Economy:
U.S. consumer spending rises in August; monthly inflation slows | Reuters
The previous article summarizes data contained in the monthly Personal Income and Outlays report:
BEA.gov The FED's preferred inflation measure is core PCE (personal consumption expenditures) which remained steady at +2% Y-O-Y. That rate declined from the .2 July monthly increase to zero. I view it as important to monitor the monthly spending, disposable income and inflation numbers contained in this report. The data for August, assuming it is reasonably accurate, is a snapshot of a healthy economy.
Pending home sales fall 1.8 percent to slowest pace since January
U.S. consumer spending rises in August; monthly inflation slows | Reuters
The previous article summarizes data contained in the monthly Personal Income and Outlays report:
BEA.gov The FED's preferred inflation measure is core PCE (personal consumption expenditures) which remained steady at +2% Y-O-Y. That rate declined from the .2 July monthly increase to zero. I view it as important to monitor the monthly spending, disposable income and inflation numbers contained in this report. The data for August, assuming it is reasonably accurate, is a snapshot of a healthy economy.
Pending home sales fall 1.8 percent to slowest pace since January
Pending Home Sales Dip 1.8 Percent in August | www.nar.realtor
Tariff wars taking some of the steam out of U.S. economic growth Exports are likely to slow.
+++
Revised NAFTA:
Yes, I know that the revised NAFTA agreement is the best one ever negotiated in U.S. history and will be the best ever negotiated by a U.S. President until the end of days.
The new name for the trilateral trade agreement will be the United States-Mexico-Canada Agreement or “USMCA.”
I do not see the revisions having a material positive impact on the U.S. economy.
The agreement, assuming it is ratified, does remove the negative repercussions flowing from an acceleration of the trade war with our two largest export markets.
There will be a slight marginal benefit for U.S. milk producers by permitting more exports of milk protein concentrate, skim milk powder and infant formula to Canada.
Trump's dairy fight with Canada gets only $70 million more than TPP
Starting in 2020, there will be an increase in car components that have to manufactured in Canada, Mexico or the U.S. to 75% from 62.5% to avoid tariffs.
Also starting in 2020, there is also a requirement that 30% of auto manufacturing has to be done by workers earning at least $16 an hour (a provision aimed at Mexico rather than Canada). That percentage to 40% in 2023. This provision may result in fewer cars made in the treaty countries for exports to China and other foreign markets.
U.S. steel and aluminum tariffs will remain in effect and will be subject to separate negotiations. Those tariffs are having negative repercussions on U.S. users of those products.
Canadian dollar, stocks rise as NAFTA salvaged | Reuters
Tariff wars taking some of the steam out of U.S. economic growth Exports are likely to slow.
+++
Revised NAFTA:
Yes, I know that the revised NAFTA agreement is the best one ever negotiated in U.S. history and will be the best ever negotiated by a U.S. President until the end of days.
The new name for the trilateral trade agreement will be the United States-Mexico-Canada Agreement or “USMCA.”
I do not see the revisions having a material positive impact on the U.S. economy.
The agreement, assuming it is ratified, does remove the negative repercussions flowing from an acceleration of the trade war with our two largest export markets.
There will be a slight marginal benefit for U.S. milk producers by permitting more exports of milk protein concentrate, skim milk powder and infant formula to Canada.
Trump's dairy fight with Canada gets only $70 million more than TPP
Starting in 2020, there will be an increase in car components that have to manufactured in Canada, Mexico or the U.S. to 75% from 62.5% to avoid tariffs.
Also starting in 2020, there is also a requirement that 30% of auto manufacturing has to be done by workers earning at least $16 an hour (a provision aimed at Mexico rather than Canada). That percentage to 40% in 2023. This provision may result in fewer cars made in the treaty countries for exports to China and other foreign markets.
U.S. steel and aluminum tariffs will remain in effect and will be subject to separate negotiations. Those tariffs are having negative repercussions on U.S. users of those products.
Canadian dollar, stocks rise as NAFTA salvaged | Reuters
+++++
Markets and Market Commentary:
Bank of America-Merrill Lynch Economists: "We're calling it. Existing home sales have peaked".
This rare divergence in the stock market could spell trouble ahead - MarketWatch I discussed the divergence between the S & P 500 and the Russell 2000 in a recent comment.
This rare divergence in the stock market could spell trouble ahead - MarketWatch I discussed the divergence between the S & P 500 and the Russell 2000 in a recent comment.
According to a National Association of Realtors survey, a record 77% of respondents believe that now is a good time to sell a home. 2018 Q3 Homeownership Opportunities and Market Experience (HOME) Survey | www.nar.realtor
Two-Thirds of U.S. Business Economists See Recession by End-2020 - Bloomberg
Bull run has echoes of 1920s: Nobel Prize-winning economist Shiller Hopefully, it will remain an "echo" with a different ending. Spending boatloads of borrowed money will eventually catch up to the U.S. government and cause a major financial debacle that will spread worldwide. That is far too distant in the future for the Stock Jocks to notice or care about, particularly when there is money to be made in the here and now.
Two-Thirds of U.S. Business Economists See Recession by End-2020 - Bloomberg
Bull run has echoes of 1920s: Nobel Prize-winning economist Shiller Hopefully, it will remain an "echo" with a different ending. Spending boatloads of borrowed money will eventually catch up to the U.S. government and cause a major financial debacle that will spread worldwide. That is far too distant in the future for the Stock Jocks to notice or care about, particularly when there is money to be made in the here and now.
++++++
Trump and Kavanaugh:
Trump mocks Kavanaugh accuser Christine Blasey Ford at campaign rally (Trump: “These are really evil people.”); Trump Mocks Kavanaugh Accusers as Confirmation Hangs in Balance
Kavanaugh is now the candidate of the white man's rage. ‘The trauma for a man’: Male fury and fear rises in GOP in defense of Kavanaugh - The Washington Post;
The lesson drawn by republicans from the Kavanaugh hearing is that young boys and teenagers need to watch out. Forget about them girls. Trump says it's 'a very scary time for young men in America' - CNN; Trump Jr.: Worried for sons in political climate -CNN
Dear dads: Your daughters told me about their assaults. This is why they never told you.
Among the angry white men crowd, which is Donald's core base, there is a strong negative reaction to the "MeToo" movement which is intertwined with the Kavanaugh confirmation process now.
More Than 500 Law Professors Condemn Kavanaugh For ‘Lack Of Judicial Temperament’
Fox News's Jeanine Pirro says the "demon rat" Democrats crucified the alter boy Kavanaugh (Ms Pirro: “The spectacle of this week was one of the most pathetic, disheartening, saddest displays to which this nation has ever stood witness. It was for all intents and purposes a crucifixion of a man who has led the kind of exemplary life few of us can mirror.”) Maybe Ms. Pirro needs to be put in a straightjacket for her own protection. When someone becomes that disconnected from reality, it is best IMO to remove them from managing their own affairs.
