Thursday, November 30, 2017

Observations and Sample of Recent Trades: COTY, DIR.UN:CA, FNB, VEIRX, VOD

Economy:

4th quarter Real GDP Forecasts


GDPNow - Federal Reserve Bank of Atlanta at 3.4% as of 11/22/17


FEDERAL RESERVE BANK of NEW YORK at 3.7% as of 11/24/17


3rd Quarter GDP


Third-quarter GDP raised to 3.3% to mark fastest U.S. economic growth in three years - MarketWatch


Markit continues to report lower numbers in its U.S. PMI indexes for services and manufacturing compared to the ISM reports. The flash estimates for November show declines from October. The services PMI declined to 54.7 from 55.3 in October. The manufacturing PMI declined to 53.8 from 54.6. 


Fed’s Beige Book says inflation pressures have strengthened-MarketWatch


The Fed Beige Book- November 29, 2017 ("Price pressures have strengthened since the last report. Most Districts reported modest to moderate growth in selling prices and moderate increases in non-labor input costs. In particular, construction-material costs rose in most regions, with many Districts citing increased lumber costs and/or increases in demand for materials due to hurricane rebuilding efforts. Residential real estate prices generally increased as well. There were also reports of increases in costs in the transportation sector. Additionally, several Districts noted input cost increases in manufacturing. In many cases, these increases in transportation and manufacturing were passed through to consumers. Fuel prices also rose, with multiple Districts reporting upward pressure on oil and natural gas prices. However, agricultural price pressures remain mixed.")


The Fed - The Potential Increase in Corporate Debt Interest Rate Payments from Changes in the Federal Funds Rate


FRB: Charge-Off and Delinquency Rates on Loans and Leases at Commercial Banks


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Commentary


Goldman says highest valuations since 1900 leave investors in for a world of hurt - MarketWatch
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Infamous Stringdusters Band:


My oldest nephew is a member.  Their album "Laws of Gravity" is up for a 2018 Grammy: 




Infamous Stringdusters - Laws of Gravity - Amazon.com Music

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

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Trump


Senate GOP tax bill hurts the poor more than originally thought, CBO finds - The Washington PostSenate GOP tax bill would hit lower-income Americans most: CBO report: CNBC ("In 2019, all income groups under $30,000 would have a bigger burden under the bill, the CBO projected."); 
Poor Americans would lose billions under Senate GOP tax bill - Nov. 27, 2017


Reconciliation Recommendations of the Senate Committee on Finance | Congressional Budget Office


Senators Scramble to Advance Tax Bill That Increasingly Rewards Wealthy - The New York Times


Trump: "I feel I'm an honest person" - CBS News


Trump Says Access Hollywood Tape Where President Boasts of Grabbing Women 'By the Pussy' Is Fake: Newsweek-'Access Hollywood' fires back at Trump: 'The tape is very real'


I have concluded beyond any reasonable doubt that Trump enjoys lying as a means of  manipulating those who are easily manipulated with false statements and outright lies.  


Of course Donald is supporting Roy Moore, two peas from the same pod. Why Trump Stands by Roy Moore, Even as It Fractures His Party-The New York Times  

Vietnamese Blogger Gets 7 Years in Jail for Reporting on Toxic Spill - The New York Times (the reports were accurate) Another blogger was sentenced to 10 years for accurately reporting facts about the fish kill associated with the toxic spill.  Donald would like to see the same results IMO for those who dare challenge his reality creations. He only needs the authoritarian power that he so craves. 

Trump calls Warren 'Pocahontas' at event honoring Native Americans - NBC News (Just another example of Trump acting in an inappropriate manner. He just had to slam Senator Warren at a ceremony honoring Navajo indians who serve in WWII as code talkers); Families of Navajo Code Talkers decry Trump's "Pocahontas" jab - CBS NewsLaura Ingraham plays racist ‘war whoops’ to defend Trump’s ‘Pocahontas’ slur and insult Navajo Code Talkers 


It is also noteworthy that the ceremony occurred with a portrait of President Andrew Jackson glaring down out the Navajos, a President remembered for the Indian Removal Act of 1830 that resulted in the Trail of Tears.




In just another example of previously unimaginable and pathetic leadership by a U.S. President, Trump went out of his way to slam Schumer and Pelosi with false statements a few hours prior to a scheduled meeting to avoid the looming government shutdown: 



Schumer and Pelosi canceled the meeting. Pelosi and Schumer pull out of meeting Why inflame needlessly the Democrats that may be needed to pass legislation? What a jerk. 

