Thursday, April 30, 2015

AT & T SA Instablog Published as an Article

I have given SeekingAlpha permission to published my Instablogs as articles without payment of any compensation to me. 

A frequent criticism of my blogs here and at SA is their length and wordiness. Mr. Oregon Man has expressed that sentiment here more than once. 

So it is not surprising that the first four readers comments were not complimentary.  

Admittedly, I have a tendency to cover a subject with factual details; and my posts are not for the Twitter Generation who wants everything condescend to a few words. A proper analysis can not be done in a manner to suit them,  and I am only summarizing some of the main bullet points.  

The focus of that article is more on how AT & T's stock fits into my financial goals and needs. The answer to that issue is not very well. The stock has some bond characteristics, yielding now more than AT & T's long term debt as noted in the article, and that was the primary reason for buying a 30 share lot in the ROTH IRA.  

SA Instablog Published: Sold 200 BHK at $13.86 and 300 ACG at $7.81-ROTH IRA

Tuesday, April 28, 2015

Dividends: Roche, GE, Swedbank, Zurich Financial/SOLD 100 ARCC at $17.195/Added 100 PSEC at $8.45/Bought 100 Canadian Utilities at C$40/Regional Bank Earnings: MBVT, NBTB, FMER, UBSI, AMNB

Stable Vix Pattern (Bullish):
Links to SeekingAlpha Instablog, Articles and Comments:

South Gent's Instablog | Seeking Alpha

South Gent's Articles | Seeking Alpha

South Gent's Comments | Seeking Alpha


Recent Developments:  While many may be pleased by the upward jaunt in U.S. stocks, with no correction since the 2011 summer, this kind of enthusiasm for any risk asset give the OG the shakes.

S & P 500 Closes:
October 3, 2011: 1,099.23 Historical Prices | S&P 500
April 28, 2015: 2,114.76

However, notwithstanding that emotional predicament, I recognize a powerful bull when I see one. I have noted frequently over the past year or so that I will require two pre-conditions before significantly reducing my stock allocation:

1. Trigger Even in my Vix Asset Allocation Model: The last one occurred in August 2007: Stocks, Bonds & Politics: VIX Chart from 2007: Alerts and Triggers Major Disruption of Cyclical Stable Bull VIX Pattern


2. A 5% decline below the 200 day SMA line for the S & P 500.

The Case-Schiller index for the 10-City Composite Index increased by 4.8% Y-O-Y and 4.3% for the 20-City Composite. The largest 1 year positive change was Denver at 10%.

General Electric: I quit reinvesting the dividend several years ago. My last discussion about GE was made in a SA article when I bought just 30 shares in an IRA: Bought General Electric In Roth IRA At $23.86 - General Electric Company (NYSE:GE) | Seeking Alpha

Taxable Account GE Dividend:

Zurich Insurance Dividend:

I received my annual distribution from the Swiss company Zurich Insurance last week.

No Swiss withholding tax was paid since the dividend was not sourced from earnings but from capital surplus. The dividend is consequently treated as a return of capital that is not currently taxed by the U.S. but lowers my cost basis by an equivalent amount.  That has been the case since I bought 100 shares at $24.72 (2/4/12)(symbol later changed to ZURVY from ZFSVY at the time of purchase)

I have now received 4 annual distributions. Given the ROC dividend classification, my cost basis is now slightly over $17.

The $2 fee is paid to the ADR custodian.


Roche Dividend:

Dividend Amount: $50.19
Tax: $7.53
Tax Rate: 15%

Switzerland 's Tax Treaty with the U.S. (15% Tax Rate in Article 10)

Brokers had until 3/19/15 to file the necessary documentation asserting treaty rates for their customers. The ex dividend date was 3/6/15. Roche DTCC Notice

That needs to be contrasted with what the Swedes are doing to U.S. citizens, as noted below, effectively undermining Sweden's Tax Treaty with the U.S.


Swedbank Annual Distribution Received Minus 30%:

Swedbank joined the list of Swedish companies who have withheld a 30% in contravention of Article 10 of the Alleged Tax Treaty Between Sweden and the United States. Sweden's Alleged Tax Treaty with the U.S.

I will receive on or about 5/1/16 the annual dividend Svenska Cellulosa AB ADS (SVCBY). Once I see the withholding rate for that one, I intend to publish an Instablog discussing the Swedish Problem.  The origin of the Swedish Problem is disclosed in the DTCC notice for Swedbank's 2014 dividend: Swedbank The broker has to compile and file in Sweden the necessary documents asserting the applicable treaty rate by 5 P.M. after the ex-dividend date. The broker can not start compiling that information until it knows the identity of customers who owned the stock on the ex-dividend data.  This is basically a way for Sweden to collect more revenues from U.S. citizens.

I will not buy more shares of any Swedish company where I am denied treaty benefits. I will look for an opportunity to sell the existing 50 share positions in both Swedbank and Svenska Handelsbanken.

1. Sold 100 ARCC at $17.195 (see Disclaimer):

Snapshot of Trade:

Snapshot of Profit: For an externally managed BDC, any share profit will do.

2015 ARCC 100 Shares +$116.36

Bought 50 ARCC At $15.41-A Typical Small Lot Purchase Of An Externally Managed BDC Stock - South Gent | Seeking Alpha (10/19/14 Post); Item # 3 Bought: 50 of the BDC ARCC at $16.17 (1/21/11 Post)

Total Return Calculations: I used a website to calculate total return numbers without reinvestment of the dividends:

The lot purchased in October 2014 had an annualized total return of 33/82% and a total return of 17.79%:

The 50 shares lot bought in 2011 had an annualized total return of  11.36% and a total return of 58.05%.

Sourced: Profit Snapshot on Trade Date Plugged into DRIP Returns Calculator | Dividend Channel.

Prior Trades: I have managed to realized my primary objective for BDCs, with one minor trade exception, when trading ARCC.  I have harvested a total return in excess of the dividend yield.

The share profit on this last transaction was the largest. The total return from the prior transaction originated by the dividend payments which were not diminished through profitable share sales.

Sold 100 ARCC at $17.54-IRAs in Two 50 Share Lots (9/13/12 Post)-Item # 4 Added 50 ARCC at $16.9-Regular IRA (5/21/11 Post) and Item # 3 Bought 50 ARCC at $16.89 (12/3/2010 Post)

Item # 3 Sold 100 ARCC Roth IRA at $17.05 (2/25/15 Post)(profit Snapshot: $17.05 +$157 in dividends)

In that last post, I made the following comment:

"I have decided to gradually eliminate BDCs from my IRAs, now viewing their many disadvantages to be inconsistent with the capital preservation emphasis in those accounts.

