year 2010, ending 10/31/2010, in the range of $1.9 to $2 per share. However, that sum included a one time gain equal to 42 cents a share for the sale of a 1/2 interest in PNY's 30% ownership stake in SouthStar Energy Services. Piedmont Natural Gas After stripping out that one time gain, earnings would be in the $1.48 to $1.58 range. The EPS number explains the number of shares purchased today-50 shares. This falls into the category of an OG income security. Possibly with a little luck I will be able to collect a few dividend payments and sell the shares for a small profit down the road, when things look less cloudy than now.

4. Sold 100 GJS at $15.6 in Roth (see disclaimer): The OG looked at the monthly interest payment for last month and decided GJS would not do. This one may just be impossible to hold onto, at least when short rates are so near zero, since it requires a lot of forward thinking. The purchase was made at $13 on 10/2: /Bought 100 GJS AT $13/ The problem with this security is that it has no guarantee and floats .9% above the 3 month T Bill rate, which looks like it is going nowhere from its currently low level for some time. The unemployment report today means the Fed will keep the Federal funds at an abnormally low rate for an extended period, they mean exactly what they say on that score, and the 3 month T Bill rate is joined at the hip to the Federal Funds rate. I did try to buy more of PYT at $15.6, which I would view as a better buy at the current price than GJS, but the order was not filled in light trading, just 200 shares traded with last 100 filled at $15.64. The kind of analysis that I do with the Goldman Sachs floaters is very price sensitive on the initial entry point. Analysis of Prior Question about Goldman Sach's Floaters /GJS VS. PYT NOW But, the deciding factor today in selling GJS was the profit to be realized on the shares juxtaposed with what looks like a long period of a low penny rate.

I also sold a stock mutual fund in the Roth.

I also bought a small hedge for stocks near the close on Friday. Most likely, I will keep it for a few weeks or until it loses 10% of its value, in which case I will sell it at loss. Maybe market participants will not be so jolly after returning from the weekend. I would prefer not to make a profit on it, but I feel better having it in place before the weekend.

And this is odd but can be explained only by understanding the worldview of the Old Geezer who is in charge now. A few months ago, there was a purchase of a stock mutual fund, a flagrant rule violation by the RB as noted in this blog. Today, some of that stock mutual fund was sold at a good profit to buy a very lost cost intermediate corporate bond fund. That was sort of an alternative to buying LQD back for the third time this year, and was a further risk reduction move and consistent with the OG's attitude of taking profits while you have them in a long term secular bear market.

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