Observations and Sample of Recent Trades: FNB, SUNS

Economy: 

Tariffs will cost Caterpillar $200 million, so it's going to raise its prices: CNBC 

Tyson shares dive after the company cuts profit outlook because of tariffs: CNBC

Pending-home sales advance in June after grim spring selling season - MarketWatch; Pending Home Sales Reverse Course, Rise 0.9 Percent in June | www.nar.realtor

U.S. Treasury's Mnuchin says he sees at least 3 percent growth for next 4-5 years | Reuters Words are easy to speak. I wanted to make a note of this comment and come back to discuss how this future prediction compared to the actual results in 4 to 5 years.   

Germany says questions remain on soy imports | Reuters

I would just note that the European Commission can not force companies to buy U.S. soybeans and natural gas liquids. The EC's President Juncker, who made that nebulous commitment to Donald which was designed to stave off a threatened 25% U.S. tariff on European cars, has no authority to carry through with the promise to increase purchases. 

There is nothing to prevent the EC from claiming that it jawboned some additional purchases, which otherwise would not have occurred, but that will be suspect and not easily proved as being true. The glaring problem with Trump’s EU soybean deal – ThinkProgress (quoting an EU officials who made the following statement:  The LNG and soybean pledge is  "a bit of a stunt. You give something without giving anything.”) 

The Europeans were already slated to buy more U.S. soybeans as a result of China's 25% tariff on U.S. exports that was causing an increase in European purchases before Juncker's promise, due to an increase in Brazil's soybean prices (China's new preferred source) and a surplus of U.S. soybeans. Trade Spat to Turn U.S. Into Top EU Soybean Supplier - Bloomberg Brazil is expected to have exhausted its supply of exportable soybeans by October which could then lead to more U.S. sales to European buyers which would occur without Juncker's promise.  

The issues for U.S. soybean farmers are that soybean prices have plummeted and the U.S. may not be able to recoup lost sales to China when the tariff war ends. 

As to the price plummet, it is a common practice for farmers to use futures to lock in the price before the crop is even harvested or available for sale. According to one estimate based on a survey of 3,000 soybean farmers, about 1/2 of the production was sold using forward contracts. 

The pain starts or accelerates, depending on the amount sold prior to the price drop, when and if the price remains near current levels or falls further when a new crop needs to be sold. 

There is already discussions and debates occurring about how long it will take to recover lost sales to China based on historical  recovery periods. Here’s what really scares soybean farmers about Trump’s trade battle with China - MarketWatch (noting that Nixon jump started soybean production in Brazil by prohibiting soybean exports in 1973 due to inflation and dwindling supplies); Lost Soybean Sales to China Continue to Climb; Soybean exports to China are down big from last year with 'lost' sales mounting 

Chart U.S. Soybean Prices: Soybeans Chart

So who caused the price decline in soybean prices? I would not recommend consulting theologians to answer that question. 

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Markets and Market Commentary: 

How to predict the next market downturn-5 Market Signals- MarketWatch (a yield inversion and a spike in volatility, similar to what I call a Trigger Event, are two of the five signals)

Prepare for the biggest stock-market selloff in months, Morgan Stanley warns - MarketWatch

A stagnation at a multi-year high for regional bank stocks, followed by a persistent decline, will often precede a recession. 

Regional bank stocks had a good run until 2006, when their prices started to stagnant and then roll over well in advance of the market's high water mark in October 2007. 

KRE was launched in June 2006 neat the multi-year top for regional banks. 

I took some same prices to show this topping formation that started in 2006 which was followed by a persistent decline that started in February 2007.    

Market High Hit in October 2007

Several regional bank stocks started their downward spiral late in 2006.  

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Trump: 


More Trump Tax Cuts for the Uber Wealthy?:  

Trump Administration Mulls a Unilateral Tax Cut for the Wealthy; Trump administration weighs $100-billion tax break for capital gains - MarketWatch

The super rich apparently need more incentives to contribute boatloads of cash to republican political campaigns. 

There is no need to worry since the Supreme Court assured us in the Citizens United case that large political donations will not influence policy. 

Quotes from the Majority Decision in Citizens United v. Federal Election Commission (01/21/10)(Justice Kennedy): 

"(W)e now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.. 

"The fact that speakers [i.e., donors] may have influence over or access to elected officials does not mean that these officials are corrupt. …"

"The appearance of influence or access, furthermore, will not cause the electorate to lose faith in our democracy."

