Economy:
As of 3/1/18, the Atlanta FED's model predicted a 3.5% real GDP growth (seasonally adjusted annal rate) in the 2018 first quarter. GDPNow - Federal Reserve Bank of Atlanta
As of 3/1/18, the Atlanta FED's model predicted a 3.5% real GDP growth (seasonally adjusted annal rate) in the 2018 first quarter. GDPNow - Federal Reserve Bank of Atlanta
Factory orders decreased by 1.4% in January, but that was after five straight monthly increases. U.S. manufacturing, business spending on equipment slowing: Reuters
Over a million Americans may have just lost their shot at refinancing - MarketWatch (due to a rise in interest rates this year)
U.S. Considers Broad Curbs on Chinese Imports, Takeovers - Bloomberg
Consumer credit grows in January at slowest pace in four months-MarketWatch; FED Data
U.S. Considers Broad Curbs on Chinese Imports, Takeovers - Bloomberg
Consumer credit grows in January at slowest pace in four months-MarketWatch; FED Data
+++++++
Market Commentary and Markets:
ECB Unexpectedly Dials Back Stimulus Pledge as Economy Improves - Bloomberg
It is not surprising that Gary Cohn resigned as Trump's chief economic advisor in response to Trump's tariffs on steel and aluminum imports. Gary Cohn to Resign as Trump’s Top Economic Adviser
This is the key point about Cohn's departure: Cohn’s Exit Leaves Hard-Liners Ascendant in Trump White House - Bloomberg
Peter Navarro, who is fairly characterized as an extremist on trade IMO, is now Trump's main advisor on trade. His views are shared by the Commerce Secretary Wilbur Ross.
Internally in the White House, there are no major dissenters to their views.
Navarro advocates a 45% tariff of China's exports to the U.S. and a repeal of the NAFTA treaty.
Trump views Navarro as a visionary while "many economists" consider him an "oddball". 'Death by China' economist ascendant as Trump pushes tariffs, hits China: Reuters
Perhaps the market recovered yesterday based on news reports that Trump may exempt some countries from the tariffs. The CAD/USD did start to rise yesterday around 12:15 E.S.T. soon after hitting .7685. That exchange rate was over .8 in mid-February.
ECB Unexpectedly Dials Back Stimulus Pledge as Economy Improves - Bloomberg
It is not surprising that Gary Cohn resigned as Trump's chief economic advisor in response to Trump's tariffs on steel and aluminum imports. Gary Cohn to Resign as Trump’s Top Economic Adviser
This is the key point about Cohn's departure: Cohn’s Exit Leaves Hard-Liners Ascendant in Trump White House - Bloomberg
Peter Navarro, who is fairly characterized as an extremist on trade IMO, is now Trump's main advisor on trade. His views are shared by the Commerce Secretary Wilbur Ross.
Internally in the White House, there are no major dissenters to their views.
Navarro advocates a 45% tariff of China's exports to the U.S. and a repeal of the NAFTA treaty.
Trump views Navarro as a visionary while "many economists" consider him an "oddball". 'Death by China' economist ascendant as Trump pushes tariffs, hits China: Reuters
Perhaps the market recovered yesterday based on news reports that Trump may exempt some countries from the tariffs. The CAD/USD did start to rise yesterday around 12:15 E.S.T. soon after hitting .7685. That exchange rate was over .8 in mid-February.
Steel History Shows How America Lost Ground to Europe-Bloomberg (unfair competition had nothing to do with the decline according to the author)
EU leader responds to Trump’s tariff plan: ‘We can also do stupid’ - MarketWatch
EU leader responds to Trump’s tariff plan: ‘We can also do stupid’ - MarketWatch
Calculated Risk: Update: Framing Lumber Prices Up Sharply Year-over-year, At Record Prices
Trump imposed tariffs on Canadian softwood imports that are used as framing lumber.
There is certainly a lot of enthusiasm for stocks among Trump supporters as discussed in this article. Stock Bulls in Trump Country Are Freaking Out Their Brokers - Bloomberg We will see whether that enthusiasm is justified at the end of Trump's first term.
Fed Study Finds Inverted Yield Curve Still Good Recession Alert - Bloomberg; Federal Reserve Bank of San Francisco | Economic Forecasts with the Yield Curve
Trump imposed tariffs on Canadian softwood imports that are used as framing lumber.
There is certainly a lot of enthusiasm for stocks among Trump supporters as discussed in this article. Stock Bulls in Trump Country Are Freaking Out Their Brokers - Bloomberg We will see whether that enthusiasm is justified at the end of Trump's first term.
Fed Study Finds Inverted Yield Curve Still Good Recession Alert - Bloomberg; Federal Reserve Bank of San Francisco | Economic Forecasts with the Yield Curve
+++++++++
Trump:
Trump says will apply the tariffs "in a loving way". This is the first time in history that tariffs will be imposed as an expression of love.
Donald also stated on Tuesday that he believes that the countries who are subjected to his tariffs will like us better for it.
We will apparently find out soon whether the foreign countries will return Trump's love with tariffs of their own-applied only of course with "a whole lotta of love" (quote from Led Zeppelin - Whole Lotta Love)
Trump also claimed that trade wars "aren't so bad". Trump Says Trade Wars ‘Aren't So Bad’ - Bloomberg
E.U. Pledges to Fight Back on Trump Tariffs as Trade War Looms
While the Europeans recognize that there are no winners in a trade war, there is also a recognition of what I would generally describe as the Munich Syndrome, where a country or a bully will take and take until stopped by a proportionate response. The President of the European Council, Donald Tusk, sent out this tweet yesterday in response to Trump:
At least the Europeans have not lost their marbles.
Trump Says U.S. Has ‘No Choice’ But to Go Ahead With Tariffs - Bloomberg In Trump's view, the fact that the U.S. has a trade deficit indicates that other countries are taking advantage of the U.S. and prior Presidents have let that happen. He is going to change everything, though it remains to be seen whether the result will end up being positive for American labor and the U.S. economy.
Inconvenient Truths About the US Trade Deficit by Martin Feldstein ("But foreign import barriers and exports subsidies are not the reason for the US trade deficit. The real reason is that Americans are spending more than they produce. .. . If a country saves more of total output than it invests in business equipment and structures, it has extra output to sell to the rest of the world. In other words, saving minus investment equals exports minus imports – a fundamental accounting identity that is true for every country in every year. So reducing the US trade deficit requires Americans to save more or invest less.")
Trump says will apply the tariffs "in a loving way". This is the first time in history that tariffs will be imposed as an expression of love.
Donald also stated on Tuesday that he believes that the countries who are subjected to his tariffs will like us better for it.
We will apparently find out soon whether the foreign countries will return Trump's love with tariffs of their own-applied only of course with "a whole lotta of love" (quote from Led Zeppelin - Whole Lotta Love)
Trump also claimed that trade wars "aren't so bad". Trump Says Trade Wars ‘Aren't So Bad’ - Bloomberg
E.U. Pledges to Fight Back on Trump Tariffs as Trade War Looms
While the Europeans recognize that there are no winners in a trade war, there is also a recognition of what I would generally describe as the Munich Syndrome, where a country or a bully will take and take until stopped by a proportionate response. The President of the European Council, Donald Tusk, sent out this tweet yesterday in response to Trump:
Trump Says U.S. Has ‘No Choice’ But to Go Ahead With Tariffs - Bloomberg In Trump's view, the fact that the U.S. has a trade deficit indicates that other countries are taking advantage of the U.S. and prior Presidents have let that happen. He is going to change everything, though it remains to be seen whether the result will end up being positive for American labor and the U.S. economy.
