Wednesday, February 20, 2019

Observations and Sample of Recent Trades: ENB, GMREPRA, MNRPRC, TANNL, TDIV

Economy

On a non-seasonally adjusted basis, CPI was up 1.6% over the 12 month period ending in January 2019. Core CPI rose 2.2%.


A significant decline in energy costs lowered CPI below core CPI. One of the quirky items is health insurance costs. The Y-O-Y increase was reported at 6.5%. Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category


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Japan's economy bounces back in Q4 - MarketWatch (1.4% growth annualized compared to -2.6% in the prior quarter)


A big change in accounting puts $3 trillion on corporate books

New York Mayor de Blasio Rips Amazon's 'Abuse' of Power - TheStreet There is a strong tendency among many democrats to kill the goose that lays the golden egg.  


I never understood why Amazon would want to establish a NYC headquarters. Nashville, one of the contenders, has a far lower cost of living, no state income taxes, and a more welcoming attitude to businesses. Berkshire’s Charlie Munger has a very blunt response to those ‘driving rich people away’ as Amazon scraps HQ2 - MarketWatch 


There are states and cities in the U.S. who are driving people and businesses away, leaving fewer businesses to finance their spending, public employee pensions, and debt service obligations. Their taxes will continue to rise, driving even more away to less costly areas, primarily growing metropolitan areas in the south. I have been noting for years the migration of businesses and individuals to middle Tennessee from high tax, nanny states with an abundance of regulations. That trend will accelerate rather than diminish in the coming years.  


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Trump:

Intimidation, Pressure and Humiliation: Inside Trump’s Two-Year War on the Investigations Encircling Him - The New York Times (a comprehensive report); republished at MSN:Intimidation, Pressure and Humiliation: Inside Trump’s Two-Year War on the Investigations Encircling Him  

This Trump performance is why people talk about the 25th Amendment - The Washington PostYou won't believe what Trump just said: 6 eye-popping moments (Trump's admiration for authoritarian leaders is boundless as is his contempt for western democracies and the institutions necessary to support them)


In three successive tweets, Donald stated that he has a 52% approval rating, the press is the enemy of the people, and that NBC needs to be investigated by the FEDs for airing a satirical skit on SNL that made fun of him: 



Satirical comedy uses exaggeration and works best when it exposes the truth more clearly through comedy. Before Trump, other Presidents took the satirical skits in stride. 

Trump did not like the cold opening where Alex Baldwin, as Trump, performed a satirical version of Trump's national emergency declaration. The skit was spot on. SNL’s Trump emergency declaration vs. the real thing - YouTube

At Don the Con's recent El Paso rally, the Trumpsters cheered when Don Jr. called teachers a bunch of losers who try to indoctrinate children "on socialism since birth".  Why Donald Trump Jr.’s ‘loser teachers’ comment was ‘a chilling moment’ for educators around the world Perhaps one of those losers could educate Don Jr. on what the word "socialism" means. Though, admittedly, it is too late to educate any Trump or the Trumpsters in general on anything.  


How Popular Is Donald Trump? | FiveThirtyEight


85% of republicans approve of Donald's national emergency declaration. Trump’s national emergency declaration unpopular among majority of Americans | PBS NewsHour 


It is not possible to be a true conservative and approve of that declaration. 

That poll is useful in that identifies the percentage of republicans who are not conservatives.  

FactChecking Trump's National Emergency Remarks - FactCheck.org


FactChecking Trump's El Paso Rally - FactCheck.org


Trump stated that he had the "absolute right" to declare a national emergency. Spoken like the authoritarian that he is. 

Senator Graham (R-SC): More urgent for kids in Kentucky to have secure border than new schoolGun violence deaths in US in year after Parkland: 1000+ kids | McClatchy Washington Bureau


For the most part, the self-described "conservative" GOP Senators have already made it clear that they will do nothing to stop Trump from usurping the constitutional powers of Congress, while expressing their usual weak-kneed "concerns". “I would have my doubts” (Sen. Ron Johnson) or “I’m not enthusiastic about it” (Sen. Pat Toomey) or “I have some concerns” (Sen. Roy Blunt), or even “I wish he wouldn’t have done it” (Sen. Chuck Grassley). 