Another Yale classmate of Kavanaugh, Chad Ludington, has come forward, claiming that Kavanaugh was untruthful in his sworn testimony about his drinking.
Ludington claims that he had seen Kavanaugh “staggering from alcohol consumption” . He also claimed as others who knew Kavanaugh that he drank frequently and was often "belligerent and aggressive" when intoxicated. Yale Classmate Accuses Kavanaugh of ‘Blatant Mischaracterization’ of His Drinking
READ: Yale classmate's full statement on Kavanaugh (Excerpt: "On one of the last occasions I purposely socialized with Brett, I witnessed him respond to a semi-hostile remark, not by defusing the situation, but by throwing his beer in the man's face and starting a fight")
Kavanaugh classmate to tell FBI of nominee's 'violent drunken' behavior in college
While individuals differ, fragmentary blackouts can occur when there is a rapid rise in blood alcohol concentration. The possibility of a fragmentary blackout starts at .14%. Blood Alcohol Concentration - CWRU Binge drinking is defined as 5 or more drinks within 2 hours for men which is likely to cause fragmentary blackouts. Kavanaugh's drinking habits described by several witnesses with personal knowledge would be consistent with multiple full and fragmentary blackouts.
Kavanaugh Was Questioned by Police After Bar Fight in 1985 - The New York Times
Text messages suggest Kavanaugh wanted to refute accuser's claim before it became public Kavanaugh swore under oath that he first heard of the claim made by Ramirez when the New Yorker story was published a few days ago. Before the publication of that story, Kavanaugh wanted classmates to go on the record to refute the allegation.
Kavanaugh tried to refute sex misconduct claim before it went public
A Yale classmate who claims to have heard information confirming Ramirez's account on the night it occurred or within two days. Repeated efforts by that man to contact the FB were not successful; and he was left with the only option of leaving an online tip on the FBI's hotline. The Confusion Surrounding the F.B.I.’s Renewed Investigation of Brett Kavanaugh | The New Yorker The FBI in his opinion was only being used to provide cover for Kavanaugh and the republican senators.
FBI has no current plans to interview Dr. Christine Blasey Ford, source says
Kavanaugh's testimony is starting to look more and more problematic
Kavanaugh in 1983 letter to friends: 'We're loud, obnoxious drunks'
One of the many denizens of white male privilege and dominance among GOP senators, Orrin Hatch, succinctly sum up their disgust with all of these people coming forward daring to challenge old white men's power: "I don't think we should put up with it, to be honest with you." Just stick a sock in their mouths in other words.
Senator Bill Cassidy (R-LA) wants the FBI to criminally investigate Julie Swetnick for coming forward with her allegations.
If Kavanaugh is confirmed and the Democrats regain control of the House, there will be an investigation by the House Judiciary Committee. Any stone left unturned by the FBI, and there will be a mountain of stones deliberately left untouched, will be turned over.
There may be an investigation by the Disciplinary Counsel in jurisdictions where Kavanaugh is licensed to practice law. Remember that Bill Clinton was suspended for five years for lying about having sex with Monica. FACT CHECK: Bill Clinton
The Trumpsters are now trying to draw attention away from Kavanaugh by having Senator Feinstein investigated over who leaked the Ford letter to the press.
Senators Tom Cotton (R-AK) and Lindsey Graham (R-SC) want the FBI to investigate Feinstein and her staff for allegedly leaking the Ford letter to the press.
Cotton claimed that it is the Democrats who have victimized Ms. Ford as road kill for their Kavanaugh "search-and-destroy mission. Cotton further asserts that Democrats will be the ones to blame if women stop coming forward to report sexual abuse.
Note that Cotton's narrative, which is just asinine as usual for this ranting zealot, has the Democrats victimizing Ms. Ford rather than Kavanaugh in the alleged attempted rape and those who accused Ms. Ford of lying or being delusional which includes Donald. In Mississippi, Trump mocks Ford's claims against Kavanaugh
Cotton says Feinstein will be investigated over leaked letter by Kavanaugh accuser; Lindsey Graham wants to investigate Dianne Feinstein's office in Kavanaugh probe
Fact-checking Donald Trump's rally in Wheeling, W.Va. | PolitiFact West Virginia
Trump mocks Kavanaugh accuser Christine Blasey Ford at campaign rally (Trump: “These are really evil people.”); Trump Mocks Kavanaugh Accusers as Confirmation Hangs in Balance
Kavanaugh is now the candidate of the white man's rage. ‘The trauma for a man’: Male fury and fear rises in GOP in defense of Kavanaugh - The Washington Post;
The lesson drawn by republicans from the Kavanaugh hearing is that young boys and teenagers need to watch out. Forget about them girls. Trump says it's 'a very scary time for young men in America' - CNN; Trump Jr.: Worried for sons in political climate -CNN
Dear dads: Your daughters told me about their assaults. This is why they never told you.
Among the angry white men crowd, which is Donald's core base, there is a strong negative reaction to the "MeToo" movement which is intertwined with the Kavanaugh confirmation process now.
More Than 500 Law Professors Condemn Kavanaugh For ‘Lack Of Judicial Temperament’
Fox News's Jeanine Pirro says the "demon rat" Democrats crucified the alter boy Kavanaugh (Ms Pirro: “The spectacle of this week was one of the most pathetic, disheartening, saddest displays to which this nation has ever stood witness. It was for all intents and purposes a crucifixion of a man who has led the kind of exemplary life few of us can mirror.”) Maybe Ms. Pirro needs to be put in a straightjacket for her own protection. When someone becomes that disconnected from reality, it is best IMO to remove them from managing their own affairs.
Another Yale classmate of Kavanaugh, Chad Ludington, has come forward, claiming that Kavanaugh was untruthful in his sworn testimony about his drinking.
Ludington claims that he had seen Kavanaugh “staggering from alcohol consumption” . He also claimed as others who knew Kavanaugh that he drank frequently and was often "belligerent and aggressive" when intoxicated. Yale Classmate Accuses Kavanaugh of ‘Blatant Mischaracterization’ of His Drinking
READ: Yale classmate's full statement on Kavanaugh (Excerpt: "On one of the last occasions I purposely socialized with Brett, I witnessed him respond to a semi-hostile remark, not by defusing the situation, but by throwing his beer in the man's face and starting a fight")
Kavanaugh classmate to tell FBI of nominee's 'violent drunken' behavior in college
While individuals differ, fragmentary blackouts can occur when there is a rapid rise in blood alcohol concentration. The possibility of a fragmentary blackout starts at .14%. Blood Alcohol Concentration - CWRU Binge drinking is defined as 5 or more drinks within 2 hours for men which is likely to cause fragmentary blackouts. Kavanaugh's drinking habits described by several witnesses with personal knowledge would be consistent with multiple full and fragmentary blackouts.