The trade deficit is caused by U.S. spending a great deal more than it produces which results in a current account deficit. "That additional spending must, by definition, go toward foreign goods and services. Financing that spending happens in the form of either borrowing from foreign lenders (which adds to the U.S. national debt) or foreign investing in U.S. assets and businesses—the capital account." The U.S. Trade Deficit: How Much Does It Matter? | Council on Foreign Relations
The U.S. trade deficit would be narrowed substantially by Americans increasing their savings rate to say 15% of disposable income and to fund discretionary purchases out of DPI only, but then that would result in a consumer led recession (possibly a severe one leading to a Depression) and massive job losses.
When the savings rate was over 10%, there was no U.S. trade deficit and an occasional trade surplus. United States Balance of Trade | 1950-2018 | Data | Chart | Calendar
The U.S. trade deficit would be narrowed substantially by Americans increasing their savings rate to say 15% of disposable income and to fund discretionary purchases out of DPI only, but then that would result in a consumer led recession (possibly a severe one leading to a Depression) and massive job losses.
When the savings rate was over 10%, there was no U.S. trade deficit and an occasional trade surplus. United States Balance of Trade | 1950-2018 | Data | Chart | Calendar
Inconvenient Truths About the US Trade Deficit by Martin Feldstein ("But foreign import barriers and exports subsidies are not the reason for the US trade deficit. The real reason is that Americans are spending more than they produce. .. . If a country saves more of total output than it invests in business equipment and structures, it has extra output to sell to the rest of the world. In other words, saving minus investment equals exports minus imports – a fundamental accounting identity that is true for every country in every year. So reducing the US trade deficit requires Americans to save more or invest less.")
Donald Trump's dubious attack on U.S.-Canada trade | PolitiFact (the U.S. had a trade surplus with Canada in 2015 and 2016, notwithstanding just another one of Donald's false claims to the contrary: "we lose a lot with Canada. People don't know it. Canada's very smooth. They have you believe that it's wonderful. And it is, for them. Not wonderful for us; it's wonderful for them."
It is important to keep in mind that Donald is ignorant and his head is filled with nothing but his own reality creations and false information. While that would not be a U.S. problem with Donald's influence limited to appearances on a reality TV show, it becomes a major problem when Donald is President and starts to base U.S. policy on that false information.
Delusional: Trump on WH exits: 'Everybody' wants to work for my administration Hope Hicks, a 29 year old former model who had an office next to the President, left to pursue other opportunities.
Prior to Trump, it was the Democrats who were more likely to advocate for tariffs with republicans being more in the free trade and globalist camp. There are still republican politicians opposed to Trump's tariff proposal. 107 GOP reps send letter to Trump asking him not to do his tariff plan; 03.07.18_Letter to Trump.pdf Navarro is a Democrat.
NAFTA Vote in the House:
H.R. 3450 (103rd): North American Free Trade Agreement Implementation Act -- GovTrack.us (e.g. 9 of the 10 Democrats from Ohio voted no; the 3 republicans from Connecticut vote aye and all of the Democrats voted no. Clinton did bring to the yes vote a number of Blue Dog Democrats, particularly in states where unions were not powerful like Tennessee)
Adviser to Emirates With Ties to Trump Aides Is Cooperating With Special Counsel - The New York Times (potentially a major concern for Trump)
Delusional: Trump on WH exits: 'Everybody' wants to work for my administration Hope Hicks, a 29 year old former model who had an office next to the President, left to pursue other opportunities.
Prior to Trump, it was the Democrats who were more likely to advocate for tariffs with republicans being more in the free trade and globalist camp. There are still republican politicians opposed to Trump's tariff proposal. 107 GOP reps send letter to Trump asking him not to do his tariff plan; 03.07.18_Letter to Trump.pdf Navarro is a Democrat.
NAFTA Vote in the House:
Adviser to Emirates With Ties to Trump Aides Is Cooperating With Special Counsel - The New York Times (potentially a major concern for Trump)
+++
1. Small Ball- Equity REIT Common and Preferred Stock Basket Strategy:
A. Bought 10 DEA at $19.18-Used Commission Free Trade:
Quote: Easterly Government Properties Inc. (DEA)
Website: Easterly Government Properties, Inc.
Properties Map
DEA is a new entrant into my "10 share buying program" strategy designed to use up my commission free trades at Fidelity primarily before they expire.
I eliminated my DEA position at $21.59 last December. Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot: $97.85)-Item # 3.A. Bought 50 DEA $19.64 (8/19/17 Post)
Dividend: Quarterly at $.26 per share or $1.04 annually
Dividends | Easterly Government Properties, Inc.
Dividend Yield at TC of $19.18 = 5.42%
Tax Characteristics 2017 Dividends (significant ROC Support):
Recent News: Easterly Government Properties Announces Acquisition of 210,373 sf FEMA Distribution Center Re-Development in Tracy, CA
Recent Earnings Report: Q/E 12/31/17
DEA reported after my purchase: Easterly Government Properties Reports Fourth Quarter and Full Year 2017 Results
B. Added 10 GMRE at $7.19 and 10 at $6.77-Used Commission Free Trade:
Quote: Global Medical REIT Inc. (GMRE)
Website: Global Medical REIT
Portfolio – Global Medical REIT (includes pictures)
Investor Presentation January 2018
For the reasons previously discussed, I regard GMRE as a high risk equity REIT.
Management: External
Last Substantive Discussion: Item 2.B. (12/26/17 Post)
Chart: Bear Trend
The stock closed below its 50, 100 and 200 day SMA lines in early December 2017.
The shares closed at $9.75 on 11/24/17.
A. Bought 10 DEA at $19.18-Used Commission Free Trade:
Quote: Easterly Government Properties Inc. (DEA)
Website: Easterly Government Properties, Inc.
Properties Map
DEA is a new entrant into my "10 share buying program" strategy designed to use up my commission free trades at Fidelity primarily before they expire.
I eliminated my DEA position at $21.59 last December. Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot: $97.85)-Item # 3.A. Bought 50 DEA $19.64 (8/19/17 Post)
Dividend: Quarterly at $.26 per share or $1.04 annually
Dividends | Easterly Government Properties, Inc.
Dividend Yield at TC of $19.18 = 5.42%
Tax Characteristics 2017 Dividends (significant ROC Support):
Recent Earnings Report: Q/E 12/31/17
DEA reported after my purchase: Easterly Government Properties Reports Fourth Quarter and Full Year 2017 Results
"As of December 31, 2017, the Company wholly owned 46 operating properties in the United States, encompassing approximately 3.7 million square feet in the aggregate, including 44 operating properties that were leased primarily to U.S. Government tenant agencies and two operating properties that were entirely leased to private tenants. As of December 31, 2017, the portfolio had an average age of 12.1 years, was 100% occupied, and had a weighted average remaining lease term of 7.0 years." (emphasis added)
DEA uses the abbreviation "CAD" which simply means cash available for distribution. DEA deducts non-cash revenues created by the straight line rent accounting convention from FFO to arrive at adjusted AFFO as well as certain non-cash expenses. The CAD number then subtracts from that AFFO number certain cash expenses like "maintenance capital expenditures", "contractual tenant improvements" and "acquisition costs". Funds used to pay those expenses are not available for distribution. Those expenses will also be variable from quarter to quarter.