There is a recognition among GOP politicians that the republican base could care less about the constitutional restraints on a republican president's power and their efforts to undermine institutions necessary for a properly functioning democracy.   

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More on My Ancestors:


Another movie idea involves the trials, tribulations and successes of Beth Slater Whitson, my first cousin two times removed. Her father was a brother of my grandfather.


Beth Slater (many Southerners have two first names) was born in the middle of nowhere Nunnelly, an unincorporated spot in rural Hickman County Tennessee. She would become the most well known person who was born in that county.


When she was young, she decided to leave her home and go to Chicago. This is an excerpt from her autobiography written in 1925:



Beth Slater was probably the most prolific songwriters in early 20th century America. Perhaps her most well known song was "Let Me Call You Sweetheart". Though, I would not focus much on playing those old tunes in a movie other than a verse or two. Tastes in music have changed, to say the least.  

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1. Pares

I am continuing to sell my highest cost lots into both the stock and bond rallies. 


The purpose is primarily part of my capital preservation strategy that involves some exposure to risk assets. 

By selling the highest cost lot, I incur less tax liability, reduce my average cost per share, and raise my dividend yield, while reducing my overall dollar exposure. 

The dollars raised can then be redeployed at lower prices. 

For those securities subject to the small ball purchase restriction, any subsequent purchase has to be at the lowest price in the chain. 

A. Pared GMREPRA - Sold 30 GMREPRA at $24.84

I sold the highest cost lot and kept the 70 share lot bought at $22.75. Item # 4.B. Bought 70 GMREPRA at $22.75 (1/13/19 Post) Just another example of small ball trading.  

Dividend Yield at $22.75 =  8.24%


History


Profit: +$9.79






Par Value: $25

Dividends: Cumulative, Non-Qualified and Paid Quarterly  

Last Ex Dividend Date:  1/14/19   (before sell) 

Issuer Optional Call: On or after 9/15/22 

B. Pared ENB-Sold 15 ENB at $37.61-Used Fidelity Commission Free Trade




Quote: Enbridge Inc. (ENB)

Website: Home - Enbridge Inc.

Closing Price Yesterday: ENB $36.29 +$0.47 +1.31% 

I sold my two highest cost lots which reduced my average cost per share from $34.77 to $34.05. Since my first purchase in this chain, the stock has trended down until recently. 


I have used the rally in stocks to sell my highest cost lots, a trading rule dictated by the small ball strategy.  


Position After Pare




Profit: +$9.29




I noticed that UBS downgraded Enbridge to neutral from buy shortly after this sell. I do not have a copy of that report.


Last  Buy Discussions
Item # 3 Bought 2 ENB at $29.95 and 2 at $30.89-Used Commission Free Trades (3/29/18 Post)Item # 2 Added 5 ENB at $32.28 2 at $31.92 and 2 at $31.45-Used Commission Free Trades (3/15/18 Post)Item # 2 Added 9 ENB at an Average Total Cost Per Share of  $32.18 (3/15/18 POST)


Last Earnings Report: Q/E 12/30/18


Enbridge Inc. Reports Strong Fourth Quarter and Full Year 2018 Results


Discussed Briefly at  Enbridge quarterly profit beats estimates-Reuters


Dividends: Quarterly and paid in USDs after conversion from Canadian Dollars. 


Subject to a 15% Canadian withholding tax when held in a U.S. citizen's taxable account, but not in a retirement account. 


Penny Rate: Currently at C$.738 per share, raised from C$.671 per share in the 2018 4th quarter. Dividends and Common Shares - Enbridge Inc. 




The dividend yield will depend on the currency conversion rate. If I assumed a quarterly rate of $.738 and a conversion rate of .75, then the annual dividend would be about $2.21 and the dividend yield at a total cost per share of $34.05 would be about 6.5% without a tax adjustment. 


I am generally able to recover all foreign dividend taxes as a credit on my tax return. 


ENB qualifies for my definition of "bond substitute". Any return in excess of the dividend is viewed as gravy.  