Kavanaugh Was Questioned by Police After Bar Fight in 1985 - The New York Times
Text messages suggest Kavanaugh wanted to refute accuser's claim before it became public Kavanaugh swore under oath that he first heard of the claim made by Ramirez when the New Yorker story was published a few days ago. Before the publication of that story, Kavanaugh wanted classmates to go on the record to refute the allegation.
Kavanaugh tried to refute sex misconduct claim before it went public
A Yale classmate who claims to have heard information confirming Ramirez's account on the night it occurred or within two days. Repeated efforts by that man to contact the FB were not successful; and he was left with the only option of leaving an online tip on the FBI's hotline. The Confusion Surrounding the F.B.I.’s Renewed Investigation of Brett Kavanaugh | The New Yorker The FBI in his opinion was only being used to provide cover for Kavanaugh and the republican senators.
FBI has no current plans to interview Dr. Christine Blasey Ford, source says
Kavanaugh's testimony is starting to look more and more problematic
Kavanaugh in 1983 letter to friends: 'We're loud, obnoxious drunks'
One of the many denizens of white male privilege and dominance among GOP senators, Orrin Hatch, succinctly sum up their disgust with all of these people coming forward daring to challenge old white men's power: "I don't think we should put up with it, to be honest with you." Just stick a sock in their mouths in other words.
Senator Bill Cassidy (R-LA) wants the FBI to criminally investigate Julie Swetnick for coming forward with her allegations.
If Kavanaugh is confirmed and the Democrats regain control of the House, there will be an investigation by the House Judiciary Committee. Any stone left unturned by the FBI, and there will be a mountain of stones deliberately left untouched, will be turned over.
There may be an investigation by the Disciplinary Counsel in jurisdictions where Kavanaugh is licensed to practice law. Remember that Bill Clinton was suspended for five years for lying about having sex with Monica. FACT CHECK: Bill Clinton
The Trumpsters are now trying to draw attention away from Kavanaugh by having Senator Feinstein investigated over who leaked the Ford letter to the press.
Senators Tom Cotton (R-AK) and Lindsey Graham (R-SC) want the FBI to investigate Feinstein and her staff for allegedly leaking the Ford letter to the press.
Cotton claimed that it is the Democrats who have victimized Ms. Ford as road kill for their Kavanaugh "search-and-destroy mission. Cotton further asserts that Democrats will be the ones to blame if women stop coming forward to report sexual abuse.
Note that Cotton's narrative, which is just asinine as usual for this ranting zealot, has the Democrats victimizing Ms. Ford rather than Kavanaugh in the alleged attempted rape and those who accused Ms. Ford of lying or being delusional which includes Donald. In Mississippi, Trump mocks Ford's claims against Kavanaugh
Cotton says Feinstein will be investigated over leaked letter by Kavanaugh accuser; Lindsey Graham wants to investigate Dianne Feinstein's office in Kavanaugh probe
Fact-checking Donald Trump's rally in Wheeling, W.Va. | PolitiFact West Virginia
Trump's Distorted Attacks on His Accusers - FactCheck.org
Trump Wrong on Mexico's VAT - FactCheck.org
Trump Wrong on Mexico's VAT - FactCheck.org
+++++
Brock Long’s improper use of FEMA staff, SUVs included Hawaii pineapple plant tour, investigation says - The Washington Post; Inspector General Report into FEMA Director Brock Long - The Washington Post
Brock Long’s improper use of FEMA staff, SUVs included Hawaii pineapple plant tour, investigation says - The Washington Post; Inspector General Report into FEMA Director Brock Long - The Washington Post
++++++++
1. Small Ball-Income Generation BDCs and MREITs:
A. Bought 50 CGBD at $17.04-Used Schwab Commission Free Trade:
Quote: TCG BDC Inc. (CGBD)(formerly known as Carlyle GMS Finance)
Closing Price Yesterday: CGBD $16.66 -$0.15 -0.89%
A. Bought 50 CGBD at $17.04-Used Schwab Commission Free Trade:
Quote: TCG BDC Inc. (CGBD)(formerly known as Carlyle GMS Finance)
Closing Price Yesterday: CGBD $16.66 -$0.15 -0.89%
Dividend: Quarterly at $.37 per share ($1.48 annually)
Dividend Yield at a $17.04 Total Cost Per Share: 8.69%
Dividend History: Sourced from Page 15 Earnings Presentation for the Q/E 6/30/18
Last Ex Dividend Date: 9/27/18 (shortly after purchase)
CGBD One Year Chart (trading at time of purchase below its 50, 100 and 200 day SMA lines)
TCG BDC SEC Filings
The IPO was in June 2017. The shares were priced to the public at $18.50 Prospectus
Net Asset Value ("NAV") Per Share History: Sourced from 10-Qs
6/30/18: $17.93
6/30/17: $18.01
6/30/16: $18.02
6/30/15: $19.09
6/30/14: $19.71
6/30/13: $18.72
Discount to NAV Per Share at $17.04 = 4.96% (using 6/30/18 value)
Last SEC Filed Annual Report: SEC Form 10-K (summary of risk factors starts at page 21 and ends at page 45)
Last Earnings Report: Q/E 6/30/18
As of 6/30, the total weighted average yield was 9.16% and 99.2% of the loans were at floating rates.
SEC Filed Press Release
Investments:
The loans are mostly first lien:
Basic terms listed starting at page 7 of the 10-Q for the Q/E 6/30/18
Recent price weakness is probably due to some loans going sour which will happen with BDCs. It is not a question of whether it will happen but how much. Five loans were written down in the quarter by $15.123M or $.24 per share.
Two of those loans, SolAero Technologies and Tweddle Group were put on non-accrual. The original cost of the SolAero first lien loan is $23.854M which was valued at $19.284M as of 6/30/18. The first lien loan to Tweddle was marked down to $3.121M from an original cost of $7.175M.
The Product Quest Manufacturing first lien loan remained on non-accrual. This loan has an original cost of $32.27M and has been marked down to $9.988M from $14.955M as of 3/31/18.
Loans to two other companies, Hydrofarm and PPT Management, were also marked down meaningfully from the first quarter valuations.
When the retail investor looks through the list of loans, all or close to all of the companies will be unknown to them. I am unable to assess for example whether the Hydrofarm and PPT Management loans will go on non-accrual and require more write-downs.
