Tuesday, July 25, 2017

Observations and Sample of Recent Trades: CPB, FBIO, KPTI, RDHL

Trump and Scaramucci

The new White House Communications Director has the well earned nickname of "mooch". 

Scaramucci: Trump still doesn't accept intelligence conclusion on Russia - CNN (and, he never will IMO irrespective of the evidence)

Scaramucci wrote 'America deserves better' than 'unbridled demagoguery' in early 2016 op-ed aimed at Trump - CNN 

Who Is Anthony Scaramucci and How Bad Are All of His Ideas? | GQ

Exit Spicey, enter the Mooch: another day in Trump's tragicomic America | Richard Wolffe | US news | The Guardian

His success indicates once again that style can triumph over substance. Ass kissing his boss will be Scaramucci's main qualification for the job. The Mooch made the following comments at his first press conference:  

"I love the president and I’m very, very loyal to the president. And I love the mission that the president has.” I love the president. “But here’s what I will tell you, O.K.? I love the president.”

Mooch, Mooch, Mooch and then Mooch some more.  

‘Full transparency’ doesn’t mean what Scaramucci apparently thinks it means - MarketWatch

Trump's tweets are what passes for informed and intelligent dialogue for millions of U.S. voters.  


Trump and the NYT

The NYT is a frequent target of Trump's venom and "Fake News" rants. This is just the latest example:

Trump saw a banner headline on "Fox News" shortly before publishing this tweet. The allegation involves the public release of information about a 5/16/15 raid that  killed an ISIS leader Abu Sayyaf and captured his wife.

How Trump Got It Wrong in Saying The Times ‘Foiled’ Killing of ISIS Leader al-Baghdadi - The New York Times

A number of news outlets provided information about that raid shortly after it happened based on information released by the Pentagon including "Fox News". (e.g.  Slain ISIS Leader Abu Sayyaf Was a Little-Known, but High-Value Target - NBC News published on 5/17/2015; U.S. Special Ops Forces Enter Syria, Kill Senior ISIS Member - NBC News published on 5/16/2015)

Fox News ran a story about the raid on 5/17/15.

The NYT story about the raid was published on 6/8/15.

Statement by Secretary of Defense Ash Carter on Counter-ISIL Operation in Syria (May 16, 2015 Press Release)

Statement by NSC Spokesperson Bernadette Meehan on Counter-ISIL Operation in Syria | whitehouse.gov (published 5/16/2015)

Trump's attacks on the free press, which are almost daily occurrences, are merely an extension of the GOP's campaign over the past several decades to convince millions to ignore anything published by responsible journalists and to instead accept their alternate reality creations transmitted through approved television personalities (e.g. Sean Hannity, Fox and Friends, Rush Limbaugh, Ann Coulter) and Alt-Right sources like Steve Bannon's Breitbart "News Network" and Alex Jones Infowars.

Alex Jones and Other Conservatives Call for Civil War Against Liberals

A liberal in the U.S. today is someone who supports informed and intelligent dialogue based on facts rather than reality creations, and who actually believes in the U.S. Constitution. Anyone to the left of Steve Bannon and Alex Jones are Libtards. Donald likes Alex Jones which is hardly surprising. A Guide To Donald Trump’s Relationship With Alex Jones


Trump's Approval Ratings

Notwithstanding the GOP's failure to agree on an Obamacare repeal and replace bill, most republicans continue to view Trump as a successful leader. Trump's overall approval rating hovers close to 40%. 

The most favorable polling organization for Trump is Rasmussen which has his current approval at 43% as of 7/21/17. Daily Presidential Tracking Poll - Rasmussen Reports™

The most striking part of the Rasmussen polling is the substantial falloff in those who strongly approve of Trump's performance as President. The number stood at 26% last Friday and at 44% on 1/26/17. The strongly disapprove number is also noteworthy at 47%. 

87% of republicans approve of Trump's job performance so far in the latest Gallup poll with an overall approval rating of 37%. Presidential Approval Ratings -- Donald Trump | GallupGallup Daily: Trump Job Approval | Gallup

Trump's approval: How low can he go? Politico

Trump Sets New Low for Second-Quarter Job Approval | Gallup

RealClearPolitics - Election Other - President Trump Job Approval (using data from all polls, the average approval was at 40% and disapprove was at 55.3%)

The 40% approval number looks solid with temporary dips to as low as 35%, regardless of what happens. Trump supporters will not blame him for his lack of leadership, failures or bad results, but will level the blame on the news media and Congress. Republican politicians fear that large core support for Trump and will consequently either remain silent or barely express chagrin in the softest of tones for Trump's most egregious actions and words.