Dividend Reinvestment: Yes 


Last Dividend Reinvestment Price: $33.4 




Last Ex Dividend Date: 2/14/19


Purchase Restriction: Small Ball Rule (each purchase, other than through dividend reinvestment, has to be at the lowest price in the chain)


Lowest Price Paid in Current Chain: $29.95 


Maximum Position: 100 shares + shares purchased with dividends 


Current Position: 46+ shares


Last Sell Discussions
Item # 3 Sold 50 ENB at $39.03 (12/21/17 Post)Sold 10 ENB at $40.14


ENB Preferred Stocks


I have bought and sold ENB's reset equity preferred stocks on the Toronto exchange but do not currently have a position. The largest gain was on a 300 and 200 share lot of ENB.PRP


+C$963



+US$1,458.25 (converted by Fidelity from CAD purchase and sell numbers)
Enbridge Inc. 4% Pfd. Series P (Canada: Toronto) This was reset in January 2019: Enbridge Provides Notice of Series P Preferred Shares Conversion Right and Announces Reset Dividend Rates

The other one that I have bought and sold is ENB.PRF: 






Enbridge Inc. Cumulative Preferred Series F Stock (Canada: Toronto)(reset 6/1/2018 to a quarterly rate of C$.29306 per share) 


I have started to look again at Canadian reset equity preferred stocks due to their price declines. Part of the problem is that many have recently or will soon reset at disappointing rates or lower than anticipated by those who bought at higher prices. 


For the 5 year resets that are based on a spread to the 5 year Canadian government bond, there is a conversion into another security that floats at the same spread but the float is over the 3 month Canadian treasury bill. Those floaters will then trade separately and have a right to convert back to the 5 year bond spread on the next reset date. There is a lot to consider and the decisions have to based in part on future interest rate forecasts through the next reset date.   


The resets require a lot of effort which is focused on comparing the terms of a large number of them. ENB has a large number of different ones outstanding, for example. Preferred Shares and Hybrid Securities-Enbridge But another pipeline, Pembina or TransCanada, may have ones that provide the better option at a particular moment in time.   


C. Pared TDIV-Sold 15 TDIV at $36.48-Commission Free for Vanguard Customers




I sold my two highest cost lots. 


Quote: First Trust ETF VI NASDAQ Technology Dividend Index Fund (TDIV)


Closing Price Yesterday: TDIV $37.00 +$0.05 +0.14% 

Sponsor's PageFirst Trust NASDAQ Technology Dividend Index Fund (TDIV)


Holdings


Profit Snapshot: $13.45




Purchase Restriction: Small Ball Rule 


Maximum Position: 100 Shares


Current Position: 15 shares (I am admittedly at a low ebb in my risk taking)


I would pick up the dollar amount of my purchases at below $30. 


Lowest Price Paid in the Current Chain: $32.3 


Item # 5.B. (12/23/18 Post) 

Dividends: Quarterly at a variable rate


Distribution History

Last Ex Dividend Date: 12/18/18 at $.312 per share 


2018 Dividends Per Share = $.9834


Last Sell DiscussionsItems # 3.A. and 3.B. Eliminated TDIV Sold 50 at $36.56 and Sold 50+ at 36 (2/26/18 Post)(profit snapshots =$462.81); Item 2 Sold 50 TDIV at $37.07 (1/25/18 Post)(profit snapshot = $270.61); Item # 5 (4/29/17 Post)(snapshots of prior trades +$683.57)


Trading Profits to Date: $1,430.44 ($1,416.99 in prior trades)

The lowest prices paid for this ETF occurred in 2012, soon after its IPO. 


Item # 3 Added 50 TDIV at $19.2 (10/15/12 Post) 


Item # 1 Bought 50 TDIV at $19.94-ROTH IRA (10/3/12 Post) 

Item # 1 Bought 50 TDIV at $19.95 (8/12/12 Post) 


D. Pared MNRPRC-Sold 50 MNRPRC at $24.57




Quote: Monmouth Real Estate Investment Corp. 6.125% Cumulative Preferred. Series C StockMNR.PC Stock Chart


Closing Price Yesterday: MNR-PC $24.01 0.11 0.46% 

CategoryAdvantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks


Monmouth Real Estate Investment Corp | 6.125% Series C Cumulative Redeemable Preferred Stock (MNR.PRC) Information Page | Preferred Stock Channel