My tipping point was reached when both FSC and PSEC slashed their dividends and continued to report significant declines in their respective net asset value per share as the external managers feasted on more income for themselves. These two BDCs and several others exist to enrich the external managers. Their relatively high dividend yields are the honey to attract individual investors, desperate for yield, to buy shares, a necessary precondition to the wealth generation for the external managers. Many of those mom and pop investors fail to notice that assets are being incinerated over time that results in a lower share price gradually working its way to zero."

Security Description: Ares Capital Corp. (ARCC) is one of the oldest and largest Business Development Corporations.

A BDC is a pass through entity, like a REIT, where taxes are avoided at the corporate level for income distributed to shareholders.

BDCs make investments throughout the capital structure mostly to private companies. Most of the investments are generally loans that are either first and second lien loans similar to the bank loans that are bought by funds specializing in that area including mutual funds, closed end investment companies and ETFs.

A question to ask and answer for oneself is why are these privates companies dealing with BDCs rather than a consortium of banks. The BDC may have pieces of some bank originated loans, while others are generated internally or acquired through participations in other BDC originated loans either initially or in the secondary market.

One important characteristic found in many of these junk loans is an increase in the coupon tied to a short term rate, mostly the 3 month Libor which is currently near zero. Most of the loans of recent origin have a Libor floor that must be exceeded before the coupon can be increased through that floating rate mechanism. A typical floor would be in the 1% to 1.5% range. Consequently, short term rates would be rising for awhile before the borrower suffers an increase in the coupon.

BDC's loans would generally fall into my junk categories of high risk and extreme high risk which are reflected in the interest rates paid by the borrowers. A measure of common sense needs to be exercised when looking at a description of those investments. What does a 14% secured loan tell you about credit risk, particularly in today's low interest rate environment when a 10 year treasury yields less than 2% and most investment grade bonds maturing in ten years or less are likely to produce negative real rates of return before taxes.

Rationale: I have turned even more negative than usual to externally managed BDCs.

I view that business structure as inherently flawed. For the most part, I have nothing positive to say about the competence level of managers running most externally managed BDCs and a few internally managed ones.

The externally managed BDCs exist to enrich their external managers. Sooner or later, many individual investors will reach that conclusion or at least the ones who are actually paying attention to dividend cuts, destruction of net asset value per share, stock offerings below net asset value, historical total return performance that can be fairly characterized as PATHETIC IMO, and incentive and base fees paid in large quantities to produce all or most of the foregoing.

The high dividend yields are simply the honey used to lure investors into buying shares, a necessary prerequisite to outlandish fee generation for performance ranging from mediocre (rare) to net asset value destruction and poor total return performance. (more common)

ARCC is probably the best externally managed BDC. The returns from this BDC are far better than from other ones that were in existence prior to 2008 as shown below. The past may not be prologue however.

All BDCs are suffering from yield compression now. ARCC's weighted average yield on income producing investments has declined every year since 2010.

The economy has been generally favorable since the recent Near Depression measured by job and GDP growth. A recession will happen and loans losses will accelerate raising the specter of dividend cuts and many externally managed ones have already cut their dividends in an expansion. PSEC's last cut took the monthly rate below where it was in 2005 (the 2005 4th quarter rate was $.28, and the monthly rate after the last slash is currently  $.08333 or $.24999 per quarter)

I achieve a decent total return, as noted in the snapshots above.

I also succeeded in selling the shares at above the net asset value per share which is becoming an increasingly rare possibility for externally managed BDCs

The last reported ARCC net asset value per share was $16.82, up from $16.46 as of 12/31/13: SEC Filed Press Release

I have noted in the past, IMO, that ARCC is probably the best of the externally managed BDCs given its track record that includes importantly the Near Depression period.

The following total returns were calculated starting on 1/3/2005 through 4/24/15:

Total Annualized
ARCC: 13.04%
PSEC: 5.35%
AINV: 3.07%
GLAD: -.03%
ACAS: -6.21
TICC: 3.69%

In that grouping, the only one working IMO is ARCC. I would view the rest as ranging from failures to mild disasters.
Some brain dead index ETFs have outperformed the Masters of the Universe by not being as brilliant as those Masters claim to be.

SPY: 7.98% SPDR S&P 500 ETF
IWM: 8.85%  iShares Russell 2000 ETF
TLT: 7.9%  iShares 20+ Year Treasury Bond ETF 
IYY: 8.39% IYY iShares Dow Jones U.S. ETF
VTI: 8.34% Vanguard Total Stock Market ETF
XLP: 11.13% Select Sector SPDR-Consumer Staples
XLV: 11.41% Select Sector SPDR-Health Care Fund 
VNQ: 7.96% Vanguard REIT ETF

Sourced: Dividends

After preparing that list, I looked at some regular "C" corporations that pay dividends though at a lower yield than the BDCs.  I typed whatever symbol that popped into my head:

Annualized Total Returns: 
MMM: 9.26%
UTX: 10.91%
PEP:    8.46%
GIS:   10.73%
NVS:  11.45%
MRK: 11.67%
JNJ:      7.42%
BA:     13.31%
MSFT:  8.39%
AAPL: 36.93%
UNP:   23.64%

Then, I wanted to see how some REITs did during that period. REITs are also bought by individual investors for their dividends and are pass through entities like BDCs.

O:       13.74%
SLG:   11.32%
AVB:  13.61%
ESS:    15.75%
OHI:    20.53%
VTR:   15.71%
EPR:    10.49%
DLR:    21.69%
HCP:    10.84%
HIW:    11.83%
EQR:    13.84%

While conditions change, I am not hopeful that externally managed BDCs will produce acceptable total returns, with limited exceptions, and their performance will get worse when the next recession hits.

Most of the currently traded BDCs have not yet been tested by a Near Depression. I doubt that any of them will do better than the ones that existed prior to 2007.

Future Buys: I will wait until I see a market price at least 5% and preferably over 10% below the last reported net asset value before considering a repurchase.

I am also going to downsize the small positions in the taxable account when I can sell shares profitably.

