Economy:
US-China trade talks: Liu He talks to Lighthizer, Mnuchin about core issues Maybe I am reading the tea leaves wrong, but those kind of comments by China are not consistent with an imminent Phase 1 trade agreement IMO.
Donald represented yesterday that the trade talks are going very well:
Trump: "We're in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever. It's going very well but at the same time we want to see it go well inHong Kong I think that President Xi can make that happen." Trump says near deal with China, but U.S. also has eye on Hong Kong - Reuters
It is 100% certain that a break-down will not be Donald's fault. Donald will blame China in that eventuality.
US-China trade optimism is overdone-overestimating the benefits, Asia expert Stephen Roach warns (Roach: “There is a strong political incentive on both sides to cut a deal. I think we’ll look back on ‘phase one’ and wonder why we called it ‘phase one’ because we’re unlikely to see phases two, three four and anything else,” he said. “This deal will be cosmetic [and] will accomplish very little for the American worker.”)
I would agree with that opinion. There could easily be a negative reaction when and if a Phase 1 deal is consummated and the details are disclosed to investors. The main open issue is whether existing tariffs will be rolled back and by how much. It is also important that no new ones are levied by the parties.
Home price gains accelerate in September, S&P Case-Shiller Index says The Y-O-Y increase in the national index through September was 3.2%, up from 3.1% in August. The 10 city index increased by just 1.5% Y-O-Y, with the 20 city index up 2.1%. The Y-O-Y percentage increases in home price have been trending down.
Case-Shiller National Home Price Index Chart:
S&P/Case-Shiller U.S. National Home Price Index-St. Louis Fed
US consumer confidence falls for fourth consecutive month
Donald represented yesterday that the trade talks are going very well:
Trump: "We're in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever. It's going very well but at the same time we want to see it go well in
It is 100% certain that a break-down will not be Donald's fault. Donald will blame China in that eventuality.
US-China trade optimism is overdone-overestimating the benefits, Asia expert Stephen Roach warns (Roach: “There is a strong political incentive on both sides to cut a deal. I think we’ll look back on ‘phase one’ and wonder why we called it ‘phase one’ because we’re unlikely to see phases two, three four and anything else,” he said. “This deal will be cosmetic [and] will accomplish very little for the American worker.”)
I would agree with that opinion. There could easily be a negative reaction when and if a Phase 1 deal is consummated and the details are disclosed to investors. The main open issue is whether existing tariffs will be rolled back and by how much. It is also important that no new ones are levied by the parties.
Home price gains accelerate in September, S&P Case-Shiller Index says The Y-O-Y increase in the national index through September was 3.2%, up from 3.1% in August. The 10 city index increased by just 1.5% Y-O-Y, with the 20 city index up 2.1%. The Y-O-Y percentage increases in home price have been trending down.
Case-Shiller National Home Price Index Chart:
S&P/Case-Shiller U.S. National Home Price Index-St. Louis Fed
US consumer confidence falls for fourth consecutive month
++++++
Markets and Market Commentary:
Why Goldman Sachs sees a ‘baby bear market’ in bonds - MarketWatch
Earnings recession is expected to swallow all of 2019 after holiday forecasts disappoint - MarketWatch
It's not just trade hopes fueling the U.S. stocks rally - Reuters
Oil gains on trade-talk optimism, hopes for OPEC extension and forecasts for weaker U.S. production - MarketWatch
The trend in intermediate and longer term treasury rates has been down since 11/8/19:
Portfolio Management:
I have eliminated all of my stock ETFs owned in my Fidelity account, with one exception (FENY), as another leg in my continuing stock allocation reduction.
I was not going to buy more shares in those ETFs. When I reach that point with stock funds, I will generally respond by selling what I own.
I am just not comfortable with my stock allocation as is, even though it has been significantly reduced over the past year or so.
I was not going to buy more shares in those ETFs. When I reach that point with stock funds, I will generally respond by selling what I own.
I am just not comfortable with my stock allocation as is, even though it has been significantly reduced over the past year or so.
I am going to use my Vanguard account for all future ETF buys which can be traded commission free at Vanguard. That account is no longer competitive on commission charges for other U.S. listed securities.
I am not interested in moving money into U.S. stock ETFs now, however. On Monday, I sold most of my small stock ETF positions in my Vanguard account.
The only advantages in favor of Vanguard, compared to Fidelity and Schwab, is that the money market rates are higher at Vanguard and its mutual funds trade on a NTF basis.
I am not interested in buying stock mutual funds now either.
I would not open a Vanguard account for those two benefits.
The only question is when will I will transfer the assets to Schwab or Fidelity.
Since the Vanguard MM funds have higher yields, I will keep those accounts open since I am unlikely to need additional cash to purchase risk assets in my Schwab or Fidelity accounts unless and until there is a Catastrophic Event in the stock market.
Bonds are uninteresting to me as well but I am using some proceeds from maturing T Bills, CDs and corporate bonds to buy Tennessee municipal bonds using several strategies (e.g. buying bonds are or near par value that are likely to be redeemed at par value in 2 or 3 years).
For now, I am going to trade individual stock positions, buying in some cases a full position in one trade.
The 100 share purchase of CBS discussed in Item # 1 below is an example.
I will continue small ball buying in dividend stocks, possibly taking a 50 share position at the outset and then buying in small lots using the small ball purchase restriction.
The general selection criteria will include a reasonable valuation IMO coupled with a willingness to hold longer term in the event that I become an involuntary long term owner.
The overall dollar exposure will be inconsequential.
If successful, there will be a lot of darting in and out of individual stocks. This was the trading strategy used roughly between August 2007 and May 2008.