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More Trump Attacks on the Media


Trump spent most of his speech at Phoenix claiming that news organizations, other than Fox and Friends, were dishonest. He also regurgitated an edited and distorted version of his remarks about the Charlottesville Nazi March. Trump’s 2017 Phoenix, Arizona Rally Full Speech Transcript | Time (the crowd cheered "CNN Suck, CNN Sucks, CNN Sucks" and booed of course when Trump launched into an attack on the NYT). 


Any news organization that contradicts Trump's lies with facts is spreading Fake News in Donald's warped worldview. Those who voted for Donald overwhelming believe that he is telling the truth when he rarely does so. They inhabit the reality creation bubble that Donald has created for them, a world filled with cliches and alternate facts and where accurate information is never allowed entry.


After returning from the Thanksgiving holiday, Donald published two tweets last Monday about the Lying Press or Lugenpresse, a term used by the Nazi's for any media outlet who criticized Hitler: The ugly history of ‘L├╝genpresse,’ a Nazi slur shouted at a Trump rally - The Washington Post




Donald continued his assault on the Free Press yesterday: 







"Check out Andy Lack's past" says Donald, shortly after mentioning the firing of Matt Lauer for alleged inappropriate sexual conduct. Is he accusing Andrew Lack, who is the Chairman of NBC and MSNBC news, of sexual misconduct without offering any information to support that accusation?  


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Trump Suggests that Joe Scarborough May Have Murdered a Staffer:


In one of the tweets above, Donald asks whether NBC will terminate Joe Scarborough, a former GOP Congressman who has a morning talk program on CNBC, based on the unsolved mystery that took place in Florida years ago which in Trump's view needs to be investigated. 


Donald Trump, Joe Scarborough and the 'unsolved mystery' that isn't - The Washington Post (the death was investigated and the authorities concluded that the staffer suffered an irregular heart rhythm that caused a fall)


Trump has called Scarborough, a former GOP congressman, "Psycho Joe" and his soon to be wife "low IQ Crazy Mike" who bleeds from her facial lift. 


Donald J. Trump on Twitter: "I heard poorly rated @Morning_Joe speaks badly of me (don't watch anymore). Then how come low I.Q. Crazy Mika, along with Psycho Joe, came.."


Donald J. Trump on Twitter: "...to Mar-a-Lago 3 nights in a row around New Year's Eve, and insisted on joining me. She was bleeding badly from a face-lift. I said no!" 


Brzezinski: Trump's Scarborough tweet 'crossed another deeply disturbing line' | TheHill


Scarborough's real crime is that he has criticized Donald.  


Donald Trump is a madman - NY Daily News


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Trump Repeats Lie That He Will Lose a Fortune When the GOP Passes "Tax Reform"


Trump repeated his lie yesterday that he will not benefit from the GOP's tax plan tailored made to benefit him: “This is going to cost me a fortune, this thing, believe me This is not good for me." Trump wrongly says he won't benefit from GOP tax plan - NBC News


Donald could release his tax returns for examination, like other Presidential candidates, but he has something to hide. 


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Possibly the Koch brothers can buy CNN and make it into a beacon of the Gospel According To Trump. Can Time Inc. Survive the Kochs? | The New Yorker


Collusion: Secret Meetings, Dirty Money, and How Russia Helped Donald Trump Win-Amazon.com: Books


FreedomWatch sues to remove Mueller (run by Larry Klayman who is profiled here: Larry Klayman | Southern Poverty Law Center)


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Trump Re-Tweets Inflammatory Videos about Muslims:


The videos were originally posted by Jayda Fransen, the deputy leader of Britain First, a far right and ultra-nationalist group. Fransen was found guilty in November 2016 of aggravated harassment of a woman wearing a hijab who 
was simply walking with her children. 



Donald Trump retweets Britain First: What is the truth behind anti-Islam tweets shared by the President? | The Independent 

Fact check: Anti-Muslim videos retweeted by Trump misrepresent what happened - Chicago Tribune 


WH defends Trump: Doesn't matter if anti-Muslim videos are real - YouTube That's right, it does not matter to Donald whether they are real, or have been taken out of context or misrepresented by a Muslim hating far right White Nationalist group. What matters to Donald is that he stoking hatred of Muslims and needlessly stoking divisions among the American people, while keeping himself at the center of everyone's attention.  


Who is Britain First's Jayda Fransen, the U.K. Far-Right Anti-Islam Leader Trump Retweeted?: Newsweek


Trump Shares Inflammatory Anti-Muslim Videos, and Britain’s Leader Condemns Them - The New York Times


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Trump Settled Lawsuit for $1.4M That Charged Him with Hiring Undocumented Workers


Trump had hired a group of 200 undocumented Polish workers to demolish a building to make way for what is now known as Trump Tower. Those workers were paid less than 1/2 of the union wage (if they got paid at all), worked 12 hour shifts, and were given inadequate safety equipment.  


