Tuesday, October 2, 2012

SNMX/ ISM Manufacturing Index Better Than Expected/Sold 70 SYRG at $4.14-LT Category/Bought 50 ENY at $16.83/End of Month Cash Flow Snapshots

Howard Gold, a Marketwatch columnist, argues that long treasury bonds, TIPs and high yield bonds are the three most overvalued assets today. MarketWatch I would agree with him.

SENOMYX (own 300) announced that its new flavor agreement, S9632, has been determined to be Generally Recognized as Safe (GRAS) by the FDA. This flavor ingredient can be substituted for sugar in a wide variety of foods to "restore the desired taste profile".

The ISM September 2012 Manufacturing was reported at 51.5%, an unexpected pop from the 49.6 reading in August. The consensus estimate was for a reading of 49.7. The new orders component increased to 52.3 from 47.1. Employment increased to 54.7 from 51.6.

My ING CEFs were ex dividend yesterday: ING Infrastructure Industrial & Material Fund (IDE) ING Risk Managed Natural Resources Fund (IRR) ING Global Equity Dividend & Premium Opportunity Fund (IGD). IGD pays monthly, whereas IRR and IDE pay quarterly.

The Global X SuperDividend ETF (SDIV) also went ex dividend yesterday for its monthly variable distribution. This last distribution was for $.19466 per share. Global X Funds I own 100 shares in the ROTH IRA.

The Wells Fargo Advantage Multi-Sector Income Fund (ERC) declared its regular monthly dividend of 10 cents per share. I own 350 shares in a taxable account and 200 shares in the ROTH IRA. Wells Fargo Advantage Closed-End Funds Declare Monthly Dividends I have never reinvested the dividend.

200 ERC Roth IRA

350 ERC Taxable Account
I am tempted to take profits which would add to my already favorable return just from the dividend.

The London P.M. gold fix yesterday was $1,787 per ounce (LBMA | Gold Fixings), a number that is becoming increasingly relevant for the "principal protected" note MOL. Added 100 MOL at $9.78 (8/29/12 Post). I now own 200 MOL.

As previously noted, I will check the dividend page at the WSJ every night. This page will list the dividend declarations and the securities about to go ex dividend (e.g. today's list shows ex dividends for tomorrow 10/3/12). I own the following securities going ex dividend on 10/3: BDN, CSI, MDT, and SYY.

1. Sold 70 of the LT SYRG at $4.14 at Last Friday (Lottery Ticket Basket Strategy)(see Disclaimer): Last Friday, I noticed that Synergy shares were up 10+% on no news. The shares closed up $.4 at  4.17  (+10.61%) I did not see any news, other than a favorable article published about the company by Seeking Alpha last Thursday. I am not going to think much about what to do with LT selections, so I just sold my shares:

2012 SYRG 50 Shares +$41.51

Yesterday's Close: SYRG: 4.26 +0.09 (+2.16%)

2. Bought 50 ENY at $16.83 Last Friday (The $500 to $1,000 Flyers Basket Strategy)(see Disclaimer): I have bought and sold the Guggenheim Canadian Energy Income ETF (ENY) on several occasions, always in small lots:

Bought 50 ETF ENY at $13.6 August 2009-Sold ETF ENY at $15.75 November 2009 

I have $366.69 of realized gains, excluding dividends, for this ETF. All of the trades have been in small lots with brief holding periods. Two round trips were completed prior to the commencement of this blog in October 2008:

2007 ENY 100 Shares (11 Days) +$78.95
This transaction occurred in October 2007. The sales price was $27.32 after deducting the brokerage commission. 

2008 ENY 140 Shares (2 lots) +138.73
The second transaction was executed on 2/21/08 after a brief holding period at a sales price of $25.2 adjusted for the brokerage commission. 

At least I know longer own ENY bought at those prices and successfully sold the position at a profit. 

2009 ENY 50 Shares +$90.97
2010 ENY 101+ Shares +$20.46
2012 ENY 50 Shares +$37.58
Sponsor's website: ENY - Guggenheim Canadian Energy Income ETF  The expense ratio is high at .7%, even with an expense cap in place until the end of 2014.

Link to Holdings: ENY Holdings

I took a snapshot of the top ten holdings as of 9/28/12:

Top 10 Holdings ENY

I have individual positions in Suncor, Enerplus and Husky. The largest of those is 200 shares of HSE:CA.

I own only 50 shares of Suncor:  Bought 50 SU at $28.67 (December 2011 Post).

There are several reasons for devoting some funds to Canadian energy stocks. First, Canada is not Venezuela, an obvious point. Second, many of these companies have long lived oil assets, particularly those with positions in oil sands. (Barrons' interview with Charles Maxwell)

ENY just went ex dividend for its quarterly distribution. The dividends are variable: ENYHistorical Dividends In 2011, the fund paid out $.339 per share in dividends. At that rate, the dividend yield would be about 3.59% at a total cost of $16.83. For the first three quarters of 2012, the fund has declared $.343 per share in dividend distributions.

Guggenheim Canadian Energy Income ETF Quote
Yesterday's Close: ENY: 16.90 +0.06 (+0.36%)

3. End of Month Cash Flow Distributions into Main Taxable Account: As previously noted, the most important and basic investment strategy for me is to generate a constant stream of cash flow which can be used to to buy more income generating securities. The following table includes interest and dividends paid into my main taxable at the end of September and on 10/1/12.

Please note a $.67 dividend paid by the Fidelity Tax-Free money market fund. How much cash is needed to generate that amount? The yield is .01%. Tax-Free Money Market Funds - F (Alphabetically) - Barrons.com  Given the market's recent surge, it would be fair to criticize the OG for having too much cash sitting around earning nothing.

It took four snapshots to capture these payments.  I did not include a $60 CAD dividend payment made by Husky Energy (HSE:CA) on 10/1/12, which appeared late last night. I own 200 shares. These snapshots show a typical earnings stream from a wide variety of assets:
Page 1

Page 2

Page 3

Page  4
Two of my larger Canadian ETF positions, 700 CLF:CA and 300 CBO:CA will make their monthly payments on 10/4. iShares 1-5 Year Laddered Government Bond Index Fund, CLFiShares 1-5 Year Laddered Corporate Bond Index Fund, CBO Of the ones shown in the page 4 snapshot above, only XTR:CA pays monthly.

CLF Distributions

CBO Distributions

These Canadian securities, including CLF, CBO, Husky and those referenced in page 4 above, were purchased with my Canadian dollar stash on the Toronto stock exchange.

Prices as of 10/1/12.

No comments:

Post a Comment