Trump’s ‘Great National Infrastructure Program’? Stalled - The New York Times ("Infrastructure remains stuck near the rear of the legislative line, according to two dozen administration officials, legislators and labor leaders involved in coming up with a concrete proposal. It awaits the resolution of tough negotiations over the budget, the debt ceiling, a tax overhaul, a new push to toughen immigration laws . .") 

Senate Parliamentarian Challenges Key Provisions of Health Bill - The New York TimesByrd Rule decisions (repealing Obamacare first and then replacing it is necessary for the Senate to avoid the Byrd Rule since they lack 60 votes to change or eliminate key provisions through budget reconciliation that requires only 50 votes)  The Senate will be voting today. Senate poised to vote today on health care - CNN 

The IMF cuts its U.S. growth forecast, citing Trump’s unfulfilled promises - The Washington Post

The Democrats will be lucky if they do not lose Senate seats in 2018 notwithstanding Trump's low approval ratings. 10 Senate seats that could flip in 2018 | TheHillUnited States Senate elections, 2018 - Ballotpedia What is their message?

I saw a poll the other day that Hillary has a higher unpopular rating than Donald. Finally, a Poll Trump Will Like: Clinton Is Even More Unpopular-Bloomberg That is an accomplishment.


Trump and the Boy Scouts

Trump relived the election, blasted Hillary & Obama, complained about the "Fake News, and rambled incoherently at the Boy Scouts jamboree. It is hard to imagine a more inappropriate speech. 

Trump’s Boy Scouts speech broke with 80 years of presidential tradition - The Washington Post

Trump boy scout Jamboree speech angers parents - BBC News

Even the Boy Scouts aren't exempt from Trump's boorishness | MSNBC

14 Most Inappropriate Moments From Trump’s Boy Scout Speech

The 29 most cringe-worthy lines from Donald Trump's hyper-political speech to the Boy Scouts - CNN


1. Short Term Bond/CD Basket Strategy

A. Bought 2 Bank of China 1.2% CDs Maturing on 10/17/17 (3 month term)

I have a .9% nine month Bank of China CD maturing on 10/19/17. 

B. Bought 3 Franklin Synergy Bank 1.5% CDs (Monthly Interest) Maturing on 10/19/18

I only had  $2K in principal amount maturing in October 2018 before this purchase and that was from a recently purchased WFC 1.5% CD maturing on 10/1/18 which also pays monthly interest.

3. Bought 2 WFC 1.5% CDs (Monthly Interest) Maturing on 8/20/18:

I own 2 more in another account.

4. Sold 2 American Express 1.7% SU Bonds Maturing on 10/30/19:

Profit = +$8.46

FINRA Page: Bond Detail

Sold at 99.9

YTM Then at 1.744%
Net at 99.8

I thought that I would do better with the 1.5% CD  maturing in August 2018 and then buying another CD upon maturity. 

$7K Net Inflow Short Term CD/Bond Basket

2. 100% Contrarian Strategy-Though With No Conviction as to Near Term Positive Catalysts:  

A. Bought Back 30 CPB at $51 (used commission free trade):

Trading History Schwab Account Last Two Years:  

Note that I sold a 30 share lot at $62.86 on 1/30/17. My last purchase at $51 represents a 18.87% decline over 5+ months. I certainly lack any conviction about the future near term price direction, and may average down after a further significant drop in price. I have periodically traded small lots since at least 2009 Spring when I bought shares at $25.8 and at 25.35. I sold the last of those two lots in September 2010: 

2010 CPB 70 Shares +$714.84
Stocks, Bonds & Politics: SOLD CPB at 35.79 and Bought 100 of the ETF XLP at 27.25/ADDED 60 BRKS at 5.8 (9/8/2010)

Campbell Soup is not now, and has not recently been a viable intermediate or long term investment, a point which is indisputable IMO. CPB Two Year Stock Chart 

That does not matter to Left Brain when it is in a trading mode and suspects that a stock is oversold, with pessimism galore being the soup du jour.