Nor can I look at any of the companies and even have an opinion on whether one or more will soon be in trouble.
I do not have any information to question the valuation marks. The borrowers are not publicly traded companies.
Instead, I simply have to rely on what the company says about the risks and values. The general risk summary can be found in its quarterly earnings presentation filed with the SEC:
Presentation at page 8
As with all other externally managed BDCs, the goal is simply to harvest the dividend and to escape with whatever profit may be available in the future.
B. Bought 10 CGBD at $17.08- and 10 at $16.67-Used Fidelity Commission Free Trades:
The second 10 share lot was bought after the quarterly ex dividend date, while the first 10 share lot was bought shortly before that date.
See Previous Discussion Above.
This starts a small ball purchase program in my Fidelity account where I have an abundance of free trades.
Maximum Position in this Account: 50 Shares (10 share increments)
Average Cost per share (20 shares this account) = $16.88
Dividend Yield at TC per share = 8.77% (assumes no change in the penny rate)
The next purchase will be in the $16.2 to $16.3 range.
C. Bought 50 DX at $6.35-Used Schwab Commission Free Trade:
Quote: Dynex Capital Inc. (DX)
Last Discussion: Item # 3.A. Bought 50 DX at $6.39-Used Fidelity Commission Free Trade (9/5/18 Post) I intend to average down in the Fidelity account until I hit 100 shares.
Current Position: 100 shares (50 shares in two taxable accounts)
Maximum Position: 150 Shares plus dividend reinvestment in the Schwab account only
I view this stock as high risk. The general idea is to harvest the dividend and hopefully escape at some point with a profit-no matter how small.
Dividend: Currently, quarterly at $.18 per share or $.72 annually
Last Ex Dividend Date: Shortly after purchase on 10/2/18
Yield at a Total Cost of $6.35 per share = 11.34%
Dividend cuts by MREITs have been the norm as of late. Operating conditions have not been favorable to them primarily due to net interest spread compression.
Last Earnings Report: Dynex Capital, Inc. Reports Second Quarter 2018 Results
Book Value (BV) Per Share as of 6/30/18: $6.93
Discount to Book Value at $6.35 Share Price and 6/30/18 BV = -8.37%
Book value for MREITs has been sliding as of late. The DX BV per share was at $7.07 as of 3/31/18.
5 Year Operating History: DSourced from 2017 Annual Report at pp. 27-28
Note the decline in BV per share over the 5 year period and some compression in the net interest spreads. BV per share did increase to $9.02 in 2014 from $8.69. The decline from $9.02 (12/31/14) to $6.93 (6/30/18) is 23.17%.
Average Annual Total Returns with Dividends Reinvested Through 9/19/18 Using Purchases at Closing Prices on
12/31/08 11.52% (Near Depression period)
12/31/09 7.86%
12/31/10 4.49%
12/31/11 6.08%
12/31/12 4.53%
12/31/13 6.55%
12/31/14 4.14%
12/31/15 10.82%
12/31/16 6.7%
12/31/17 -4.82%
DRIP Returns Calculator | Dividend Channel
The preceding table illustrates that a long term hold is an unfavorable strategy unless the starting point was in one or two years shown. Most of the time, a purchase would have resulted in the dividend losing some of its value.
TCG BDC SEC Filings
The IPO was in June 2017. The shares were priced to the public at $18.50 Prospectus
Net Asset Value ("NAV") Per Share History: Sourced from 10-Qs
6/30/18: $17.93
6/30/17: $18.01
6/30/16: $18.02
6/30/15: $19.09
6/30/14: $19.71
6/30/13: $18.72
Discount to NAV Per Share at $17.04 = 4.96% (using 6/30/18 value)
Last SEC Filed Annual Report: SEC Form 10-K (summary of risk factors starts at page 21 and ends at page 45)
Last Earnings Report: Q/E 6/30/18
As of 6/30, the total weighted average yield was 9.16% and 99.2% of the loans were at floating rates.
Investments:
The loans are mostly first lien:
Basic terms listed starting at page 7 of the 10-Q for the Q/E 6/30/18
Recent price weakness is probably due to some loans going sour which will happen with BDCs. It is not a question of whether it will happen but how much. Five loans were written down in the quarter by $15.123M or $.24 per share.
Two of those loans, SolAero Technologies and Tweddle Group were put on non-accrual. The original cost of the SolAero first lien loan is $23.854M which was valued at $19.284M as of 6/30/18. The first lien loan to Tweddle was marked down to $3.121M from an original cost of $7.175M.
The three borrowers on non-accrual as of 6/30/18 accounted for about 3.2% of debt investments at total cost and 1.7% of those investments at the current mark.
Loans to two other companies, Hydrofarm and PPT Management, were also marked down meaningfully from the first quarter valuations.
When the retail investor looks through the list of loans, all or close to all of the companies will be unknown to them. I am unable to assess for example whether the Hydrofarm and PPT Management loans will go on non-accrual and require more write-downs.
Nor can I look at any of the companies and even have an opinion on whether one or more will soon be in trouble.
I do not have any information to question the valuation marks. The borrowers are not publicly traded companies.
Instead, I simply have to rely on what the company says about the risks and values. The general risk summary can be found in its quarterly earnings presentation filed with the SEC:
As with all other externally managed BDCs, the goal is simply to harvest the dividend and to escape with whatever profit may be available in the future.
B. Bought 10 CGBD at $17.08- and 10 at $16.67-Used Fidelity Commission Free Trades:
The second 10 share lot was bought after the quarterly ex dividend date, while the first 10 share lot was bought shortly before that date.
See Previous Discussion Above.
This starts a small ball purchase program in my Fidelity account where I have an abundance of free trades.
Maximum Position in this Account: 50 Shares (10 share increments)
Average Cost per share (20 shares this account) = $16.88
Dividend Yield at TC per share = 8.77% (assumes no change in the penny rate)
The next purchase will be in the $16.2 to $16.3 range.
C. Bought 50 DX at $6.35-Used Schwab Commission Free Trade:
Quote: Dynex Capital Inc. (DX)
Last Discussion: Item # 3.A. Bought 50 DX at $6.39-Used Fidelity Commission Free Trade (9/5/18 Post) I intend to average down in the Fidelity account until I hit 100 shares.
Current Position: 100 shares (50 shares in two taxable accounts)
Maximum Position: 150 Shares plus dividend reinvestment in the Schwab account only
I view this stock as high risk. The general idea is to harvest the dividend and hopefully escape at some point with a profit-no matter how small.