I just averaged down yesterday on one of them with a 100 PSEC share purchase that will hopefully give me a better opportunity to escape with a share profit.  I am not going to discuss that trade here, since I start to become ill when thinking about the managers of that company and what they have done to earn their compensation.  (See my PSEC comments to this Seeking Alpha article.)

I reduced my average cost to $8.82 per share.

PSEC 230+ Shares/Ave. Cost Per Share: $8.82

PSEC went ex dividend for its monthly distribution the day after my purchase. Prospect Capital Corporation I suspect that dividend reinvestment will lower the average cost per share some. So I would just be waiting for a small pop before saying adieu (so few have been paid so much for so little, disgusting is way too kind of a description)

2. Bought 100 Canadian Utilities at C$40 (CU:CA) (Canadian Dollar (CAD) Income Strategy)(see disclaimer):

Snapshot of Trade:

The ordinary shares can be purchased using USD on the pink sheet exchange. However, volume is very light. Canadian Utilities Ltd. (CDUAF) Only 976 shares traded on 4/23 versus almost 110,000 in Toronto.

On the day of my purchase, the ordinary shares priced in USD rose 1.38% to close at $32.97.

The CAD priced ordinary shares traded in Toronto closed  down .1%.  CU.TO Historical Prices

And what does that tell you about the exchange rates that day. Was the Canadian dollar moving up or down in value against the USD?

CAD/USD Interactive Chart

I took a snapshot of the currency values before a placed the trade, but deleted it. I took the following snapshot later on 4/23:

The conversion value is really important when I am buying the ADR or ordinary shares using USDs. I do not view it as important when I am using what I view as a permanent CAD position to fund a purchase in Toronto. The relevance exist only when I sell the security and the broker uses the conversion values from CADs into USDs (both purchase and sell) to calculate the profit reportable to the IRS.

I decided to use my CAD stash to buy the ordinary shares in Canada preferring to draw down my CADs rather than USDs at that moment in time.  I am earning zilch on both cash amounts unless one is inclined to call a Fidelity MM rate of .01% a return and I would just as soon earn zero which is what my idle CADs throw off.

Prior Trades: None. First Purchase.

Company Description: I would describe Canadian Utilities as a diversified electric utility company with significant  energy infrastructure assets.

Sourced: Investor Quickfacts

MW stands for "Megawatts", which is defined as 1 million watts or 1,000 kilowatts and is generally enough electricity to power about 600 homes.

KMS stands for Kilometers. (86,000 KMS of power lines equals  53,437.92+ Miles)

PJ = Petajoule   (46 PJ=423215224.42992 hundred cubic feet of natural gas)

The company operates through a number of subsidiaries in Canada, Australia and Mexico:

ATCO power's businesses includes the supply of electricity  from natural gas, coal-fired and hydroelectric generating facilities located in Western Canada and Ontario. About 80% of the generating capacity is located in Alberta. A map of those facilities can be found in the 2014 Annual Report (page 30)

ATCO electric owns and operates electrical transmission and distribution facilities in Alberta. ATCO Pipelines operates about 4,000 KM of natural gas pipelines in Alberta.

Both of those operations have a significant exposure to an economy that is significantly dependent on oil exploration and production. There was as of 12/31/14 about 11,000 KM of transmission lines and 69,000 KM of distribution lines. Transmission lines are those large and tall structures that carry electricity at high voltages over long distances (see pictures at page 13) They are expensive too build. Power is supplied to about 224,000 customers in 245 communities.

The significant exposure to Alberta can have benefits and risks. It would be better to have that exposure through Canadian Utilities that has a diverse customer base rather than a leveraged oil sands energy company.

ATCO Australia owns 299MW of generating capacity and has 13,700 KM of natural gas distribution pipelines serving 700,000 customers.

Sourced: Corporate Structure2014 Annual Report and Management Discussion 2014 Annual.pdf

Company Page for Shareholders: Investors

Company Website: Welcome to Canadian Utilities Limited

Investor Returns

The ordinary shares closed at C$40.62 last Friday. At that price and as of 4/26/15, Bloomberg shows the TTM P/E at 18.0785 and a P/E of 17.6916 based on estimated 2015 earnings. The five year dividend growth rate is shown at 8.87%. The dividend yield was then 2.91% based on a quarterly dividend of C$.295.

The company's debt is rated "A" by DBRS and S & P.  Credit Ratings

Dividend History: The dividend growth has been good over the years. Before taxes and inflation, money will double in about 8.16 years at 8.87%: Estimate Compound Interest

40 Years of Growth:

Dividends & Share Splits

I will receive the dividend payment's in CADs. As a U.S. taxpayer, however, I have to report to the IRS in USDs and consequently I will not be taxed on the CAD amount of the dividend but its value in USDs.  I will receive the CAD dividend payment after a 15% withholding tax. I am a very long term holder of CADs so I do not mind paying less tax due attributable to a decline in the CAD's value.

An owner of the USD priced ordinary shares will receive payment in U.S. dollars after conversion at the then existing exchange rate and also after a 15% withholding tax.

The owner of that security in effect receives a dividend cut when the CAD loses value and a dividend raise when the CAD rises in value using the exchange rate in existence at the time of purchase.

A far more important impact on the USD priced shares is their share value. A 20% decline in the CAD/USD from 1 to .8 will decrease the USD priced shares by 20% compared to the ordinary shares priced in CADs. A rise from .8 to 1 will cause a 25% outperformance in the USD priced shares.

Online Calculator:  Percentage Increase or  Decrease 

The CAD/USD (1 CAD= ) was at 1.05 in July 2011, hit 1.02 in September 2012; .99 in May 2013; and declined to .78 in mid-March 2015 before rallying some.  That is a bad result for an owner of a USD priced Canadian security.

The .78 rate was near a ten year low for the CAD/USD: CAD/USD Interactive Chart

Chart: I took a snapshot of a two year chart comparing the performance of the ordinary shares priced in  CADs (traded in Toronto) and the ordinary shares priced in USDs (traded on the U.S. pink sheet exchange). The disparity is caused by the decline in the CAD's value against the USD.

Based on what I just said, the reader has to already know the answer to this question. Did the CAD priced shares outperform the same ordinary shares priced in USDs over the past two years?

