Economy:
China cancels US pork import order as trade war drags on (order was for 3,247 metric tonnes of U.S. pork)
No talks have occurred to schedule another trade negotiation meeting. China's tough rhetoric leaves trade talks with U.S. in limbo - Reuters
Fed’s Rosengren says economy can ‘withstand’ trade fight with China - MarketWatch Yes, but what does that mean?
Retail sales fall in April and show broad weakness in key part of the U.S. economy - MarketWatch
Compare that retail sales report with the most recent consumer survey: US consumer sentiment surges to highest level in 15 years
China cancels US pork import order as trade war drags on (order was for 3,247 metric tonnes of U.S. pork)
No talks have occurred to schedule another trade negotiation meeting. China's tough rhetoric leaves trade talks with U.S. in limbo - Reuters
Fed’s Rosengren says economy can ‘withstand’ trade fight with China - MarketWatch Yes, but what does that mean?
Retail sales fall in April and show broad weakness in key part of the U.S. economy - MarketWatch
Compare that retail sales report with the most recent consumer survey: US consumer sentiment surges to highest level in 15 years
Morgan Stanley: More tariffs will lead to a US recession
U.S. Consumer spending has been slowing down which is not good news for an economy heavily dependent on that spending. If an acceleration of the tariff war with China hits the U.S. economy just as it is weakening due to other factors, then the recession odds within 12 months go way up.
DoubleLine's Gundlach warns of recession, 'cocktail of economic risk'
‘I don’t see him crying uncle’: Trump believes China tariffs will help him win reelection
U.S. Consumer spending has been slowing down which is not good news for an economy heavily dependent on that spending. If an acceleration of the tariff war with China hits the U.S. economy just as it is weakening due to other factors, then the recession odds within 12 months go way up.
DoubleLine's Gundlach warns of recession, 'cocktail of economic risk'
‘I don’t see him crying uncle’: Trump believes China tariffs will help him win reelection
Trump carries out tariff trade wars with China, EU, Canada and Mexico
Tariffs Will Make iPhones More Expensive, Analyst Says — but Apple Stock Is Still a Winner How so? Apple's production is concentrated in China and it derives about 1/6th of its revenue from Chinese customers. One analyst predicted that implementation of 25% tariffs on the remaining $300B in exports could raise an average IPhone's price by $150. The Trade War and Tariffs Will Make the Stock Market Scary. Don’t Panic. - Barron's
And who could really know now about the full impact on IPhone sales in China following an all out trade war. There will be Chinese consumer boycotts of U.S. products.
China has been stepping up its warnings to Donald:
Trade war: China media taking an aggressive tone on new tariffs: CNBC;
Tariff on China imports: China posts sassy message to US on Internet: USA Today
U.S. trade war will only make us stronger, China's top paper says - Reuters
China's government is preparing its citizens for a protracted trade war. This effort is also designed to provoke boycotts of American products sold in China IMO by appealing to Chinese nationalism.
The Finance 202: Trump dashes hopes of trade peace with China, Europe and Japan - The Washington Post (the author claims that investors are not reading the tea leaves correctly which is also my opinion).
China has cut its holdings of US debt to the lowest level in two years
‘I don’t see him crying uncle’: Trump believes China tariffs will help him win reelection - The Washington Post After all, the tariffs are a win-win for the U.S. in TrumpWorld since foreign countries have to fill U.S. coffers with the money stolen from the U.S. Reality creations in support of false narratives are easy sells to an uninformed electorate. In this narrative, it is important to convince millions of U.S. voters that the tariffs are not taxes on them but on foreign countries. Trump's tariffs are equivalent to one of the largest tax increases in decades
Walmart says higher tariffs on China goods will increase prices for U.S. shoppers
Donald is an expert on everything.
He arrived at that exalted status by making no effort to learn anything.
The process of learning starts in the Duck's gut, information acquired therein works through various blood vessels until it breaches the brain barrier and ends its travel with bile deposits containing all of the knowledge acquired in Donald's gut onto his brain cells. God works in mysterious ways.
Donald may even believe that he knows something about trade issues. When he discusses those issues, he talks as if he is channeling an omnipotent being, when in fact he is either lying or displaying his total ignorance. Donald Trump’s cockamamie, upside-down, inside-out theory of trade - MarketWatch; Trump Wall Street Journal interview: transcript shows trade ignorance - Vox
Can anyone imagine Donald sitting still while someone spent ten minutes correcting him on just a few of his erroneous opinions relating to international trade. Before uttering two sentences, that person might as well give the Duck his resignation letter. It is not something that can be taught with a coloring book and crayons. But, having made that contention, there is some evidence that coloring books can work however. Juncker used ‘brightly coloured, simple flashcards’ to explain trade to Trump during meeting | The Independent
++
Donald effusively praised the anti-semite President of Hungary, Victor Orban, during the later's visit to the White House.
According to Donald, this authoritarian leaning politician has "respect all over Europe", which would be a rare accurate statement from the Duck provided Europe is limited to far right anti-Semitic xenophobes who are challenging the very foundation of western democracies. Orban is Trump's kind of leader.
Viktor Orbán’s anti-Semitism problem-POLITICO;
Viktor Orbán White House: Trump welcomes a kindred authoritarian spirit - Vox
Tariffs Will Make iPhones More Expensive, Analyst Says — but Apple Stock Is Still a Winner How so? Apple's production is concentrated in China and it derives about 1/6th of its revenue from Chinese customers. One analyst predicted that implementation of 25% tariffs on the remaining $300B in exports could raise an average IPhone's price by $150. The Trade War and Tariffs Will Make the Stock Market Scary. Don’t Panic. - Barron's
And who could really know now about the full impact on IPhone sales in China following an all out trade war. There will be Chinese consumer boycotts of U.S. products.