Some of CPB's issues are discussed in this SA article: Campbell Soup: Red Flags For A Red Label - Campbell Soup Company (NYSE:CPB) | Seeking Alpha

Campbell's Brands

The stock went ex dividend on 7/11/17, one day after my purchase (7/10/17). The stock price had been declining into the ex dividend date, having closed at $56.6 on June 14 and at $58.56 on 5/24/17. 

The quarterly dividend rate is currently $.35 per share, There has been slow dividend growth since the 2004 third quarter when the quarterly rate was $.17 per share, but there has been dividend "freezes" for more than four quarters. The dividend rate was cut to $.158 per share in 2001 from $.225 per share. Dividend HistoryCampbell's - Mmm Mmm, Not So Good?-Seeking Alpha

The dividend yield at the current penny rate and a $51 total cost per share is about 2.75%.

There were four 2 for 1 stock splits between August 1985 and March 1997, but none since 1997.  Stock Split History

The company is stilled controlled by the descendants of John Thompson Dorrance, a chemist who figured out how to create condensed soup. Dorrance family

In the past, there have been rumblings by some family members to sell the company, but I have not seen anything recent. The Dorrance Dynasty Apparently some family members received almost $50K in dividends per day taking into account the recent dividend increase. 

The company would be easily digestible by a larger consumer products company like the highly acquisitive Kraft Heinz, but no one will bother until the Dorrance heirs who hold a controlling interest are willing to sell. The market cap at a $52 price is about $15.76B. 

Shortly after my purchase, the shares did rise last week after the company reaffirmed guidance for the current fiscal year:

Campbell to Provide Update on Growth Strategies and Outline Key Initiatives for Fiscal 2018 | Business Wire ("For the year, Campbell continues to expect net sales to change by -1 to 0 percent; adjusted Earnings Before Interest and Taxes (EBIT) to increase by 2 to 4 percent; and adjusted Earnings Per Share (EPS) to increase by 3 to 5 percent, or $3.04 to $3.09 per share. . . .Campbell reiterated its long-term targets for organic sales and earnings. The company is targeting long-term organic sales growth of 1 to 3 percent. Excluding currency translation, the company is targeting adjusted EBIT growth of 4 to 6 percent and adjusted EPS growth of 5 to 7 percent.")

Campbell Takes Actions to Reshape Portfolio toward Faster-Growing Spaces; Outlines Fiscal 2018 Priorities | Business Wire

Doug Kass added to his CPB position after the company reaffirmed its forecast: It's Hard to Be Optimistic on the Stock Market, So That's Why I Hiked My Short Position: Doug Kass - TheStreet

The consensus E.P.S. estimate is currently $3.19 for the fiscal year ending 7/18: CPB Analyst Estimates Using the $51 total cost per share number, the forward P/E based on that estimate would be about 15.98 which is within what I would call a range of reasonableness for this slow growing company.

Campbell has acquired a number of companies over the past several years and recently announced the purchase of Pacific Foods of Oregon for $700M in cash: Campbell to Acquire Pacific Foods to Expand in Faster-Growing Health and Well-Being Categories

Fiscal Third Quarter Results (not good):

Campbell Reports Third-Quarter Results | Business Wire

Analysts are for the most part not enthusiastic. While S & P has a 3 star rating, the 12 month price target is $60 which would provide a decent total return if achieved. (+17.65% price appreciation from $51). I would settle for a 10% total return within 12 months. That would require a price appreciation of $5.1 per share with no dividends (or $56.1) and less with quarterly dividends. Since I about to received one $.35 per share, the 10% total return can now be achieved by selling at $55.65 using a commission free trade.

Argus has a hold rating but a long term buy rating.

Morningstar has a 3 star rating and a $52 fair value estimate.

Credit Suisse has an underperform rating and a $47 price target (report dated 7/21/17).

I do buy a variety of CPB's Bolthouse beverages, Pepperidge Farm cookies, and Goldfish crackers, and occasionally purchase a V-8 fruit/vegetable blend. I rarely consume their soup which is not atypical anymore. I would drink more Bolthouse beverages, a premium line, provided the sugar content was significantly reduced. Sugar is not added but is a natural by-product of the ingredients.