For now, I am going to trade individual stock positions, buying in some cases a full position in one trade.
The 100 share purchase of CBS discussed in Item # 1 below is an example.
I will continue small ball buying in dividend stocks, possibly taking a 50 share position at the outset and then buying in small lots using the small ball purchase restriction.
The general selection criteria will include a reasonable valuation IMO coupled with a willingness to hold longer term in the event that I become an involuntary long term owner.
The overall dollar exposure will be inconsequential.
If successful, there will be a lot of darting in and out of individual stocks. This was the trading strategy used roughly between August 2007 and May 2008.
+++++
Trump:
The Democrats are going nowhere with impeachment.
Continuing along that path with a House vote will be a futile gesture.
Key swing voters do not view impeachment as important to them and many view it as partisan. “It Is Hard to Read This as Anything but a Warning”: New Polling Suggests Democrats’ Impeachment Push Could Alienate Key Voters | Vanity Fair The vote will be entirely along partisan lines.
Republican support for Trump has hardened and the impeachment vote will be entirely, or almost so, along partisan lines.
Donald has an authoritarian like grip over the GOP. Trump impeachment: Republicans dig in as hopes of bipartisan support dashed I doubt there will be a single House republican voting for impeachment, though every single one of them would vote to impeach a democrat president for the same conduct. The only option for democrats is to target with their political contributions vulnerable republican Senate and House members.
Republican politicians cower in fear of a Trump tweet, a fear that results in the same servile and unquestioning allegiance that an authoritarian would secure through threats of death or imprisonment.
As I have argued, the Democrats need to abandon the impeachment effort and continue with their investigations on the Ukraine matter and other issues that relate directly to Donald's unfitness to be President, his obstruction of justice efforts, abuses of Presidential powers, and his numerous conflicts.
Just lay out the facts for the voters who do not live in the Alternate Reality of Trumpworld and are consequently capable of being persuaded with facts.
Currently, the polls are consistently showing that about 30% of voters strongly approve of Donald's performance as President while 40% strongly disapprove.
The rest are leaning one way or the other.
The focus of the Democrats needs to be on those who mildly disapprove rather than appealing to the strongly disapprove who want them to engage in a futile impeachment effort.
++
Impeachment:
Trump claims Marie Yovanovitch refused to hang his portrait (A photograph was not available until late October 2017, since the Duck would not sit for one); Federal offices are still waiting to hang Trump’s picture - The Washington Post
Trump blames ex-diplomat for not hanging his picture (another lie, Ukraine embassy hanged the picture when it was finally received)
Fact-checking Trump’s falsehoods on Fox & Friends about Ukraine, impeachment and Mueller report | PolitiFact
Trump Repeats False Ukraine Claims - FactCheck.org
Trump's Economic Falsehoods - FactCheck.org
Donalds tells multiple lies everyday. No single individual, who engages in widely disseminated public statements, has lied more IMO, no one in history has come anywhere near the number of lies that Trump has told just since he became President.
New Documents Reveal Details of Pompeo’s Role in Ukraine Affair
Trump administration officially put hold on Ukraine aid same day as Trump call; Two OMB officials resigned in part over Ukraine aid hold - The Washington Post; Full transcript of testimony of Mark Sandy, deputy associate director for national security programs, Office of Management and Budget-The Washington Post Republicans generally ignore or downplay that it was Donald who personally placed a hold on the military aid that had been approved by Congress.
And, Ukraine knew that a failure to disburse the aid on or before 9/30/19 would require another congressional authorization. Exclusive: White House Ignored Pentagon Warning on Ukraine Funding - Just Security Ukraine was in between a rock and hard place making that ally even more susceptible to Donald's demands to investigate the Bidens and the totally bizarre Crowdstrike conspiracy theory. Donald formed U.S. policy with Ukraine based on the Russian intelligence narrative that it was the Ukraine rather than Russia that hacked the DNC servers.
Trump Knew of Whistle-Blower Complaint When He Released Aid to Ukraine Trump unfroze the aid only after being briefed about the whistleblower's complaint. He also called Sondland that day to let him know there was no quid pro quo, a phrase first used by Trump before it entered the public lexicon.
+++
Republicans Advancing Putin's Talking Points:
Continuing along that path with a House vote will be a futile gesture.
Key swing voters do not view impeachment as important to them and many view it as partisan. “It Is Hard to Read This as Anything but a Warning”: New Polling Suggests Democrats’ Impeachment Push Could Alienate Key Voters | Vanity Fair The vote will be entirely along partisan lines.
Republican support for Trump has hardened and the impeachment vote will be entirely, or almost so, along partisan lines.
Donald has an authoritarian like grip over the GOP. Trump impeachment: Republicans dig in as hopes of bipartisan support dashed I doubt there will be a single House republican voting for impeachment, though every single one of them would vote to impeach a democrat president for the same conduct. The only option for democrats is to target with their political contributions vulnerable republican Senate and House members.
Republican politicians cower in fear of a Trump tweet, a fear that results in the same servile and unquestioning allegiance that an authoritarian would secure through threats of death or imprisonment.
As I have argued, the Democrats need to abandon the impeachment effort and continue with their investigations on the Ukraine matter and other issues that relate directly to Donald's unfitness to be President, his obstruction of justice efforts, abuses of Presidential powers, and his numerous conflicts.
Just lay out the facts for the voters who do not live in the Alternate Reality of Trumpworld and are consequently capable of being persuaded with facts.
Currently, the polls are consistently showing that about 30% of voters strongly approve of Donald's performance as President while 40% strongly disapprove.
The rest are leaning one way or the other.