Donald Trump Paid $1.4 Million Over Undocumented Workers | Time


The settlement was put under seal by the court, but Time Magazine convinced the court to unseal the settlement documents in the public interest. Trump opposed the request. The settlement documents are reproduced in the Time article. 


Trump Paid Over $1 Million in Labor Settlement, Documents Reveal - The New York Times


Trump has a history of refusing to pay those who have provided labor and materials for his real estate projects. USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills: USA Today His approach is to use litigation to brow beat workers in accepting less than what is owed by him. 


Exclusive: Trump's 3,500 lawsuits unprecedented for a presidential nominee: USA Today 


After six Trump companies declared bankruptcy, stiffing bondholders and other lenders, Trump created his own reality of a successful businessman and then sold that creation to a gullible public. His business morphed into one where he licenses his name for large sums of money and consequently avoids the risks that resulted in six bankruptcies. 


Yep, Donald Trump's companies have declared bankruptcy...more than four times | PolitiFact


Donald Trump's Real Secret To Riches: Create A Brand And License It: Forbes


How Trump has made millions by selling his name - Washington Post


Donald Trump's Name is Everywhere -- But What Does He Actually Own? -- The Motley Fool


Donald has no redeeming positive personality traits, only clearly identifiable and major negative ones.


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Macy's


Macy's has offered to purchase up to $400M of its higher cost debt. 


Macy’s, Inc. Announces Debt Tender Offer  


Included in the tender, at priority level 2, is the 7.75% SU bond that I own which was originally issued by May Department stores. 




FINRA Page: Bonds Detail

Prospectus
Item # 2 Bought 1 Macy's Bond Maturing in 2030 @ 99.5

There is currently only $18.2+M in principal amount outstanding out of the original $200M. The offer is $1,128.22 for $1,000 in principal amount. 


I will not tender and will simply wait for Macy's to redeem whatever is left under the make whole provision in the prospectus:   


I recently bought a few shares of common stock and have already sold my highest cost lot. Item #2.C. Bought 35 shares of Macy's at average cost per share of $18.15 (11/9/17 Post)Item # 3.C. Sold 10 M at $20.3 (11/13/17 Post)

Closing M Price Yesterday: M $23.98 +$1.81 8.16% : Macy's Inc 


Macy's Effective Tax Rates: 


2017 Third Quarter: 10-Q at page 23 



2016 and 2015 Effective Tax Rates: 2016 10-K at page 26 

Generally, a corporate tax cut from 35% to 20% will significantly benefit most U.S. retailers and banks. The effective tax rates can be found in the 10-K and 10-Q filings.  


Tax Rates by Sectors


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EPR Properties: Preferred Stocks:


EPR Properties (EPR) recently sold a 5.75% cumulative equity preferred stock. Prospectus The proceeds will be used "to redeem all of its outstanding 6.625% Series F preferred shares (liquidation preference of $25.00 per share) at an aggregate redemption price equal to the aggregate liquidation preference of $125 million, plus all accrued and unpaid dividends on the Series F Preferred Shares, up to, but not including, the redemption date."


A notice of redemption has been sent by EPR, with an effective date of 12/21/17: EPR Properties Announces Redemption of 6.625% Series F Cumulative Redeemable Preferred Shares ("The Series F Preferred Shares will be redeemed at a redemption price of $25.00 per share, plus $0.299045 per share, the amount equal to all accumulated and unpaid dividends up to, but not including, the Redemption Date.")

I currently own 50 shares. South Gent's Comment Blog # 7: Bought 50 EPRPRF at $24.95 (12/12/16 Comment) 


I previously sold in 50 shares that had been bought at $22.5Item # 7 Sold ROTH IRA: 50 EPRPRF at $24.65, (6/28/2014 Post) 


I also own 1 EPR 4.5% SU bond maturing on 4/1/25: Stocks, Bonds & Politics: Item # 1.B. 


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1. Small Ball

A.  Sold 51+ VOD at $30.21:


Profit Snapshot: +$40.75


Stocks, Bonds & Politics: Item 1.A. Bought 50 VOD at $29.13 (6/17/17 Post)

Vodafone Group PLC ADR  (VOD)

Vodafone Group PLC Stock Quote (U.K.: London) 

This was a successful dividend capture.


The stock went ex dividend shortly after my purchase. The dividend rate was $1.12336 per share.