Two Year Comparative Chart: CAD Priced CU:CA vs. USD Price CDUAF

For a new buyer of the USD priced shares last Friday, the last date shown in the chart, the only certainty is that such a CDUAF buyer missed the adverse impact on price cause by the CAD's decline that is reflected in the preceding chart. The investor assumes the risk of a further decline and is likewise exposed to the potential benefit flowing from the CAD gaining strength after the purchase. Simply put,  a return to parity (1CAD=$1) would cause the USD priced shares to close at $40.62 (rather than $33.33 as of 4/25/15), assuming that the CAD priced shares were then at last Friday's closing price of C$40.62.  That currency gain resulting from a future hypothetical would be 21.87% with the Toronto shares remaining at the very same price.

2014 vs. 2013 Financials:  E.P.S. increased 20% Y-O-Y. Dividends per share rose 10.31%.

Sourced from 2014 Annual Report .pdf

The foregoing includes some extraordinary items as shown below.

Rationale: I am going to keep this section really simple.

For a utility, the earnings and dividend growth rates have been excellent. I would emphasize the past tense used in the prior sentence.

My Canadian Dollar stash earns zero until I invest it. Being a turtle, I am only gradually putting to work CADs raised in a bout of profit taking during 2014.

The five year chart looks good to me: CU Stock Chart

Risks: I recently discussed interest rate risk as applied to utilities in this SA article: A Word Of Caution About New Purchases In The Utility Sector | Seeking Alpha

I am mindful of those risks when I elected to limit my exposure to 100 shares.

The yield based on my cost is not viewed  favorably and could be looked upon with more disfavor during an interest rate spike.

The CU E.P.S. and dividend growth is better than the 2.3% earnings growth rate shown for U.S. utilities owned by the Vanguard-Utilities ETF.

I would emphasize once again the currency risk for investors who are not long term owners of Canadian Dollars.

I would note the tax risk and potential benefits, particularly for an investor like myself who is trying to increase my CAD stash over time through trading profits and dividends. I purchased CU with CADs and will receive CADs when I sell the position. My profit or loss from selling those shares will not determined based on my CAD profit or loss.

Both the purchase and sell are converted into USDs for tax reporting purposes. When the CAD falls in value after my purchase, and I have a profit realized in CADs, the profit in USDs will be lower and possibly even wiped out for tax reporting purposes.

The example that I give to highlight this tax issue is my sell of 300 ARTIS that generated  a C$367 profit but only a $6+ reportable profit.  The reverse can happen where the CAD gains in value after my purchase.  A lower profit adjustment was made in connection with selling my Healthlease units only because I held them for a short period when the CAD was declining against the U.S.D.

Stocks, Bonds & Politics: SOLD: 300 HLP-UN:CA at C$14.17 and 300 AX-UN:CA at C$15.71 (9/26/14)(Healthlease CAD profit at C$1,244.35 vs. USD Profit of $1,123.65)

I am fine with that result. Another possibility is that my USD profit will higher than my CAD profit due to the CAD rising in value after purchase. That may be more of a risk now with the CAD rising after plummeting in value.

It is important to simply be aware of these kind of tax issues. The tax result for buying the ordinary shares priced in USDs and in CADs is basically the same for a U.S. taxpayer before taking into account differences in commission costs and currency exchange fees. If I had bought the Artis ordinary shares price in USDs rather than the ordinary shares priced in CADs, I would have had the same USD profit before those two expenses.

The usual assortment of risks incident to operations are summarized starting at page 38.

Future Buys and Sells: I am not likely to buy more. I do not have a sell target price. One purpose of the Canadian Dollar strategy is simply to generate income paid in Canadian dollars that can be aggravated with the payments made by other securities, including Canadian REITs that pay monthly, that increase my CAD position for diversification purposes. I prefer increasing the CAD stash through trading profits and income rather than converting more USDs to CADs and incurring a 1% fee.

3. Bank Earnings: I am not going to discuss bank earnings in any detail unless I am buying or selling a position. I will simply provide snapshots of what I view as core metrics and an editorial opinion on certain aspects of each report.

I also look at other numbers that will not be reflected in the snapshot, including loan and deposit growth.

A. American National (AMNB): Actual $.40 vs. $.4 estimate (3 analysts)

American National Bankshares Inc. Reports First Quarter 2015 Earnings

AMNB was a recent tepid and at best marginal buy: Bought: 50 EROL at $24.45 and 50 AMNB at $22.07  (4/23/15). I am hoping for an average annual total return of about 8% with one-half provided by the dividend, assuming no dividend increases.

B. Merchant's Bankshares (MBVT): Actual $.53 vs. Estimate $.52

NPL ratio remains the lowest in my basket. The coverage ratio is the highest. MBVT is probably my most conservative bank.

Merchants Bancshares Eyes Growth Opportunity Through Agreement To Acquire Nuvo Bank & Trust Company (April 27, 2015)

MBVT is currently paying a quarterly dividend of $.28 per share.

Nuvo is a privately owned state chartered bank based in Springfield, Mass. NOVO's shareholders can choose to receive $7.15 per share or .2416 MBVT shares "subject to the total consideration being comprised of approximately 75% stock and 25% stock". The $7.15 cash price is about 133% of NUVO's tangible book (which is fine) and "51.9 times NUVO's last twelve month's earnings" (say what?)

MBVT's branches are located in Vermont. It is the "largest Vermont-based" bank with 32 branches statewide. The NUVO acquisition will be the first banking office in Mass.  Branch Listing | Locations

I currently own 50 share bought at $26.25.

In 2011, I sold a 50 share MBVT lot for a $160.1 profit (profit snapshot in the preceding linked post and in the Regional Bank Gateway Post)

SOLD 50 MBVT at $26.5

C. NBT Bancorp (NBTB): Actual $.41 vs. $.42 estimate

E.P.S. is stagnant. NIM is stable Y- O-Y. NIM compression is a prevalent and meaningful problem for banks. Return on tangible equity remains good. The charge-off ratio is near the current national average. The coverage ratio is good. The capital ratios are okay.  I am not impressed by this report.

NBT Bancorp Inc. Announces Net Income of $18.2 Million for the First Quarter of 2015; Announces 5% Dividend Increase

The quarterly dividend was raised the quarterly rate to $.22 per share from $.21. My total cost per share is currently $22.95, and I am not reinvesting the dividend. Item # 2 Bought: 50 NBTB at $22.76 (2/17/14 Post)

This dividend increase raises my yield to 3.87%.

Link to March 2015 Article about NBTB, published at Seeking Alpha, and written by Dallas Salazar.