China has been stepping up its warnings to Donald:
Trade war: China media taking an aggressive tone on new tariffs: CNBC;
Tariff on China imports: China posts sassy message to US on Internet: USA Today
U.S. trade war will only make us stronger, China's top paper says - Reuters
China's government is preparing its citizens for a protracted trade war. This effort is also designed to provoke boycotts of American products sold in China IMO by appealing to Chinese nationalism.
The Finance 202: Trump dashes hopes of trade peace with China, Europe and Japan - The Washington Post (the author claims that investors are not reading the tea leaves correctly which is also my opinion).
China has cut its holdings of US debt to the lowest level in two years
‘I don’t see him crying uncle’: Trump believes China tariffs will help him win reelection - The Washington Post After all, the tariffs are a win-win for the U.S. in TrumpWorld since foreign countries have to fill U.S. coffers with the money stolen from the U.S. Reality creations in support of false narratives are easy sells to an uninformed electorate. In this narrative, it is important to convince millions of U.S. voters that the tariffs are not taxes on them but on foreign countries. Trump's tariffs are equivalent to one of the largest tax increases in decades
Walmart says higher tariffs on China goods will increase prices for U.S. shoppers
Donald is an expert on everything.
He arrived at that exalted status by making no effort to learn anything.
The process of learning starts in the Duck's gut, information acquired therein works through various blood vessels until it breaches the brain barrier and ends its travel with bile deposits containing all of the knowledge acquired in Donald's gut onto his brain cells. God works in mysterious ways.
Donald may even believe that he knows something about trade issues. When he discusses those issues, he talks as if he is channeling an omnipotent being, when in fact he is either lying or displaying his total ignorance. Donald Trump’s cockamamie, upside-down, inside-out theory of trade - MarketWatch; Trump Wall Street Journal interview: transcript shows trade ignorance - Vox
Can anyone imagine Donald sitting still while someone spent ten minutes correcting him on just a few of his erroneous opinions relating to international trade. Before uttering two sentences, that person might as well give the Duck his resignation letter. It is not something that can be taught with a coloring book and crayons. But, having made that contention, there is some evidence that coloring books can work however. Juncker used ‘brightly coloured, simple flashcards’ to explain trade to Trump during meeting | The Independent
++
Donald effusively praised the anti-semite President of Hungary, Victor Orban, during the later's visit to the White House.
According to Donald, this authoritarian leaning politician has "respect all over Europe", which would be a rare accurate statement from the Duck provided Europe is limited to far right anti-Semitic xenophobes who are challenging the very foundation of western democracies. Orban is Trump's kind of leader.
Viktor Orbán’s anti-Semitism problem-POLITICO;
Viktor Orbán White House: Trump welcomes a kindred authoritarian spirit - Vox
++++
Markets and Market Commentary:
JP Morgan: 3M troubles will continue, may cut dividend
Deere blames escalating trade war for worsening outlook - Reuters
Exclusive: Insurer says Iran's Guards likely to have organized tanker attacks - Reuters
A group of superrich investors, spooked by China and potential ‘black swans,’ raises cash to levels not seen in years - MarketWatch
Shiller is playing down the tariff war impact on the economy, classifying investor reactions to each news event as emotional. Market is overreacting to trade war 'theater,' Robert Shiller says While there are emotional reactions to Donald's tweets, which is bizarre given the source, the reactions so far merely show a SPX jumping bean between 2800 and 2945, and do not indicate any concerns about an all out trade war actually developing. That risk is still priced at near a zero chance IMO.
JP Morgan: 3M troubles will continue, may cut dividend
Deere blames escalating trade war for worsening outlook - Reuters
Exclusive: Insurer says Iran's Guards likely to have organized tanker attacks - Reuters
A group of superrich investors, spooked by China and potential ‘black swans,’ raises cash to levels not seen in years - MarketWatch
Shiller is playing down the tariff war impact on the economy, classifying investor reactions to each news event as emotional. Market is overreacting to trade war 'theater,' Robert Shiller says While there are emotional reactions to Donald's tweets, which is bizarre given the source, the reactions so far merely show a SPX jumping bean between 2800 and 2945, and do not indicate any concerns about an all out trade war actually developing. That risk is still priced at near a zero chance IMO.
++++
Trump:
Justifying unilateral executive branch action through declaring national emergencies is the latest trend toward authoritarian rule in the U.S.
The market rallied last Wednesday partially in response to reports that Donald would not levy up to 25% tariffs on auto imports this weekend. Trump administration to delay auto tariffs amid trade war
No focus was placed on the source of Donald's power to even levy such tariffs. The purported source was a law, 19 U.S. Code § 1862, that allowed the President to levy tariffs on products that threaten U.S. national security.
And, ask yourself this question.
How could a tariff on a BMW or Mercedes be justified as promoting national security? What is the limit on Presidential power now to enact legislation using "national emergency" and "national security" as the legal justification.
What would the Trumpsters say if Obama had levied tariffs on auto imports using that justification?
What will they say when a Democrat president issues an executive order imposing stringent new environmental laws based on a "national emergency" or "national security" legal basis citing climate science?
U.S. courts will be reluctant to second guess a President's judgment on this type of issue which allows wide latitude for abuses of Presidential powers granted in that law through Congressional abdication of responsibility and oversight.
Trump declares national emergency to get border wall funding - ABC News
Trump has cited national security to justify tariffs. A new WTO ruling spells trouble - Los Angeles Times (Trump has threatened many times to pull the U.S. out of the World Trade Organization, part of the world order created by the U.S. post WWII)
Trump declares emergency over threats to US tech amid Huawei concerns
Donald wants to turn the 4th of July celebration into a campaign event for himself. White House reimagination of Washington’s traditional Fourth of July events puts Trump at center of celebration - MarketWatch How are those bone spurs doing Donald?
Justifying unilateral executive branch action through declaring national emergencies is the latest trend toward authoritarian rule in the U.S.