B. Added 10 GMRE at $7.19 and 10 at $6.77-Used Commission Free Trade:
 |
| 10 at $6.77 |
Quote: Global Medical REIT Inc. (GMRE)
Website: Global Medical REIT
Portfolio – Global Medical REIT (includes pictures)
Investor Presentation January 2018
For the reasons previously discussed, I regard GMRE as a high risk equity REIT.
Management: External
Last Substantive Discussion: Item 2.B. (12/26/17 Post)
Chart: Bear Trend
The stock closed below its 50, 100 and 200 day SMA lines in early December 2017.
The shares closed at $9.75 on 11/24/17.
Average Total Cost Per Share (142+ shares) = $8.02
Dividend: Quarterly at $.2 per share or $1 annually
Dividends - Global Medical REIT
I am reinvesting the dividend.
Last Ex Dividend Date: 12/22/07
Dividend Yield at ATC per share = 9.98%
Dividend Tax Classification for 2017: Mostly ROC Support
Recent Earnings Report: Q/E 12/31/17
This report was released yesterday after the close.
Global Medical REIT Inc. Announces Fourth Quarter and Year Ended December 31, 2017 Financial Results, the Declaration of Its First Quarter 2018 Common and Preferred Dividends
This relatively new REIT has a ways to go before it covers its dividend with cash flow.
Over the past year, this REIT did significantly increase its portfolio. The following snapshots show acquisitions in the 2017 4th quarter and the 2018 first quarter to 3/7/18:
There are two potential acquisitions in the due diligence phase. The contracts were signed in the 2018 first quarter:
After completion of those two purchases, I doubt that GMRE will have much financial firepower left until the common share price recovers. Possibly some capital can be raised through an equity preferred stock offering, but that would be expensive capital for this REIT.
The cash balance was at $5.1M as of 12/31/17.
GMRE's "total debt, which includes outstanding borrowings on the revolving credit facility, notes payable (net of unamortized deferred financing costs), and related party debt, was $203.4 million as of December 31, 2017, compared to $66.5 million as of December 31, 2016. The Company’s weighted-average interest rate and term of its debt was 3.72% and 2.94 years, respectively, as of December 31, 2017."
Based on yesterday's closing price of $6.79, the total market capitalization is about $146+M.
IPO: JUNE 2016 at $10 per share
Prospectus for Stock IPO
Preferred Stock:
Global Medical REIT Inc. 7.5% Cumulative Preferred Series A Stock
GMREPRA Prospectus
Last Stock Offering: June 2017-3.5M shares plus greenshoe at $9 per share
Prospectus
It would be an obvious negative event for management to initiate a new stock offering at anywhere near the current market price.
Prior Round Trip Trades:
Stocks, Bonds & Politics: Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post)
Stocks, Bonds & Politics: Item 3.A. Bought 50 GMRE at $8.36 (2/23/17 Post)
South Gent's Comment Blog # 7: Eliminated GMRE
South Gent's Comment Blog # 2: Bought 50 GMRE at $9.11
Trading Profits to Date: $204.97 (extremely hard to generate)
Janney Montgomery Scott started GMRE with a buy recommendation last February and a $9 price target. Based on what I know now, I would probably eliminate my position at that target price or, at a minimum, sell my highest cost lots if I still have commission free trades available.
C. Added 10 APLE at $17.54 and 5 at $17.1-Used Commission Free Trade:
Quote: Apple Hospitality REIT Inc. (APLE)
Website: Apple Hospitality REIT
Hotel Map
Average TC Cost Per share This Account Only (71+ Shares): $18
Dividend: Monthly at $.1 per share or $1.2 annually
Apple Hospitality REIT Announces March 2018 Distribution
Dividend Yield at $18 TC per share = 6.67%
Last Ex-Dividend Date: 3/1/18
I am reinvesting the dividend in this account.
The shares have been steadily declining after the last earnings report, which was released after the close on 2/22/18 until the 3/1 ex dividend date.
Closing Prices:
2/22 $17.92
2/23 $17.78
2/26 $17.53
2/27 $17.09
2/28 $16.99 (5.19% decline from $17.92)
3/1 $16.92 (ex dividend date: gain of $.03 from prior close adjusted for the $10 per share dividend)
Since VNQ was relatively stable during this period, closing at $73.76 (2/22) and at $73.35 (2/28), I conclude that decline in APLE was linked to its 4th quarter report and 2018 guidance.
Earnings Report for the 2017 4th Quarter:
In 2017, modified FFO ("MFFO") per share exceeded the total dividend amount by $.54. MFFO Comparable hotel REV/PAR increased 3.5% in the 2017 4th quarter compared to the 2016 4th quarter. MFFO per share declined 2.7% to $.36 per share in the 2017 4th quarter.
MMFO takes net income adds back depreciation and a non-cash impairment charge and subtracts a gain resulting from selling real estate. If there was a loss, then the loss would be added to net income rather subtracted in this calculation:
There was a problem with a NYC hotel called the Renaissance:
Guidance for 2018:
Capital improvements are a major expense item:
"As of December 31, 2017, Apple Hospitality had approximately $1.2 billion of total outstanding indebtedness with a current combined weighted-average interest rate of approximately 3.6 percent for 2018"
Apple Hospitality REIT Reports Results of Operations for Fourth Quarter and Full Year 2017
My total position is currently at 185+ shares.
Trading Profits to Date: $233.48
Item # 5.A. Sold 50 APLE at $19.6 (12/18/17 Post)
Item # 6.B. Sold Highest Cost Lot in Schwab at $19.22 (10/19/17 Post)
Item 2.B. Sold 100 APLE at $19.43(5/25/17 Post)
D. Bought 5 SIR at $18.96 and 5 at $18.61-Used Commission Free Trades:
Quote: Select Income REIT (SIR)
SIR did manage to rise in yesterday's trading: SIR $19.15 +$0.63 +3.40%
At its previous rate of descent, the price would have been at zero before Easter. The shares closed at $25.85 on 12/18/17. The lowest recent intra-day low was on 3/2/18 at $17.8. The percentage decline between those two prices is about 31.14% in less than 3 months.
Website: Select Income REIT - Home
Properties Map
Management: External
Total Cost Per Share This Account = $19.14
Dividend: Quarterly at $.51 per share or $2.04 annually
Dividend Yield at TC of (20 shares in this account) = 10.66%
Last Substantive Discussion: Item 1.B. (1/21/18 Post)
Last Round-Trip: Item 6.A. Sold 50 SIR at $25.28 (11/20/17 Post)-Item # 6.A. Bought 50 SIR at $22.95 (9/11/17 Post)
Trading Profits to Date = $276.06
Currently Own: 85 shares (two accounts, all shares bought with commission free trades)
Last Earnings Report: Investors responded negatively to the 4th quarter report.