D. First Merit (FMER): Actual $.33 vs. $.33 estimate

Efficiency ratio is okay. The charge off, coverage and NPA ratios are good. E.P.S. was increased to $.33 from $.31 in the 2014 first quarter. NIM plummeted Y-O-Y, probably due to lower accretion from acquired loans as those balances decrease. I discuss that issue in a recent SA article dealing with Trustmark: Regional Bank Basket Strategy: Bought Back Trustmark At $22.25 - Trustmark Corporation (NASDAQ:TRMK) | Seeking Alpha

FirstMerit Reports First Quarter 2015 EPS of $0.33 Per Share

After selling my 100 highest cost shares, I currently own 141+ at an average cost per share of $14.52: Item # 2 Bought 30 FMER at $11.35 (August 2011)Item # 2 Added 50 FMER at $15.2 (September 2012)Item # 3 Added 50 FMER at $15.09 (February 13, 2013 Post) The foregoing purchases account for 130 of the 141+ shares with shares purchased with dividends accounting for the remainder.

E. United Bankshares (UBSI): Actual $.5 vs. $.49 Estimate

United Bankshares, Inc. Announces Increase in Earnings | Business Wire

Based on my dividend yield of 7.66%, UBSI is become a bond like income generator.  I would not buy shares at the current price.

The bank did not cut its dividend during the last banking debacle but the rate of dividend growth is really slow and is not increased every year. United Bankshares, Inc. (UBSI) Dividend History

My dividend yield is not high based on dividend increases. The rate was $.29 in 2009 and is now $.32. My yield is due far more to buying at $16.56 and then just holding onto those shares bought at a favorable price. The dividend yield at the time of the November 2009 purchase was around 7%.

I bought this 50 share lot on 11/17/09:

The total return without dividends reinvested is 166.11% or an average annual return of 19.71%. With dividends reinvested, the total return would be 189.78% through last Monday's close.

Dividend Channel

The difference in those two numbers could narrow based on the return generated by a cash dividend. Keeping the cash in a money market fund since November 2009, which would have earned at most a few pennies, would simply mean that the differentials shown above would be very close to the actual differences between reinvesting the UBSI dividend or receiving the dividend in cash and leaving those funds in a .01% MM account.

Update For Regional Bank Basket Strategy As Of 4/20/15 | Seeking Alpha

Thursday, April 23, 2015

Bought: 50 EROL at $24.45 and 50 AMNB at $22.07/Reality Creations Made by Politicians, Citizens and Investors and the Profound Negative Consequences Flowing Therefrom

I excerpted the discussion of the EPOL purchase for publication as an Instablog.  I have a long introduction section in that Instablog discussing investment strategy that is not found here.  

Bought IShares MSCI Poland Capped ETF (EPOL) With An Investment Strategy Discussion Introduction - South Gent | Seeking Alpha

Stable Vix Pattern (Bullish):
Links to SeekingAlpha Instablog, Articles and Comments:

South Gent's Instablog | Seeking Alpha

South Gent's Articles | Seeking Alpha

South Gent's Comments | Seeking Alpha


Recent Developments:

Existing-Home Sales Spike in March |

I left a comment at SeekingAlpha today discussing the obstacles to interest rates being set by the market using traditional criteria such as inflation and inflation expectations and how the FED is now in a box. The abnormal central bank policies worldwide have both current and potential negative repercussions.

Seeking Alpha

Reality Creations: 

While many may differ, I have noticed over the past 40 years that most individuals engage in a constant stream of reality creations and false memories about important issues. It is only a  question of decree.

The political ideologues who engage in fact creation to confirm their beliefs will do the same when investing their money. And when I read what they have written and corrected facts that are clearly wrong with citations to original source material, they refuse to look at the material or just dismiss it and resort back to their own created reality. The false reality is more comfortable psychologically and fits into an ironclad belief system that will never be questioned by them no matter how much contradictory evidence is placed before them.

The observation that I have noticed over 40+ years is that facts do not matter to them. Facts are false whenever they do not confirm their carefully drilled round hole since any fact having a different shape is per se false or at best classified as unimportant by those whose brains have not yet calcified by 100%.

While ideologues of all stripes are frequently reality distorters, the most prevalent reality creators in our society are the right wing reactionaries who adopt the gospel according to the Fox propaganda machine, Rush Limbaugh, Glen Beck, Ann Coulter and other zealots. They are not in any sense conservative, but the antithesis of true conservative values.

I see the same reality creation even when the subject is investing, an area where it is just patently obvious that individuals need to cleanse their mind of all pre-existing ideologies, particularly those that are based on political or social issues that are likely to cause the most errors when transferred into the investing arena. Instead of reality creations and the psychologically related emotionally driven impulse decisions,  the objective of an investor has to be the collection of all relevant data and then allow the facts to form the opinion rather than the opinion forming the facts.

At SA, I have repeatedly corrected reality creations hatched normally by individuals whose political beliefs are not open to dispute.

Even if I cite a bevy of factual data contradicting a statement made by them, they will ignore it and then make the same easily disprovable statement over and over again.  Facts do not matter and never will.

I saw an example of how beliefs create reality rather than the more productive path of facts creating opinions, when reading the comment sections to a WSJ articles, one of the many places where reality creators hang their shingles.

I am doing investment research of psychological abnormalities that impact investment decisions when reading those comments. The WSJ comment sections are productive laboratories for real time research with subjects eager and willing to provide free of charge material for my research in what one observer called in 1841 Extraordinary Popular Delusions & the Madness of Crowds by Charles MacKay.

There are a lot of similarities between accepting,  even  now, the reasons given for the Iraq Invasion and those type of financial events, including the bubbles in Japanese stocks that developed in the late 1980s and in U.S. stocks in the late 1990s; the parabolic spike in home price in the U.S. between 2002 and 2007, a similar land bubble in Florida during the 1920s; the gold and silver price spikes in the late 1970s and again in 2009-September 2013 (just look at the linked charts); the vast array of Ponzi schemes, and so on until one becomes weary of typing the list.

Maybe I could just type the symbol for infinity to express the time period associated with Extraordinary Popular Delusions and the Madness of Crowds:  ∞

Several commenters in a WSJ thread were aggressively dismissing a comment made by one of the few rational human beings who, for whatever futile reason, decided to leave a factually based comment. That individual was simply saying that the so called mobile biological labs in IRAQ did not exist. I do not make any comments there wishing to maintain my status as an objective observer.

