Thursday, March 18, 2010

Bought 50 NABZY at 24.7/Sold 100 MCQPF at $7.18 and Bought 100 ATP:TO at 13.01 CAD/Bought 50 TMM at 2.85-LT/Unum ACET/BOUGHT 50 DKQ AT 19.03/GE

1. Bought 50 shares of NABZY at $24.70 (See Disclaimer): NABZY is the symbol for the ADR for the National Bank of Australia, traded in the U.S. on the pink sheet exchange. National Australia Bank Ltd. (Victoria, Australia) - NABZY Prior to placing the order, I did a currency conversion at YF to see how the U.S. dollar price on the pink sheets compared to the then prevailing price of this bank on the Australian exchange, and found them to be roughly equivalent.NAB.AX: Summary for NATIONAL AUSTRAL BK Since it is cheaper for me to buy on the U.S. exchange, I placed a market order to buy just 50 shares of NABZY which was filled yesterday at $24.7.

Prior to the start of the Near Depression, this stock was trading at over 40 Australian dollars and bottomed at around 16.8 AUD in early March 2009. It then rallied until October 2009, hitting 31.6 AUD and then proceeded to fall to 24.4 in early February 2010. NATIONAL AUSTRAL BK Share Price Chart | NAB.AX - It has since turned up some, sitting just a tad above its 200 day moving average line after falling below it in the last correction. NATIONAL AUSTRAL BK Share Price Chart

This is a link to the 150 page annual report for the year ending September 2009: .pdf The bank had cash earnings of 3.8 billion but underlying profit was up 14.6% to 9.3 billion. The large banks in Australia and Canada performed much better during the Near Depression period than those in the U.S. and Europe. The report for the quarter ending in December is available at the bank's web site: TradingUpdate.pdf NAB has cash earnings for its first quarter of approximately 1.1 billion which represents a 20% increase from its 4th quarter of the 2009 financial year. Tier 1 capital increased to 9.3%. "Bad and doubtful debt charges have fallen and are not expected to return to the peak experienced in the third quarter of the 2009 financial year". (page 2)

As of 9/30/09, NAB's Tier 1 capital ratio was 8.96%. In addition to Australia, the bank has operations in New Zealand, the U.S. and the United Kingdom. The U.S. banking operations are carried out under the name of the Great Western Bank in SD, NE, IA, KS, MO and AZ, which has been expanding. Financial News and Banking Events at Great Western Bank Financial News

While the dividend may be reduced or increased, the current dividend rate is close to 5%, paid semi-annually in June and November. National Australia Bank Ltd., NAB Stock Quote

This is a link to the Reuters analyst estimates: Part of the recent weakness in the shares may be due to concerns about acquisitions. Last December, National Australia bank launched an AUD 13.3 Billion offer to acquire AXA Asia Pacific Holdings Limited. AXA.AX The competition competition in Australia has yet to rule on this matter, but apparently is concerned about NAB making this acquisition. Reuters This is a link to the PDF version of the Commission's view of the issues:

2. Aceto (owned LOTTERY TICKET category): This small company was the subject of a good discussion in this recent Seeking Alpha article. /Bought 50 ACET at 5.2-LT/ ; ITEM # 4 ACET ; ITEM # 2 ACET

3. Unum (own senior bonds in TC form only): I noted yesterday that Bank of America upgraded the common stock of Unum from underperform to buy. While looking at that news, I saw a report that A.M. Best had revised its outlook on Unum to positive from stable: MarketWatch I made a switch from owning deferrable interest junior bonds to senior bonds when there was what I would call a pricing anomaly.Bought 50 PJR at $16.72 ADDED TO PJR at $20.70 I currently own the TC PJR: UPC-1 7.4% 28, PJR

4. BOUGHT 50 Grupo TMM, S.A.B. (TMM) at $2.85 (Speculative Lottery Ticket Category) (See Disclaimer): The OG is not much of a gambler, and is not exactly risking the homestead on this one. This is a typical type of speculative LT purchase (a LT is speculative by definition, and a speculative LT adds speculation on top of speculation). TMM is a Mexican transportation company that has been hit hard by the Near Depression. The ADR price hit $27 in 2006 and went into a channel trading pattern of between $15 to $20 prior to the bear market. It went into a waterfall pattern starting in October 2007 falling from $15 to $2.45 in October 2008. Since then, it has been trading mostly in a channel between $2.5 and $5: Grupo TMM, S.A.B. New American Share Price Chart | TMM There are no analyst's estimates. Price to sales is listed at YF at .18 and price to book at .5: TMM: Key Statistics for Grupo TMM, S.A.B Hopefully, with an economic turnaround, this company will be able to both service and pay down its debt, and ultimately return to consistent profitability.