"Normalized funds from operations, or Normalized FFO, attributed to SIR for the quarter ended December 31, 2017 were $34.8 million, or $0.39 per diluted share, compared to $63.5 million, or $0.71 per diluted share, for the same quarter last year. Normalized FFO attributed to SIR for the quarter ended December 31, 2017 include business management incentive fees of $25.6 million, or $0.29 per diluted share." (emphasis added)
"Normalized FFO attributed to SIR for the year ended December 31, 2017 were $209.9 million, or $2.35 per diluted share, compared to $255.8 million, or $2.86 per diluted share, for the same period last year. Normalized FFO for the year ended December 31, 2017 include business management incentive fees of $25.6 million, or $0.29 per diluted share, and a write-off of straight line rents receivable of $12.5 million, or $0.14 per diluted share, related to leases associated with the tenant bankruptcy referenced above." (emphasis added)
Select Income REIT Announces Fourth Quarter and Year End 2017 Results
Q4 2017 Results - Earnings Call Transcript | Seeking Alpha
I discussed previously the spinoff of Industrial Logistics Properties Trust (ILPT). SIR still owns 69.2% of the stock which has fallen in price since this recent IPO. ILPT Stock Chart
E. Bought 10 HTA at $25.79 and 5 at $24.92-Used Commission Free Trades:
Quote Healthcare Trust of America Inc. (HTA)
The 10 share lot was my first purchase pursuant to my "10 share lot buying program".
Website: Healthcare Trust of America, Inc.
Dividends: Quarterly at $.305 per share or $1.22 Annually
Healthcare Trust of America, Inc. Announces its First Quarter Dividend
Healthcare Trust of America, Inc. Increases Dividend (July 2017). The increase was inconsequential IMO at 1.67%.
Dividend Yield at TC of $25.5 per share for 15 shares: 4.774%
Chart: The one year chart reveals a bear trend starting in mid-December 2017: Healthcare Trust of America Inc. Interactive Chart
A five year chart reveals an uptrend from $19+ starting in December 2013 to $34+ in July 2016, followed by a consolidation trend mostly in $29 to $31 range until mid-December 2017.
It would be my opinion that HTA was probably overpriced at $27+ over the past year and clearly overpriced at over $30. And those prices assume no major uptick in intermediate term interest rates from current levels.
Recent Earnings Report: Healthcare Trust of America, Inc. Reports Fourth Quarter And Year Ended 2017 Earnings
Normalized FFO: "Increased 45.7%, to $86.7 million, compared to Q4 2016. Normalized FFO per diluted share increased 2.4%, to $0.42 per diluted share, compared to Q4 2016."
Normalized Funds Available for Distribution ("FAD"): "Increased 39.1%, to $72.6 million, compared to Q4 2016."
Same-Property Cash Net Operating Income ("NOI"): "Increased $2.3 million, or 2.8%, to $82.5 million, compared to Q4 2016." (emphasis added)
The day after this purchase Raymond James downgraded HTA to outperform from strong buy. The question is why RJ did not downgrade HTA before the price dropped 18.41% from $31.61 (12/18/17).
Recent Stock Offerings:
Healthcare Trust of America Announces Pricing of Upsized Public Offering of Common Stock (May 2017)(47.5M shares at $28.5 per share); Prospectus
Recent Press Releases:
Healthcare Trust of America, Inc. Announces Full Year 2017 Investment Activity
Healthcare Trust of America Closes Over $2.6 Billion in 2Q Investments and Raises $2.9 Billion of Capital (July 2017)
Healthcare Trust of America Announces Pricing of $500 million of 3.750% Senior Unsecured 10-Year Notes and $400 million of SU 2.95% 5 Year Notes (6/1/17); Prospectus
I currently own the 2.95% SU bond maturing in 2022: FINRA Bond Detail (rated BBB and Baa2)
Dividend: Quarterly at $.2 per share or $1 annually
Dividends - Global Medical REIT
I am reinvesting the dividend.
Last Ex Dividend Date: 12/22/07
Dividend Yield at ATC per share = 9.98%
Dividend Tax Classification for 2017: Mostly ROC Support
Recent Earnings Report: Q/E 12/31/17
This report was released yesterday after the close.
Global Medical REIT Inc. Announces Fourth Quarter and Year Ended December 31, 2017 Financial Results, the Declaration of Its First Quarter 2018 Common and Preferred Dividends
This relatively new REIT has a ways to go before it covers its dividend with cash flow.
Over the past year, this REIT did significantly increase its portfolio. The following snapshots show acquisitions in the 2017 4th quarter and the 2018 first quarter to 3/7/18:
There are two potential acquisitions in the due diligence phase. The contracts were signed in the 2018 first quarter:
After completion of those two purchases, I doubt that GMRE will have much financial firepower left until the common share price recovers. Possibly some capital can be raised through an equity preferred stock offering, but that would be expensive capital for this REIT.
The cash balance was at $5.1M as of 12/31/17.
GMRE's "total debt, which includes outstanding borrowings on the revolving credit facility, notes payable (net of unamortized deferred financing costs), and related party debt, was $203.4 million as of December 31, 2017, compared to $66.5 million as of December 31, 2016. The Company’s weighted-average interest rate and term of its debt was 3.72% and 2.94 years, respectively, as of December 31, 2017."
Based on yesterday's closing price of $6.79, the total market capitalization is about $146+M.
IPO: JUNE 2016 at $10 per share
Prospectus for Stock IPO
Preferred Stock:
Global Medical REIT Inc. 7.5% Cumulative Preferred Series A Stock
GMREPRA Prospectus
Last Stock Offering: June 2017-3.5M shares plus greenshoe at $9 per share
Prospectus
It would be an obvious negative event for management to initiate a new stock offering at anywhere near the current market price.
Prior Round Trip Trades:
Stocks, Bonds & Politics: Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post)
Stocks, Bonds & Politics: Item 3.A. Bought 50 GMRE at $8.36 (2/23/17 Post)
South Gent's Comment Blog # 7: Eliminated GMRE
South Gent's Comment Blog # 2: Bought 50 GMRE at $9.11
Trading Profits to Date: $204.97 (extremely hard to generate)
Janney Montgomery Scott started GMRE with a buy recommendation last February and a $9 price target. Based on what I know now, I would probably eliminate my position at that target price or, at a minimum, sell my highest cost lots if I still have commission free trades available.
C. Added 10 APLE at $17.54 and 5 at $17.1-Used Commission Free Trade:
 |
| 10 at $17.54 |
 |
| 5 at $17.1 |
Website: Apple Hospitality REIT
Hotel Map
Average TC Cost Per share This Account Only (71+ Shares): $18
Dividend: Monthly at $.1 per share or $1.2 annually
Apple Hospitality REIT Announces March 2018 Distribution
Dividend Yield at $18 TC per share = 6.67%
Last Ex-Dividend Date: 3/1/18
I am reinvesting the dividend in this account.
The shares have been steadily declining after the last earnings report, which was released after the close on 2/22/18 until the 3/1 ex dividend date.
Closing Prices:
2/22 $17.92
2/23 $17.78
2/26 $17.53
2/27 $17.09
2/28 $16.99 (5.19% decline from $17.92)
3/1 $16.92 (ex dividend date: gain of $.03 from prior close adjusted for the $10 per share dividend)
Since VNQ was relatively stable during this period, closing at $73.76 (2/22) and at $73.35 (2/28), I conclude that decline in APLE was linked to its 4th quarter report and 2018 guidance.