The reality creators were not citing any authority, apparently relying on the pervasive false propaganda that poured from the mouths of those fixing the facts. One noted that those purported biological labs could be placed in operation quickly and could produce a variety of biological weapons to reign down on NYC in another 9/11 attack. I am being fair in that description.

The rational human being was citing an array of actual data that those alleged biological mobile labs, found buried in the desert, were actually for the production of hydrogen gas to fill artillery balloons. From 'Biological Laboratories' to Harmless TrailersIraqi mobile labs nothing to do with germ warfare, report finds

The CIA knew that the primary source of that information was and Iraqi seeking asylum in Germany, and who was justifiably called "Curveball" by his handlers.

Curveball later admitted that he fabricated the story. No one should be surprised that those relying on his tale are not surprised by that admission. Defector admits to WMD liesIraqi  Admits WMD Lies - ABC News'Curveball': I lied about WMD to hasten Iraq war-NBC News

Dick Cheney still believes that those hydrogen gas trailers are biological labs.

The foregoing is just one of many reality creations used to justify the Iraq Invasion.

Other well documented ones include the then known falsity that aluminum tubes intercepted in Jordan were not appropriate for uranium enrichment, as claimed by the administration and the obviously forged Niger yellow cake documents (known to be forgeries before the invasion)

The foregoing is not a political discussion. I would be equally critical of LBJ's rationale for the Vietnam war and its escalation.

As I have said here many times before, going to war decisions are not political but should involve a fact based and truthful assessment (internally formulated and externally expressed to the population) of how the expenditures of large sums of borrowed money and the loss of life (both U.S. soldiers and civilians) furthers, in a rational and objective manner, national security interest that are jeopardized by a failure to act.

Lies and misleading statements are made regardless of party affiliation. For politicians, their power and influence is frequently far more important to them than a real concern (distinguished from the prevalent pretend variety) about  the best course of action for the nation. A failure to disclose details that would undermine or call into the question the rationale for a $2+ trillion expenditure, using borrowed money that will probably have to be refinanced forever,  is no different that an outright lie.

A statement made that the aluminum tubes were for uranium enrichment, based on some non-expert opinion advanced by a guy named "Joe" at the CIA, is not false because Joe made that claim which he did do. The evidence then showed how Joe had repeatedly dismissed the own experts hired to rebut U.S. scientists after they agreed with the U.S. centrifuge experts at our Oak Ridge facility.

The Big Lie was the failure to say that the experts in gas centrifuges at the U.S. Oak Ridge enrichment facility had examined the tubes and found them to be inappropriate for gas centrifuges, a fact known at the highest levels of the Bush Administration before the Invasion and disclosed to members of the Senate's Intelligence Committee and in a brief sentence in a footnote to a security briefing document disclosed only to those politicians who took the time to review it.

Only a few politicos actually reviewed even that abbreviated version, If the politicians had reviewed just that footnote, a bright red flag would have been raised about other false justifications.

For political survival, it is best to say I voted for the Iraq Resolution and there is no paper record that I reviewed that report.

Why did Hillary lose to Obama in the Democrat primaries?  Obama gave a speech opposing the war and Hillary voted for it and too much was then known, during that nomination process by Democrats, about the false factual assertions made to justify the incursion, as well as the costs and loss of life with over 100,000 civilians killed in the conflict and the emergence of Iran as a more powerful regional power.

E.G.  Going to War Decisions: Conservative or Liberal vs. Competent or Incompetent? (12/25/2008 Post)

Lexington Realty (LXP) Reinvestment Price:

As I noted in an SA Instablog, I moved my entire position in LXP to my Fidelity Roth IRA, the only account that I have where I can receive a 5% discount on the dividend reinvestment price and avoid a tax on the fictitious income created by the IRS based on that discount.

My Fidelity Roth IRA reinvestment price for the last quarterly dividend was $9.2825, below the 52 week low price of $9.49 as of 4/21/15.

For a family member who does not have a Fidelity account, the average was was $9.74. The broker aggregated the LXP dividends received by all of its customers requesting reinvestment and then used those funds to make an open market purchase. That is what is done with all of my brokers, with Fidelity being only a limited exception. The market purchase of shares will of course be without a reinvestment discount available under a corporation's reinvestment program. And, that practice frequently results in significant price differences depending on the timing as I have noted here in the past.

This issues are discussed by me in a SA Instablog: Lexington REIT (LXP) - South Gent | Seeking Alpha

Fidelity does not sign their customers up directly for the company reinvestment plan. Instead, it goes through a Depository Trust program that is limited in scope to participating securities. I currently own one other security that offers a 5% discount through DTC, and that is  Bridge Bancorp (BDGE). I own that position in a taxable account and quit reinvesting the dividend based on valuation issues. I do not know now whether the discount is still being offered by DTC and BDGE. If I buy more BDGE shares, when those valuation concerns no longer exist, the placement will be in the Roth IRA.

Conclusion of My Effort to Secure the Correct Withholding Rate for the SVNLY Dividend: 

As expected. Fidelity did not change its position that the non-treaty rate of 30% was final, rather than the lawful treaty rate of 15% applicable to me as a U.S. citizen, as clearly spelled out in Article 10 of the Sweden's tax treaty with the IRA and the opinions of Big Eight accounting firms.

I summarized a reply in an addition to this earlier blog:

Scroll to Update April 22, 2015:

Stocks, Bonds & Politics: Update on Svenska Handelsbanken (SVNLY) Dividend Withholding Tax

The importance of this 30% vs. 15% has to do with customers who have to fill out the cumbersome IRS Form 1166 to claim a foreign tax credit due to running over the minimum levels for a simple line entry in the 1040. If Congress had any interest whatsoever in making taxpayers incur more in costs than the benefit to the government from a low or regulation, then the full tax credit should be allowed without filling out that form and creating a nightmare for everyone concerned, but alas that is just irrelevant. Possibly, if some contributor laid out a few million in "campaign" contributions, spread it around in the most productive manner, then someone may actually listen. Otherwise, just forget about it.

Since the dividend is qualified, subject to a maximum rate of 15% for me, that complex form and burdensome form limits my credit to no more than 15%, my qualified rate, which the rate that I would have to pay but for the credit.