The focus of the Democrats needs to be on those who mildly disapprove rather than appealing to the strongly disapprove who want them to engage in a futile impeachment effort.
++
Impeachment:
Trump claims Marie Yovanovitch refused to hang his portrait (A photograph was not available until late October 2017, since the Duck would not sit for one); Federal offices are still waiting to hang Trump’s picture - The Washington Post
Trump blames ex-diplomat for not hanging his picture (another lie, Ukraine embassy hanged the picture when it was finally received)
Fact-checking Trump’s falsehoods on Fox & Friends about Ukraine, impeachment and Mueller report | PolitiFact
Trump Repeats False Ukraine Claims - FactCheck.org
Trump's Economic Falsehoods - FactCheck.org
Donalds tells multiple lies everyday. No single individual, who engages in widely disseminated public statements, has lied more IMO, no one in history has come anywhere near the number of lies that Trump has told just since he became President.
New Documents Reveal Details of Pompeo’s Role in Ukraine Affair
Trump administration officially put hold on Ukraine aid same day as Trump call; Two OMB officials resigned in part over Ukraine aid hold - The Washington Post; Full transcript of testimony of Mark Sandy, deputy associate director for national security programs, Office of Management and Budget-The Washington Post Republicans generally ignore or downplay that it was Donald who personally placed a hold on the military aid that had been approved by Congress.
And, Ukraine knew that a failure to disburse the aid on or before 9/30/19 would require another congressional authorization. Exclusive: White House Ignored Pentagon Warning on Ukraine Funding - Just Security Ukraine was in between a rock and hard place making that ally even more susceptible to Donald's demands to investigate the Bidens and the totally bizarre Crowdstrike conspiracy theory. Donald formed U.S. policy with Ukraine based on the Russian intelligence narrative that it was the Ukraine rather than Russia that hacked the DNC servers.
Trump Knew of Whistle-Blower Complaint When He Released Aid to Ukraine Trump unfroze the aid only after being briefed about the whistleblower's complaint. He also called Sondland that day to let him know there was no quid pro quo, a phrase first used by Trump before it entered the public lexicon.
+++
Republicans Advancing Putin's Talking Points:
Putin recently gloated and congratulated himself for another successful propaganda campaign: “Thank God no one is accusing us anymore of interfering in the U.S. elections Now, they’re accusing Ukraine." Putin on Impeachment: 'Thank God No One Is Accusing Us of Election Meddling’ - YouTube
Why the GOP-pushed conspiracy theories about Trump-Ukraine are bogus - Business Insider
The Republicans' Ukraine conspiracy theory is going mainstream
How Russian operatives hacked the DCCC and disrupted the 2016 election - 60 Minutes - CBS News When looking at the evidence of Russian interference, and statements by republican politicians like John Kennedy, the only conclusion possible is that facts do not matter to them when the facts are inconvenient or unfavorable.
Why the GOP-pushed conspiracy theories about Trump-Ukraine are bogus - Business Insider
The Republicans' Ukraine conspiracy theory is going mainstream
How Russian operatives hacked the DCCC and disrupted the 2016 election - 60 Minutes - CBS News When looking at the evidence of Russian interference, and statements by republican politicians like John Kennedy, the only conclusion possible is that facts do not matter to them when the facts are inconvenient or unfavorable.
Senator John Kennedy (R-LA), no relation to the prominent Kennedy family of democrats, recently propagated Russia's talking points about 2016 election interference. GOP senator: 'I don't know' if Ukraine or Russia hacked 2016 election Senator Kennedy claimed and later retracted that the Democrats hacked their own server using Ukraine somehow, released the emails that hurt Hillary's campaign in an effort to help her win the election.GOP Sen. John Kennedy backtracks on Ukraine hacking claim: 'I was wrong It is important to some GOP politicians to avoid looking extremely ridiculous.
It is interesting how republicans are parroting Russian propaganda and talking points that have sought to blame the country it has invaded and dismembered for the election interference committed by Russia.
Republicans Solidly Against Impeachment:
When reviewing comments made by republican rank and file on impeachment related matters, the fact that republican politicians are propagating Russia propaganda designed to break U.S. support for Ukraine is not within their consciousness.
Republicans will be drawn to conspiracy theories being advanced by Fox and republican politicians without question.
Facts inconsistent with those fact free alternate reality scenarios will be disregarded and viewed as suspect, particularly when coming from a "deep state" investigation (FBI/CIA) and reported nationwide by respected media organizations.
Republican faithful claim that Donald has done nothing wrong and refuse to come into contact with any facts that indicate otherwise.
I hear them frequently say that the Trump impeachment effort is a waste of time and money, but the republican effort to impeach Clinton for lying about having sex with Monica was worth the time and money as was the two year investigation attempting to blame Hillary for the security lapses at one embassy. 2012 Benghazi attack - Wikipedia
There is no doubt in my mind that all of them would vociferously support impeachment of a democrat president who committed the same acts. That would not be a waste of time and money.
The foregoing is based on reading or listening to comments made by over 100 republicans, mostly from reading interview transcripts or watching video interviews.
Republicans Still Think Obama Was Born in Kenya as Trump Resurrects Birther Conspiracy Theory Trump has an innate feel for his audience. He knows that they can not be persuaded by facts and are likely to believe demonstrably false statements and narratives fed to them by Donald and similar "truth tellers".
Timeline: Trump, Giuliani, Biden, and Ukrainegate (updated)
Trump, Ukraine, Giuliani and the First Quid Pro Quo:
The evidence is overwhelming that Donald withheld military aid authorized by Congress to coerce the Ukrainian government to launch investigations of the Bidens and the crackpot Crowdstrike conspiracy theory pushed by Russian intelligence .