StrategyEquity REIT Common and Preferred Stock Basket Strategy


I kept the lower cost shares that I recently bought at $23.12Item # 3.B. Bought 50 MNRPRC at $23.12 (12/16/18 Post) 


Yield at $23.12 = 6.62%

Profit Snapshot: +$23.75




Item # 3.B. Bought 50 MNRPRC at $24 (7/12/18 Post)


Security Description


Issuer: Monmouth Real Estate Investment Corp. Cl A (MNR)

MNR SEC Filings
MNRPRC Prospectus
Par Value: $25
Dividends: Quarterly, Cumulative and Non-Qualified
Stopper Clause: Yes
Issuer Optional Redemption: At par value on or after 9/15/21

Previous Round-TripItem 5.A. Sold 100 MNRPRC at $24.85 (1/21/17 Post)(profit snapshot = $71.93).


2. Eliminations:


A. Sold 30 TANNL at $25.36:


2 Year History Schwab Account:




Quote: TravelCenters of America LLC 8% Senior Notes due 12/15/29 (TANNL)


Closing Price Yesterday: TANNL $24.89 -$0.09 -0.36% 

Category: Exchange Traded Baby Bonds


Issuer: TravelCenters of America LLC (TA)


TA Analyst Estimates


TA SEC Filings


Prospectus

Profit Snapshot: +$36.35




Item # 1.A. Bought 30 TANNL at $23.99-Used Commission Free Trade (8/15/18 Post)


I view this senior unsecured bond to be high risk. In the past, the bottom has fallen out with the price spiraling down.


One recent purchase was during one of those events. Item # 5 Bought 30 TANNZ at $17.25 (9/3/17 Post) That is another TA exchange traded bond: TravelCenters of America LLC 8% Senior Notes due 10/15/30 (TANNZ)


I will tread lightly in TravelCenter bonds and will generally be looking for an exit point soon after buying a few shares. I view those bonds to be a short term rental rather than a buy and hold. 


The exchange trade TravelCenter bonds are not rated but would be in junk territory IMO if rated. 


List of Trades in TANNL (formerly traded under the TANO symbol):


Item # 4.B. Sold Remaining TANNL at $25.46 (4/14/17 Post)(profit $11.57); Item # 5. Sold 50 TANO in Roth IRA: Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 3/28/16 - South Gent | Seeking Alpha (profit snapshot=+$55.47)- Item # 2. Bought 50 TANO at $23.2-ROTH IRA: Update For Exchange Traded Bond And Preferred Stock Basket As Of 12/18/15 - South Gent | Seeking AlphaItem # 4.A Stocks, Bonds & Politics: Observations and Sample of Recent Trades: 3/1/17-Item # 2. Added 50 TANO at $24Update For Exchange Traded Bonds And Preferred Stock Basket Strategy As Of 2/3/16 - South Gent | Seeking Alpha


I seriously doubt that I would own this bond for long when the price goes over the $25 par value.


3. Short Term Bond/CD Ladder Basket Strategy:


A. Bought 3 Treasury Bills Maturing on 7/5/19 (secondary market purchase)

YTM = 2.436%



This security is a 6 month treasury bill originally auctioned on 12/31/18 at 98.726625: Treasury Auction Results.pdf


B. Bought 1 Wells Fargo 2.15% SU Maturing on 1/30/20




FINRA Page Bond Detail (prospectus linked)


I now own 3 bonds. 


Bought at a Total Cost of 99.455

YTM at TC Then at 2.725%
Current Yield at TC = 2.1618%

For higher quality short term bond maturing within 18 months of purchase, I am not influenced by the current yield number but only by the yield-to-maturity. This bond has just one more semi-annual interest payment before paying its last payment along with the principal amount next January. 


The spread to the 1 year treasury was about 25 basis points for a lot equal to or greater than $25K and about 28 basis points for a 1 bond secondary market purchase. 


Many investors would prefer to go with the treasury, given the small yield difference and the state income tax issue. I look at it as having some minor importance only on a total bond portfolio basis, where a .25% added yield does amount to more than small change (somewhere in the $3K to $4K range annually). In addition, I am not personally concerned about the credit risk; and the state tax issue is not relevant for me.   


I am buying more short term treasuries now than comparable maturity investment grade corporate bonds based on the spread differential narrowing.  