Bolthouse Farms

I like the three cafe drinks as a quick alternative to coffee or tea: Bolthouse Farms - Cafe Drinks

I will buy two of the 1915: Cold-Pressed Organic Juice lines. One has Apple, Romaine, Cucumber, Spinach , Kale and Lemon, and the other has Apple, Grapefruit, Peach and Raspberry.

In the Cold-Pressed Organic juice category, Bolthouse has significant competition from Suja Juice and Naked to a lesser extent.

Since there is competition and a limited customer base for this type of premium brand, I simply buy when the products are on sale.

My nephew stayed with me several days last week prior his concert at the Ryman last Thursday. He drank almost all of my cold pressed drinks and ignored everything else.

The Infamous Stringdusters

Cover of  He's Gone [ The Grateful Dead ] - SILVER SKY DELUXE PACKAGE - YouTube

The Infamous Stringdusters - Let It Go [OFFICIAL MUSIC VIDEO] - YouTube

The Infamous Stringdusters | "Gravity" | Laws Of Gravity - YouTube

The Infamous Stringdusters - Rockets [OFFICIAL MUSIC VIDEO] - YouTube

Cover of Dylan's Don't Think Twice It's Alright - YouTube

The Infamous Stringdusters "You Can't Stop the Changes" - YouTube

Run To Heaven - The Infamous Stringdusters ft. Nicki Bluhm Live @ Red Rocks - YouTube

The Infamous Stringdusters 2nd Set 3-12-14 - YouTube

In the Bolthouse Smoothy category, I will drink the Green Goodness, Strawberry Banana, Berry Boost, Tropical Goodness and the Berries-Green Veggies. Bolthouse Farms - Smoothies

3. Small Cap Biotech Lottery Ticket Basket Strategy:

To emphasize an important point again, I have no expertise whatsoever in this sector and perform no more than 1 hour of research before buying what I call a lottery ticket. The selections are based primarily on what I as a lay person find interesting. I expect some failures and blowups.  And, I have had several selections go up or down over 50%. I have had one go down 50% before rising almost 300%. A drug failure will frequently cause a massive price collapse, whereas a drug success can lead to well over 100% gains. I view this strategy as an alternative to playing blackjack for $300 a hand. When I last tried doing that, earlier this year, I lost four hands in a row and the dealer had blackjack on two of the four hands.  

A. Bought 30 KPTI  at $9.46 ($1 Commission):

Quote: Karyopharm Therapeutics (KPTI)

My first purchase was a 30 share lot bought at $7.11: Item # 2 Update For Healthcare Basket Strategy As Of 8/12/16 - South Gent | Seeking Alpha I later added 30 at $6.82 and sold that lot at $10.67, using Schwab commission free trades. South Gent's Comment Blog # 8

I sold the 30 share lot bought at $7.11 earlier this year at $12.04: Item # 3.C. Stocks, Bonds & Politics: Observations and Sample of Recent Trades: 3/13/17

Trading Profits (two 30 share lots) = $261.14

Karyopharm Therapeutics was discussed in a Bret Jensen article published on 6/30/17 at Seeking Alpha. Bret says he purchased a few shares based on his analysis of risk and reward. I bought back what is most likely fewer shares than Bret's few shares. 

KPTI's primary compound Selinexor is currently in multiple trials. Pipeline - Karyopharm Therapeutics

Oral Selinexor (KPT-330) - Karyopharm Therapeutics

Karyopharm Reports First Quarter 2017 Financial Results and Highlights Recent Progress  

Karyopharm Doses First Patient in Pivotal Phase 3 BOSTON Study Evaluating Selinexor in Patients with Relapsed/Refractory Multiple Myeloma (6/7/2017) 

Karyopharm Therapeutics Announces Pricing of Public Offering of Common Stock (4/25/17 Press Release)(3,902,439 shares of  common stock at a price to the public of $10.25 per share before the greenshoe allocation). 

U.S. FDA Division of Hematology Products Lifts Partial Clinical Hold on Karyopharm's Selinexor Clinical Trials (3/20/17)(" The partial clinical hold was not the result of any patient death or any change in the safety profile of selinexor.")