Earnings Report for the 2017 4th Quarter:
In 2017, modified FFO ("MFFO") per share exceeded the total dividend amount by $.54. MFFO Comparable hotel REV/PAR increased 3.5% in the 2017 4th quarter compared to the 2016 4th quarter. MFFO per share declined 2.7% to $.36 per share in the 2017 4th quarter.
"As of December 31, 2017, Apple Hospitality had approximately $1.2 billion of total outstanding indebtedness with a current combined weighted-average interest rate of approximately 3.6 percent for 2018"
Apple Hospitality REIT Reports Results of Operations for Fourth Quarter and Full Year 2017
My total position is currently at 185+ shares.
Trading Profits to Date: $233.48
Item # 5.A. Sold 50 APLE at $19.6 (12/18/17 Post)
Item # 6.B. Sold Highest Cost Lot in Schwab at $19.22 (10/19/17 Post)
Item 2.B. Sold 100 APLE at $19.43(5/25/17 Post)
D. Bought 5 SIR at $18.96 and 5 at $18.61-Used Commission Free Trades:
Quote: Select Income REIT (SIR)
SIR did manage to rise in yesterday's trading: SIR $19.15 +$0.63 +3.40%
At its previous rate of descent, the price would have been at zero before Easter. The shares closed at $25.85 on 12/18/17. The lowest recent intra-day low was on 3/2/18 at $17.8. The percentage decline between those two prices is about 31.14% in less than 3 months.
Website: Select Income REIT - Home
Properties Map
Management: External
Total Cost Per Share This Account = $19.14
Dividend: Quarterly at $.51 per share or $2.04 annually
Dividend Yield at TC of (20 shares in this account) = 10.66%
Last Substantive Discussion: Item 1.B. (1/21/18 Post)
Last Round-Trip: Item 6.A. Sold 50 SIR at $25.28 (11/20/17 Post)-Item # 6.A. Bought 50 SIR at $22.95 (9/11/17 Post)
Trading Profits to Date = $276.06
Currently Own: 85 shares (two accounts, all shares bought with commission free trades)
Last Earnings Report: Investors responded negatively to the 4th quarter report.
"Normalized funds from operations, or Normalized FFO, attributed to SIR for the quarter ended December 31, 2017 were $34.8 million, or $0.39 per diluted share, compared to $63.5 million, or $0.71 per diluted share, for the same quarter last year. Normalized FFO attributed to SIR for the quarter ended December 31, 2017 include business management incentive fees of $25.6 million, or $0.29 per diluted share." (emphasis added)
"Normalized FFO attributed to SIR for the year ended December 31, 2017 were $209.9 million, or $2.35 per diluted share, compared to $255.8 million, or $2.86 per diluted share, for the same period last year. Normalized FFO for the year ended December 31, 2017 include business management incentive fees of $25.6 million, or $0.29 per diluted share, and a write-off of straight line rents receivable of $12.5 million, or $0.14 per diluted share, related to leases associated with the tenant bankruptcy referenced above." (emphasis added)
Q4 2017 Results - Earnings Call Transcript | Seeking Alpha
I discussed previously the spinoff of Industrial Logistics Properties Trust (ILPT). SIR still owns 69.2% of the stock which has fallen in price since this recent IPO. ILPT Stock Chart
E. Bought 10 HTA at $25.79 and 5 at $24.92-Used Commission Free Trades:
Quote Healthcare Trust of America Inc. (HTA)
The 10 share lot was my first purchase pursuant to my "10 share lot buying program".
Website: Healthcare Trust of America, Inc.
Dividends: Quarterly at $.305 per share or $1.22 Annually
Healthcare Trust of America, Inc. Announces its First Quarter Dividend
Healthcare Trust of America, Inc. Increases Dividend (July 2017). The increase was inconsequential IMO at 1.67%.
Dividend Yield at TC of $25.5 per share for 15 shares: 4.774%
Chart: The one year chart reveals a bear trend starting in mid-December 2017: Healthcare Trust of America Inc. Interactive Chart
A five year chart reveals an uptrend from $19+ starting in December 2013 to $34+ in July 2016, followed by a consolidation trend mostly in $29 to $31 range until mid-December 2017.
It would be my opinion that HTA was probably overpriced at $27+ over the past year and clearly overpriced at over $30. And those prices assume no major uptick in intermediate term interest rates from current levels.
Recent Earnings Report: Healthcare Trust of America, Inc. Reports Fourth Quarter And Year Ended 2017 Earnings
Normalized FFO: "Increased 45.7%, to $86.7 million, compared to Q4 2016. Normalized FFO per diluted share increased 2.4%, to $0.42 per diluted share, compared to Q4 2016."
Normalized Funds Available for Distribution ("FAD"): "Increased 39.1%, to $72.6 million, compared to Q4 2016."
Same-Property Cash Net Operating Income ("NOI"): "Increased $2.3 million, or 2.8%, to $82.5 million, compared to Q4 2016." (emphasis added)
The day after this purchase Raymond James downgraded HTA to outperform from strong buy. The question is why RJ did not downgrade HTA before the price dropped 18.41% from $31.61 (12/18/17).
Recent Stock Offerings:
Healthcare Trust of America Announces Pricing of Upsized Public Offering of Common Stock (May 2017)(47.5M shares at $28.5 per share); Prospectus
Recent Press Releases:
Healthcare Trust of America, Inc. Announces Full Year 2017 Investment Activity
Healthcare Trust of America Closes Over $2.6 Billion in 2Q Investments and Raises $2.9 Billion of Capital (July 2017)
Healthcare Trust of America Announces Pricing of $500 million of 3.750% Senior Unsecured 10-Year Notes and $400 million of SU 2.95% 5 Year Notes (6/1/17); Prospectus
I currently own the 2.95% SU bond maturing in 2022: FINRA Bond Detail (rated BBB and Baa2)
2. Small Ball CEFs:
A. Added 10 Share THQ at $16.96-Used Commission Free Trade:
Quote: Tekla Healthcare Opportunities Fund (THQ)
Fund Sponsor's Website Tekla Capital Management LLC
Leverage: Last reported at 22.6%
Last SEC Filed Shareholder Report: Period Ending 9/30/17
Last Discussed: Item # 2.C. Sold 232+ THQ at $17.59 (7/3/17 Post)(profit snapshot= $157.31 + dividends); Item # 2.D (same post) Sold 118+ THQ at $18.7-Roth IRA (profit snapshot = +$189.68 + dividends); Item # 3.A. Sold 160 THQ at $17.41 (6/5/17 Post)(profit snapshot= $208.77 + dividends)
Dividend: Monthly at $.1125 per share ($1.35 annually) I am reinvesting the dividend at the moment.
