Friday, December 9, 2011

GE/Added 60 IGR at $6.92/Sold 200 Artis Real Estate at 14.09 CADs/

General Electric (own) may be able to boost its annual dividend to as much as 85 cents per share, from the current 60 cents, according to an analyst at Sterne Agee. TheStreet  Before anyone gets worked up about that possibility, I would add that the annual rate was $1.24 in 2008. As a result of GE's 68% dividend cut in 2009, this company can no longer be trusted as a reliable source of income, and that statement is intended to mean forever in my book.

Morningstar has a five star rating on GE common stock.

Any company that cuts its dividend can not be relied upon ever again by retirees looking for income. Many large industrial companies increased their dividends during the Near Depression period.

Banks are generally an unreliable source of dividend income for retirees, given their propensity to blow themselves up and to otherwise commit mistakes that result in dividend cuts. The natural habitat of the Masters of Disaster, the most overpaid doofuses in the history of civilization,  are financial institutions.

The Master of Disaster Jon Corzine has apologized to the shareholders, employees and customers of MF Global, asserting that he has no idea what happened to the money belonging to MF's customers.  An executive of the  CME will testify that MF Global moved customer money into its accounts.  Reuters

The worldwide Jihad against the savings class continued yesterday as the ECB reduced its benchmark rate to 1%, the lowest on record. ECB: Monetary policy decisions In short, the responsible are being forced to bailout the irresponsible, most of whom profited by reckless, selfish and greedy actions that were either immoral and/or criminal. Of course, those who committed crimes have received a pass from the U.S. government, a topic explored in a recent superficial 60 Minutes episode.

The European Banking Authority has concluded that European banks will need to raise €114.7 billion in equity.  Bloomberg

The European Central Bank squashed hopes yesterday that it would engage in unsterilized bond purchases (quantitative easing). The ECB also indicated that it would not increase its sovereign debt purchases.

Texas Instruments lowered guidance for the 4th quarter. The company now expects E.P.S. to be between $.21 to $.25, down from the prior forecast of $.28 to $.36.  The consensus estimate had been for 32 cents. The revenue forecast was lowered to $3.19 to $3.33 billion, compared to the consensus forecast of $3.4 billion SEC Filed News Release (no position) The reduced guidance was due to "broadly lower demand across a wide range of markets, customers, and products, except for wireless applications processors".

Altera also lowered guidance after the close yesterday (no position).

I am glad to see that John le Carré's "Tinker, Tailor, Soldier, Spy" has been made into a movie, favorably reviewed in the NYT,

1. ADDED 60 to Stock CEF IGR at 6.92 (see Disclaimer): This brings me up to 415+ shares. I also changed my distribution option to reinvestment after noticing that this CEF was selling at over a 14% discount to its net asset value per share.  On 12/6/11, the shares closed at $6.92 which was a 14.57% discount to its then net asset value per share of $8.10.

IGR page at the Closed-End Fund Association

As the name suggests, the CBRE Clarion Global Real Estate Income Fund invest in real estate companies, owning both the common and preferred stocks. 

Last Filed SEC Form N-Q. This form shows the holdings as of 9/30/11. As of that date, the fund had a 81.3% weighting in common stocks and 22.8% in preferred stocks.  The U.S. common stock weighting was at 33.2%. 

Last SEC Filed  Shareholder Report

This fund pays monthly dividends, currently at the rate of $.045 per share. Distribution History Assuming a continuation of that rate, which is no way assured of course, the yield at a total cost of $6.92 would be around 7.8%.

This CEF is not rated by Morningstar.  Morningstar does have data on the fund. This data shows that the dividend has been supported some by a return of capital and the average three year discount is -11.46. The fund uses a modest decree of leverage.

CBRE Clarion Global Real Estate Income Fund fell 17 cents yesterday to close at $6.82. The NAV per share was $8.02 at yesterday's close, creating a discount to net asset value per share of -14.96.

2. Sold 200 Artis Real Estate Investment Trust at 14.09 CADs-Toronto Exchange Last Wednesday (Canadian Dollar (CAD) Strategy)(See Disclaimer): As with other Canadian REITS that I have owned, Artis pays monthly dividends. The shares sold last Wednesday were bought at 13.21 CADs back in September 2011. This is my second round trip transaction in Artis shares. Sold 200 Artis REIT at 13.88 CAD May 2011 I am content to collect some dividends and sell the shares for a profit.

Artis Real Estate Investment Trust closed yesterday at 14 CAD.

For Canadian securities purchased on the Toronto exchange, I will use Canadian dollars to pay for the purchase. All dividends are taken in CADs. The distributions are reduced by a 15% Canadian withholding tax.  Two of the larger positions in this particular strategy are Canadian bond ETFs:  Claymore 1-5 Year Laddered Government Bond ETF, CLF Fund Quote - (TOR) (400 shares) and Claymore 1-5 Year Laddered Corporate Bond ETF, CBO Fund Quote - (TOR) (300 shares). 

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