A reader of one of my SA articles reproduced a reply from Fidelity on the withholding tax issue for TD's dividend payment into an IRA and how Fidelity decides whether or not to claim the tax treaty exemption.  I would recommend reading its, particularly for investor who have MLPs in an IRA and believe that Fidelity is making the UBTI computations necessary for filling out the IRA Form 990-T:
Link to Reader Comment: Dividend Growth And Large Cap Valuation Strategies: Bought Toronto Dominion Bank - Toronto-Dominion Bank (NYSE:TD) | Seeking Alpha

Link to My Response (quickly made, since I instantly recognized the importance): Dividend Growth And Large Cap Valuation Strategies: Bought Toronto Dominion Bank - Toronto-Dominion Bank (NYSE:TD) | Seeking Alpha


1. Bought 50 EPOL at $24.45 (see Disclaimer):

Snapshot of Trade:

Security Description: The iShares MSCI Poland Capped ETF (EPOL) attempts to track an index representing Poland's stock market.

MSCI Poland Index.pdf

Sponsor's website: iShares MSCI Poland Capped ETF | EPOL

Sponsor's Fact Sheet as of 3/31/15: EPOL (beta vs. S & P 500=.57; the standard deviation is high at 21.92 over 3 years compared to SPY at 9.56)

I view the expense ratio as high for an ETF at .6%.

Sponsor's Website: iShares International Select Dividend ETF (expense ratio: .5%)

I am not familiar with any of the stocks owned by this fund.

I took a snapshot of the top 15 holdings as of 4/16/15:

The fund at that time owned 45 stocks.

I know nothing about those stocks and would never take the research them for a possible purchase. A few of the top 15 names are at least capable of being pronounced by me.

I just limited myself to looking at the Marketwatch pages for the top two holdings and glanced at their recent earnings reports:

Powszechna Kasa Oszczednosci Bank Polski S.A. Stock Price Today (PKO:WAR)
Financial Reports | Investor Relations | Polish PKO Bank | Bank PKO Polish
ADR Trades in USDs on the Pink Sheet Exchange: PSZKY

Powszechny Zaklad Ubezpieczen S.A. Stock Price Today (PZU:WAR)
Financial Data
Analyst Coverage And Recommendations

One money manager currently calculates the following valuation metrics for Poland's Stock Market based on what was shown as of 4/20/15:

Shiller CAPE P/E: 10.2
P/E: 19.8
Price to Book: 1.3
Price to Sales:   .8

Even with three low ratios, I would not have bought this ETF but for the substantial decline in the Polish Zloty's value against the U.S.

Two themes are being played with these small foreign county ETFs: a substantial decline in the ordinary currency vs. the USD and a low Shiller and other valuation ratios.

The Polish stocks have 3 out of 4 of those valuation ratios suggesting only a low valuation. As with any individual stock, there are reasons why investors are not enthusiastic about future prospects, at least when viewed at the current moment in time.

Shiller CAPE P/E: 28.8
P/B: 2.9
P/S: 1.7
P/E: 20.6

Global Stock Market Valuation Ratios

The sponsor claims that the P/E ratio was 17.7 as of 3/31/15. It is important to click the "i" next to that number to see how that P/E is calculated. The P/E is based on trailing 12 months earnings but excludes "extraordinary" items, companies with negative earnings and stocks with greater than 60 P/Es. My response is to give me the facts as they are rather than after a massage.

In my article discussing the purchase The Global X MSCI Norway ETF ( NORW), I noted that the Shiller CAPE P/E frequently has no relationship with annual performance numbers.

Some of the worst performing stock markets in 2014 had the lowest CAPE ratios (e.g. Greece and Russia), while some of the higher CAPE ratios performed well into positive territory.

Meb Faber has the CAPE ratios as of 12/31/13 and the 2014 performance numbers.

There are other objective and subjective factors that will have material impacts on overall performance, ranging from rational economic future forecasts to delusions.

Poland had a 12.3 CAPE as of 12/31/13 and EPOL lost 15.34%. The highest CAPE was Indonesia at 26.5 with a +24.05% performance. Those who adhere tightly to Shiller's CAPE will argue that the high CAPE ratio countries will revert to their means, which is established by data since the 1880s for the U.S. stock market.

Poland's Economic Indicators: 

The EU believes that Poland "weathered the economic crisis and its aftermath very well".

Sourced: poland/ pdf

Poland's unemployment rate is currently high at 11.7%.

Poland's annual GDP growth rate has averaged 4.2% from 1995 until 2014. The 2014 GDP increased by 3.1% compared to the 2013 4th quarter.

On a negative note, Poland's CPI numbers have been negative since June 2014, with a -1.5% reading in March 2015. The average inflation rate was an unhealthy 9.64% from 1992 through 2014. While it is to soon to know, replacing those problematic historical inflation numbers in the rear view mirror and generating low future inflation numbers, would be more positive operating environment. Persistent deflation and problematic inflation numbers are unhealthy

EU Forecasts for Poland's economy:

Sourced: .EC Forecasts as of February 2015/pdf

Prior Trades: None. This is my first purchase.

Dividend History: Dividends are paid semi-annually at variable rates.

The fund paid out $.827638 per share in dividends. If I use that number, the dividend yield would be about 3.39% based on a total cost per share of $24.45.  The actual yield will vary based on future distributions.

Chart: The price peaked in April 2011 near $40 per share and then crashed to about $23.5 within a few months thereafter. A low was hit near $20.9 during May 2012. Since that time, EPOL has been trading in a channel mostly between $24 to $30. The last upward price spike started in June 2013 near $24 and peaked at near $31.5 in November 2013.

All of the foregoing severe up and down spikes contribute to the high standard deviation number. Usually, I prefer far less volatility in a stock or a fund.

Standard deviation is explained in a number of articles  available for review using the internet, including these articles published at Morningstar and StockCharts.

Rationale: I have been buying 50 share lots of foreign country ETFs that have low Shiller P/Es and other ratios, particularly compared to the U.S. stock market, and whose currencies have declined 20% or more versus the USD.

The large decline in the Polish Zloty ("PLN" hereinafter) against the USD makes Polish stocks cheaper for a new buyer of a USD priced ETF that owns stocks priced in PLNs.

A one year chart shows the carnage. The important point is that I missed the decline until the date of my purchase.

One Year Chart PLN/USD:

7/14/14: 1 USD=3.04 PLNs
3/15/15: 1 USD=3.954 PLNs
PLN's Value -30.07%
TOP on Day of EPOL Share Purchase 4/15/15=3.8
% Decline 7/14/14 to 4/15/15: -25%

The USD is at a ten year high against the PLN. USD/PLN Chart The prior spike in the USD topped at 1 USD buys 3.9 PLNs on 2/18/2009. The USD was strong against most major currencies during that post Lehman bankruptcy period. The recent spike high hit 3.954 on 3/15/15.