Dividend Yield at $16.96 = 7.96%
Average Cost Per Share for Remaining 136+ Shares: $17.02
Data as of Day of Trade (2/22/18)
Net Asset Value Per Share: $18.82
Closing Market Price: $16.93
Discount: -10.04%
Average Discounts:
1 year -8.82%
3 years 9.28%
No 5 year data yet
A. Added 10 Share THQ at $16.96-Used Commission Free Trade:
Quote: Tekla Healthcare Opportunities Fund (THQ)
Fund Sponsor's Website Tekla Capital Management LLC
Leverage: Last reported at 22.6%
Last SEC Filed Shareholder Report: Period Ending 9/30/17
Last Discussed: Item # 2.C. Sold 232+ THQ at $17.59 (7/3/17 Post)(profit snapshot= $157.31 + dividends); Item # 2.D (same post) Sold 118+ THQ at $18.7-Roth IRA (profit snapshot = +$189.68 + dividends); Item # 3.A. Sold 160 THQ at $17.41 (6/5/17 Post)(profit snapshot= $208.77 + dividends)
Dividend: Monthly at $.1125 per share ($1.35 annually) I am reinvesting the dividend at the moment.
Dividend Yield at $16.96 = 7.96%
Average Cost Per Share for Remaining 136+ Shares: $17.02
Data as of Day of Trade (2/22/18)
Net Asset Value Per Share: $18.82
Closing Market Price: $16.93
Discount: -10.04%
Average Discounts:
1 year -8.82%
3 years 9.28%
No 5 year data yet
THQ Tekla Healthcare Page at CEFConnect
3. Small Ball-Small Cap Biotech Lottery Ticket Basket Strategy:
A. Added 20 IMDZ at $3.09-Used Commission Free Trade:
QUOTE: Immune Design Corp.
Immune Design | Harnessing the Immune System to Fight Disease
Pipeline:
Investor Presentation February 2018
3. Small Ball-Small Cap Biotech Lottery Ticket Basket Strategy:
A. Added 20 IMDZ at $3.09-Used Commission Free Trade:
QUOTE: Immune Design Corp.
Immune Design | Harnessing the Immune System to Fight Disease
Pipeline:
Investor Presentation February 2018
This brings me up to 80 shares altogether with 50 of those held in this Schwab account. The average cost per share in that account is $4.53.
I had a profit in this clinical stage small cap biotech for a few months. The shares went over $12 after I made two 30 share purchases. I neglected to harvest the profit and rode the position into unrealized loss territory.
The trouble began on October 13, 2017 when the price closed at $10.95. The shares then went into a swan dive closing at $3.95 on 10/26/17. Immune Design Corp. Interactive Chart
Part of the problem was a large share offering for this tiny company. Immune Design Prices $80.0 Million Public Offering of Common Stock (10/24/17) IMDZ offered 19.5M shares, plus a greenshoe of up to 2.925M shares, at $4.1. Prospectus The 2.925M over-allotment option was exercised by the underwriters, bringing net proceeds to IMDZ of approximately $86.6M "after deducting underwriting discounts and commissions and estimated offering expenses of $5.4 million."
Another part of the problem IMO was that those funds were going to be used to advance CMB305 into a pivotal phase 3 for synovial sarcoma patients but that trial would not start until mid-2018. Progression Free Survival Data "may occur as early as 24 months from the first patient dosed, depending on the number of events." So maybe we will have data to examine in mid-2020. So that is going to be a long wait. Possibly some interim data will be available for that trial and another one earlier, but that is not known by me one way or the other.
This small biotech has major hedge fund and mutual fund support. I took these snapshots at the time of my last purchase. The information is dated and is based on Schedule 13s filed quarterly with the SEC. And, as I have stated many times here, I have zero expertise in this sector. I am a complete ignoramus when it comes to evaluating any medical or other science issue.
Recent Press Releases:
Combination of G100 with KEYTRUDA (pembrolizumab) Triggers Robust Systemic Responses in Follicular NHL Patients (12/10/17)
Immune Design Announces Multiple Presentations at CTOS and SITC Highlighting the Breadth of Existing & Future Product Candidates (11/7/17 )
Immune Design Reports Third Quarter 2017 Financial Results and Provides Corporate Update (11/1/17)
4. Short Term Bond/CD Ladder Basket Strategy:
A. Added 1 Treasury 1.375% Coupon Maturing on 7/31/18:
YTM = 1.771%
I now own 3 bonds. This purchase was made in my Schwab account, where idle funds earn .1%. Schwab does not charge a commission for fixed coupon treasury trades in the secondary market or at auction. However, for trades made in the secondary market, I would recommend checking and comparing the offering price with at least one other broker where commission free trades are also offered (e.g. Fidelity, Vanguard).
B. BOUGHT 1 GATX 2.6% SU Bond Maturing on 3/30/20:
Finra Page: Bond Detail (prospectus linked)
Issuer: GATX Corp. (GATX)
GATX Analyst Estimates
GATX Corporation Reports 2017 Fourth-Quarter and Full-Year Results
GATX Analyst Estimates
GATX Corporation Reports 2017 Fourth-Quarter and Full-Year Results
Credit Ratings:
Bought at a Total Cost of 99.707
YTM at TC Then at 2.743%
Current Yield at TC = 2.6076%
On my day of purchase, the two year treasury note closed at a 2% yield.
2018 Daily Treasury Yield Curve Rates
C. Added 1 Caterpillar F.S. 1.8% SU Bond Maturing on 11/30/18:
I now own 4 bonds.
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's Downgrades Caterpillar ratings to A3/Prime-2; outlook is stable.
Fitch Rates Caterpillar Financial Services Limited 'A' (6/14/17)
Bought at a Total Cost of 99.783
YTM at TC Then at 2.102%
Current Yield at TC = 1.8039%
My last buy was at a total cost of 99.9 on 12/13/17 (IB account): Item 4.F. Short term rates have increased since that purchase to such an extent that I increased my YTM, based on total cost numbers, by .191% and yet I am more than 2 months closer to maturity with my 2/20/18 purchase. This CAT bond had at the time of my last purchase a maturity that was about in between the 6 month and 1 year treasury bills.
C. Added 1 Caterpillar F.S. 1.8% SU Bond Maturing on 11/30/18:
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's Downgrades Caterpillar ratings to A3/Prime-2; outlook is stable.
Fitch Rates Caterpillar Financial Services Limited 'A' (6/14/17)
Bought at a Total Cost of 99.783
YTM at TC Then at 2.102%
Current Yield at TC = 1.8039%
My last buy was at a total cost of 99.9 on 12/13/17 (IB account): Item 4.F. Short term rates have increased since that purchase to such an extent that I increased my YTM, based on total cost numbers, by .191% and yet I am more than 2 months closer to maturity with my 2/20/18 purchase. This CAT bond had at the time of my last purchase a maturity that was about in between the 6 month and 1 year treasury bills.
U.S. 3 Month Treasury Bill
At the time of my purchase, the 1 year T Bill was selling at a 2% yield with the 6 month bill at 1.83%, so there was not that much additional yield gained by going out another 6 months. The CAT bond had a YTM .1% greater than the 1 year treasury bill at the time of purchase with almost a 3 month closer maturity.
D. Added 1 Laboratory Corporation of America 2.625% SU Bond Maturing on 2/1/2020:
I now own 3 bonds.
Finra Page: Bond Detail (prospectus)
Credit Ratings:
Issuer: Laboratory Corp. of America Holdings (LH)
LH Analyst Estimates
LabCorp Announces Record 2017 Fourth Quarter and Full Year Results and Provides 2018 Guidance
Bought at a Total Cost of 99.828
YTM at TC Then at 2.716%
Current Yield at TC = 2.6295%
E. Added 1 Union Pacific 1.8% SU Bond Maturing on 2/1/20:
I now own 2 bonds.