C. Bought 3 Treasury Bills Maturing on 1/2/20
YTM = 2.532%



This bond was a 52 week treasury bill auctioned on 12/31/18 at 97.426722: Treasury Auction Results.pdf


As a treasury bill, it was sold without a coupon. Interest consists of the difference between the purchase price and par value or $66.36 for this purchase.


The bill had a slightly higher YTM than the bill maturing in January 2019 that had coupons. It was also purchased from Schwab's inventory which generally has a slightly better yield than those available from other sellers.    


D. Sold 1 Wells Fargo 2.5% SU Maturing on 3/4/21




Profit Snapshot: +$9.21




This bond was purchased on 5/14/18 at a total cost of 97.899. 


I in effect exchanged this bond for the 1 WFC bond maturing on 1/30/20 that has a slightly lower YTM, but matures 13 months sooner, as described in Item 3.B. above. As the 1/30/20 bond near maturity, I may buy back this bond, in effect, rolling the proceeds into the bond that I sold.   


Finra Page: Bond Detail


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

13 comments:

  1. I am finding it more difficult by the day to find anything to buy.

    I mentioned that I would likely liquidate the leveraged bond CEF GDO which I have now done.

    I used part of the proceeds to buy 100 of the unleveraged stock CEF ADX which I have bought and sold many times since 1984. I really do not want to buy much of anything but thought that I disliked a leveraged bond CEF more than a unleveraged stock fund.

    ADX generally owns the kind of stocks that I would own if I was managing a stock fund with some exceptions.

    Website:
    https://www.adamsfunds.com/funds/diversified-equity/at-a-glance/

    3rd quarter report:
    https://www.sec.gov/Archives/edgar/data/2230/000114420418056395/tv505132_nq.htm

    The treasury yield curve is still near inversion at several points along the curve.

    15 basis points separates the 2 and 10 year while the 7 year is only 1 basis point higher than the 1 year.

    https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

    To secure a 4% YTM from a corporate bond properly rated BBB+/Baa1, it is necessary to go to 2029 or later. For example, the Baa1 rated McDonald's 3.5% SU maturing in 2027 last traded today with a 3.59% yield and another MCD bond maturing in 2028 closed today with a 3.75% YTM. By going out to 2035, you could buy a MCD bond with a 4.34% YTM.

    If the investor goes short and picks up say 2.5% with a 1 year treasury bill, the problem then may become lower rates when that bill matures.

    The CME Tool has no FED rate increases through January 2021; a 1% chance of a .25% increase, a 17.2% chance of a .25% decrease and a 1.2% chance of a .5% decrease.

    https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

    That view is being reinforced by recent FED statements including the one released today. Some bad numbers in the first half will increase the odds of a rate decrease by September.

    ReplyDelete
  2. The stock market barely reacted today to several negative economic reports, including the Philly FED manufacturing index for February sliding into contraction, a lower than expected core capital good sales, and a decline in existing home sales last month.

    While no firm conclusions can be drawn from that data-yet, since there is a lot of bouncing up and down even in an expansion, the numbers are consistent with a slowdown that is already underway.

    The existing home sales have declined for three straight months. The problem which is not going away anytime soon is that median price homes are no longer affordable for many median income households based on price appreciation even with mortgage rates trending back down. Affordability is aggravated by the change in the tax law that limited the state tax deduction for income and property taxes to $10K.

    The ten year treasury yield rose about five basis points to 2.7%. While it does not make any sense to me, I attribute that move partly to the German 10 year rising from .1% to .13%. It is a knee jerk reaction that a meaningless rise in the German 10 year contributes to a rise in the U.S. ten year.

    The economic reports did not support a rise in yield.

    Kraft Heinz may take the consumer goods sector down tomorrow. The problems however appear to be mostly unique to that company such as write-offs and accounting issues.

    Kraft Heinz Co.
    AFTER HOURS $40.48 -$7.83 -15.98%
    Last Updated: Feb 21, 2019 at 5:50 p.m. EST
    https://www.marketwatch.com/story/kraft-heinz-earnings-reveal-sec-investigation-and-massive-write-offs-stock-plunges-2019-02-21

    I do not have a position. I will take a look over the weekend to see whether I want to start a small ball purchase program, starting with 10 shares.

    My main problem with Heinz is that it overpaid for slow growing businesses IMO and loaded up the balance sheet to pay for acquisitions. The stock may need to sink into the low 30s to mid-30s before I will start buying. The company probably needs to cut the dividend in half and to use the savings to pay down debt.

    ReplyDelete
    Replies
    1. The KHC write-down was $15.4B.

      http://ir.kraftheinzcompany.com/news-releases/news-release-details/kraft-heinz-reports-fourth-quarter-and-full-year-2018-results

      I did not see anything in the earnings news release about a dividend cut, but the news services are reporting that the quarterly dividend was cut by 36% to 40 cents per share. I mentioned in the prior comment that a 50% slash would be more appropriate IMO with no chance of a dividend hike for several years.

      https://www.marketwatch.com/story/kraft-heinz-cuts-dividend-stock-falls-farther-2019-02-21

      Delete
  3. Immune Design Corp. (IMDZ)
    $5.82 +4.40 +309.86%
    At close: 4:00PM

    Merck agreed to acquire the company for $5.85 in cash.

    https://www.businesswire.com/news/home/20190221005198/en/

    I have this one in my small cap biotech lottery ticket basket. I have been mostly ignoring it. There was a drug failure that sent the stock plummeting after my last purchase. I am now back into profit territory. I own 50 in my Schwab account which was up $220 today and is now at a $64.29 profit.

    Since this is something that I do not want to mull over or think about, I will probably sell tomorrow.

    ReplyDelete
  4. South Gent,

    KHC's is trading at $38.24 after-hours with a yield of about 4.2%. I would anticipate that analysts soon rush out stock downgrades.

    ReplyDelete
    Replies
    1. Y: I have mixed results with my biotech with flame outs and multi-baggers. Before the drug failure, IMDZ was trading over $10 back in October 2017. That is the problem. The small clinical stage biotech companies are so dependent on one, possibly two drug candidates, and the odds of a trial failure somewhere along the way is high. And, it is common for a drug to look pretty good in an early phase and then turn out to have bad side effects or proves to be ineffective or less effective than an existing drug when given to a larger patient population. I sold a 30 share lot at $8.4 in my IB account in 11/16 before the drug failure, realizing a $41.49 gain. If I had held those shares until today, Merck's premium takeover offer would have been a take under.

      I am basically leaving the basket alone and hope something clicks down the road. I probably have less than $1,500 invested overall.

      Kraft Heinz is probably untouchable for me now. The write-downs prove that management overpaid for acquisitions. The dividend will not be raised for years. The bonds may drift down some in the coming days providing an investor with about the same yield as the stock with greater downside protection.

      I will take another look when and if the price drifts down to $30 to $33, but I will use the small ball approach given the heightened uncertainties.

      A bond example would be the 3.5% SU maturing in 2022 which closed near par value today.

      http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C660287&symbol=BRK4395610

      I may own that one already. Need to check.

      When one of KHC's bond maturing in 3 to 5 years equals the dividend yield on the stock, then I may consider buying 2 more.

      4 bonds would be my limit given the risks and I would not go out further than 2023.

      The dividend cut is a positive for the bond owners.

      Delete
    2. I do own 2 KHC 3.5% SU bonds maturing in 2022 bought at a total cost of 99.231:

      Item # 3.B.
      https://tennesseeindependent.blogspot.com/2018/06/observations-and-sample-of-recent.html

      Delete
  5. South Gent,

    I bought my IMDZ on 1/4/2017 as part of my small cap biotech lottery ticket basket. Over time I found that my batting average in this basket was so bad that I totally gave up on this strategy.

    ReplyDelete
  6. Kraft Heinz Co. $35.05 -$13.13
    Last Updated: Feb 22, 2019 at 1:39 p.m. EST
    https://www.marketwatch.com/investing/stock/khc

    Apparently, the Wall Street analysts saw something that they did not like before the opening bell and changed their recommendations from buy to neutral.

    https://www.marketwatch.com/story/kraft-heinz-downgraded-multiple-times-after-earnings-announcement-filled-with-bad-news-2019-02-22?mod=mw_latestnews

    I recall reading that a service which tracks their performance does not tag them with the percentage decline provided their recommendation change is lodged before the start of regular trading.