Those statements are firmly rooted in La La Land. 

Perhaps the republican Justices need to review the long sordid history of how money buys votes. One place to start their education is Jane Mayers book: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right 

Since I am familiar with that history, I am having difficulty with the proposition that the real reason underlying large campaign contributions is to accurately inform the public about the issues solely as a public service.  

Personally, I thought the super rich were amply paid back in the "tax reform" legislation for their republican campaign donations, but that appears now to be a mistaken conclusion.  

While some part of that new $100B tax break will find its way into the real economy, most of the $100B will simply add to the federal deficit. The tax break, properly labelled a "tax expenditure", has the same effect as spending on the deficit. What are the largest tax expenditures? | Tax Policy Center; Policy Basics: Federal Tax Expenditures | Center on Budget and Policy Priorities

The government will have to issue new debt to cover the revenue shortfall caused by the tax expenditure and that debt will have to be refinanced with interest over and over again for as long as the U.S. remains a viable borrower.
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Trump and the Constitution's Emoluments Clauses: 

Judge Allows Trump Emoluments Clause Lawsuit To Proceed- NPR Importantly, the District Court judge rejected the Justice Department's narrow reading of the emolument clauses contained in the Constitution. The term was defined to mean "any profit, gain or advantage" of value that Trump receives from any foreign, federal or state government. 17-1596-Opinion.pdf That opinion is probably the most detailed discussion made by any U.S. court to date on the meaning of the two emolument clauses contained in the Constitution.

This could end up being big trouble for Donald. A court case you've probably never heard of could become a major problem for President Trump-CNN

Article I, Section 9, Clause 8- The United States Constitution:

Article 2, Section 1, Clause 7 of the Constitution for the United States

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Trump and GOP Tribalism:

Trump uses twitter as a means to nurture and expand republican tribalism. His efforts have been, and will likely continue to be a resounding success. 

In a tweet last Sunday, he claimed to be the most popular President ever among republicans:

I would just note that polls were not in existence during Lincoln's presidency. 

This claim about his popularity in the republican party is close to being true, however, based on recent polling. I do recall Reagan having at least one higher approval number than Trump among republicans.

The strong tendency toward tribalism is nurtured by Trump in a variety of ways including almost daily attacks on common enemies and using extreme rhetoric that has been successful for authoritarian demagogues throughout history. 

The common enemies of course include the free press, which was attacked again in a Sunday tweet, and the Democrats:

I read that Ronald Reagan Jr. opined that there are many Trump supporters who would prefer Putin as the U.S. President over a democrat. While I would agree that is true, I would not be comfortable putting a percentage range on the number. Trump Supporters Would Prefer Putin as President Than Any Democrat, Says Ronald Reagan’s Son  

{Among many of my republican acquaintances and members of my extended family who voted for Trump, a handful would have voted for Joe Biden over Trump, but went ahead and reluctantly voted for Donald. They would never have voted for Hillary, Elizabeth Warren, or Bernie in any race. Trump is viewed with disdain and contempt by about 5% to 10% of republican voters, generally some professionals and other college educated self-identified republican voters who are more traditional republicans than the modern day GOP tribe members. The Trumpsters derisively call them RHINOs, Republican In Name Only or Country Club Republicans}


The New Your Times publisher had a much different take on this meeting which was supposed to be off the record but Trump broke that promise by his tweet reproduced above: Times publisher warned Trump about labeling journalists as enemies; New York Times Publisher Rebuts Trump’s Account of Private Meeting - The New York Times  

Another Donald tweet from Sunday provides another example of a demagogue at work: 

Trump: Democrats care little about crime and are supported by the Fake News Media

Musk, Trump and a mass psychology effect both successfully exploit

Trump and Musk have many of the same personality traits including extreme narcissism.

Does Trump Suffer from Narcissistic Personality Disorder? | Psychology Today  The answer is of course yes. 

For foreign leaders who wish to manipulate Donald, it is important to understand and to play into his narcissistic personality disorder. 

One other common trait shared by Donald and Musk is an inability to deal with fact based criticism. The common response is to denigrate the fact based criticism by attacking the person or entity making it.

The British diver who helped save the Thai boys trapped in a cave was called a pedophile by Musk. 

Why? 

The diver said that the miniature submarine that Musk sent in a publicity stunt was useless in the cave which was the undeniably the case. 

The fact based response to Musk's offer was viewed as an insult to him personally which caused Musk to go instantly into attack mode with the pedophile accusation. 