FINRA PAGE: Bond Detail
Issuer: Union Pacific Corp (UNP)
UNP Analyst Estimates
Union Pacific Reports Fourth Quarter and Full Year 2017 Results
Credit Ratings:
Bought at a Total Cost of 98.822
YTM at TC Then at 2.425%
Current Yield at TC = 1.8215%
On the day of this purchase, the two year treasury note closed at a 2.26% yield.
The next 2 year treasury auction is on 3/26/18. Treasury Auctions.pdf
F. Bought 2 Bank of Baroda 1.45% CDs Maturing on 4/30/18 (2 month CDs):
Schwab pays .1% in my sweep account.
G. ADDED 1 DTE Energy 1.5% SU Bond Maturing on 10/1/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer: DTE Energy Co. (DTE)
DTE Analyst Estimates
DTE Energy reports solid 2017 financial results; positive impact of tax reform provides significant benefit to customers and improves 2018 guidance
2017 Annual Report (long term debt discussed starting at page 110)
Credit Ratings:
Fitch Rates DTE's $500MM Sr. Notes Issuance 'BBB+'; Outlook Negative
DTE also issues exchange traded junior bonds which are rated BBB-: { Fitch Rates DTE Energy Co.'s $400MM Subordinated Debentures 'BBB-'; Outlook Negative; DTE Energy Co. 5.375% Junior Subordinated Debenture Due 2076 Stock Quote (DTJ); DTE Energy Co. 5.25% Junior Subordinated Debenture Series C due 12/1/2062 Stock Quote (DTQ); DTE Energy Co. 5.25% Junior Subordinated Debenture Due 2077 (DTW).} I have no interest in those junior bonds.
Bought at a Total Cost of 98.186
YTM at TC Then at 2.667%
Current Yield at 1.5277%
I now own 3 bonds.
I may buy 1 or 2 more at lower prices. Over 1% of the YTM is in the profit upon maturity. Generally I prefer a higher current yield for 1+ year maturities and a narrower spread between current yield and YTM.
H. Bought 1 Live Oak Banking 2.5% (monthly interest payments) Maturing on 9/9/20 (2 1/2 year CD):
Holding Company: Live Oak Bancshares Inc. (LOB)
LOB Analyst Estimates
Live Oak Bancshares, Inc. Reports Fourth Quarter 2017 Results
I. Bought 2 Bank of Baroda 1.45% CDs Maturing on 4/9/18 (1 month CD, discussed out of time order):
5. Intermediate Term Bond/CD Ladder Basket Strategy:
The Consolidated Edison purchase barely qualifies as intermediate term using my definitions for the bond basket strategies.
A. Bought 1 Consolidated Edison 2% SU Bond Maturing on 5/15/21-A ROTH IRA Account:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Consolidated Edison Inc. (ED)
ED Analyst Estimates
Con Edison Reports 2017 Earnings
2017 Annual Report (long term debt list starts at page 93)
Credit Ratings:
Moody's changes outlooks on 25 US regulated utilities primarily impacted by tax reform (ED's outlook changed to negative from stable)
Bought at a Total Cost of 97.461 (with $2 brokerage commission)
YTM at TC Then at 2.83%
Current Yield at TC = 2.0521%
This was another marginal buy in my Vanguard Roth IRA. In part, I am hoping to trade this bond for a small profit before the Vanguard Prime MM yield exceeds the current 2.05+% yield of this bond.
I would anticipate that the Vanguard Prime MM will exceed the current yield sometime in the 2018 4th quarter but will not likely provide a higher current yield than this bond's YTM prior to mid-2020.
I previously sold this bond at higher prices:
Item # 1.D. Sold at 98.578 (6/12/17 Post)
I sold this bond in another ROTH IRA account at 99.7 on 8/28/17.
Stocks, Bonds & Politics: Item # 3.E. Sold at 99.7- A Roth IRA Account (8/31/17 Post)
B. Bought 1 Diageo Capital 2.625% SU Bond Maturing on 4/29/23:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Diageo Capital, a wholly owned of Diageo PLC who guarantees the notes:
DEO Analyst Estimates - Diageo PLC ADR
Credit Ratings:
Debt Holders & Rating | Investors | Diageo
Bought at a Total Cost of 97.181
YTM at TC Then at 3.22%
Current Yield at TC = 2.7011%
I previously sold this bond at higher prices:
Item # 3.B. Sold at 101.544 Roth IRA (8/31/17 Post)
Item # 3.B. Sold at 101.56 (8/31/17 Post)
This bond was bought using the proceeds from a one year 1% CD that matured on the same day:
At the time of my purchase, the 1 year T Bill was selling at a 2% yield with the 6 month bill at 1.83%, so there was not that much additional yield gained by going out another 6 months. The CAT bond had a YTM .1% greater than the 1 year treasury bill at the time of purchase with almost a 3 month closer maturity.
D. Added 1 Laboratory Corporation of America 2.625% SU Bond Maturing on 2/1/2020:
Finra Page: Bond Detail (prospectus)
Credit Ratings:
Issuer: Laboratory Corp. of America Holdings (LH)
LH Analyst Estimates
LabCorp Announces Record 2017 Fourth Quarter and Full Year Results and Provides 2018 Guidance
Bought at a Total Cost of 99.828
YTM at TC Then at 2.716%
Current Yield at TC = 2.6295%
E. Added 1 Union Pacific 1.8% SU Bond Maturing on 2/1/20:
FINRA PAGE: Bond Detail
Issuer: Union Pacific Corp (UNP)
UNP Analyst Estimates
Union Pacific Reports Fourth Quarter and Full Year 2017 Results
Credit Ratings:
Bought at a Total Cost of 98.822
YTM at TC Then at 2.425%
Current Yield at TC = 1.8215%
On the day of this purchase, the two year treasury note closed at a 2.26% yield.
The next 2 year treasury auction is on 3/26/18. Treasury Auctions.pdf
F. Bought 2 Bank of Baroda 1.45% CDs Maturing on 4/30/18 (2 month CDs):
Schwab pays .1% in my sweep account.
G. ADDED 1 DTE Energy 1.5% SU Bond Maturing on 10/1/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer: DTE Energy Co. (DTE)
DTE Analyst Estimates
DTE Energy reports solid 2017 financial results; positive impact of tax reform provides significant benefit to customers and improves 2018 guidance
2017 Annual Report (long term debt discussed starting at page 110)
Credit Ratings:
Fitch Rates DTE's $500MM Sr. Notes Issuance 'BBB+'; Outlook Negative
DTE also issues exchange traded junior bonds which are rated BBB-: { Fitch Rates DTE Energy Co.'s $400MM Subordinated Debentures 'BBB-'; Outlook Negative; DTE Energy Co. 5.375% Junior Subordinated Debenture Due 2076 Stock Quote (DTJ); DTE Energy Co. 5.25% Junior Subordinated Debenture Series C due 12/1/2062 Stock Quote (DTQ); DTE Energy Co. 5.25% Junior Subordinated Debenture Due 2077 (DTW).} I have no interest in those junior bonds.