    The bonds are barely reacting to the news but are trading down some. The 2022 KHC bond last traded at 100 after closing yesterday at 100.314. You would not know that anything untoward had happened by looking at today's trades compared to yesterday.

    ReplyDelete
  7. In another act of silliness, the Bond Ghouls took the ten year treasury back to 2.65% from yesterday's 2.7% based IMO on the German 10 year going back down to below .1%. Those two movements retrace the rise in yields from Thursday that I mentioned in an earlier comment.

    BDCs have been acting much better which has given me an opportunity to pare my highest cost lots. There was a surge in some of the worst performers today including TCRD and CMFN.

    THL Credit Inc. $7.40 $0.45 +6.47%
    https://www.marketwatch.com/investing/stock/tcrd

    CM Finance Inc $7.95 +$0.25 +3.25%
    https://www.marketwatch.com/investing/stock/cmfn

    The larger BDCs saw fractional gains. The VanEck Vectors BDC Income ETF rose 1.46%.

    https://www.marketwatch.com/investing/fund/bizd

    KHC closed down 27.46% which was unwelcome news for Berkshire who owned 325,634,818 shares as of 12/31/18:

    https://www.marketwatch.com/story/warren-buffetts-berkshire-hathaway-stock-falls-as-big-bet-on-kraft-heinz-sours-2019-02-22

    And here I was thinking about and then rejecting buying 10 shares today as a starter position today. I might have to take a chill pill if I was in Warren's shoes.

    ReplyDelete
  8. I have published a new post.

    https://tennesseeindependent.blogspot.com/2019/02/observations-and-sample-of-recent_23.html

    ReplyDelete
  9. I think you may hold Enbridge. And, at least I recall you wrote that you did. I own a small position the gray market preferred ....EBBGF.... which has zero volume, week after week and just established a tiny position in ENB. What is your take on the Gray market in preferreds? This was my first. And, if I could get out of EBBG, I think it would be my last since I don't intend to have a Canadian dollar account. Best, JN

    ReplyDelete
    Replies
    1. JN: I still own both EBGEF and ENB.


      Pipelines have performed poorly recently due to permitting problems and related litigation. Duke and Dominion had to abandon a pipeline project since lawsuits had delayed the project so long that it became uneconomical due to cost increases. The Keystone Pipeline has been held up for the same reasons. A federal district court judge recently ordered the owners of a pipeline to the Dakota Access Pipeline until a more extensive environmental impact statement can be done, though I believe that order was stayed for now by the appellate court.

      Previously, the pipelines were under pressure due to E & P companies shutting in some production and the related precipitous decline in energy prices earlier this year.

      My most recent ENB discussion can be found here:
      Item # 1.C. Added 1 ENB at $27.23; 1 at $26.21; 1 at $25.79; 1 at $24.9; 1 at $23.68
      https://tennesseeindependent.blogspot.com/2020/04/aeb-cpxpre-cs-d-enb-doc-gmta-gmre.html

      That post also contains links to recent sell discussions.

      My most recent discussion of EBGEF can be found here:
      Item # 3.B Added to EBGEF-Bought 10 at US$14.81:
      https://tennesseeindependent.blogspot.com/2020/07/angl-arcc-doc-duk-ebgef-eprprc-finx-jdd.html

      I will be discussing ENB in a future post since I recently bought 5 shares at $30.65, bringing the total in one account up to just 34+ shares at an average cost of $31.27. I am keeping it light due to the issues discussed above. I also started a small ball "buying program" in my Vanguard taxable account with a 5 share purchase at about the same price.
      Altogether, I own just 39+ ENB shares and I am reinvesting the dividend.

      I currently view ENB and EBGEF as undervalued but both are out-of-favor now.

      EBGEF is down primarily IMO due to concerns about the next reset coupon ending up being lower than the current one. The next reset is in 2024 at a 2.82% spread to the then 5 year U.S. treasury yield. It is too early IMO to assess what that rate will be but the Bond Ghouls are forecasting now a very low coupon for that 5 year Treasury. When this one reset in 2019, the five year treasury was close to 2.56% but is now near.27%.


      https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

      In the future, please leave comments to the last published post. Also, if you use the symbol links to the right, you will be taken to the last discussion first.

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