History:



The U.K. did not withhold a dividend tax, which is normal. I did have to pay the ADR custodian a $1 fee out of the dividend however. 

I made a slight profit on the 1.93 shares bought with the dividend, which is always a plus, since it raises my effective dividend yield.


Note that the round trip commission was $14. This trade occurred in my Vanguard taxable account which is currently my highest cost brokerage account.


Given the higher brokerage commission charged by Vanguard, I am going to use that account more for bond, Vanguard Mutual Fund and Vanguard ETF purchases, and less for individual stock purchases. 


Treasuries, Vanguard Mutual Funds, and Vanguard ETFs can be bought commission free. Corporate and municipal bond purchases are $2 per bond or $1 higher than charged by Fidelity and IB.


I am not likely to be buying stock funds anytime soon.


I may start trading again the Vanguard stock ETFs, but would like to see a major downdraft in prices even before buying small lots.


Vodafone did report better than expected earnings for the third quarter. Vodafone announces results for the six months ended 30 September 2017


I own several VOD senior unsecured bonds.  


1.5% Maturing on 2/19/18

2.5% Maturing on 9/26/22
2.95% Maturing on 2/19/23

B. Bought 10 COTY shares at $16.94 and 10 at $16.78:




Quote: Coty Inc. Cl A (COTY) 

COTY Analyst Estimates (E.P.S. Consensus at $.68 this F/Y and $.95 for the next F/Y)
Company Website: Coty | A Global Beauty Leader
Our Brands | Coty

COTY manufactures beauty and skin care products, fragrances and color cosmetics. The company is headquartered in NYC. 


The stock is currently out-of-favor. A three year stock chart has a downtrend starting in June 2015 when the stock price was over $32 per share. Coty Interactive Chart I do not see anything in that 3 year chart that suggests-yet-that the downtrend has run its course. There has been a mild bounce starting in late October 2017 from the $14.3 area. 


The last earnings report gave the stock a lift. Coty's stock soars after profit beats and revenue rises in line with expectations-MarketWatch


Coty Inc. Reports First Quarter Fiscal 2018 Results

10-Q for the Q/E 9/30/17

There is some dividend support. COTY is currently paying a quarterly dividend of $.125 per share or $.5 annually. Coty Inc. Declares Quarterly Dividend. At a TC per share of $16.94, the dividend yield is about 2.95%.


The ex dividend date was yesterday (11/29/17), shortly after my two 10 lot purchases.  


COTY joined the S & P 500 last September.


Last October, COTY acquired Procter and Gamble's "global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands". Procter & Gamble Completes Transfer of Specialty Beauty Business to Coty


Consideration for Purchase:




Sourced from Page 10 of 10-Q


Coty Inc. Announces 82% Dividend Increase and Transition to Quarterly Dividend Payout (11/9/16 Press Release)


CODY SEC Filings


I will average down in 10-20 share lots up to 50 shares using commission free trades, but will not average up.


C. Added 10 FNB at $13.04-Used Commission Free Trade


REGIONAL BANK BASKET STRATEGY GATEWAY POST




The stock is ex dividend today (11/30/17). FNB Stock Price


This purchase was an average down from my recent 50 share purchase: Stocks, Bonds & Politics: Item # 4.B. Bought Back 50 FNB at $13.59-Used Commission Free Trade In Item # 4.A. to the same post, I discussed selling 100 FNB at $13.94 in another taxable account, realizing a $137.21 gain. I do not have any commission free trades in that satellite taxable account.


FNB's Effective Tax Rate Information: 

Sourced Page 72 10-Q 

Annual Effective Tax Information: Page 56 Form 10-K




FNB Trading Profits to Date: $1,025.98 

I have nothing further to add to my recent discussion linked above.


2. Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy:


A. Added 100 Units DIR.UN:CA at C$8.75 (averaged up in IB account)




Quote: Dream Industrial Real Estate Investment Trust (Canada: Toronto)


Website: Dream Industrial REIT


I currently own 1000 units. The proper terms are units rather than shares and distributions rather than dividends. 


USD Priced Grey Market Shares: Dream Industrial Real Estate Investment Trust  (DREUF)(limit orders, set after converting ordinary shares priced in CADs into USD,  have to be used. The U.S. Grey Market is dark and liquidity is thin. Schwab is my best broker to use for Grey Market purchases of Canadian stocks since the price displayed is already converted into USDs and there are no extra fees/commissions associated with the trade).


Dividends: As with other Canadian REITs, this one makes monthly distributions. 