That abuse of power was probably not the first Ukrainian quid pro quo of Donald's presidency based on a timeline of events that took place when Poroshenko was Ukraine's President and Yuri Lutsenko was its chief prosecutor.
There was an ongoing investigation by Ukraine's special anti-corruption bureau into the secret payments made to Trump's former campaign manager Paul Manafort.
Giuliani met with Poroshenko on two occasions in 2017. Rudy Giuliani met with Ukrainian President Poroshenko twice last year amid U.S.-Ukraine arms deal negotiations
After the first meeting, the Ukrainian investigation into Paul Manafort was transferred from the special anti-corruption bureau to Lutsenko where the investigation promptly stalled.
The second meeting occurred after Manafort was indicted in the U.S. The Ukrainians were then trying to buy javelin missiles from the U.S. The sale was held up the Office of Management and Budget. The sale of the javelins was approved in April 2018, the same month that Lutsenko announced that he was freezing all Manafort investigations.
It is interesting how republicans are parroting Russian propaganda and talking points that have sought to blame the country it has invaded and dismembered for the election interference committed by Russia.
Republicans Solidly Against Impeachment:
When reviewing comments made by republican rank and file on impeachment related matters, the fact that republican politicians are propagating Russia propaganda designed to break U.S. support for Ukraine is not within their consciousness.
Republicans will be drawn to conspiracy theories being advanced by Fox and republican politicians without question.
Facts inconsistent with those fact free alternate reality scenarios will be disregarded and viewed as suspect, particularly when coming from a "deep state" investigation (FBI/CIA) and reported nationwide by respected media organizations.
Republican faithful claim that Donald has done nothing wrong and refuse to come into contact with any facts that indicate otherwise.
I hear them frequently say that the Trump impeachment effort is a waste of time and money, but the republican effort to impeach Clinton for lying about having sex with Monica was worth the time and money as was the two year investigation attempting to blame Hillary for the security lapses at one embassy. 2012 Benghazi attack - Wikipedia
There is no doubt in my mind that all of them would vociferously support impeachment of a democrat president who committed the same acts. That would not be a waste of time and money.
The foregoing is based on reading or listening to comments made by over 100 republicans, mostly from reading interview transcripts or watching video interviews.
Republicans Still Think Obama Was Born in Kenya as Trump Resurrects Birther Conspiracy Theory Trump has an innate feel for his audience. He knows that they can not be persuaded by facts and are likely to believe demonstrably false statements and narratives fed to them by Donald and similar "truth tellers".
Timeline: Trump, Giuliani, Biden, and Ukrainegate (updated)
Trump, Ukraine, Giuliani and the First Quid Pro Quo:
The evidence is overwhelming that Donald withheld military aid authorized by Congress to coerce the Ukrainian government to launch investigations of the Bidens and the crackpot Crowdstrike conspiracy theory pushed by Russian intelligence .
That abuse of power was probably not the first Ukrainian quid pro quo of Donald's presidency based on a timeline of events that took place when Poroshenko was Ukraine's President and Yuri Lutsenko was its chief prosecutor.
There was an ongoing investigation by Ukraine's special anti-corruption bureau into the secret payments made to Trump's former campaign manager Paul Manafort.
Giuliani met with Poroshenko on two occasions in 2017. Rudy Giuliani met with Ukrainian President Poroshenko twice last year amid U.S.-Ukraine arms deal negotiations
After the first meeting, the Ukrainian investigation into Paul Manafort was transferred from the special anti-corruption bureau to Lutsenko where the investigation promptly stalled.
The second meeting occurred after Manafort was indicted in the U.S. The Ukrainians were then trying to buy javelin missiles from the U.S. The sale was held up the Office of Management and Budget. The sale of the javelins was approved in April 2018, the same month that Lutsenko announced that he was freezing all Manafort investigations.
+++++++++
All trades are commission free unless other noted.
1. Bought 100 CBS at $38.4:
Quote: CBS Corp. Cl B (CBS)
Added 12/29/19: After acquiring Viacom, the name and symbol changed to ViacomCBS Inc. (VIAC), and that is the symbol used in the right hand column as a link to this post, replacing CBS.
Closing Price Yesterday: CBS $40.51 +$0.42 +1.05%
CBS Corp. Cl B Analyst Estimates
2020 E.P.S. Consensus: $5.54 as of 11/20/19
P/E at $38.4 and E.P.S. of $5.54 = 6.93
SEC Filings
This is a trade. I am selecting the stocks to trade based on valuation and a willingness, if necessary, to hold the stock longer term at the purchase price.
I would prefer to also have meaningful dividend support, which is not the case with CBS, in case I become an involuntary long term owner.
I view CBS stock to be undervalued without its pending acquisition of Viacom.
CBS currently owns CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network, CBS Films, Showtime Networks, Pop and Smithsonian Networks, and Simon & Schuster.
Upon completion of the pending merger, Viacom shareholders will receive .5965 CBS share for each Viacom share. I view that exchange rate to be favorable to CBS. The combined company will be called ViacomCBS, Inc. The symbol will also change.
The goal will be a flip within 1 year that harvests anywhere between a $300 to $500 total return.
5 Year Chart:
The label that describes this chart is bear market.
Dividend: Quarterly at $.18 per share
Dividend Yield at $38.4 = 1.875%
This purchase can not be justified in my universe based on the dividend yield or the dividend history.
Last Earnings Report (9/30/19): SEC Filed Press Release
This will be the final report for CBS as a standalone company. The acquisition of Viacom is scheduled for completion on 12/4/19.