It remains to be seen whether or not that level will be the top.

In a recent article, I discussed the rationality of the USD spike against major currencies: Added To iShares International Select Dividend ETF-iShares International Select Dividend ETF (NYSEARCA:IDV) | Seeking Alpha

It is impossible to know at what level or the time period of a parabola's peak, up or down.

And, it is possible that the USD's parabola will collapse upon itself using the U.S. Dollar Index (6 currencies weighted in the EURO) or the broader Bloomberg Dollar Spot Index with 10 foreign currencies, while the PLN remains weak against the USD for reasons specific to that country.

The PLN is not included in those two Dollar indexes, where dollar strength is measure when the line moves up. The 5 year charts for the DXY and the Bloomberg Dollar Spot Index clearly shows the USD's current parabola.

Seeking Alpha published an article after my purchase discussing his arguments for PLN to continue its decline against the USD.

There is some dividend support for the ETF.

The $24.45 current price was near the low end of the 2012-April 2014 price channel.

Risks: Currency risk is of course a dominant risk as noted above.

The fund describes the usual risks in the Prospectus (e.g. risks associated with concentration, country, currency, stock, sector risks (e.g. financials), non-diversification, EU, etc.and so on)

Barron's published a negative article about Poland's stock market in November 2014. One of the problems was the overweight in financials that were in the author's view richly priced at the time.

There is certainly concentration risk with this ETF.

I suspect that Poland's stocks are feeling some blowback from Russia's renewed military aggression. Poland borders both the Ukraine and Russia. The Ukraine confrontation appears to have just boiled to a simmer in recent weeks.

And, as we know, Russia had an ongoing military occupation of Poland after WWII.

And the current Ukrainian President claimed that Putin privately threatened to invade Poland, Hungary and the Baltic states. Sounds about right but who knows unless there is a recording and that would need to be forensically examined by impartial experts.

2. Bought 50 AMNB at $22.07 (REGIONAL BANK BASKET STRATEGY)(see disclaimer):

Snapshot of Trade:

Company Description: The American National Bankshares Inc. (AMNB) is a bank holding company for the American National Bank that has 27 branches located in Virginia and North Carolina (8). AMNB's headquarters is located in Danville, Virginia. ( nice building: Google Maps)

Map of Branch Locations

Prior Trade: Item # 5 Sold 50 AMNB at $23.03(profit snapshot=$77.57)- Item # 4 Bought 50 AMNB at $21.16 (9/7/2013 Post)

I chucked this position due to a negative E.P.S. trend which is still continuing. I decided to try again and see whether the bank, which has positive metrics, can receive a lift from a recent acquisition and an improvement in its net interest margin later this year or in 2016.

I am referring to the acquisition of MainStreet Bankshares, the holding company for the Franklin Community Bank, that was consummated on 1/1/15. SEC Filed Press Release This acquisition expands AMNB's territory into the Roanoke, VA. metropolitan area, which I view as a long potential positive development.

Roanoke, Virginia - Wiki

Dividends: The good news is AMNB did not cut is dividend during the Near Depression period or its aftershocks. The bad news is the dividend has remained constant since it was first paid during the 2007 second quarter. Prior to this long dividend increase moratorium, the bank was doing just fine with its dividend growth rate, raising the quarterly rate from $.075 (1st Q. 1996) to that $.23 (2007 2nd Q.). That increase in about 11 years amounts to +206.67%. Calculate Percent Increase

At a $22.07 total cost per share, the current dividend at its long term running in place number is 4.17%, which is pretty good in the sixth year of the FED's Jihad Against the Savings Class.

Chart: The five year chart is not appealing. AMNB Interactive Stock Chart The stock has not gained ground over that period. At least I have not been a long term shareholder going up and down and ending up at the point where I started in one of the largest percentage moves in history and the second longest without a 10% correction.

Just unappealing.

I cast my votes in every annual shareholder's meeting. When looking at that kind of chart, I will vote against the Board of Directors and against any measure requesting approval of their compensation and benefit packages.  I am just calling balls and strikes as I see them.

Results: 2014 vs. 2013 (2015 1st quarter not yet available for review)

This snapshot highlights the problems and is self-explanatory. Suffice it to say that E.P.S. was reported at $1.62 in 2014 and at $2 in 2013:

Earnings are trending down, not up.

ROA and ROE down year-over-year.

Efficiency ratio going the wrong way.

NIM went from 4.1% in 2013 to 3.66% in 2014.

One positive trend is that NPLs decreased year over year and are also good (

Two other positives are a low charge off ratio of .07% in 2014 and a coverage ratio of 302.01%:

There was also some growth in AUM, deposits and loans.

SEC Filed Press Release

Rationale and Risks: This bank's managers and Board are not adding value. The shares are just running in place for the most part in a fairly narrow channel as shown in the preceding chart. The results including in the Y-O-Y snapshot are not going to entice many investors to become shareholders.

Still, the dividend is secure and well above the ten year treasury yield and investment grade corporates maturing in 10 years or less.

Some metrics are positive including the

There is at least some possibility that shareholders will at some point benefit by a takeover.

AMNB discusses risks incident to its operations starting at page 14 of its 2014 Annual Report. 

3. Regional Bank Reports and BHB Dividend Increase: 

A. CNB Financial (CCNE): Actual E.P.S. $.39 vs. Estimate of $.38 (one analyst)

Looks fine to me. Market does not care about this small PA bank.

CNB Financial Corporation Reports First Quarter Earnings for 2015

B. First Bancorp (FNLC): Actual E.P.S. $.39 (No Estimates)

2015 1st Q. vs. 2014 1st Q

"The local economy has rebounded considerably in the past year".

The First Bancorp Reports Record Quarterly Net Income

C. Financial Institutions: Actual E.P.S. $.46 vs. $.44 estimate (2 analysts)

Financial Institutions, Inc. Announces First Quarter Earnings: FISI

D. Bar Harbor raised its dividend again. Bar Harbor Bankshares Increases Quarterly Cash Dividend As noted in that press release, Bar Harbor had increased the dividend by 12% since the 2014 second quarter. The rate is $25 per share. This raises my yield to 4.6% based on a total cost of $21.74 per share.

Snapshot of position is in the latest update: Update For Regional Bank Basket Strategy As Of 4/20/15 - South Gent | Seeking Alpha