B. Bought 50 FBIO at $4.55 (used commission free trade):

Quote: Fortress Biotech Inc. (FBIO)

I would describe this company as a small cap biotech incubator. 

Fortress Biotech - Specializing in Acquiring, Developing and Commercializing Novel Pharmaceutical and Biotechnology Products

July 2017 FBIO Investor Presentation;  Corporate Presentations of Fortress Biotech and Related Companies

Two of those companies have gone public within the past 12 months: 

Avenue Therapeutics Completes Initial Public Offering Nasdaq:ATXI ("completed its initial public offering of 6,325,000 shares of common stock, at a public offering price of $6.00 per share, for a total offering size of $37,950,000, before deducting underwriting discounts and commissions and estimated offering expenses."), Avenue Therapeutics Website, ATXI Stock Price and 

Checkpoint Therapeutics Commences Trading on the NASDAQ Capital Market Nasdaq:CKPTCheckpoint Therapeutics Website | A Fortress Biotech CompanyCKPT Stock Price  

Portfolio Companies

Fortress Biotech Forms New Subsidiary, Cyprium Therapeutics, Inc., to Develop Novel Therapies for Menkes Disease and Related Copper Metabolism Disorders (3/14/17 Press Release)

Fortress Biotech Forms New Subsidiary, Cellvation, Inc., to Develop Novel Therapies for the Treatment of Traumatic Brain Injury (11/7/2016 Press Release)  

FBIO bought a controlling interest in a small brokerage company, that has taken and will apparently continue to take the subsidiary companies public. Fortress Biotech Completes Tender Offer for Shares of National Holdings Corporation (NHLD) 

Examples of NHLD's Involvement in FBIO Subsidiaries: 

Checkpoint Therapeutics Closes $58M in Private Placement Financing ("closed on a total of $58 million, before commissions and expenses, in a series of private placement financings. National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ:NHLD), acted as sole placement agent for the financing.")

National Holdings’ OPN Capital Markets Closes $94.5 Million Private Placement Financing for Mustang Bio, Inc., a Subsidiary of Fortress Biotech 

Other Recent News: 

Mustang Bio Reports First Quarter 2017 Financial Results and Recent Corporate Highlights

Fortress Biotech Reports First Quarter 2017 Financial Results and Recent Corporate Highlights

National Holdings Corporation Reports Financial Results for Fiscal Year 2016  

National Holdings Corporation Reports Financial Results for Fiscal Second Quarter 2017 

SEC Filed FBIO Presentation October 2016 

I would emphasize that most of the drugs being investigated by FBIO companies are a long way from commercialization. Through the non-public company Journey Medical, FBIO has four drugs approved for marketing. Product revenue for Fortress in the Q/E 3/31/17 was only $2.085M. 10-Q ( FBIO net loss of $12M or $.30 per share for the 2017 first quarter)

Products Under Development

Anyone interested in FBIO also needs to research the compensation arrangements for FBIO's management and its fees associated with the subsidiary companies. 2016 FBIO Annual Report 

C. Added 20 RDHL at $8.36+ (used commission free trade):

Quote: RedHill Biopharma Ltd. ADR  (RDHL)

Home | RedHill

This brings me up to 50 shares bought using commission free trades. 

This purchase was an average down:  Item 4.A. Bought 30 RDHL at $9.56 

Bret Jensen published an article discussing this company last May: Redhill Biopharma: $10 Biotech Stock With Upcoming Catalysts

RDHL is an ADR that represents 10 ordinary shares price in Israeli Shekels.

So there is a currency issue with the ADR. The ADR price will depend on the ordinary share price converted into USDs.

RedHill Biopharma Ltd: TLV:RDHL

XE: ILS / USD Currency Chart. Israeli Shekel to US Dollar Rates

RedHill Announces Expected Timeline for DSMB meeting and Provides Update on Enrollment in the RHB-104 Phase III Study for Crohn’s Disease

RedHill Biopharma Announces Confirmatory Phase III Study Initiated with RHB-105 (TALICIA™) for H. pylori Infection (6/15/ 2017)