Adjusted E.P.S. from continuing operations declined by 23% to $.95 with a 1% Y-O-Y increase in revenue to $3.3B. GAAP E.P.S. was $.85.
The third quarter of 2018 benefited from election related advertising as will the 2020 third quarter.
"Affiliate and subscription fee revenues were up 12%, driven by increases in fees from CBS Television Network affiliated stations and retransmission revenues, as well as growth from the Company’s direct-to-consumer streaming services. Content licensing and distribution revenues were up 1%, mainly as a result of higher sales of series produced for third parties." Advertising declined by 7% Y-O-Y.
The 2019 third quarter was also negatively impacted by an AT & T blackout that lasted about 3 weeks.
CBS is aggressively spending on new programs with 94 shows in production, up 20% from 2018 and up more than 120% compared to five years ago (Morningstar report)
I recently subscribed to CBS AllAccess commercial free and am currently watching the first two seasons of Star Trek: Discovery (Official Site) CBS All Access.
Last Viacom Earnings Report
Viacom owns Paramount Studios, somewhat of a problem child, and a number of media networks described in the following snapshot:
Sourced from Page 3 Annual Report for the F/Y ending 9/30/19
Broker Reports:
S & P (11/13/19): 3 stars with a 12 month PT of $40
Morningstar (11/13/19): 5 stars with a fair value estimate of $77
Argus (11/13/19): Hold
Credit Suisse (11/12/19): Outperform with a $52 PT (arrived at by using 8 x 2021 estimated Viacom-CBS price to free cash flow)
Prior Trades: This is my first CBS common stock purchase. I have bought and sold Viacom SU bonds and currently own a few.
All trades are commission free unless other noted.
1. Bought 100 CBS at $38.4:
Quote: CBS Corp. Cl B (CBS)
Added 12/29/19: After acquiring Viacom, the name and symbol changed to ViacomCBS Inc. (VIAC), and that is the symbol used in the right hand column as a link to this post, replacing CBS.
Closing Price Yesterday: CBS $40.51 +$0.42 +1.05%
CBS Corp. Cl B Analyst Estimates
2020 E.P.S. Consensus: $5.54 as of 11/20/19
P/E at $38.4 and E.P.S. of $5.54 = 6.93
SEC Filings
This is a trade. I am selecting the stocks to trade based on valuation and a willingness, if necessary, to hold the stock longer term at the purchase price.
I would prefer to also have meaningful dividend support, which is not the case with CBS, in case I become an involuntary long term owner.
I view CBS stock to be undervalued without its pending acquisition of Viacom.
CBS currently owns CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network, CBS Films, Showtime Networks, Pop and Smithsonian Networks, and Simon & Schuster.
Upon completion of the pending merger, Viacom shareholders will receive .5965 CBS share for each Viacom share. I view that exchange rate to be favorable to CBS. The combined company will be called ViacomCBS, Inc. The symbol will also change.
The goal will be a flip within 1 year that harvests anywhere between a $300 to $500 total return.
5 Year Chart:
Dividend: Quarterly at $.18 per share
Dividend Yield at $38.4 = 1.875%
This purchase can not be justified in my universe based on the dividend yield or the dividend history.
Last Earnings Report (9/30/19): SEC Filed Press Release
This will be the final report for CBS as a standalone company. The acquisition of Viacom is scheduled for completion on 12/4/19.
Adjusted E.P.S. from continuing operations declined by 23% to $.95 with a 1% Y-O-Y increase in revenue to $3.3B. GAAP E.P.S. was $.85.
The third quarter of 2018 benefited from election related advertising as will the 2020 third quarter.
"Affiliate and subscription fee revenues were up 12%, driven by increases in fees from CBS Television Network affiliated stations and retransmission revenues, as well as growth from the Company’s direct-to-consumer streaming services. Content licensing and distribution revenues were up 1%, mainly as a result of higher sales of series produced for third parties." Advertising declined by 7% Y-O-Y.
The 2019 third quarter was also negatively impacted by an AT & T blackout that lasted about 3 weeks.
CBS is aggressively spending on new programs with 94 shows in production, up 20% from 2018 and up more than 120% compared to five years ago (Morningstar report)
I recently subscribed to CBS AllAccess commercial free and am currently watching the first two seasons of Star Trek: Discovery (Official Site) CBS All Access.
Last Viacom Earnings Report
Viacom owns Paramount Studios, somewhat of a problem child, and a number of media networks described in the following snapshot:
Broker Reports:
S & P (11/13/19): 3 stars with a 12 month PT of $40
Morningstar (11/13/19): 5 stars with a fair value estimate of $77
Argus (11/13/19): Hold
Credit Suisse (11/12/19): Outperform with a $52 PT (arrived at by using 8 x 2021 estimated Viacom-CBS price to free cash flow)
Prior Trades: This is my first CBS common stock purchase. I have bought and sold Viacom SU bonds and currently own a few.
2. Canadian Reset Equity Preferred Stocks (C$1 IB Commission):
A. Added 50 ENBPRP at C$15.68:
Quote: Enbridge Preferred Series P (ENB-PP.TO)
This is an average down from a prior purchase: Item # 4.A. Bought 100 ENBPRP:CA at C$16.5 (3/20/19 Post)
I will just drag and drop some of the discussion from that post here.
This Canadian equity preferred stock just reset its coupon for five years at 4.35%, which is higher than the 4% coupon paid during the five year fixed coupon period. The reset is based on a 2.5% spread to 5 year Canadian government bond. Enbridge Provides Notice of Series P Preferred Shares Conversion Right and Announces Reset Dividend Rates
The 4.35% coupon will last to, but excluding 3/1/24.