The market rallied last Wednesday partially in response to reports that Donald would not levy up to 25% tariffs on auto imports this weekend. Trump administration to delay auto tariffs amid trade war
No focus was placed on the source of Donald's power to even levy such tariffs. The purported source was a law, 19 U.S. Code § 1862, that allowed the President to levy tariffs on products that threaten U.S. national security.
And, ask yourself this question.
How could a tariff on a BMW or Mercedes be justified as promoting national security? What is the limit on Presidential power now to enact legislation using "national emergency" and "national security" as the legal justification.
What would the Trumpsters say if Obama had levied tariffs on auto imports using that justification?
What will they say when a Democrat president issues an executive order imposing stringent new environmental laws based on a "national emergency" or "national security" legal basis citing climate science?
U.S. courts will be reluctant to second guess a President's judgment on this type of issue which allows wide latitude for abuses of Presidential powers granted in that law through Congressional abdication of responsibility and oversight.
Trump declares national emergency to get border wall funding - ABC News
Trump has cited national security to justify tariffs. A new WTO ruling spells trouble - Los Angeles Times (Trump has threatened many times to pull the U.S. out of the World Trade Organization, part of the world order created by the U.S. post WWII)
Trump declares emergency over threats to US tech amid Huawei concerns
Donald wants to turn the 4th of July celebration into a campaign event for himself. White House reimagination of Washington’s traditional Fourth of July events puts Trump at center of celebration - MarketWatch How are those bone spurs doing Donald?
Trump: Discussing Biden probe with Barr would be 'appropriate' It is only appropriate in TrumpWorld, not in the U.S.A. or what use to be the U.S.A., to have a sycophant AG launch criminal investigations into political opponents and then indict for political reasons. One cliche is that a grand jury would indict a "ham sandwich". Only one side is presented and evidence can be cherry picked and slanted to arrive the desired proof using a low threshold of proof (probable cause to believe a crime may have been committed reached in a non-adversarial setting)
Trump wants Barr to consider investigating Biden – Giuliani
This particular right wing conspiracy, hatched by Showboat Rudi and the Trump minions at Fox, is to create a claim against Biden when no credible one exists. Joe Biden's Ukraine Scandal Is His Policy, Not Personal Interests - Bloomberg (points to statements from Ukrainian officials that the Burisma investigation was dormant at the time the U.S. and America's European allies argued for the ouster of prosecutor Shokin for alleged corruption, and Shokin was not even the prosecutor in charge of the investigation.)
And contrary to the false assertions made by Sean Hannity and his buddy John F. Solomon, the investigation has not been reopened by the Ukrainian prosecutors. Why the alleged Joe Biden ‘Ukraine conspiracy’ doesn’t hold up - The Washington Post
Showboat Rudi had planned to go to the Ukraine to pressure the government to reopen the case and probably to indict Biden's son who was at one time a director of Burisma. Rudy Giuliani cancels Ukraine trip amid criticism - Vox (quotes a Vanderbilt law professor making this statement: “This is the first instance of which I am aware in which a private lawyer for the president of the United States has, in his own words, ‘meddled’ in a foreign criminal investigation of a third party in order to politically benefit the president.”) The Trumpsters are enthusiastic about Trump using the criminal justice system to lock up Donald's political opponents. Soon we will be hearing them chant "Lock Him Up" chants whenever Donald mentions Biden at his never ending campaign rallies.
If the senate republicans led by the Trump sycophant Lindsey Graham want to launch an investigation into the Biden matter, that is up to them. Placing Presidential pressure on the lap dog AG to indict Biden is an entirely different matter.
Nearly every country in the world approves pact to reduce plastic pollution, except the U.S.; Fast facts about plastic pollution: National Geographic; Marine Plastics | Smithsonian Ocean
Trump wants Barr to consider investigating Biden – Giuliani
This particular right wing conspiracy, hatched by Showboat Rudi and the Trump minions at Fox, is to create a claim against Biden when no credible one exists. Joe Biden's Ukraine Scandal Is His Policy, Not Personal Interests - Bloomberg (points to statements from Ukrainian officials that the Burisma investigation was dormant at the time the U.S. and America's European allies argued for the ouster of prosecutor Shokin for alleged corruption, and Shokin was not even the prosecutor in charge of the investigation.)
And contrary to the false assertions made by Sean Hannity and his buddy John F. Solomon, the investigation has not been reopened by the Ukrainian prosecutors. Why the alleged Joe Biden ‘Ukraine conspiracy’ doesn’t hold up - The Washington Post
Showboat Rudi had planned to go to the Ukraine to pressure the government to reopen the case and probably to indict Biden's son who was at one time a director of Burisma. Rudy Giuliani cancels Ukraine trip amid criticism - Vox (quotes a Vanderbilt law professor making this statement: “This is the first instance of which I am aware in which a private lawyer for the president of the United States has, in his own words, ‘meddled’ in a foreign criminal investigation of a third party in order to politically benefit the president.”) The Trumpsters are enthusiastic about Trump using the criminal justice system to lock up Donald's political opponents. Soon we will be hearing them chant "Lock Him Up" chants whenever Donald mentions Biden at his never ending campaign rallies.
If the senate republicans led by the Trump sycophant Lindsey Graham want to launch an investigation into the Biden matter, that is up to them. Placing Presidential pressure on the lap dog AG to indict Biden is an entirely different matter.
Nearly every country in the world approves pact to reduce plastic pollution, except the U.S.; Fast facts about plastic pollution: National Geographic; Marine Plastics | Smithsonian Ocean
++++
1. Bought 50 IRM at $31.58 (IB $1 commission):
This purchase was made in my Interactive Brokers account. I will not be buying more shares in that account, nor will I invest the dividend to buy more shares.
I have an ongoing small ball "buying program" in my Fidelity account and may buy additional shares below $30.3. The average cost per share is currently at $31.17. That would probably mean a buy in the $29 to $29.5 range assuming no new material negative news.
