Monday, October 31, 2011

Bought Back CHN at $25.975/VLY FFIC GBCI/Bought 50 SLGPRD at 24.7/Sold 30 TEX at $18/Sold 50 FFIC at $13.53/Sold 50 GBCI at $12.53

Microsoft's Windows 7.5 phone received a favorable review in the NYT.

Felix Zulauf expects the European sovereign debt crisis to continue for several years.  Barrons  He recommends buying more gold on dips, which I will not do. Zulauf expects gold to continue building a base in the $1,475 to $1,750 range, which "could be" the "platform" for another move up next year. I sold some gold for the first time when it crossed $1,900 per ounce and will sell another ounce when and if the price moves over $2000. Recent Gold and Silver Sales

I ran a comprehensive test over the past month to ascertain how two minor changes in driving impacts my mileage per gallon. Needless to say, no sensible driving practice is observed in the SUV Capital of the World that would have the effect of conserving gas.  Both changes involved coasting. I would coast into red lights and coast whenever I could maintain my speed close to the speed limit without touching the gas. My Saturn averaged another 1.5 miles per gallon.  In the SUV Capital of the World, SUV's would pass me as I coasted into a red light, pedal to the medal, hitting the brakes hard just before ramming the SUV in front of them, usually with a "W" sticker on the bumper  next to a sticker saying "Drill Baby Drill".

1. Bought Back 50 of the Stock CEF CHN at $25.975 Last Thursday (see Disclaimer): I briefly owned 50 shares in the China Fund last year, and sold those shares at $30 over a year ago. I bought back those shares last Thursday at $25.975.  The Chinese stock market has undergone a significant correction over the past several months, as shown in this ugly looking chart: SHANGHAI INDEX Chart I decided to repurchase these shares based on the comments from the Chinese premier that may signal an end to China's monetary tightening cycle. 

Sponsor's website: The China Fund, Inc. - Welcome

Morningstar has a 4 star rating on this CEF. I view the expense ratio as low for this kind of fund.

The fund manager looks to be young: China Fund Monthly Insight Report-SEC Filing

This is a link to the last SEC filed Form N-Q listing the fund's portfolio holdings as of 7/31/11: SEC Form N-Q

This is a link to the fund's last SEC filed shareholder report: SEC Form N-CSR

CHN closed at $26.28 last Friday. At that time, the fund's net asset value per share was $28.25 and the discount to net asset value was -9.22% based on the closing price of $26.28 on 10/28/11.

2. Valley National (VLY)(own: Regional Bank Stocks Basket Strategy): VLY is one of my largest positions in this basket strategy. Valley National reported net income of $35.4 million or 21 cents per share for the third quarter, in line with estimates. As of 9/30/11, the net interest margin was 3.8% (up from 3.67% as of 6/30/11); the allowance for losses as a percentage of non-accrual loans was at 114.01%; the efficiency ratio was at 60.01; NPLs as a percentage of total loans stood at 1.12%; total accruing past due and non-accrual loans as a percentage of total loans were 1.73%; the total risk based capital ratio was at 12.65%; and the tier 1 leverage ratio was 8.1%. 


3. Sold 50 Glacier Bancorp (GBCI) at $12.53 Last Thursday (Regional Bank Stocks Basket Strategy)(see Disclaimer): I sold these shares before GBCI released earnings. Based on the current consensus forecast of 69 cents in 2011 (GBCI Analyst Estimates), this stock was more expensive on a P/E ratio basis than most of the banks in this basket.  This is my second round trip in GBCI. The shares sold last Thursday were recently bought at $10.15. (9/16/11 Post).

After the close on Thursday, Glacier Bancorp reported 19 cents per share excluding a goodwill charge. The consensus estimate was for 19 cents. 

GBCI closed at $11.93 last Friday, down 58 cents or 4.64%.

Item # 3 Realized Gains Regional Banks

4. Sold 50 Flushing Financial at $13.53 Last Thursday (FFIC)(Regional Bank Stocks Basket Strategy) (see Disclaimer): Using FIFO accounting, I sold the 50 shares purchased at $11.05. I placed this trade before Flushing released its third quarter earnings report.  I had previously sold higher cost shares @ 14.51.

After the market closed last Thursday, Flushing Financial reported core earnings of 30 cents per share (33 cents GAAP). The consensus estimate was for 30 cents.

FFIC closed at $12.42 last Friday, down $1.01 or 7.52%.

5. Bought back 50 SLGPRD at 24.7 Last Thursday (see Disclaimer): This is the security that I wanted to substitute for CUZPRA, which was sold last week. Sold 50 CUZPRA at $25  I am more comfortable with the credit risk of SL Green Realty than Cousins Properties.

SLGPRD is a cumulative equity preferred stock issued by the REIT S L Green. It has a 7.875% coupon on a $25 par value. Dividends are paid quarterly. There is no maturity date. This security is junior in priority to all debt and senior only to common stock.


As with other REIT preferred stocks bought near par value, I am not a long term holder. I hope only to collect a few quarterly dividends and to exit the position at any profit north of $1. This security is bought with no expectation of a material gain on the shares. Instead, it is bought solely for its income generation.

I recently bought 50 shares of the functionally equivalent SLGPRC in my ROTH IRA. I discuss this REIT in more detail in that post: Bought 50 SLGPRC at $24.4-Roth IRA October 2011

This is a link to my Gateway Post discussing REIT preferred stocks:  REIT CUMULATIVE PREFERRED LINKS IN ONE POST/Advantages & disadvantages

SLG.PD closed at $24.47 last Friday.

6. SOLD 30 Terex at $18 Last Thursday (see disclaimer): I am going to keep my TEX bond. /Bought: 1 Terex 8% Senior Subordinated Bond Maturing on 11/15/2017 at 96.947 The 30 share lot was not a serious buy and the stock popped almost 20% last Thursday. I bought those shares recently at $13.59.

The market had a lot more excitement about TEX's earnings report than I did.  SEC Filed Press Release

I will discuss the remainder of my trades from last Thursday in the next post. 

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