Dividend: Currently, quarterly at $.18 per share or $.72 annually
Last Ex Dividend Date: Shortly after purchase on 10/2/18
Yield at a Total Cost of $6.35 per share = 11.34%
Dividend cuts by MREITs have been the norm as of late. Operating conditions have not been favorable to them primarily due to net interest spread compression.
Last Earnings Report: Dynex Capital, Inc. Reports Second Quarter 2018 Results
Book Value (BV) Per Share as of 6/30/18: $6.93
Discount to Book Value at $6.35 Share Price and 6/30/18 BV = -8.37%
Book value for MREITs has been sliding as of late. The DX BV per share was at $7.07 as of 3/31/18.
5 Year Operating History: DSourced from 2017 Annual Report at pp. 27-28
Note the decline in BV per share over the 5 year period and some compression in the net interest spreads. BV per share did increase to $9.02 in 2014 from $8.69. The decline from $9.02 (12/31/14) to $6.93 (6/30/18) is 23.17%.
Average Annual Total Returns with Dividends Reinvested Through 9/19/18 Using Purchases at Closing Prices on
12/31/08 11.52% (Near Depression period)
12/31/09 7.86%
12/31/10 4.49%
12/31/11 6.08%
12/31/12 4.53%
12/31/13 6.55%
12/31/14 4.14%
12/31/15 10.82%
12/31/16 6.7%
12/31/17 -4.82%
DRIP Returns Calculator | Dividend Channel
The preceding table illustrates that a long term hold is an unfavorable strategy unless the starting point was in one or two years shown. Most of the time, a purchase would have resulted in the dividend losing some of its value.
2. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Packaging Corporation of America 2.45% SU Bonds Maturing on 12/15/20:
Finra Page: Bond Detail (prospectus linked)
2017 Annual Report (debt listed at page 58)
Credit Ratings:
Bought at a Total Cost of 98.395 (includes $4 Vanguard Commission)
YTM at TC Then at 3.192%
Current Yield at TC = 2.49%
B. Bought 1 Ryder 2.45% SU Bond Maturing on 9/3/19:
Finra Page: Bond Detail (prospectus linked)
Issuer: Ryder System Inc. (R)
R Analyst Estimates
Ryder Reports Second Quarter 2018 Results
Credit Ratings:
Fitch Expects to Rate Ryder System's Sr. Unsecured Notes 'A-' (7/30/18)
Bought at a Total Cost of 99.662
YTM at TC Then at 2.804%
Current Yield at 2.4132%
Comparable Treasury YTM at time of Purchase (1 bond order) = 2.509%
C. Bought 2 Ebay 2.2% SU Bonds Maturing on 8/1/19:
I now own 4 bonds.
FINRA Page: Bond Detail (prospectus)
Issuer: eBay Inc. (EBAY)
EBAY Analyst Estimates
eBay Inc. Reports Second Quarter 2018 Results
Cash Assets, Short and Long Term Investments as of 6/30/18:
10-Q for the Q/E 6/30/18
2017 Annual Report (debt listed at page F-28)
Credit Ratings:
Fitch Affirms eBay at 'BBB/F2'; Outlook Stable (8/18/17)
Bought at a Total Cost of 99.579 (includes $2 Fidelity Commission)
YTM at TC Then at 2.684%
Current Yield at TC = 2.2093%
D. Bought 1 McDonalds 2.75% SU Bond Maturing on 12/9/20: IB Account
Finra Page: Bond Detail (prospectus linked)
Issuer: McDonald's Corp. (MCD)
MCD Analyst Estimates
McDonald's Reports Second Quarter 2018 Results
Credit Ratings:
Fitch Affirms McDonald's at 'BBB'/'F2'; Outlook Stable (12/13/17)
Bought at a Total Cost of 99.607 (includes $1 IB commission)
YTM at TC Then at 2.931%
Current Yield at 2.7609%
E. Bought Two 3 month Treasury Bills at Auction Maturing on 12/20/18: Schwab Account
Investment Rate: 2.166%
Auction Details:
F. Bought 1 Treasury .75% Coupon Maturing on 7/15/19: Schwab Account
YTM = 2.446%
Most of my auction purchases will be in my Schwab account since the sweep account yield is a paltry .22%.
Bought at a Total Cost of 99.662
YTM at TC Then at 2.804%
Current Yield at 2.4132%
Comparable Treasury YTM at time of Purchase (1 bond order) = 2.509%
C. Bought 2 Ebay 2.2% SU Bonds Maturing on 8/1/19:
I now own 4 bonds.
FINRA Page: Bond Detail (prospectus)
Issuer: eBay Inc. (EBAY)
EBAY Analyst Estimates
eBay Inc. Reports Second Quarter 2018 Results
Cash Assets, Short and Long Term Investments as of 6/30/18:
10-Q for the Q/E 6/30/18
2017 Annual Report (debt listed at page F-28)
Credit Ratings:
Fitch Affirms eBay at 'BBB/F2'; Outlook Stable (8/18/17)
Bought at a Total Cost of 99.579 (includes $2 Fidelity Commission)
YTM at TC Then at 2.684%
Current Yield at TC = 2.2093%
D. Bought 1 McDonalds 2.75% SU Bond Maturing on 12/9/20: IB Account
Finra Page: Bond Detail (prospectus linked)
Issuer: McDonald's Corp. (MCD)
MCD Analyst Estimates
McDonald's Reports Second Quarter 2018 Results
Credit Ratings:
Fitch Affirms McDonald's at 'BBB'/'F2'; Outlook Stable (12/13/17)
Bought at a Total Cost of 99.607 (includes $1 IB commission)
YTM at TC Then at 2.931%
Current Yield at 2.7609%
E. Bought Two 3 month Treasury Bills at Auction Maturing on 12/20/18: Schwab Account
Investment Rate: 2.166%
Auction Details:
F. Bought 1 Treasury .75% Coupon Maturing on 7/15/19: Schwab Account
YTM = 2.446%
3. Small Ball-Small Cap Canadian E & P:
A shortage of pipeline capacity in Canada, mostly a self-inflicted wound on the Canadian economy, has resulted in Canadian crude being priced far lower than U.S. crude. Canada Is Missing Out on the Global Oil Recovery - Bloomberg
A shortage of pipeline capacity in Canada, mostly a self-inflicted wound on the Canadian economy, has resulted in Canadian crude being priced far lower than U.S. crude. Canada Is Missing Out on the Global Oil Recovery - Bloomberg
A. Bought 100 Whitecap Resources at C$7.85 (C$1 commission-IB Account):
Quote: Whitecap Resources Inc. (WCP:CA)
USD Priced Shares: SPGYF (pink sheet exchange)
Symbols that end in "F" are ordinary shares issued by foreign corporations that are priced in USDs and traded on the pink sheet exchange or the U.S. Grey Market.