Quote: Iron Mountain Inc. (IRM)-A REIT
Website: Data & Records Management | Shredding | Iron Mountain
Closing Price Last Friday: IRM $32.09 -$0.27 -0.83%
Dividend: Quarterly at $.611 per share ($2.444 annually, raised by 4% effective for the payment made on 1/3/19)
Iron Mountain - Stock - Dividend History and Tax Treatment
Last Ex Dividend Date: 3/14/19
Yield at 7.73% at $31.6 total cost number
Tax Treatment for 2018 Dividends: ROC at $.116 per share
Chart: Bear Market Trend Since Last Earnings Report
Last Buy Discussion: Item # 3.B. Bought 5 IRM at $30.65 and 5 at $30.3-Used Commission Free Trades (11/4/18 Post)
Last Sell Discussions: Item # 1.C. Sold 10 IRM at $33.91-Used Commission Free Trade (12/26/18 Post); Item # 3 Sold 50 IRM at $33.82-Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot= +$398.06)-Item # 3. Bought 50 IRM at $25.7: Update For Equity REIT Basket Strategy As Of 1/11/16 - South Gent | Seeking Alpha
IRM Trading Profits: $412.4
Last Earnings Report (Q/E 3/31/19):
Iron Mountain Reports First-Quarter 2019 Results
"In the first quarter, our revenue performance was slightly ahead of our expectations due in part to stronger volume and revenue management," said William L. Meaney, president and CEO of Iron Mountain. We are disappointed by this negative impact to our otherwise strong performance."
Iron Mountain (IRM) Misses Q1 FFO and Revenue Estimates - April 25, 2019 - Zacks.com
This report sent IRM shares spiraling downward. On the last trading day before the report was released, IRM closed at $35.84.The company claimed that expenses were unusually high in the first quarter and that will extend into the current quarter.
IRM CEO: "Unfortunately, we experienced temporary higher labor costs in our North America businesses in March, which contributed to an approximately $10 million variance in Adjusted EBITDA compared to our internal expectations."
1. Bought 50 IRM at $31.58 (IB $1 commission):
This purchase was made in my Interactive Brokers account. I will not be buying more shares in that account, nor will I invest the dividend to buy more shares.
I have an ongoing small ball "buying program" in my Fidelity account and may buy additional shares below $30.3. The average cost per share is currently at $31.17. That would probably mean a buy in the $29 to $29.5 range assuming no new material negative news.
Quote: Iron Mountain Inc. (IRM)-A REIT
Website: Data & Records Management | Shredding | Iron Mountain
Closing Price Last Friday: IRM $32.09 -$0.27 -0.83%
Dividend: Quarterly at $.611 per share ($2.444 annually, raised by 4% effective for the payment made on 1/3/19)
Iron Mountain - Stock - Dividend History and Tax Treatment
Last Ex Dividend Date: 3/14/19
Yield at 7.73% at $31.6 total cost number
Tax Treatment for 2018 Dividends: ROC at $.116 per share
Chart: Bear Market Trend Since Last Earnings Report
Last Buy Discussion: Item # 3.B. Bought 5 IRM at $30.65 and 5 at $30.3-Used Commission Free Trades (11/4/18 Post)
Last Sell Discussions: Item # 1.C. Sold 10 IRM at $33.91-Used Commission Free Trade (12/26/18 Post); Item # 3 Sold 50 IRM at $33.82-Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot= +$398.06)-Item # 3. Bought 50 IRM at $25.7: Update For Equity REIT Basket Strategy As Of 1/11/16 - South Gent | Seeking Alpha
IRM Trading Profits: $412.4
Last Earnings Report (Q/E 3/31/19):
Iron Mountain Reports First-Quarter 2019 Results
"In the first quarter, our revenue performance was slightly ahead of our expectations due in part to stronger volume and revenue management," said William L. Meaney, president and CEO of Iron Mountain. We are disappointed by this negative impact to our otherwise strong performance."
Iron Mountain (IRM) Misses Q1 FFO and Revenue Estimates - April 25, 2019 - Zacks.com
This report sent IRM shares spiraling downward. On the last trading day before the report was released, IRM closed at $35.84.The company claimed that expenses were unusually high in the first quarter and that will extend into the current quarter.
IRM CEO: "Unfortunately, we experienced temporary higher labor costs in our North America businesses in March, which contributed to an approximately $10 million variance in Adjusted EBITDA compared to our internal expectations."
"Adjusted EBITDA for the first quarter was $324.5 million, compared with $343.0 million in the first quarter of 2018. On a constant currency basis, Adjusted EBITDA decreased by 2.6%, primarily reflecting the impact of increased SG&A expenses."
"Iron Mountain maintained its 2019 full-year guidance, and expects, on a constant currency basis, revenue growth of 1% to 6%. In addition, Iron Mountain expects constant currency Adjusted EBITDA growth to be flat to 8% and AFFO growth to be up 1% to 8%. Iron Mountain expects stronger Adjusted EBITDA growth in the second half of the year after expected ongoing expenses in the second quarter, which are a residual effect of the higher costs incurred in March."
The share price decline in response to this report was understandable. If IRM achieves its revenues growth target for 2019 and it in fact reports improved cash flow during the second half, then the selloff may prove to be overdone. That remains to be seen.
With IRM, I am simply trying to earn a total return in excess of the dividend yield.
"Iron Mountain maintained its 2019 full-year guidance, and expects, on a constant currency basis, revenue growth of 1% to 6%. In addition, Iron Mountain expects constant currency Adjusted EBITDA growth to be flat to 8% and AFFO growth to be up 1% to 8%. Iron Mountain expects stronger Adjusted EBITDA growth in the second half of the year after expected ongoing expenses in the second quarter, which are a residual effect of the higher costs incurred in March."