RedHill Biopharma Announces Successful Phase III Top-Line Results with BEKINDA for Acute Gastroenteritis (6/14/17) The market did not react well to this "successful" phase 3 results as I noted earlier. Look at the placebo response rate compared to the drug: "Correcting for a randomization error, the difference in effect is greater with 65.8% vs. 53.9% favoring BEKINDA® vs. placebo in reaching the primary endpoint of the study (p = 0.03). In per-protocol (PP) analysis of patients who met all protocol entry criteria and for which the diagnosis of gastroenteritis was confirmed (n=177 in the BEKINDA® group and n=122 in the placebo group), BEKINDA® improved the efficacy outcome by 27%; 69.5% of patients in the BEKINDA® group vs. 54.9% in the placebo group (p = 0.01). BEKINDA® 24 mg was also shown to be safe and well-tolerated. Importantly, electrocardiogram results showed no adverse changes with treatment." (emphasis added) 

RedHill Biopharma Initiates Promotion of Donnatal® and EnteraGam® in the U.S. (6/13/17)

RedHill Biopharma Reports 2017 First Quarter Financial Results

RedHill Biopharma Receives FDA Orphan Drug Designation for YELIVA for the Treatment of Cholangiocarcinoma (4/4/17)

D. Bought 20 CNCE at $13.42 ($1 Commission)

Quote: Concert Pharmaceuticals Inc.  (CNCE) 

Concept Pharmaceuticals Ltd Website

I spent about twenty minutes researching this one, and decided to limit my initial to 20 shares which will cause me to at least pay some attention to future developments. 

Product Pipeline - Concert Pharmaceuticals

Near term, a lot depends on receiving approval for AVP-786 in at least one indication. 

The company is known for its DCE Platform based on deuterium chemistry: Technology - Concert Pharmaceuticals ("Because deuterium forms more stable bonds with carbon, deuterium substitution can in some cases alter drug metabolism including, through improved metabolic stability, reducing the formation of toxic metabolites, increasing the formation of desired active metabolites, or a combination of these effects."); DCE Platform - Concert Pharmaceuticals

2017 First Quarter Report (cash at $83.9M; net loss of $13.333M or $.60 per share) 

2016 Annual Report

CNCE SEC Filings

Recent News: I just glanced at these releases.  

FDA Lifts Clinical Hold on Concert Pharmaceuticals Clinical Trial with CTP-543  (7/10/17 Press Release)

Concert Pharmaceuticals Announces $30 Million Venture Debt Financing from Hercules Capital (6/12/17 Press Release)

Concert Pharmaceuticals Announces Shareholder Approval of CTP-656 Asset Purchase Agreement with Vertex Pharmaceuticals ("As part of the agreement, Vertex will pay Concert $160 million in cash for all worldwide development and commercialization rights to CTP-656. If CTP-656 is approved as part of a combination regimen to treat cystic fibrosis, Concert could receive up to an additional $90 million in milestones based on regulatory approval in the U.S. and reimbursement in the UK, Germany or France." emphasis added)

The FTC has terminated the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act which was the last obstacle to finalizing this deal with Vertex.  Concert Pharmaceuticals Announces Termination of the HSR Act Waiting Period for CTP-656 Asset Purchase Agreement with Vertex 

After my purchase, this article was published at SA: Concert Pharmaceuticals Provides Investment Opportunity With Deuterated Drug Technology - Concert Pharmaceuticals, Inc. (NASDAQ:CNCE) | Seeking Alpha

Bret Jensen published an article last April. 

H.C. Wainwright initiated coverage on 7/24/17 with a buy rating and a $20 price target. 

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.


  1. RedHall (RDHL): I discussed a small add in this post. RDHL reported 2nd quarter results earlier today.

    RedHill Biopharma Reports 2017 Second Quarter Financial Results

    RedHill Biopharma Ltd. (RDHL)
    $10.46+0.70 (+7.17%)
    Volume 48,414
    Avg. Volume 63,401
    As of 9:54AM EDT


    I linked a press release above about RDHL launching two GI specialty products, Donnatal and EnteraGam in June.

    Possibly there is some enthusiasm this morning that the revenues for those two products generated "initial net revenues of approximately $0.5 million in the second half of June alone."

    The company ended the quarter with $51M in cash and no debt.

  2. BBT (Own): BBT increased its quarterly dividend by 10% to $.33 per share.


    For my remaining 121+ shares, my average cost per share is $32.9. This dividend raise gives me a 4.01% yield based on my constant cost number. I am not reinvesting the dividend anymore.