At that time, Enbridge can redeem at par value plus accrued and unpaid dividends.
If ENB does not redeem, then the coupon will reset a 2.5% spread to the then existing 5 year Canadian bond. This kind of provision provides a rolling five year call protection for the owners.
Par Value: C$25
A. Added 50 ENBPRP at C$15.68:
Quote: Enbridge Preferred Series P (ENB-PP.TO)
This is an average down from a prior purchase: Item # 4.A. Bought 100 ENBPRP:CA at C$16.5 (3/20/19 Post)
I will just drag and drop some of the discussion from that post here.
This Canadian equity preferred stock just reset its coupon for five years at 4.35%, which is higher than the 4% coupon paid during the five year fixed coupon period. The reset is based on a 2.5% spread to 5 year Canadian government bond. Enbridge Provides Notice of Series P Preferred Shares Conversion Right and Announces Reset Dividend Rates
The 4.35% coupon will last to, but excluding 3/1/24.
At that time, Enbridge can redeem at par value plus accrued and unpaid dividends.
If ENB does not redeem, then the coupon will reset a 2.5% spread to the then existing 5 year Canadian bond. This kind of provision provides a rolling five year call protection for the owners.
Par Value: C$25
The prospectus can be found here: Preferred Shares and Hybrid Securities - Enbridge Inc.
Dividends: Quarterly and Cumulative
Credit Ratings:
Last Ex Dividend: 11/14/19 (after purchase)
Dividend Yield at C$15.68 TC = 6.94%
Average Cost (150 shares) = C$16.23
Current Yield at Average Cost = 6.7%
Previous Round-Trips: Item # 4.A. Sold 200 ENBPRP at C$19.91 (3/25/17 Post)(realized gain snapshot= C$963). That post also contains a snapshot of a 300 share round-trip that netted U.S.$1,458.25. That 300 share lot was bought at C$12.39. Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 2/29/16 - South Gent | Seeking Alpha Fidelity converts the CAD profit into USDs while I have to wait for IB to send out a 1099 showing the reportable USD profit.
ENBPRP Realized Gains to Date: US$2,964.32 converted from CADs for tax reporting
3. Eliminations and Pares:
I am reducing my stock allocation.
A. Eliminated TRST-Sold 56+ at $8.8:
Quote Trustco Bank Corp.
Closing Price Yesterday: TRST $8.73 -$0.04 -0.40%
Category: Regional Bank Basket Strategy
Profit Snapshot: $68.51 (11/11 sell only)
Last Discussed: Item # 2.B. Sold 125 TRST at $8.6 (11/2/19 Post); Item # 1.A. Bought 100 TRST at $8.55 and 25 at $8.26 (10/7/18 Post); Item # 1.B. Sold 161+ TRST at $9.2+ (7/2/18 Post)
TRST Realized Gains to Date: $1,067.4 ($998.86 in prior trades)
As previously discussed, I am paring my regional bank basket down based on a number of considerations and concerns, including the following: (1) net interest margin is not likely to meaningfully expand anytime soon, with the more probable than not scenario being no growth or further NIM compression; and (2) the long positive credit cycle may be nearing an end with non-performing loans and charge offs being at or near historical lows for regional banks.
B. Pared SJR-Sold Highest Cost 50 Share Lot at $20.85:
Quotes:
USD: Shaw Communications Inc. Cl B NV
CAD: Shaw Communications Inc. Cl B NV (Canada: Toronto)
Closing Price Yesterday: SJR $20.52 +$0.17 +0.84%
Investor Relations
Shaw Communications Inc (USA) Profile | Reuters
Shaw Communications Inc Key Developments | Reuters
Profit Snapshot: $34.66
Item # 1 Bought 50 SJR at $20.16 and 50 at $19.7 (10/8/19 Post)
I kept the 50 share bought at $19.7.
I have nothing to add to my recent discussion other than to emphasize a couple of points.
Trudeau may place additional economic pressure on wireless carriers to reduce prices.
Another issue is a recent ruling that requires Canada's internet carriers to permit reseller's access to their infrastructure at prices allegedly below the carriers' cost which, if true, is confiscatory. Cogeco calls on the government to order the CRTC to restore much-needed balance in its high-speed internet wholesale regulatory framework (11/13/19)
Current Position: 50+ shares
Average Cost Per Share = $19.7
Maximum Position: 100 Shares + shares purchased with monthly dividend
Purchase Restriction: Small Ball Rule
C. Eliminated CS-Sold 50 at $13 ($1 IB Commission):
Quote: CS | Credit Suisse Group AG ADR
Closing Price Yesterday: CS $13.27 -$0.06 -$0.45%
CS - Credit Suisse Group AG (ADR) Profile | Reuters
Credit Suisse Group AG (ADR) Key Developments | Reuters
Profit Snapshot: +$73.73
Item # 1 Bought 50 CS at $11.49 (10/11/19 Post)
D. Eliminated FHLC-Sold 25+ at $46.92:
Quote: Fidelity MSCI Health Care Index ETF Overview
Sponsor's Website: FHLC | ETF Snapshot - Fidelity
Expense Ratio: .08%
Profit Snapshot: +$81.52
Last Discussed: Item # 3.A. (5/1/19 Post)
I am in the process of liquidating almost all of my small ETF stock positions. I am not comfortable with my stock allocation given my capital preservation objective and no financial need to take any risk.
Dividends: Quarterly and Cumulative
Credit Ratings:
Last Ex Dividend: 11/14/19 (after purchase)
Dividend Yield at C$15.68 TC = 6.94%
Average Cost (150 shares) = C$16.23
Current Yield at Average Cost = 6.7%
Previous Round-Trips: Item # 4.A. Sold 200 ENBPRP at C$19.91 (3/25/17 Post)(realized gain snapshot= C$963). That post also contains a snapshot of a 300 share round-trip that netted U.S.$1,458.25. That 300 share lot was bought at C$12.39. Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 2/29/16 - South Gent | Seeking Alpha Fidelity converts the CAD profit into USDs while I have to wait for IB to send out a 1099 showing the reportable USD profit.
ENBPRP Realized Gains to Date: US$2,964.32 converted from CADs for tax reporting
3. Eliminations and Pares:
I am reducing my stock allocation.
A. Eliminated TRST-Sold 56+ at $8.8:
Quote Trustco Bank Corp.
Closing Price Yesterday: TRST $8.73 -$0.04 -0.40%
Category: Regional Bank Basket Strategy
Profit Snapshot: $68.51 (11/11 sell only)
Last Discussed: Item # 2.B. Sold 125 TRST at $8.6 (11/2/19 Post); Item # 1.A. Bought 100 TRST at $8.55 and 25 at $8.26 (10/7/18 Post); Item # 1.B. Sold 161+ TRST at $9.2+ (7/2/18 Post)
TRST Realized Gains to Date: $1,067.4 ($998.86 in prior trades)
As previously discussed, I am paring my regional bank basket down based on a number of considerations and concerns, including the following: (1) net interest margin is not likely to meaningfully expand anytime soon, with the more probable than not scenario being no growth or further NIM compression; and (2) the long positive credit cycle may be nearing an end with non-performing loans and charge offs being at or near historical lows for regional banks.
B. Pared SJR-Sold Highest Cost 50 Share Lot at $20.85:
Quotes:
USD: Shaw Communications Inc. Cl B NV
CAD: Shaw Communications Inc. Cl B NV (Canada: Toronto)
Closing Price Yesterday: SJR $20.52 +$0.17 +0.84%
Investor Relations
Shaw Communications Inc (USA) Profile | Reuters
Shaw Communications Inc Key Developments | Reuters
Profit Snapshot: $34.66
Item # 1 Bought 50 SJR at $20.16 and 50 at $19.7 (10/8/19 Post)
I kept the 50 share bought at $19.7.
I have nothing to add to my recent discussion other than to emphasize a couple of points.
Trudeau may place additional economic pressure on wireless carriers to reduce prices.
Another issue is a recent ruling that requires Canada's internet carriers to permit reseller's access to their infrastructure at prices allegedly below the carriers' cost which, if true, is confiscatory. Cogeco calls on the government to order the CRTC to restore much-needed balance in its high-speed internet wholesale regulatory framework (11/13/19)
Current Position: 50+ shares
Average Cost Per Share = $19.7
Maximum Position: 100 Shares + shares purchased with monthly dividend
Purchase Restriction: Small Ball Rule
C. Eliminated CS-Sold 50 at $13 ($1 IB Commission):
Quote: CS | Credit Suisse Group AG ADR
Closing Price Yesterday: CS $13.27 -$0.06 -$0.45%
CS - Credit Suisse Group AG (ADR) Profile | Reuters
Credit Suisse Group AG (ADR) Key Developments | Reuters
Profit Snapshot: +$73.73
Item # 1 Bought 50 CS at $11.49 (10/11/19 Post)
D. Eliminated FHLC-Sold 25+ at $46.92:
Quote: Fidelity MSCI Health Care Index ETF Overview
Sponsor's Website: FHLC | ETF Snapshot - Fidelity
Expense Ratio: .08%
Profit Snapshot: +$81.52
Last Discussed: Item # 3.A. (5/1/19 Post)
I am in the process of liquidating almost all of my small ETF stock positions. I am not comfortable with my stock allocation given my capital preservation objective and no financial need to take any risk.
4. Short Term Bond/CD Ladder Basket Strategy:
SU = Senior Unsecured Bond ($1K par value per bond)
FM = First Mortgage Bond
CD = Certificate of Deposit ($1K par value per CD)-FDIC Insured
MI = Monthly Interest Payments
Treasury: U.S. Treasury Debt ($1K par value per bill, note or bond)
IR: Investment Rate for Treasury Bills Bought at Auction
Secondary Market: Commission Free Bond Market Purchase at below Par Value
SU corporate bond are bought at discounts to par value.
December 2019 Maturities
1 DTE SU 2.5% 12/1 (bought 6/18)
10 Treasury 58D Bills 1.743%IR 12/2 (bought at auction)
1 Am Ex CD 1.9% 12/5 (2 Yr CD)
5 Treasury 1.972%IR 12/5 (3Mo Bill Auction)
3 East West 2.4% CDs MI 12/5 (6 month CDs)
2 Treasury 2.319%IR 12/5 (6 month Bill Auction)
1 Treasury 2.726% IR 12/5 (1 yr T Bill-auction)
2 Treasury 2.319% IR 12/5 (6 mo T Bill auction)
2 Synchrony BK. 2.45% CDs 12/9 (6 month CDs)
10 Citizens Bank 2.45% CDs 12/12 (6 month CDs)
5 Treasury 3Mo Bill 1.962% IR 12/12 (bought at auction)
2 Goldman Sachs 2.3% SU 12/13 (bought 12/17)
2 Southern Co. 1.95% SU 12/15 (bought 1/18)
2 Treasury 1.375% 12/15 (secondary market purchases)
1 Treasury 12/15 (bought at auction)
2 Dominion Gas 2.5% SU 12/15 (bought 1/19 and 8/18)
2 Church & Dwight 2.45% SU 12/15 (bought 8/18)
2 SmartBank 2.4% CDs 12/16 (6 month CD)
2 Reliant Bank 2.4% CDs MI 12/16 (6 Mo CDs)
11 Treasury 28 Day Bills 1.593% IR 12/17 (bought at auction)
2 Bank of China 1.9% CDs 12/17 (2 mo CDs)
5 Treasury 56 Day Bills 1.697%IR (bought at auction)
2 Bank of China 2.4% CDs 12/19 (6 mo CDs)
5 Treasury 3 MO Bills 1.987% IR 12/19 (bought at auction)
1 Capital One 2.45% CD 12/20 (2 Yr CD)
3 Treasury 1.913% YTM 12/26 (secondary market)
1 First Bank 2.75% CD 12/27 (1 Yr CD)
3 Merchants Bank 2.35% CDs 12/27 (6 month CDs)
2 Simmons Bk. 2.4% CDs MI 12/27 (6 month CDs)
1 Bar Harbor 2% CD 12/30 MI (2 YR CD)
1 Treasury 2 YR Note 12/31 (bought at auction)
1 Treasury 1.625% 12/31 (secondary market)
2 Treasury 1.875% 12/31 (secondary market)
2 Centennial 2.4% CD MI 12/31 (7 month CDs)
$101K
This is a problem given the decline in short term rates.
2019 Daily Treasury Yield Curve Rates
This is a problem given the decline in short term rates.
2019 Daily Treasury Yield Curve Rates
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
South Gent,
ReplyDeleteYou last bought PNNT on 10/10/2019. Since then JPM down graded it to Sell, but SunTrust maintains a Buy rating (although with a lower target of $7). It hit the bottom at $5.84 on 11/22/2019.
Its most recent quarterly non-GAAP earning is lower than last year, but covers its dividend. Lately the CEO was buying at the lowest price range in 3 years. However, the CEO also bought shares last two quarter at higher prices.
I think it's a buy at $6.11 with a yield of 11.9%, and a strong buy if it drops further.
Y2000: PNNT is not covering its dividend with net investment income. The quarterly dividend is $.18 per share.
DeleteWhen I discussed PNNT in an October post, I mentioned that the second quarter NII per share number was $.17.
Item # 2.A. Bought 10 PNNT at $6.09:
https://tennesseeindependent.blogspot.com/2019/10/observations-and-sample-of-recent_26.html
I discussed the third quarter report in a comment:
https://tennesseeindependent.blogspot.com/2019/11/observations-and-sample-of-recent_20.html?showComment=1574430073409#c1627789040304524223
I mentioned in that comment that it was PFLT that covered its dividend and PNNT did not. PFLT has been moving up since that report.
PNNT Third Quarter Earnings Press Release
http://www.globenewswire.com/news-release/2019/11/21/1951101/0/en/PennantPark-Investment-Corporation-Announces-Financial-Results-for-the-Fourth-Quarter-and-Fiscal-Year-Ended-September-30-2019.html
NII per share was reported at $.14 in the third quarter which included a 3 cent negative hit for a debt financing. If I overlooked that charge as non-recurring and used the non-GAAP NII per share number of $.17, PNNT came up 1 cent per share short of covering its $.18 per share dividend.
For its fiscal year ending 9/30/19, PNNT did cover the $.72 per share dividend with $.72 in non-GAAP NII. (GAAP NII for the F/Y was $.66)
Several factors are negatively impacting NII including loans that go on non-accrual and lower Libor rates since the floating rate loans are priced at a spread to a Libor rate.
I classify PNNT as a deservedly hated BDC, based in large part on its declining net asset value per share.
I am looking to get out rather than to dig a deeper hole.
Unless PNNT improves NII per share and quits incinerating assets, I do not see much upside in the share price.
On 9/30/14, net asset value per share was reported at $11.03 and at $8.68 as of 9/30/19.
While my average cost per share is $6.48 currently, I am not hopeful that I will achieve my goal for BDCs, which is to eventually escape with a total return in excess of the dividend payments.
In the past, it has been difficult to realize a share profit gain when trading PNNT.
I am reinvesting the dividend as a means to average down.
I mentioned in my last post discussion that the dividend may be cut unless NII improved. I forgot when I made that assertion that PNNT had undistributed taxable spillover income of $.34 which provides a "significant dividend cushion" according to the CEO:
Page 2
https://seekingalpha.com/article/4308650-pennantpark-investments-pnnt-ceo-art-penn-q4-2019-results-earnings-call-transcript?page=2
I would note that distributing cash in excess of NII will have a negative impact on net asset value per share. If PNNT distributed $.34 per share as a dividend in excess of current NII, the NAV per share would decline by that number.
AKEBIA THERAPEUTICS INC (AKBA)$
ReplyDelete$ 6.21 +$ 0.6647 +11.98%
Last Updated: Nov 29, 2019 at 10:06 a.m. EST
DAY RANGE 5.51 - 6.56
https://www.marketwatch.com/investing/stock/akba
The early morning pop to $6.56 brought out some sellers.
AKBA is one of my Lottery Ticket small cap biotech stocks.
I last discussed a 70 share buy at $3.98
https://tennesseeindependent.blogspot.com/2019/10/observations-and-sample-of-recent_16.html
I later bought 5 shares at $3.68 which I did not discuss here. My average cost for 105 shares is at $5.06.
After hitting an intra-day low at $3.06 on 11/19, the stock started a parabolic rise with no down days.
I do not see any recent news. Recognizing that I am ignorant on medical science matters, my overall opinion is skepticism as expressed in my last discussion.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/11/observations-and-sample-of-recent_30.html