I now own 250 shares with 150 of those being the USD priced ordinary shares that are traded on the U.S. pink sheet exchange.
Last Discussion: Item # 1.B. Bought 50 SPGYF at U.S.$6.73-Used Schwab Commission Free Trade (8/5/18 Post)
I have nothing to add to that recent discussion.
B. Bought 100 BTE at $2.7-Used Fidelity Commission Free Trade:
Quotes: Baytex Energy Corp. (U.S.: NYSE); Baytex Energy Corp. (Canada: Toronto)
Closing Price Yesterday: BTE $2.95 -$0.10 -3.28%
Last Discussion:Bought 100 BTE at C$4.32 (8/5/18 Post)
I bought 100 BTE:CA shares in Toronto using CADs to settle the trade. I also received BTE:CA shares in exchange for my Raging River shares. Baytex Announces Closing of Strategic Combination With Raging River, Updated 2018 Guidance and Confirmation of Preliminary 2019 Plans Those CAD priced shares are owned in my Interactive Brokers account where I do all of my international stock trading.
This last purchase is an average down. The customary caveat is that I view small Canadian E & P companies to be undervalued, but I may be in a minority of one. I am in the hole on all of them except for Surge Energy where I am frequently moving back and forth from a net unrealized gain to an net unrealized loss.
Excerpt from Previous Link:
4. Small Ball- REGIONAL BANK BASKET STRATEGY:
A. Bought 10 HOPE at $16.57 and 10 at $16.18-Used Fidelity Commission Free Trades:
Quote: Hope Bancorp Inc.
Closing Price: HOPE +16.15 +$0.01 +0.06%
The regional bank ETF KRE is now in correction territory.
USD Priced Shares: SPGYF (pink sheet exchange)
Symbols that end in "F" are ordinary shares issued by foreign corporations that are priced in USDs and traded on the pink sheet exchange or the U.S. Grey Market.
I now own 250 shares with 150 of those being the USD priced ordinary shares that are traded on the U.S. pink sheet exchange.
Last Discussion: Item # 1.B. Bought 50 SPGYF at U.S.$6.73-Used Schwab Commission Free Trade (8/5/18 Post)
I have nothing to add to that recent discussion.
B. Bought 100 BTE at $2.7-Used Fidelity Commission Free Trade:
Quotes: Baytex Energy Corp. (U.S.: NYSE); Baytex Energy Corp. (Canada: Toronto)
Closing Price Yesterday: BTE $2.95 -$0.10 -3.28%
Last Discussion:Bought 100 BTE at C$4.32 (8/5/18 Post)
I bought 100 BTE:CA shares in Toronto using CADs to settle the trade. I also received BTE:CA shares in exchange for my Raging River shares. Baytex Announces Closing of Strategic Combination With Raging River, Updated 2018 Guidance and Confirmation of Preliminary 2019 Plans Those CAD priced shares are owned in my Interactive Brokers account where I do all of my international stock trading.
This last purchase is an average down. The customary caveat is that I view small Canadian E & P companies to be undervalued, but I may be in a minority of one. I am in the hole on all of them except for Surge Energy where I am frequently moving back and forth from a net unrealized gain to an net unrealized loss.
Excerpt from Previous Link:
4. Small Ball- REGIONAL BANK BASKET STRATEGY:
A. Bought 10 HOPE at $16.57 and 10 at $16.18-Used Fidelity Commission Free Trades:
Quote: Hope Bancorp Inc.
Closing Price: HOPE +16.15 +$0.01 +0.06%
The regional bank ETF KRE is now in correction territory.
HOPE Consensus Analyst E.P.S. Estimates (on last purchase date 9/28)
2018 $1.47
2019 $1.54
P/E on Consensus 2019 Estimate = 10.76
Dividend: Quarterly at $.14 per share ($.56 annually)
Dividend Yield at $16.18 = 3.46%
Position this Account: 70+ Shares
Average Cost Per Share: $17.11
Dividend Yield at Total Average Cost Per Share = 3.27%
Dividend Reinvestment: Yes at below $19
Last Sell Discussions: Item 3.C. Sold 20 HOPE at $17.91 (8/26/18 Post); Item 1.A. Sold 50 HOPE at $19 (11/4/17 Post)
I have now bought back that 20 share lot at an average total cost per share of $16.375.
Last Earnings report: Q/E 6 /30/18
E.P.S. $.36
NIM: 3.61% (includes accretion on purchased loans)
Efficiency Ratio: 51.87%
NPL Ratio: 1.03%
NPA Ratio: .87%
Coverage Ratio for non-performing loans: 131.74%
ROE: 9.89%
ROA: 1.3%
Stock Repurchases During Quarter: 4.4M shares at an average cost per share of $18.1
"The effective tax rate for the 2018 second quarter was 25.9%, compared with 25.7% in the preceding 2018 first quarter and 38.5% in the 2017 second quarter. The 2018 effective tax rates reflect the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which lowered the corporate federal tax rate from 35% to 21% effective January 1, 2018."
Hope Bancorp Reports 2018 Second Quarter Financial Results
Hope Bancorp Announces Authorization of New $50 Million Share Repurchase Program (9/26/18 Press Release)
5. Recent Cash Flow into Schwab Taxable Account:
This account has more CDs than any other account and a majority of those make monthly interest payments.
The following snapshots reflect those CD interest payments, several monthly or quarterly BDC dividends (GOOD, NMFC, TCRD, CPTA), one REIT quarterly dividend payment (DEA), one CEF quarterly distribution (DPG), one ETF quarterly distribution (ENY), one quarterly Canadian common stock dividend paid in USDs (PWCDF) with 15% withheld as a foreign tax, one U.S. quarterly common stock dividend (HBAN); and one Canadian common stock monthly dividend paid in USDs with a 15% withholding tax withheld (TWSWF).
The focus is on income generation and capital preservation. While fixed coupon investments will fluctuate in price prior to maturity, the capital preservation objective is achieved by the credit quality and the promise to pay a sum certain at a date certain.
I received $6K in maturing CD proceeds and another $3K in a short term treasury. Of that amount, I redirected $3K into the one month treasury bill auction yesterday and the remainder is still in the sweep account.
I received semi-annual Tennessee municipal tax exempt interest payments (Wilson County, Maury County, Metropolitan Government of Nashville, and Knoxville) These bonds are high quality.
Cash flow consists of a maturing proceeds from bonds and CDs as well as , interest and dividend payments. I am holding onto proceeds for up to one week before redeploying in this account, since I expect short term rates to rise.
My Vanguard accounts are larger than my Schwab account, but there is a large allocation in the Vanguard Prime Money Market fund that fluctuates around 25% of the total value. The IB account is my smallest and is currently concentrated in short term investment grade corporate bonds.
I am now using 50% of cash flow in my Vanguard accounts to buy commission free ETFs that are out-of-favor or moving in that direction (e.g. DES). I will discuss how this works in my next post.
2018 $1.47
2019 $1.54
P/E on Consensus 2019 Estimate = 10.76
Dividend: Quarterly at $.14 per share ($.56 annually)
Dividend Yield at $16.18 = 3.46%
Position this Account: 70+ Shares
Average Cost Per Share: $17.11
Dividend Yield at Total Average Cost Per Share = 3.27%
Dividend Reinvestment: Yes at below $19
Last Sell Discussions: Item 3.C. Sold 20 HOPE at $17.91 (8/26/18 Post); Item 1.A. Sold 50 HOPE at $19 (11/4/17 Post)
I have now bought back that 20 share lot at an average total cost per share of $16.375.
Last Earnings report: Q/E 6 /30/18
E.P.S. $.36
NIM: 3.61% (includes accretion on purchased loans)
Efficiency Ratio: 51.87%
NPL Ratio: 1.03%
NPA Ratio: .87%
Coverage Ratio for non-performing loans: 131.74%
ROE: 9.89%
ROA: 1.3%
Stock Repurchases During Quarter: 4.4M shares at an average cost per share of $18.1
"The effective tax rate for the 2018 second quarter was 25.9%, compared with 25.7% in the preceding 2018 first quarter and 38.5% in the 2017 second quarter. The 2018 effective tax rates reflect the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which lowered the corporate federal tax rate from 35% to 21% effective January 1, 2018."
Hope Bancorp Reports 2018 Second Quarter Financial Results
Hope Bancorp Announces Authorization of New $50 Million Share Repurchase Program (9/26/18 Press Release)
5. Recent Cash Flow into Schwab Taxable Account:
This account has more CDs than any other account and a majority of those make monthly interest payments.
The following snapshots reflect those CD interest payments, several monthly or quarterly BDC dividends (GOOD, NMFC, TCRD, CPTA), one REIT quarterly dividend payment (DEA), one CEF quarterly distribution (DPG), one ETF quarterly distribution (ENY), one quarterly Canadian common stock dividend paid in USDs (PWCDF) with 15% withheld as a foreign tax, one U.S. quarterly common stock dividend (HBAN); and one Canadian common stock monthly dividend paid in USDs with a 15% withholding tax withheld (TWSWF).
The focus is on income generation and capital preservation. While fixed coupon investments will fluctuate in price prior to maturity, the capital preservation objective is achieved by the credit quality and the promise to pay a sum certain at a date certain.
I received $6K in maturing CD proceeds and another $3K in a short term treasury. Of that amount, I redirected $3K into the one month treasury bill auction yesterday and the remainder is still in the sweep account.
I received semi-annual Tennessee municipal tax exempt interest payments (Wilson County, Maury County, Metropolitan Government of Nashville, and Knoxville) These bonds are high quality.
Cash flow consists of a maturing proceeds from bonds and CDs as well as , interest and dividend payments. I am holding onto proceeds for up to one week before redeploying in this account, since I expect short term rates to rise.
My Vanguard accounts are larger than my Schwab account, but there is a large allocation in the Vanguard Prime Money Market fund that fluctuates around 25% of the total value. The IB account is my smallest and is currently concentrated in short term investment grade corporate bonds.
I am now using 50% of cash flow in my Vanguard accounts to buy commission free ETFs that are out-of-favor or moving in that direction (e.g. DES). I will discuss how this works in my next post.
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.
The Masters of Disaster who control GOV and SIR could teach everyone interesting and creative ways to destroy their shareholders' money.
ReplyDeleteGovernment Properties Income Trust (GOV)
$9.87 -$0.89 -8.27%
Last Updated: Oct 3, 2018 at 11:37 a.m. EDT
https://www.marketwatch.com/investing/stock/gov
Prior to announcing its acquisition of SIR just a few days ago, GOV was trading at over $17. It takes a lot of work and ingenuity to cut the stock price almost in half with an acquisition proposal.
Select Income REIT
$19.51 -$1.68 -7.93%
Last Updated: Oct 3, 2018 at 11:38 a.m. EDT
https://www.marketwatch.com/investing/stock/sir
SIR shareholders can not be happy with a take under to its pre-merger announcement price. GOV claimed that the value to SIR shareholders was over $29 per share, which was technically true at the moment in time of utterance, but was quickly proved to be an illusion as I discussed earlier.
The precipitous decline today is due to GOV offering to sell its SIR shares in a public offering, which was anticipated as part of the acquisition deal.
https://www.businesswire.com/news/home/20181002006052/en/
It was predictable that those shares would be sold at a substantial loss to their original purchase price, which IMO had no benefit to GOV's shareholders at the time of purchase and was done to solidify control for the external manager RMR.
Who would want to buy those SIR shares now and receive GOV shares (plus some ILPT shares owned by SIR in a taxable distribution) other than arbs who would want a big discount to take the risk.
So much for the Bond Ghouls holding the 3.11% yield line for the 10 year treasury:
ReplyDeleteU.S. 10 Year Treasury Note
3.164% + 0.099%
Last Updated: Oct 3, 2018 at 2:20 p.m. EDT
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
At least regional banks have returned to their normal correlation with interest rate movements today:
SPDR S&P Regional Banking ETF $60.24 +$1.615 +2.76%
https://www.marketwatch.com/investing/fund/kre
Even though I knew there was going to be a FEMA test of the presidential alert on my iPhone at 1:18 CST, I still jumped when the alarm went off.
When I was in grade school, we had drills where everyone put their heads underneath their desk for protection against nuclear bombs raining down.
South Gent,
ReplyDeleteWould you characterize CGBD as an "External" managed BDC or an "Internal" managed BDC? Since Carlyle is a more reputable firm maybe we can place a bit higher confidence in the numbers and reports produced by the company?
Re. the saga between GOV and SIR, GOV is now changing hands at less than its tangible book value and yielding over 17% is it a value trap?
Y: CGBD is an externally managed BDC.
DeleteThe 10-K has information on the compensation arrangement.
In 2017, the external manager was paid $25.254M in a base management fee and $21.084M in an incentive fee. Total investment income was at $165M with a net income number after all expenses of $92.151.
The % of management fees to total investment income was at 28% last year.
I have referred to BDCs as similar to hedge funds that have a 2/20 compensation scheme (2% base management fee + 20% of the profits). The returns are not worth what is paid to the managers. There was also a waiver of $5.927M in the base management fee.
Page 57:
https://www.sec.gov/Archives/edgar/data/1544206/000154420618000010/cgbd-2017x12x31x10k.htm
The internal management BDCs have lower management fees . Several of them have managers who have had a history of destroying capital. So the existence of an internal management agreement is not equivalent of a better BDC.
GOV is going to slash its dividend when it completes the merger. There will only be one more dividend at the current rate.
The new annual dividend will be between $.5 and $.6 per share down from the current annual rate of $1.72. The external manager of GOV can not be trusted to act in the interest of shareholders.
I discussed the details in an earlier post:
Sunday, September 23, 2018
Item # 3.A. Sold 10 GOV at $17.03-Used Commission Free Trade:
https://tennesseeindependent.blogspot.com/2018/09/observations-and-sample-of-recent_23.html
I also discussed selling the balance of my SIR position in Item # 3.B.
I am down to owning 25 shares of GOV with an average cost per share of $12.43. I have no good explanation of why I did not sell those 25 shares when the merger was announced. The most likely explanation is simply that I forgot that owned any.
Maybe the Stock Jocks are having an anxiety attack today due to the unsettling spurt in interest rates.
ReplyDeleteS&P 500 Index
2,906.15 -19.36 -0.66%
Last Updated: Oct 4, 2018 at 10:51 a.m. EDT
https://www.marketwatch.com/investing/index/spx
The 10 year treasury's decisive breakout of its 2018 trading range yesterday does create uncertainty about how high will the new range go.
U.S. 10 Year Treasury Note 3.192%
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
Part of the stock market's success is built upon easy money and ridiculously low interest rates by historical standards. Interest rates remain abnormally low in developed countries.
I do not see the current interest rates levels as having a net material negative impact on the real economy, with the main negative impact being on new housing sales, which will play out gradually, and the rise in existing home prices.
There is a positive impact from rising rates in that it creates more disposable income for consumers which can be saved, spent and/or used to pay down higher cost debt.
The most serious near term impact from a persistent rise in rates will be the psychological effects, which may prove to be profound given the long duration of abnormally low rates.
The rise is starting to have a negative impact on bond and preferred stock prices.
During the 2013 interest rate spike, the ten year topped out at a 3.04% yield on 12/31/2013, capping a persistent rise from around 1.66% as I recall from early May.
If you look at the prices for exchange traded baby bonds and preferred stocks then in existence, their prices were much lower due to that spike than now, even though the 10 year yield has surpassed the high from that previous spike. So there may certainly be more room for those prices to fall.
It is certainly easy now to find very short term and high quality bonds that yield materially more than the dividend yield of the S & P 500 which is currently at 1.76%.
http://www.multpl.com/s-p-500-dividend-yield/
The one month treasury bill is currently trading with about a 2.14% yield.
https://www.marketwatch.com/investing/bond/tmubmusd01m?countrycode=bx
Paratek Pharmaceuticals, Inc. (PRTK)
ReplyDelete$11.86 +1.82 (+18.13%)
As of 11:46AM EDT.
This is a delayed reaction to PRTK receiving two FDA approvals. Oddly, there was a brief share price decline, which has become normal, after the approvals.
One of the drugs is an acne treatment that has been licensed to Allergan who licensed it to Almirall SA.
" Paratek earned a $12 million milestone payment upon FDA approval and is now entitled to receive tiered royalties at rates ranging from high-single to low double digits on net sales of SEYSARA."
https://globenewswire.com/news-release/2018/10/02/1588602/0/en/FDA-Approves-SEYSARA-Sarecycline-for-the-Treatment-of-Moderate-to-Severe-Acne.html
The other drug is the antibiotic NUZYRA (Omadacycline), which is more important to PRTK. The approval is for "community-acquired bacterial pneumonia (CABP) and acute skin and skin structure infections (ABSSSI)." The drug will be made available in the 2019 first quarter.
https://globenewswire.com/news-release/2018/10/02/1600459/0/en/Paratek-Announces-FDA-Approval-of-NUZYRA-Omadacycline.html
I own 30 shares as part of my Lottery Ticket basket strategy for small biotech stocks.
Thursday, June 21, 2018
Item # 1.B. Bought 30 PRTK at $10.85-Used Commission Free Trade:
https://tennesseeindependent.blogspot.com/2018/06/observations-and-sample-of-recent_21.html
For most of the time since my most recent purchase, I have been in the hole. I do have $92.47 in realized gains, so I am making progress of a sort.
FS Investment Corp.
ReplyDelete$6.93 -$0.195 -2.74%
Last Updated: Oct 4, 2018 at 2:33 p.m. EDT
https://www.marketwatch.com/investing/stock/fsic
FYI, Wells Fargo downgraded the stock from buy to neutral this morning. The price target was lowered to $7 from $8.25. I do not have access to the report.
Manulife Financial Corp.
$17.38 -$0.67 -3.71%
Last Updated: Oct 4, 2018 at 2:36 p.m. EDT
https://www.marketwatch.com/investing/stock/mfc
The Muddy Waters short seller (Carson Block) published a report today arguing its bear thesis that involves an ongoing trial relating to MFC's universal life products. The suit involves a claim that the hedge fund must be allowed to deposit unlimited funds in a policy issued in 1997 that guaranteed a 4% rate of return.
https://www.bloomberg.com/news/articles/2018-10-04/muddy-waters-carson-block-shorts-canadian-insurer-manulife
I am not able to assess that argument without reading the policy itself and being privy to the arguments and case law being cited by the parties.
I am going to stop buying MFC shares until I know more. I did not see a discussion of that pending action in MFC's annual report.
++
I noticed that Senator Heidi Heitkamp (D-NK) will vote against Kavanaugh. She will likely lose her re-election bid this November to Kent Cramer. North Dakota went for Trump by almost 40 points. If she voted for Kavanaugh, Senator Heitkamp could lose a lot of democrat votes and gain nothing from republicans who would vote against her even if she voted for Kavanaugh. Either way, she loses so she might as well vote her conscience and for traditional moral values. Perjury is only a conservative value when practiced by republican Supreme Court nominees willing to toe the line on GOP ideology, which includes the reversal of Roe v. Wade and probably the gay marriage rights decision as well.
The only other wavering Democrat is Joe Manchin who is in a tough re-election bid in West Virginia where the calculus is probably different. I suspect he will vote for Kavanaugh.
My best guess now is that only republican who will vote no is Lisa Murkowski. So I am anticipating that the vote on Saturday will be 51 yes and 49 no. At best for those opposing the nomination, the vote would be 50/50 with Pence casting the deciding vote.
Recent polls have found that the republicans have been more energized to vote in November by this nomination fight than the democrats.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/10/observations-and-sample-of-recent_7.html