The company recently sold shares at the equivalent of $4.4 per ADR raising over 41 million: /

The President of two years resigned in February:

This is a link to the firm's web page: GRUPO TMM This is a link to the Reuters Key Developments page. This is the link to the Reuters company description.

The last quarter was a loss. 2009.htm Management claims that it became cash flow positive in the 4th quarter which will "consistently" allow the firm to reduce its debt. The firm acquired 13 vessels during the quarter. TMM shows 84.241 million in cash on the balance sheet as of 12/31/09 and a trust certificate debt outstanding of 677.52 million, plus another 14.8 in bank loans. So this company is highly leveraged and that is the main problem now.

5. Sold 100 Macquarie Power & Infrastructure Income Fund ( MCQPF) at $7.18 and Added 100 Atlantic Power Company at 13.01 CAD (See Disclaimer): This was basically a work reduction move. Really, the OG is blowing fuses trying to keep up with everything. As a result of this exchange yesterday, I now only have to track one Canadian independent power producer. MCQPF was bought at $5.84 on 12/30/09: Bought 100 MCQPF at $5.84 The previous 100 ATP:TO was bought at 11.97 CAD. Both of these companies pay good monthly dividends, and Canada has a 15% withholding tax applied to both of them. The yields are fairly close. Atlantic Power is the larger company, and its assets are located in the U.S. Another difference is that I do not convert my dividend payments into U.S. dollars when I buy stocks on the Toronto exchange. This enables me to build up a Canadian dollar position over time which is viewed as a long term hedge against a decline in my U.S. dollar denominated assets. Since my Canadian dollars do not earn any interest, I am constantly looking to invest them into income generating Canadian stocks. The dividend yield of the Atlantic Power shares is close to 8.38% at a total cost of 13 CAD. So the transaction yesterday brings me up to 200 shares of ATP.TO at close to a 12.5 CAD average cost and an annualized yield at the current dividend rate of around 8.75%.

The Canadian dollar is once again approaching parity with the U.S. Dollar. USD/CAD Currency Conversion Chart Both the Canadian and Australian dollars have resumed an upward trend against the U.S. dollar after suffering minor declines recently. USD/AUD Currency Conversion Chart If you want to see what an investment in the Canadian Dollar would have looked like over the past year, I would suggest looking at the 1 year chart for FXC, the currency ETF for the Canadian Dollar: FXC Chart

I have read that Atlantic will be applying for a U.S. listing sometime this year. It can be purchased now on the pink sheet exchange using U.S. dollars: Atlantic Power Corp. - ATLIF

6. Bought 50 shares of the Trust Certificate DKQ at $19.03 in Roth (see Disclaimer): The last buy of this senior Macy's bond contained in DKQ was at a lower price, a small 50 share purchase last November at $15.95. I first discussed this TC when it was trading at around $10: TRUST CERTIFICATE MACY'S BOND DKQ I then sold 100 shares at $15 on a day last May when the OG got a little antsy. Sold DKQ I am now back up to owning 100 shares, and admittedly would have been better off just keeping the first 100 shares bought, but then you have to make allowances for the OG as the LB is fond of saying. The coupon on the TC is 6.25%, lower than the 6.9% coupon of the underlying bond. The original issuer was May Department store, which is now part of Macy's, and the underlying bond can be found in the Macy's section at FINRA. The TC and the bond mature on the same day of course, which will be 1/15/2032. Par value is $25 so I would not mind this one being called, but do not expect that will happen. My current yield at a total cost of 19.03 is around 8.22% paid in semi-annual installments. The YTM of shares bought at a total cost of 19.03 would be about 8.85%: Morningstar Bond Calculator: Yield to Maturity, Returns, Taxable and Municipal Bonds I had some funds left over from the recent sale of EMO. The pickings in my TC niche are really, really slim to non-existent now.

7. General Electric (GE)(Owned): I am now up to about 400 shares of GE, and have been buying in small increments at between $10 and $16 for about a year. Item # 9 Bought GE at 15.48; ITEM # 5 /General Electric I am reinvesting the dividends. GE has been behaving strangely recently- going up. The stock closed over $18 yesterday and hit a 52 week high intra-day of $18.4. In February 2009, GE reduced its quarterly dividend from 31 cents to 10 cents. I did read a story earlier in the week where the CFO said that GE would "like" to grow the dividend in 2011. I would just point out that other industrial companies, such as Emerson maintained their dividends and even increased them during the Near Depression. So I am not too impressed that the CFO would "like" to grow the dividend that was hacked by about 70%. Sterne Agee upgraded GE to neutral from sell. The analyst for that company, Nicholas Heymann, had been predicting all kinds of disasters: I briefly mentioned his negativity in a post from last September: Added to Medtronic/Sold LT Opnext/Bought 50 AMAT at $13/Bought 50 STIPRA at $17.2/GE, AT & T and VZ My reactions to his bearish note was to buy some more.

No comments:

Post a Comment