For creatures like Donald and Musk, it is irrelevant for the attack to have any factual basis whatsoever. Reality creations are preferred anyway. 

A criticism of the cult's leader is viewed as a criticism of all cult members.  

Elon Musk's Trump Derangement Syndrome

When tribalism is as strong as it is now among republicans, facts do not matter. Accurate information is per se false when it contradicts a conviction held among cult members.  

91% of strong Trump supporters believe that Donald is the most trustworthy source of news. 

Anyone who views Donald as an honest source of information is beyond the reach of accurate information IMO.  

The republican multi-decade effort to envelope their tribe members in a reality creation bubble has been successful and is irreversible. 

I would label it as the most successful indoctrination in modern U.S. political history since it cuts off any attempt to even access alternative sources of information or to accept factual information that manages to penetrate the nearly impenetrable firewall of non-consideration. 

Sean Hannity is Trumpism's Chief Propagandist. 

The end result is that the demonstrably false statements of a pathological liar are believed to be true 

It is Orwellian. It is getting worse.   

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More Attacks From Donald on the Press and Mueller: 

Everyone can read the following rage tweets and make up their own mind. They were published last Sunday. 

It is my opinion that they indicate the Trump Derangement Syndrome, but not in the way that Donald uses that phrase in the first tweet. 

I use the phrase Trump Derangement Syndrome to describe a collection of mental illnesses possessed by Donald which together can now be called the Trump Derangement Syndrome:  

Donald the Demagogue continued attacking the free press in tweet published yesterday: 

Donald is in full victim mode in these tweets, filled with anger that anyone would dare to confront or challenge Our Great and Dear Leader and his frequently false narrative in any way. Where is the praise and adulation that he so richly deserves? Don't we all know that he is one of the greatest and smartest persons to have lived on this planet or any other since the big bang?  

At his core, Donald is a narcissistic authoritarian who lives in his own reality creations. That is what will never change.   

There is only one way to effectively deal with the Trump Derangement Syndrome, and that is to vote in the upcoming mid-term election and in the 2020 general election. 

Those who believe in Donald and the republican party remade in his image will be out in droves. Donald has already proven that a GOP candidate must demonstrate total abject subservience to, and boundless praise for Don the Demagogue before being rewarded with a tweet endorsement. Poll shows Trump endorsement gives DeSantis an edge in Florida governor’s race; In Florida, Not All Politics Are Local, as Trump Shapes Governor’s Race - The New York Times (Ron DeSantis could not grovel more if he tried; see, e.g. this DeSantis commercial: Florida Guv Republican Candidate Ron DeSantis Teaches Child to Build a Wall in New Ad - YouTube) It is not a question of who would be the most competent governor or representative but who grovels more to Trump.  

The alternative for those who disagree with Trumpism is to deny them power through the ballot box rather than to make a totally futile effort to engage Donald in a rational fact based discussion.  
  
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Trump Renews Threat to Shutdown the Government:

Trump renewed his threat to shutdown the government in September unless the Democrats agree to fund his wall and pass the GOP's other immigration law changes.

If the Democrats do not agree with what Trump wants to do, then Demagogue Don then states as a fact that the opposition party is for more crime and drugs and are responsible for the government shutdown. This kind of tweet is just another dog whistle among republican tribe members.

Trump repeated this threat during a news conference last Monday: “If we don’t get border security after many many years of talk within the United States, I would have no problem doing a shutdown, We’re the laughingstock of the world.”

Part of me would like to see what happens on election day when and if Trump refuses to sign a continuing resolution to keep the government open past the election. But I doubt that Donald will carry through with the threat prior to the election. 

A shutdown will receive a lot of support among GOP tribe members. It will not help that tribe in the November mid-term elections. 

The GOP would normally not be in any serious danger of losing the House given the strong economy. 

Trump's intentionally divisive language, his persistent over-the-top lying, and his many other undesirable personality characteristics are viewed as objectionable by large numbers of swing voters and have already resulted in a serious backlash that would not have existed with another republican president-at least to the same degree. 

Any republican in the White House would have signed the "tax reform" legislation to benefit their wealthy benefactors and appointed a reactionary justice to the Supreme Court willing to overturn Roe v. Wade and the gay marriage decision. 

What Trump has done is to mobilize a lot of opposition against the republican party by childish and counter-productive rhetoric and demagoguery that is totally lacking in civility and restraint, plus non-stop reality creations designed and intended to deceive the electorate.

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Putin wanted to interrogate me. Trump called it ‘an incredible offer.’ Why?-The Washington Post (opinion column by former U.S. ambassador to Russia Michael McFaul)

GOP Rep. Jason Lewis (R-MN) called people on government assistance 'parasites,' said blacks on welfare 'plantation'' Rep. Jason Lewis (R) Rails Against Black ‘Entitlement Mentality,’ the Welfare ‘Plantation’ in Unearthed Tapes | Mediaite A GOP congressman once lamented not being able to call women 'sluts' anymore - CNN 

When Mitt Romney referred to 47% of Americans as being parasites during his campaign against Obama, (47 Percent" Comments - YouTube) Jason Lewis agreed with his characterization: “The parasites outnumber the producers, and when the parasites outnumber the producers, the party of parasites will give the majority of votes.”  

{Note that the commenters agreed with Romney's characterizations. It would be an exercise in futility to point out the facts to them: Who Are Mitt Romney's 47%? - The Atlantic}

Paul Ryan leaped to Lewis's defense. Words that would normally be viewed as racist or offensive to centrists and moderates, who may swing the upcoming elections, do not mean what they mean and are not to be taken literally. The fact that the GOP's base likes the dog whistles and wants more of them is not to be taken literally but only figuratively, whatever that means. And, to be sure, anyone offended by the dog whistles is a "liberal" or worse. 

Lewis represents  Minnesota's 2nd congressional district.

U.S. "most dangerous" place to give birth in developed world, USA Today investigation finds - CBS News; Hospitals know how to protect mothers. They just aren’t doing it.

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Donald, Kim and the Iranians:  

This video is interesting in how Trump described Kim during the first thirty seconds of the interview: 

Everyone can make their own decision on whether Trump's opinions and observations about Kim are warranted or deeply delusional. Trump was far more effusive in his praise of  North Korea's dictator than he has been for a leader of any western democracy where his primary emphasis is to criticize. 

North Korea reportedly appears to be building new ICBMs; U.S. spy agencies: North Korea is working on new missiles  

I doubt that Donald's economic pressure will bring Iran back to the negotiating table before the end of his first term. Iran rejects Trump offer of talks as 'humiliation', without value | Reuters (Iran's Response: “Based on our bad experiences in negotiations with America and based on U.S. officials’ violation of their commitments, it is natural that we see no value in his proposal” to meet with Iranian officials without preconditions) The Iranian government probably will wait to see whether Donald wins the 2020 election. The Iranian economy is in the crapper.   

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1. REGIONAL BANK BASKET STRATEGY:

A. Bought Back 50 FNB at $13.08 and 50 at $12.6-Used Commission Free Trades: 

Closing Price Day of First Buy (7/24/18): FNB $13.06 -$0.75 -5.43%  (Volume was 6.315+M shares vs. 2.232+M average volume) 

Closing Price Day of Second Buy (7/25/18): FNB $12.67 -$0.39 -2.99% 

Closing Price Yesterday (7/31/18): FNB $12.83 -$0.16 -1.23% 

Regional bank stocks slid yesterday as interest rates declined slightly:

KRE $61.51 -$0.25 -0.40%: SPDR S&P Regional Banking ETF 
IEF $101.78  +$0.14  +0.14% : iShares 7-10 Year Treasury Bond ETF 

The downdrafts in FNB's price noted above were in reaction to an earnings report that met the consensus E.P.S. estimate. 

FNB Analyst Estimates

Chart: Two Years as of 7/25/18

As with other regional bank, there was a spike up in price after Trump's election. 

Current Position: 100 Shares (probably the maximum position as well)

Average Total Cost Per Share  = $12.84 

Dividend: $.12 per share

Dividend Yield at $12.84 TC = 3.74%

Last Ex Dividend Date: 5/31/18 

Consensus E.P.S. Estimates (day of purchase)
2018  $1.12 (via Yahoo Finance) 
2019  $1.23 
P/E at $12.84 cost per share and $1.23 2019 estimate: 10.44

Over the past few days, the consensus E.P.S. estimate has moved down to $1.11 this year and $1.18 in 2019. Using the current 2019 estimate, the P/E at a total cost of $12.84 is 10.88. While I do not know for certain, I suspect that the downward revisions in 2018 and 2019 E.P.S. estimates were linked to the second quarter report based on their timing. 

Earnings Report: Q/E 6/30/18

F.N.B. Corporation Reports Second Quarter 2018 Earnings

"On an operating basis, second quarter of 2018 earnings per diluted common share (non-GAAP) was $0.27, excluding the after-tax impact of $5.2 million of costs related to branch consolidations as well as the after-tax impact of a $0.7 million discretionary 401(k) contribution made following tax reform." GAAP net income was reported at $.26 per share, up from $.22 in the 2017 second quarter.    

Net Interest Margin: "The net interest margin (FTE) (non-GAAP) expanded 9 basis points to 3.51% and included $5.8 million of incremental purchase accounting accretion and $10.2 million of cash recoveries, compared to $0.5 million and $1.1 million, respectively, in the second quarter of 2017.  The tax equivalent adjustment to net interest income totaled $3.3 million, compared to $4.5 million, primarily due to the lower federal statutory tax rate. The impact of the tax equivalent adjustment to net interest margin was 0.05%, compared to 0.07% in the same quarter last year".


Effective Tax Rate: The effective tax rate was 19.4%, compared to 28.5%, reflecting the passage of the Tax Cuts and Jobs Act (TCJA), which lowered the U.S. corporate income tax rate from 35% to 21% as of January 1, 2018.

Average Loans: "Average loans totaled $21.4 billion and increased 5.3%, due to strong growth in the commercial and consumer portfolios. Average commercial loan growth totaled $570 million, or 4.4%, led by strong commercial origination activity in the Cleveland and Mid-Atlantic (Greater Baltimore-Washington D.C. markets) regions and continued growth in the equipment finance and asset-based lending businesses. Average consumer loan growth was $514 million, or 6.9%, as growth in residential mortgage loans of $401 million or 16.6% and indirect auto loans of $315 million or 24.0% was partially offset by declines in direct installment and consumer line of credit average balances."

F.N.B.'s (FNB) CEO Vince Delie on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha ("Change in funding costs is mostly offset by upward repricing on the loan portfolio as 57% of the loan portfolio is variable or adjustable with about 46% of total loans tied to prime or one month LIBOR" at page 5, emphasis added)

As I have discussed several times recently, banks are being squeezed by a rise in yields paid to depositors that is largely or entirely offsetting the increase in loan yields. What needs to happen is an increase in the yield curve with some stability in deposit costs as loan yields rise. 

In response to this report, Raymond James downgraded the stock from strong buy to outperform and lowered its price target to $15 from $17. I do not have access to that report. I suspect that a lot of institutional investors are just disgusted with the Board and management. All of the top officers and Board need to be replaced but that is not going to happen.  

Links to Recent Discussions: I have repeatedly stated that I hold this bank in disfavor. The reasons are discussed in prior posts and primarily relate to a lack of earnings growth, a 50% dividend slash in 2009, no increase in the dividend since that slash, and a misguided leadership focused on empire building with no meaningful tangible benefits to shareholders so far. 

FNB Dividend History-Dividend Channel      

Item # 1.D. Sold 50 FNB at $13.9-Used Commission Free Trade (6/18/18 Post)-Item # 2.A. Bought 50 FNB at $12.87 (5/14/18 Post) 

Item 2.A. Sold 60 FNB at $14.59  (3/5/2018)Item # 1.C Added 10 FNB-Used Commission Free Trade (11/30/17 Post) and Item # 4.B. Bought Back 50 FNB at $13.59-Used Commission Free Trade (10/23/17 Post)

Item # 4.A. Sold 100 FNB at $13.94-Satellite Taxable Account (10/23/17 Post)-Item # 1.A. Bought 100 FNB at $12.43 (9/14/17 Post)

Trading Profits to Date: $1,143.74

Since I am almost playing with the house's money on this one, I may let the position ride far longer than usual. A lot of the deservedly negative vibe is already priced into the stock. That includes management's empire building with no meaningful benefit IMO to shareholders. Mergers & Acquisitions | First National Bank It is impossible to reach any other conclusion looking at FNB's five year earnings history: 

2017 Annual Report at page 40 

So, looking at that table and the acquisition history, where's the beef? 

The bank will receive an E.P.S. boost this year from the corporate tax reduction as noted above. 

2. Short Term Bond/CD Ladder Basket Strategy: 

I have slowed down my purchases of short term bonds and CDs, as I wait for higher yields. I am using some of the proceeds from maturing securities to purchase higher yielding common stocks. 

A. Bought 2 BBT 2.45% SU Bonds Maturing on 1/15/20: 

FINRA PAGE: Bond Detail (prospectus linked)

Issuer: BB&T Corp.  (BBT)
BBT Analyst Estimates
BB&T reports record quarterly earnings of $0.99 per diluted share; Up $0.22, or 28.6 percent, compared to second quarter 2017

Credit Ratings: 

Bought at a Total Cost of  99.53 (includes $4 Vanguard Commission)
YTM at TC Then at 2.779%
Current Yield at TC = 2.4616%

I do not have any concerns about the credit risk. The only risk is  what I call the risk of lost opportunity, a category of interest rate risk, that is caused by having funds tied up in this bond when rates rise enough that I would have been better off waiting to buy this bond or keeping the funds in the Vanguard Money Market Fund. 

At the time of this purchase, the Vanguard Prime Money Market fund had a seven day yield of 2.05%. I currently anticipate that the MM fund will be yielding more than 2.46% in 6 months and more than 2.8% in July 2019. Nonetheless, this BBT bond will provide slightly more income than the MM alternative due to its current yield advantage. It is also possible that (1) the FED will slow down its increases in the FF rate in less than 4 over the next 12 months and (2) decrease rates in the second half of 2019 or earlier based on an economic slowdown. 

B. Bought 1 Treasury .875% Coupon Maturing on 5/15/19: 
YTM = 2.303%

3. Income Generation: BDCs: 

A. Bought 50 SUNS at $16.81 and 10 at $16.65-Used Commission Free Trades: 

Quote: Solar Senior Capital Ltd.  (SUNS)

I am using up the few remaining Schwab commission free trades before they expire early this month.

SUNs is a nano cap, externally managed BDC. 

Last Annual Report: Form 10-K (risk factor summary discussion starts at page 24 and ends at page 52)

Dividend: Monthly at $.1175 per share ($1.41 annually)

Solar Senior Capital Ltd. Announces Monthly Distribution of $0.1175 Per Share for July 2018

Dividend Yield at $16.78: 8.4%

Last Ex Dividend Date: 7/18/18

Last Round-Trip: Item # 2.B. at $17.45 on ex-dividend date (3/1/17 Post)(profit snapshot = $117.48)- Item # 1 Bought 50 SUNS at $15.06-Update For Portfolio Management And Positioning As Of 10/16/15 - South Gent | Seeking Alpha

Net Asset Value Per Share History: Taken mostly from Form 10-K at page 58

3/31/18  : $16.84
12/31/17: $16.84
12/31/16: $16.8
12/31/15: $16.33
12/31/14: $17.65
12/31/13: $18.14
12/31/12: $18.33
12/31/11: $18.15
IPO at $20, net to company before its expenses at $18.6 Form 497 (2/2011)

I view this history to be slightly negative for an externally managed BDC. There has been some stability in net asset value since 2014 but there was a meaningful decline starting in 2014 through 2015. Looking at the 2014 annual report, I can see that part of the problem originated from paying out more in dividends in 2013 and 2014 than SUNS earned in net investment income which depletes the net asset value per share numbers:

The monthly dividend has remained steady at $.1175 per share since the August 2012 payment: Solar Senior Capital Ltd. (SUNS) Dividend Date & History - NASDAQ.com

Earnings Report: Q/E 3/31/18 (last one available at time of purchase)

Weighted Average Yield of Investments = 8.9% at fair value

Non-Performing Loan: "During the quarter, we placed one asset on non-accrual representing 1.8% of Solar Senior’s portfolio at cost and 0.9% at fair value."

 The NPL was Metamorph US 3 (Metalogix) at a cost of $7.848M which was valued by  SUNS at $5.805M as of 3/31/18: Form 10-Q at page 11. 

Portfolio Composition:

As set forth in the preceding snapshot, floating rate loans were weighted at 94.5% of the total. The 10-Q provides more details about the loans: Form 10-Q starting at page 7 

Solar Senior Capital Ltd. Announces Quarter Ended March 31, 2018 Financial Results 

As always, the goal with any BDC purchase is simply to harvest one or more dividends and to escape by selling the shares at whatever profitable may be available. 

The time duration of the holding will depend in part on subsequent earnings reports, growth or decline in net asset value per share, dividend cuts or raises, and how soon an acceptable total return is achieved after harvesting several dividends.  

For SUNS, the acceptable return for me is simply defined as a total return in excess of the 8.4% dividend yield, preferably achieved after collecting several monthly dividends.  

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.