  3. WASH (own): I did not notice yesterday's big jump in WASH until this morning:

    Washington Trust Bancorp, Inc. (WASH)
    $54.00 +$3.55 (+7.04%)
    Volume 97,530
    Avg. Volume 36,546

    At close: July 25 4:00PM EDT

    I have somehow managed to hold onto shares bought at $15+ back in 2010.

    WASH did release yesterday its second quarter report:


    "second quarter 2017 net income of $13.2 million, or $0.76 per diluted share, up by 12% from the $11.8 million, or $0.68 per diluted share, reported for the first quarter of 2017.

    Returns on average equity and average assets were strong at 13.06% and 1.21%, respectively. Comparable amounts for the first quarter of 2017 were 11.87% and 1.08%, respectively.

    Net charge-offs amounted to $484 thousand in the second quarter of 2017"

    Nonperforming assets to total assets 0.49%
    Nonaccrual loans to total loans 0.63 %
    Allowance for loan losses to nonaccrual loans 132.00% (coverage ratio)
    Return on average assets 1.21%
    Net interest margin (FTE) 2.97 %
    Tangible equity to tangible assets - Non-GAAP 7.73%

  4. DXY: The USD is looking sickly which is not consistent with a robust economy and multiple FED rate hikes in the offing.

    The U.S. Dollar Index is currently at 93.4, down -.68 or .73% as of 5:36 E.S.T.

    The downward trend is showing no signs of let up.


    The DXY was around 98 on 11/8 and jolted up to 103+ by mid-December and has been skiing downhill since closing near 103.2 on 1/3/17. Like the Bond Ghouls, the currency traders had one opinion of Trump shortly after the election and a diametrically different one as more information about his stability become known.

    The downdrift in the USD is working wonders for my foreign currency positions and the USD values for foreign stocks held in ADR form or ordinary shares price in their local currencies.

    The CAD and the AUD have experienced good rallies notwithstanding the up and down running in place performance of commodities.

    The CAD/USD crossed over .8 today, up from .72+ in early May:


    The AUD/CHD also crossed over .8 today, up from 73+ in early May.


    I would imagine that many moneyed foreign nationals probably think that the U.S. has gone crazy, and I would not argue too forcefully to the contrary.

    Gold rallied some today and may have put in a temporary bottom near $1,211 where spot gold closed on July 10-11.

    The trailing 12 month GAAP for the S & P 500 was at 24.35 as of 7/21/17. The forward P/E, based on non-GAAP estimates for the next 12 months, was then 18.87.


    There is an ongoing surge in most stock markets worldwide based on better economic numbers in Europe and other nations. I would not call those rallies has having anything to do with Trump's Make America Great Again promise.

    If those foreign investors believed that Trump would actually follow through on his Merchantilistic trade policies, those markets would be tumbling.


    The U.S. so far this year has generated numbers similar to the first seven months of 2016.

    I would note that Trump's approval rating hit 37% in today's daily Gallup poll.

    Jimmy Carter was over 60% in his first six months and ended his 4 year term at about 34%.


    Obama was around 54% at this time in his first term and ended up at 59%:


    Trump's strong disapproval numbers and low favorably rating are extraordinary and unique for a newly elected President, particularly given that the economic numbers have been benign since Trump took office.

    1. The Barron's technical analyst noted that the critical support level for DXY is in the 92.6 to 93.15 area:

      "However, by January it became clear that the breakout had failed. In technical analysis, a failed bullish signal often becomes a bearish signal—as proved by the index’s run back down to support levels. But that may not be the end of it. Unless that support holds and the market turns around rather soon, the odds will favor the bears for the next year or so."


    2. South Gent,

      What is the implication of sector allocation if Dollar down trend continues into 2018? Overweigh ADRs?

    3. Y: The most immediate impact will be on foreign currency positions, the USD priced ADR performing better than the ordinary shares priced in a currency rising in value against the USD, and the value of dividends.

      The fact that the EURO has risen against the USD does not mean that a particular European ADR will produce gains, but only that the ADR will perform better than the ordinary shares priced in Euros.

      Since dividends are initially paid in a foreign currency and then converted into USDs for the ADR owner, the dollar amount of those dividends will increase when the local currency rises in value vs. the USD and vice versa. The dividend value of a USD priced Canadian stock would have risen about 10% since May.