The share price decline in response to this report was understandable. If IRM achieves its revenues growth target for 2019 and it in fact reports improved cash flow during the second half, then the selloff may prove to be overdone. That remains to be seen.
With IRM, I am simply trying to earn a total return in excess of the dividend yield.
2. Intermediate Term Bond Basket Ladder Strategy:
A. Sold 2 General Mills 3.2% SU Maturing on 2/10/27:
I recently bought this bond.
Profit Snapshot: $61.78
FINRA Page: Bond Detail
Sold at 97.61
YTM at 97.61 = 3.553%
Proceeds at 97.51
I still own GIS bonds maturing on 10/21/19 and 4/16/21, both 2 bond lots.
B. SOLD 2 Kellogg 3.125% SU Maturing on 5/17/22:
Profit Snapshot: +$17.86
Item # 3.C. Bought 2 Kellogg 3.125% SU at a TC of 99.257 (5/3/18 Post)
FINRA Page: Bond Detail
Sold at 100.250
YTM at 100.250 = 3.038%
Proceeds at 100.150 (after $1 per bond commission)
3. Eliminations and Pares- Regional Bank Basket Strategy:
Continued net interest margin suppression caused by the flat yield curve has resulted in either anemic or negative Y-O-Y earnings growth for regional banks. On the positive side, the dividend yields are a plus in a low yield world, particularly when interest rates are falling and may fall further. P/E multiples are low reflecting in part a lack of enthusiasm among investors due in large part to net interest margin pressure flowing from a flat yield curve and possibly concerns about the favorable credit cycle coming to an end.
A. PARED FNB-Sold 30 at $11.95 (Used Commission Free Trade:
Quote: FNB Stock Quote
FNB Analyst Consensus Estimates
SEC Filings
Closing Price Last Friday: FNB $11.46 -$0.06 -0.52%
This was my highest cost lot held in my Fidelity account. This sell reduced my average cost per share to $9.97 from $10.35 and increased my dividend yield to 4.8% from 4.64%.
Profit Snapshot: +$28.09
Item # 1.A Bought 30 FNB at $10.49-Used Commission Free Trade (1/9/19 Post)
Last Discussed: Item # 1.A. (1/9/19 Post)
Category: Regional Bank Basket Strategy
Last Earnings Report: Q/E 3/31/19
Investors reacted favorably to this report.
F.N.B. Corporation Reports First Quarter 2019 Earnings per Share of $0.28 and Operating Earnings per Share of $0.29
FNB Trading Profits to Date: +$1,200.47
5 Year Chart: Unfavorable
FNB Interactive Chart
I would simply describe this chart as a roller coaster ride going nowhere.
Dividend History: Unfavorable
The current quarterly dividend is $.12 per share which was reduced from $.24 in 2009.
Next Ex Dividend Date: 5/30/19
Reinvestment: Yes
5 Year Operating History Through 2018: Unfavorable
Sourced: 2018 Annual Report at page 37
FNB has been acquiring other banks. While that has led to high net income, GAAP E.P.S. declined from $.81 in 2014 to $.63 in 2017. Possibly, the worm turned in 2018 with a reported E.P.S. of $1.13. However, I would note also that GAAP E.P.S. was reported at $1.31 in 2004, page 16.
B. Eliminated BHB-Sold 54+ at $26.34-Used Commission Free Trade:
Quote: Bar Harbor Bankshares (BHB)
Closing Price Last Friday: BHB $25.66 -$0.44 -1.69%
Profit Snapshot: +$131.1
Note the 4 share purchase. I had placed a limit order for 50 shares and received a partial fill. BHB generally has a large bid/ask spread which can result in unfortunate partial fills when placing a limit order. That is okay when I am using a commission free trade but would obviously be unacceptable when paying Fidelity a $4.95 standard commission rate.
When I no longer have commission free trades, then odd lot trades for securities with large bid/ask spreads will either hit the ask price using Interactive Brokers or will be 100 share all or none limit orders at below the ask price. Fidelity allows AON orders for 100 share trades. Schwab requires a minimum of 200 shares.
Last Discussed: Item # 1.A. Bought 50 BHB at $24-Used Commission Free Trade (12/16/18 Post)
Last Sell Discussions: Item # 1.A. Sold 100 BHB at $30.69-Used Commission Free Trade (7/15/18 Post)(profit snapshot = +$1,718.56); Item # 1.A. Sold 50 BHB at $30.02 (5/21/18 Post); Item #3.A. Sold 100 BHB at $29.55 (4/26/18 Post); Item # 1. A. Sold 30 BHB at $29.42 (3/25/18 Post)(also contains snapshot of 2016 realized gain on 100 shares of $936.96)
Dividends: Quarterly at $.22 effective for the 2019 second quarter, up 2 cents from the prior quarter.
Last Ex Dividend Date: 5/13/19
Last Earnings Report: Slightly Negative IMO
Bar Harbor Bankshares Reports First Quarter Results; Increases Dividend 10%
I view BHB as a well managed mini cap bank. The problem with small regional banks in particular is that their net interest margins are being squeezed by the flat yield curve. This is causing me to buy and sell more quickly and to recalculate both my entry and exit points at lower prices than previously.
There are several issues with the last earnings report. Net income per share declined by 2 cents compared to the December 2018 quarter and 3 cents from the 2018 first quarter. ROA and ROE are declining. NIM declined to 2.67, excluding purchase loan accretion, down from 2.85% in the year ago quarter. Both of those numbers are below average.
C. Pared ORIT Again-Sold 89+ shares at $17.49:
This transaction eliminated the position in my Schwab account. I still own shares in a Roth IRA, and in a Fidelity taxable account where purchases are subject to small ball trading rules.
Closing Price Last Friday: ORIT $16.39 -$0.05 -0.30%
History Schwab Account:
Profit Snapshot: +$153.96
Last Purchase Discussion: Item #1.B. Bought 10 ORIT at $15.1 Used Fidelity Commission Free Trade (10/31/18); Item # 1.B Bought 50 ORIT at $15.8 in a Roth IRA Account(10/7/18 Post)
Last Sell Discussions: Item # 2.C. Pared ORIT-Sold 30 at $17.9-Used Commission Free Trade (3/13/19 Post); Item # 4.A. Sold 50 ORIT at $17.08 (2/17/19 Post); Item 1.E. Sold 20 ORIT at $16.91-Used Commission Free Trade (6/28/18 Post)
Trading Profits to Date: $228.73
Dividend: Regular quarterly dividend at $.25 per share
Special Dividends: (would not count on more)
Special Ex-Dividend
12/6/18: $.15 per share
12/7/17: $.45 per share
12/7/16: $.50 per share
12/2/15: $.50 per share
12/8/14: $.25 per share
12/4/13: $.25 per share
Dividends > Oritani Bank
Last Ex Dividend Date: 5/2/19
Remaining Shares-Average Cost Per Share-Yield:
Yield calculation does not include special dividends
66+ Shares/Avg. Cost $15.32/Yield at 6.53%
56+ Shares/Avg. Cost $15.94/Yield at 6.27%
Reinvesting the dividend in both accounts
Last Earnings Report (Q/E 3/31/19): Slightly Negative IMO
E.P.S. was reported at $.29 down from $.30 in the year ago quarter.
"The Company’s spread and margin have been under pressure due to several factors, including a flat and partially inverted treasury yield curve, modifications of loans within the existing loan portfolio, prepayments of higher yielding loans and investments, and increased funding costs. While spread and margin have been under pressure for an extended period, the competitive market for deposits increased substantially in fiscal 2019. Although the Company has realized increases in both the cost of funds and the yield on interest earning assets, the increase in cost of funds has outpaced the increase in yield on assets"
Net interest margin for the quarter was reported at 2.45%, down from 2.68% in the year ago quarter
The charge-off ratio was excellent at .01%.
Oritani Financial Corp. Announces Dividend and 3rd Quarter Results
4. Short Term Bond/CD Ladder Basket Strategy:
$7K in adds
A. Bought 5 Six Month T Bills at Auction Maturing on 11/7/19:
IR = 2.449%
Action Results:
B. Bought 2 Wells Fargo 2.4% CDs (monthly interest payments) Maturing on 6/17/20:
This CD provided a slightly better yield than a treasury maturing at about the same time. I do not have a state income tax issue that can detract from a CD's after-tax yield compared to the similar maturity treasury.
5. Small Ball-Commission Free ETFs:
A. Bought 1 OEF at $124.62-Commission Free at Fidelity:
Quote:OEF Fund - iShares S&P 100 ETF Overview
Closing Price Last Friday: OEF $127.26 -$0.78 -0.61%
Sponsor's website: iShares S&P 100 ETF
Expense Ratio: .20%
Last Discussed: Item # 4.B. Bought 5 OEF at $127.88 (4/14/19 Post)
Current Position: 6 Shares
Maximum Position: 50 Shares
Purchase Restriction: Small Ball Rule (each purchase has to be at the lowest price in the chain)
B. Bought 5 LRGF at $30.68-Commission Free at Vanguard:
Quote: iShares Edge MSCI Multifactor USA ETF Overview
Closing Price Last Friday: LRGF $30.71 -$0.21 -0.68%
Sponsor's Website: iShares Edge MSCI Multifactor USA ETF | LRGF
Expense Ratio: .2%
Last Discussed: Item # 3.B. Bought 10 LRGF at $31.93 (5/1/19 Post)
Purchase Restriction: Small Ball Rule
Current Position: 15 Shares
Maximum Position: 100 Shares
C. Bought 3 VEU at $49.62-Commission Free for Vanguard Customers:
Quote: Vanguard FTSE All-World ex-US ETF Overview
Closing Price Last Friday: VEU $49.40 -$0.45 -0.90%
Sponsor's website: VEU - Vanguard FTSE All-World ex-US ETF
Expense Ratio: .09%
Last Discussed: Item # 4.C. Bought 10 VEU at $51.75 (5/5/19 Post)
Current Position: 13 shares
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rule
B. SOLD 2 Kellogg 3.125% SU Maturing on 5/17/22:
Item # 3.C. Bought 2 Kellogg 3.125% SU at a TC of 99.257 (5/3/18 Post)
FINRA Page: Bond Detail
Sold at 100.250
YTM at 100.250 = 3.038%
Proceeds at 100.150 (after $1 per bond commission)
3. Eliminations and Pares- Regional Bank Basket Strategy:
Continued net interest margin suppression caused by the flat yield curve has resulted in either anemic or negative Y-O-Y earnings growth for regional banks. On the positive side, the dividend yields are a plus in a low yield world, particularly when interest rates are falling and may fall further. P/E multiples are low reflecting in part a lack of enthusiasm among investors due in large part to net interest margin pressure flowing from a flat yield curve and possibly concerns about the favorable credit cycle coming to an end.
A. PARED FNB-Sold 30 at $11.95 (Used Commission Free Trade:
Quote: FNB Stock Quote
FNB Analyst Consensus Estimates
SEC Filings
Closing Price Last Friday: FNB $11.46 -$0.06 -0.52%
This was my highest cost lot held in my Fidelity account. This sell reduced my average cost per share to $9.97 from $10.35 and increased my dividend yield to 4.8% from 4.64%.
 |
| Position Before Pare |
 |
| Position After Pare |
Item # 1.A Bought 30 FNB at $10.49-Used Commission Free Trade (1/9/19 Post)
Last Discussed: Item # 1.A. (1/9/19 Post)
Category: Regional Bank Basket Strategy
Last Earnings Report: Q/E 3/31/19
Investors reacted favorably to this report.
F.N.B. Corporation Reports First Quarter 2019 Earnings per Share of $0.28 and Operating Earnings per Share of $0.29
FNB Trading Profits to Date: +$1,200.47
5 Year Chart: Unfavorable
FNB Interactive Chart
I would simply describe this chart as a roller coaster ride going nowhere.
Dividend History: Unfavorable
The current quarterly dividend is $.12 per share which was reduced from $.24 in 2009.
Next Ex Dividend Date: 5/30/19
Reinvestment: Yes
5 Year Operating History Through 2018: Unfavorable
Sourced: 2018 Annual Report at page 37
FNB has been acquiring other banks. While that has led to high net income, GAAP E.P.S. declined from $.81 in 2014 to $.63 in 2017. Possibly, the worm turned in 2018 with a reported E.P.S. of $1.13. However, I would note also that GAAP E.P.S. was reported at $1.31 in 2004, page 16.
B. Eliminated BHB-Sold 54+ at $26.34-Used Commission Free Trade:
Quote: Bar Harbor Bankshares (BHB)
Closing Price Last Friday: BHB $25.66 -$0.44 -1.69%
Profit Snapshot: +$131.1
Note the 4 share purchase. I had placed a limit order for 50 shares and received a partial fill. BHB generally has a large bid/ask spread which can result in unfortunate partial fills when placing a limit order. That is okay when I am using a commission free trade but would obviously be unacceptable when paying Fidelity a $4.95 standard commission rate.
When I no longer have commission free trades, then odd lot trades for securities with large bid/ask spreads will either hit the ask price using Interactive Brokers or will be 100 share all or none limit orders at below the ask price. Fidelity allows AON orders for 100 share trades. Schwab requires a minimum of 200 shares.
Last Discussed: Item # 1.A. Bought 50 BHB at $24-Used Commission Free Trade (12/16/18 Post)
Last Sell Discussions: Item # 1.A. Sold 100 BHB at $30.69-Used Commission Free Trade (7/15/18 Post)(profit snapshot = +$1,718.56); Item # 1.A. Sold 50 BHB at $30.02 (5/21/18 Post); Item #3.A. Sold 100 BHB at $29.55 (4/26/18 Post); Item # 1. A. Sold 30 BHB at $29.42 (3/25/18 Post)(also contains snapshot of 2016 realized gain on 100 shares of $936.96)
Dividends: Quarterly at $.22 effective for the 2019 second quarter, up 2 cents from the prior quarter.
Last Ex Dividend Date: 5/13/19
Last Earnings Report: Slightly Negative IMO
Bar Harbor Bankshares Reports First Quarter Results; Increases Dividend 10%
I view BHB as a well managed mini cap bank. The problem with small regional banks in particular is that their net interest margins are being squeezed by the flat yield curve. This is causing me to buy and sell more quickly and to recalculate both my entry and exit points at lower prices than previously.
There are several issues with the last earnings report. Net income per share declined by 2 cents compared to the December 2018 quarter and 3 cents from the 2018 first quarter. ROA and ROE are declining. NIM declined to 2.67, excluding purchase loan accretion, down from 2.85% in the year ago quarter. Both of those numbers are below average.
C. Pared ORIT Again-Sold 89+ shares at $17.49:
This transaction eliminated the position in my Schwab account. I still own shares in a Roth IRA, and in a Fidelity taxable account where purchases are subject to small ball trading rules.
Closing Price Last Friday: ORIT $16.39 -$0.05 -0.30%
History Schwab Account:
Profit Snapshot: +$153.96
Last Purchase Discussion: Item #1.B. Bought 10 ORIT at $15.1 Used Fidelity Commission Free Trade (10/31/18); Item # 1.B Bought 50 ORIT at $15.8 in a Roth IRA Account(10/7/18 Post)
Last Sell Discussions: Item # 2.C. Pared ORIT-Sold 30 at $17.9-Used Commission Free Trade (3/13/19 Post); Item # 4.A. Sold 50 ORIT at $17.08 (2/17/19 Post); Item 1.E. Sold 20 ORIT at $16.91-Used Commission Free Trade (6/28/18 Post)
Trading Profits to Date: $228.73
Dividend: Regular quarterly dividend at $.25 per share
Special Dividends: (would not count on more)
Special Ex-Dividend
12/6/18: $.15 per share
12/7/17: $.45 per share
12/7/16: $.50 per share
12/2/15: $.50 per share
12/8/14: $.25 per share
12/4/13: $.25 per share
Dividends > Oritani Bank
Last Ex Dividend Date: 5/2/19
Remaining Shares-Average Cost Per Share-Yield:
Yield calculation does not include special dividends
66+ Shares/Avg. Cost $15.32/Yield at 6.53%
56+ Shares/Avg. Cost $15.94/Yield at 6.27%
Reinvesting the dividend in both accounts
Last Earnings Report (Q/E 3/31/19): Slightly Negative IMO
E.P.S. was reported at $.29 down from $.30 in the year ago quarter.
"The Company’s spread and margin have been under pressure due to several factors, including a flat and partially inverted treasury yield curve, modifications of loans within the existing loan portfolio, prepayments of higher yielding loans and investments, and increased funding costs. While spread and margin have been under pressure for an extended period, the competitive market for deposits increased substantially in fiscal 2019. Although the Company has realized increases in both the cost of funds and the yield on interest earning assets, the increase in cost of funds has outpaced the increase in yield on assets"
Net interest margin for the quarter was reported at 2.45%, down from 2.68% in the year ago quarter
 |
| Non-Performing Loans and Asset Ratio: Good |
Oritani Financial Corp. Announces Dividend and 3rd Quarter Results
4. Short Term Bond/CD Ladder Basket Strategy:
$7K in adds
A. Bought 5 Six Month T Bills at Auction Maturing on 11/7/19:
IR = 2.449%
Action Results:
B. Bought 2 Wells Fargo 2.4% CDs (monthly interest payments) Maturing on 6/17/20:
This CD provided a slightly better yield than a treasury maturing at about the same time. I do not have a state income tax issue that can detract from a CD's after-tax yield compared to the similar maturity treasury.
5. Small Ball-Commission Free ETFs:
A. Bought 1 OEF at $124.62-Commission Free at Fidelity:
Quote:OEF Fund - iShares S&P 100 ETF Overview
Closing Price Last Friday: OEF $127.26 -$0.78 -0.61%
Sponsor's website: iShares S&P 100 ETF
Expense Ratio: .20%
Last Discussed: Item # 4.B. Bought 5 OEF at $127.88 (4/14/19 Post)
Current Position: 6 Shares
Maximum Position: 50 Shares
Purchase Restriction: Small Ball Rule (each purchase has to be at the lowest price in the chain)
B. Bought 5 LRGF at $30.68-Commission Free at Vanguard:
Closing Price Last Friday: LRGF $30.71 -$0.21 -0.68%
Sponsor's Website: iShares Edge MSCI Multifactor USA ETF | LRGF
Expense Ratio: .2%
Last Discussed: Item # 3.B. Bought 10 LRGF at $31.93 (5/1/19 Post)
Purchase Restriction: Small Ball Rule
Current Position: 15 Shares
Maximum Position: 100 Shares
C. Bought 3 VEU at $49.62-Commission Free for Vanguard Customers:
Quote: Vanguard FTSE All-World ex-US ETF Overview
Closing Price Last Friday: VEU $49.40 -$0.45 -0.90%
Sponsor's website: VEU - Vanguard FTSE All-World ex-US ETF
Expense Ratio: .09%
Last Discussed: Item # 4.C. Bought 10 VEU at $51.75 (5/5/19 Post)
Current Position: 13 shares
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rule
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.
I do not pay any attention to El-Erian.
ReplyDeleteIn remarks earlier today, he assigned a 20% chance to an all out trade war with China; 15% to a "Reaganesque" moment, and 65% to a "short term" trade deal.
https://www.cnbc.com/2019/05/20/mohamed-el-erian-do-not-discount-a-reagan-moment-for-trump-on-china.html
The Stock Jocks still view the all out trade war as the most unlikely scenario and assign less than a 20% to that scenario unfolding IMO (closer to zero than 20% except for companies currently and undeniably adversely impacted). The general approach is to dismiss the hardening Chinese position as mere posturing and to assign a high probability to Donald backing down. Those beliefs are wishful thinking rather than a reasonable assessment of what is happening now IMO.
I have difficulty seeing any meaningful chance of a "short term" fix which El-Erian assigns a 65% probability. That would require Donald to back down from a number of key demands which I do not see happening. He does not want to appear weak.
IMO, it is not even worthwhile to spend a minute trying to figure out what he means by a "Reaganesque" moment.
Currently, the Stock Jocks are only hitting stocks hard that are undeniably being adversely impact by what has happened up to now. Those U.S. companies include component suppliers to Huawei since they have lost an important customer due to Trump's sanctions. Others include a few multinationals who specifically blame the tariff wars for downbeat earnings and/or earnings forecasts.
""IMO, it is not even worthwhile to spend a minute trying to figure out what he means by a "Reaganesque" moment.
Delete""
I was going to ask you what Reaganesque could possibly mean.
I've liked El-Erian's assessment in the past. I don't remember what it was an assessment of. I think of regulations vs economy.
Several months ago, I discussed why I was not going to buy Tanger Factory Outlets Centers (SKT).
ReplyDeleteTanger Factory Outlet Centers, Inc. (SKT)
$17.74 -$0.73 (-3.95%)
https://finance.yahoo.com/quote/SKT?p=SKT&.tsrc=fin-srch
This REIT was being recommended by a number of authors at SA. Besides the weakness in retail brick and motor stores in general, I noted that Tanger leased stores to some financially shaky operators. I specifically recall mentioning the stores leased to the Ascena Retail Group:
Ascena Retail Group, Inc. (ASNA)
$1.14 -$0.1200 (-9.52%)
https://finance.yahoo.com/quote/ASNA?p=ASNA&.tsrc=fin-srch
One retail chain owned by Ascena is Dress Barn. The company announced a plan to wind down the Dress Barn operations that will result in the eventual closure of all 650 stores.
https://www.usatoday.com/story/money/2019/05/20/dressbarn-closing-all-stores/3747205002/
It is difficult to find out, looking at Tanger's SEC filings, how many stores are leased by Dress Barn. The last Tanger Annual report states that 145 stores are leased to the Ascena Retail Group, Inc. which includes Dress Barn, Ann Taylor, Land Bryant and other Ascena brands.
Page 25
https://www.sec.gov/Archives/edgar/data/899715/000089971519000060/skt10k2018123118.htm
The last 10-Q from Ascena is more forthcoming, noting at pages 26-27 the number of store closures within the prior 12 months:
13 net Ann Taylor store closures in the last twelve month
18 net Lane Bryant store closures in the last twelve months
17 Catherines store closures in the last twelve months
67 dressbarn store closures in the last twelve months
50 maurices store closures in the last twelve months
10 net LOFT store closures in the last twelve months
https://www.sec.gov/Archives/edgar/data/1498301/000149830119000014/asna10q-q2fy19.htm
I do not know how many of those stores were leased by Tanger or how difficult any release might be and on what terms.
Brad Thomas just published a SA article where he calls Tanger his strongest conviction buy. The article has not yet disappeared behind SA paywall.
https://seekingalpha.com/article/4263644-tanger-factory-outlet-centers-superior-investors-strive-behave-contrarians
I scanned the article and did not see Ascena mentioned, even though that company is SKT's largest tenant. Some of the commenters were aware of it. I did not see Brad respond to any of those comments, as if Ascena's problems did not exist at all.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/05/observations-and-sample-of-recent_22.html