Friday, October 12, 2012

Bought 30 VELT at $7.7-LT Category/Sold 50 MS at $17.4/ Dividend Cut at CWH/GOV

Initial claims for unemployment fell to the their lowest level in four years.  The Labor Department reported that the seasonally adjusted initial claims was 339,000 for the week ending 10/6/12. The unadjusted number was 327,063. ETA Press Release: Unemployment Insurance Weekly Claims Report However, the decline may be due, at least in part, to one large state's inability to report some figures. CNBC MarketWatch I believe that the overall downtrend in these initial claims is important. (9/6/12 Post; and 4-Week Moving Average of Initial Claims)

CommonWealth REIT (CWH) cut its dividend to $.25 from $.50, in line with my expectations based on management's statement during the last conference call. Many investors believe that CWH's management has a conflict of interest which leads to decisions that are not in the shareholder best interests. While I own 170 shares, I am not going to buy any more shares, or reinvest the dividend, until the current managers are fired by shareholders. I will of course vote against their compensation arrangements and all members of the Board. This is a snapshot of an excerpt from a previous post:

Stocks, Bonds & Politics: 8/10/12 Post Yesterday's Close: CWH: 15.19 +0.24

Another decline in Apple shares (AAPL: 628.10 -12.81 probably played a role in the market losing its gains yesterday.

The Huffingpost published a transcript of a telephone call from Scott DesJarlais, a pro life GOP Congressman from Tennessee, and his mistress who he allegedly got pregnant. Scott was then a physician, and the lady was one of his patients. The anti-abortion, family values republican was urging her to fix the problem. I do not care whether a person is genuinely pro-life or pro-choice, but I will draw the line at hypocrisy. A large number of genuinely pro-life people are being played by GOP politicians who at most share their belief solely in a politically opportunistic way and only in theory.  

1. Bought 30 VELT at $7.7 Last Wednesday (Lottery Ticket Basket Strategy)(see Disclaimer): This company claims to be a "leading global provider of mobile marketing and advertising solutions", i.e.,  ads for mobile devices. The company is headquartered in Dublin, Ireland. 

I came across a couple of articles, published at the Motley Fool and Seeking Alpha, that were sufficiently intriguing that I bought 30 shares in the LT category. 

Velti recently inked a 2 year, $27M deal with a major U.S. brand to provide mobile marketing and advertising. The company called that deal "the largest ever mobile marketing deal" with a U.S. brand. After that deal was announced,  Needham reiterated its buy rating and $13 price target. 

The initial public offering in the U.S. was at $12 in January 2011. Prospectus 

The stock has been on a roller coaster since its initial IPO: VELT Interactive Chart

The current consensus E.P.S. is for $.73 in 2012 which is dependent on the 4th quarter estimate of $.72 and $.98 in 2013. Those estimates have to be non-GAAP since the company had a net loss of 28 cents per share during the last quarter. Velti Announces Record Q2 Financial Results and Free Cash Flow Generation Revenue Growth of 71 Percent and Adjusted EBITDA of 100 Percent Year-Over-Year (Nasdaq:VELT) The non-GAAP loss was 1 cent per share. This report was filed with the SEC: Velti Interim Report 6.30.12 Document As of 6/30/12, the company had $44.699M in cash

2011 Annual Report Filed with the SEC: Velti 20F 12.31.11
Yesterday's close: VELT: 7.92 +0.06 (+0.76%)

2. Sold 50 MS at $17.4 Last Wednesday (The $500 to $1,000 Flyers Basket Strategy)(see Disclaimer): I decided that 250 shares of Morgan Stanley's floating rate equity preferred stock was enough exposure for now. While the stock has moved up smartly since my recent purchase, I would anticipate an uninspiring third quarter earnings report scheduled to be released next Thursday, 10/18/12. Unless the quarter proves to be far worst than expected, I would consider buying back these shares at less than $15. I would add that I have a natural disdain for brokerage companies and investment banks, which has been continually reinforced by events over the past 40 years or so.   

2012 MS 50 Shares +105.1
Bought 50 MS at $14.98 (9/5/12 Post). 

I currently have an unrealized profit in the MSPRA shares of close to $250, with those shares bought in small incremental lots. Floaters: Links in One Post Of those buys, the lowest cost shares were purchased at $16.6 in September 2011. Bought 50 MSPRA at $16.6 The last purchase was a 100 share lot last March: Added 100 MSPRA at $18.9

I have also booked some profits on that security which pays the greater of 4% or .7% above the 3 month LIBOR rate: Advantages and Disadvantages of Equity Preferred Floating Rate Securities The largest gain was $962.87, realized in 2010, on 150 shares.  MSPRA went ex distribution for its quarterly qualified dividend on 9/26/12.

Equity preferred stocks issued by financial companies will be hyper sensitive to both warranted and unwarranted credit risk concerns. These securities are junior to all debt, and financial firms have a lot of debt.  And, except for REIT preferred stocks, most of those securities are non-cumulative which simply means that there is no obligation to pay a lawfully eliminated dividend.

3. Government Properties Income Trust (own): Government Properties Income Trust raised its quarterly dividend by 1 cent to $.43 per share.

S & P announced after the close on 10/10/12 that GOV will be added to the S & P SmallCap 600 index after the market's close next Monday.

Bought 50 GOV at $22.9-ROTH IRA (May 2012); Added 50 GOV at $21.22 (6/18/12); Sold 50 of 100 GOV at $23.45 (7/19/12 Post); Bought Back GOV at $21.78 Roth IRA (8/6/12 Post).

Yesterday's Close: GOV: 24.40 +0.60 (+2.52%) 

No comments:

Post a Comment