The current penny rate is C$.05833 or C$.70 annually. At that rate, the yield is about 8% at a TC of C$8.75 per share. Distributions 


Properties: As of 9/30/2017, the company owns 212 light industrial properties located in Canada (with one exception) containing 16.1M square feet of leasable area. Occupancy was at 96.7%.  


The company recently completed its first acquisition in the U.S., a "717,000 sq. ft. Nissan distribution center in Nashville, Tennessee for $60.9 million. This represents a going in capitalization rate of 6.3% and an average capitalization rate of 6.5% over the remaining lease term of 8.5 years. "


Nashville is strategically located as a distribution hub, both geographically and with multiple transportation links including interstates, rail and waterways. Nashville - Google Maps (multiple interstate highway convergences in all directions; Cumberland River; CSX railroad hub as noted in this post: Bought:  100 CSX at $26.33-Item # 5 11/23/13 Post)   


Dream Industrial REIT Announces First U.S. Asset Acquisition and Updates Strategy to Increase Unitholder Value With Acquisitions and Developments of Unique Properties (7/24/17 Release)


Property ListDream.pdf


Recent Earnings Report:  


Dream Industrial REIT Delivers Strong Q3 2017 Results, 96.7% Occupancy and 81.8% Tenant Retention Ratio



3. Intermediate Term Bond/CD Ladder Basket Strategy:


A. Added 1 Dominion Energy 2.75% SU Bond Maturing on 9/15/22:


This brings me up to 3 bonds.


Issuer: Dominion Energy Inc. (D)

D Analyst Estimates
2017 Third Quarter Earnings Release
10-Q for the Q/E 9/30/17

FINRA Page: Bonds Detail (prospectus linked)




Fitch at BBB+ Fitch Rates Dominion Resources Senior Notes 'BBB+'


Bought at a Total Cost of 99.974

YTM at Total Cost: 2.755%
Current Yield at TC: 2.7507%

4.  Short Term Bond/CD Ladder Basket Strategy

A. Bought 1 Bridgewater Bank 1.75% CD (monthly interest) Maturing on 5/15/2020 (30 month CD)


This is a small privately owned bank headquartered in Bloomington, Minnesota.  

FDIC financial information: 


I do not see anything that would currently cause me concerns. 

As of 6/30/17, Bridgewater had a 5 star rating from Bankrate: Bridgewater Bank Bank Reviews and Ratings - Bankrate.com


B. Added 2 Stanley, Black & Decker 1.622% Junior Bonds Maturing on 11/17/18:

I now own 4 bonds. Each purchase was a 1 bond lot. The first bond was bought last January and the second in June 2017. All 4 bonds have been bought at a total cost per bond at below par value.


Issuer:  Stanley Black & Decker Inc. (SWK)

SWK Analyst Estimates

FINRA Page: Bond Detail


Credit Ratings:

Moody's at Baa2
Moody's assigns Baa2 rating to Stanley Black & Decker's subordinated notes
S & P at A -

Bought 1 in IB Account:




Bought at a Total Cost of 99.786

YTM Then at 1.838%
Current Yield at 1.6255%

Bought 1 in Fidelity Account:




Bought at a Total Cost of 99.754

YTM then at 1.87%
Current yield at 1.6255%

Fidelity had a slightly better price.


C.  Bought 1 Bank West SF 1.45% CD Maturing on 8/21/18 (9 month CD):




D. Bought 1 ConnectOne Bank 2% CD (monthly interest) Maturing on 11/30/20 (3 year CD):




Holding Company: ConnectOne Bancorp Inc. (CNOB) 

This bank has a 4 star rating from Bankrate based on date through 6/30/17: ConnectOne Bank Bank Reviews and Ratings 

E. Bought 2 Compass Bank 1.45% CDs Maturing on 8/24/18 (9 month CDs)


As of 6/30/17, this bank has a 3 star rating from Bankrate: Compass Bank Bank Reviews and Ratings 

The holding company for Compass Bank is wholly owned by Banco Bilbao Vizcaya Argentaria S.A. 

I own 1 Compass Bank junior bond with a $1K par value: 


5. Sold $1,000 of the Vanguard Equity Income Fund-Admiral Class (VEIRX) at $77.81 Yesterday:  


I am selling $1k of this fund whenever the value goes over $51K. 

I last discussed selling $1K here: Item # 8 (10/11/2017 Post) 

I am no longer reinvesting the dividend. 

The fund is currently ranked at 5 stars by Morningstar: VEIRX Vanguard Equity-Income Admiral Fund 

I started this controlled burn last year with $3K redemptions that were not tied to increases in the fund's value. In February, I started $1K withdrawals that required a $1+K increase in value:   

2016: 


2017:    

Current Position: 

DisclaimerI 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.