Bought at a Total Cost of 98.186
YTM at TC Then at 2.667%
Current Yield at 1.5277%
I now own 3 bonds.
I may buy 1 or 2 more at lower prices. Over 1% of the YTM is in the profit upon maturity. Generally I prefer a higher current yield for 1+ year maturities and a narrower spread between current yield and YTM.
H. Bought 1 Live Oak Banking 2.5% (monthly interest payments) Maturing on 9/9/20 (2 1/2 year CD):
Holding Company: Live Oak Bancshares Inc. (LOB)
LOB Analyst Estimates
Live Oak Bancshares, Inc. Reports Fourth Quarter 2017 Results
I. Bought 2 Bank of Baroda 1.45% CDs Maturing on 4/9/18 (1 month CD, discussed out of time order):
5. Intermediate Term Bond/CD Ladder Basket Strategy:
The Consolidated Edison purchase barely qualifies as intermediate term using my definitions for the bond basket strategies.
A. Bought 1 Consolidated Edison 2% SU Bond Maturing on 5/15/21-A ROTH IRA Account:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Consolidated Edison Inc. (ED)
ED Analyst Estimates
Con Edison Reports 2017 Earnings
2017 Annual Report (long term debt list starts at page 93)
Credit Ratings:
Moody's changes outlooks on 25 US regulated utilities primarily impacted by tax reform (ED's outlook changed to negative from stable)
Bought at a Total Cost of 97.461 (with $2 brokerage commission)
YTM at TC Then at 2.83%
Current Yield at TC = 2.0521%
This was another marginal buy in my Vanguard Roth IRA. In part, I am hoping to trade this bond for a small profit before the Vanguard Prime MM yield exceeds the current 2.05+% yield of this bond.
I would anticipate that the Vanguard Prime MM will exceed the current yield sometime in the 2018 4th quarter but will not likely provide a higher current yield than this bond's YTM prior to mid-2020.
I previously sold this bond at higher prices:
Item # 1.D. Sold at 98.578 (6/12/17 Post)
I sold this bond in another ROTH IRA account at 99.7 on 8/28/17.
Stocks, Bonds & Politics: Item # 3.E. Sold at 99.7- A Roth IRA Account (8/31/17 Post)
B. Bought 1 Diageo Capital 2.625% SU Bond Maturing on 4/29/23:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Diageo Capital, a wholly owned of Diageo PLC who guarantees the notes:
DEO Analyst Estimates - Diageo PLC ADR
Credit Ratings:
Debt Holders & Rating | Investors | Diageo
Bought at a Total Cost of 97.181
YTM at TC Then at 3.22%
Current Yield at TC = 2.7011%
I previously sold this bond at higher prices:
Item # 3.B. Sold at 101.544 Roth IRA (8/31/17 Post)
Item # 3.B. Sold at 101.56 (8/31/17 Post)
This bond was bought using the proceeds from a one year 1% CD that matured on the same day:
I am starting to buy back some intermediate term bonds that were bought and sold at higher prices last year. I do not know, nor does any other human, how high intermediate interest rates will go or the speed of their ascent. It is also possible that a rise in those interest rates, along with other events, could trigger the next recession which would likely then lower intermediate term interest rates.
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.
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.
Asia stocks are moving up based on news that Trump will soon meet with KIM.
ReplyDeletehttps://www.bloomberg.com/news/articles/2018-03-08/trumps-says-major-announcement-imminent-by-south-korean-envoys
NIKKEI 225 Index
21,767.62
+399.55 1.87%
Last Updated: Mar 9, 2018 at 9:34 a.m. JST
https://www.marketwatch.com/investing/index/nik?countrycode=jp
China's markets are not yet open. The Hang Sang index did rise 1.52% yesterday.
https://www.marketwatch.com/investing/index/hsi?countrycode=hk
NK has broken every agreement that it has signed relating to its nuclear program. Maybe this time will be different.
https://www.cnn.com/2013/10/29/world/asia/north-korea-nuclear-timeline---fast-facts/index.html
The Stock Jocks recovered quickly from a very mild anxiety attack caused by Trump's steel and aluminum tariffs.
ReplyDeleteThe strong jobs report released before the market's open today was the primary catalyst for the surge:
S&P 500 Index
2,786.57 +47.60 +1.74%
https://www.marketwatch.com/investing/index/spx
The S & P 500 index closed at its high for the day. The index is still almost 100 points below its 52 week of 2,872.87 which was both the hit intra-day and closing high on 1/26/18. The S & P 500 closed at 2,677.67 on 3/1/18, so there has been a 108.9 rise in that index starting on 3/2 through today (6 trading days).
The VIX sure settled down fast from its brief February spike and closed today at 14.64 today, down 1.9 or -11.49%.
The U.S. stock market remains in a Stable Vix Pattern, defined in my Vix Asset Allocation Model as a cyclical bull market. The Model only gives cyclical signals that can last generally between 1 and 6 years. Secular bull and bear market trends are determined by a different analysis.
I do not think that the rally today was based on Trump's decision to meet with KIM, though that may have contributed some to euphoria.
There are multiple sound reasons why no prior sitting American President has agreed to accept a North Korean invitation for a meeting.
If the basic terms of an agreement can not be ironed out by underlings, including the foreign and defense ministers, then there is no reason to have Trump or any other U.S. President meet with KIM.
Consequently, it is probably not a good idea for Trump to meet with KIM in a couple of months since I doubt there was any specific groundwork laid for an agreement before Trump made an impulsive decision to meet.
N.K. has not offered in the past to permit an independent inspection of its nuclear facilities to determine compliance with a disarmament agreement. N.K. continued its nuclear program in the past notwithstanding agreements or understandings that it would cease development in exchange for tangible benefits received from the U.S. and other parties. KIM is more untrustworthy than Putin and is probably more untrustworthy than Donald which is not a compliment for either man.
Given the modest uptick in the ten year treasury yield, which closed at 2.895%, equity REITs managed some gains with VNQ closing up $.41:
https://www.marketwatch.com/investing/fund/vnq
On a robust up day for commons stocks, a rising tide can lift most boats, so being a common stock rather than a bond is a plus. VNQ still significantly underperform the S & P 500 which rose 1.74%.
Regional banks performed in line with SPX with a 1.66% gain today. KRE closed at $65.03, up about $6 per share in price YTD.
The technology sector performed better than the S & P 500 index today:
Technology Select Sector SPDR ETF
$70.51 +$1.31 +1.89%
https://www.marketwatch.com/investing/fund/xlk
The financial ETF XLF which owns larger banks, insurance companies, fund managers and brokers performed better than XLK:
Financial Select Sector SPDR ETF
$29.70 +$ 0.70 +2.41%
https://www.marketwatch.com/investing/fund/xlf
Sponsor's Page:
https://us.spdrs.com/en/etf/financial-select-sector-spdr-fund-XLF
XLF owns 67 stocks that are constituents of the S & P 500.
Fidelity has a financial ETF which can be bought commission free by its customers that owns more stocks (384) than XLF and has a slightly lower expense ratio.
https://screener.fidelity.com/ftgw/etf/goto/snapshot/snapshot.jhtml?symbols=FNCL
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/03/observations-and-sample-of-recent_12.html