      The CAD has had difficulty since 2014 maintaining a rally over .8. The last rally over .8 lasted for a few days back in May 2015.

      Ultimately a prolonged decline in foreign currencies will hurt the competitive positions of foreign exporters vs. their U.S. multinational competitors, and that can impact the share price in the respective local currencies.

      A few days ago, I bought in a family members account PG which would be a beneficiary of the USD's decline looking at GAAP earnings.

      The problem is that the repatriation tax on foreign earnings prevents U.S. multinationals from moving funds from overseas back to the U.S. So GAAP earnings, which reflect currency conversion back into USDs, is not a meaningful yardstick IMO, particularly compared to organic growth in overseas revenue, but many investors just focus on the GAAP derived improvement in revenues and profits caused by a better phantom currency conversion (which does not actually occur) back into USDs.

      Those GAAP created increases in revenues and profits will not start right away and may not start to show meaningfully until the first quarter of 2018.

      My most immediate reaction to the CAD/USD returning to .8 was to sell over C$15K in Canadian stocks held in my Fidelity account and to immediately convert the proceeds into USDs.

      That is in large part due to transitioning out of Fidelity as my international broker. I also converted this week the CADs held in that account into USDs.

      I have a significant CAD currency position in my IB account which has gained about $4K in value since May, but I am keeping those CADs for now.

  5. OHI: I have trimmed my position to just 81+ shares with my last sell at $34.85:

    Item 5.A.

    OHI reported earnings after the close yesterday:


    Omega Healthcare Investors, Inc. (OHI)
    $31.90 -$1.55 (-4.63%)
    As of 11:08AM EDT

    I would not attribute that decline to the earnings report but to the possibility that the republican senators may be able to advance their Obamacare repeal and replace effort by passing a skinny repeal and then negotiating with the House to arrive at a final bill.

    Even if the Senate passes the skinny repeal which would result in much higher premiums and over 10 million more uninsured if that bill became law according to the CBO's estimate, it is questionable whether this approach will ultimately work.

    The skinny bill would probably eliminated the individual and employer mandates for insurance coverage but leave pre-existing condition coverage in place. So the insurance pool would have far fewer healthy people and the same or larger number of sick people, a sure fired way to cause insurance premiums to skyrocket for healthy persons.

    It would not take much of a cut in Medicaid payments to nursing homes (or even a slower rate of growth below the rise in expenses) to cause some operators to bankrupt.

    Institutions remain negative on this stock. Short interest is high at 16.8% as of 7/15/17, according to Schwab.

    I am thinking about buying OHI today in my IRA but I am far from enthusiastic on that idea.

    I last eliminated OHI in my Roth at $33.96:

    Item 2.A.

    A purchase at the current price would be below my last entry point in this account which was at $32.5:

    Item # 2. Added 50 OHI at $32.5 Roth IRA

    The ex dividend date is tomorrow.

  6. OHI: I did not buy any additional shares today. The decline in price was probably due more to the disclosures made during the conference call.

    Two of OHI's top 10 tenants are close to 90 days behind in their rent. While those two tenants are paying rent, they are not paying the full amount and the total rent in arrears is about 90 days.

    Three of the 10 top operators have received "information requests" from the DOJ and 1 of those is currently in settlement talks.


    These operator liquidity issues are likely to become more prevalent in the event the GOP is successful in drastically slowing the growth of Medicaid spending and placing the burden on the states to manage with far less federal money as healthcare cost inflation rises at a faster pace than headline CPI and the population expands.

    I will not be buying additional shares anytime soon and will consider selling what I own provided the price goes back over $33.

  7. CVX: I briefly mentioned in my 7/19/17 post that I was considering a small purchase in Chevron.

    Item # 1

    I nibble that day, buying just 30 shares at $103.82 using a commission free trade at Schwab-just more small ball.

    Chevron reported second quarter earnings this morning:


    So far in early trading, investors are responding positively:

    Chevron Corporation (CVX)
    $107.80 +$1.69 (+1.59%)
    As of 9:45AM EDT.

    Chevron announced its regular quarterly dividend of $1.08 per share on the 26th:

    The ex dividend date is 8/16/17 according to Marketwatch:


  8. I have published a new post: