Economy:
US National Debt Passed $23 Trillion, Jumped $1.3 Trillion in 12 Months | Wolf Street (take a look at the chart in this article)
Jim Cramer is 'suspicious' of the 'trade truce happy talk' with China Skepticism is warranted.
U.S. may roll back tariffs on $112 billion in Chinese imports: report - MarketWatch The U.S. is "considering" removing tariffs on $112B of China's exports in exchange for some kind of concession from China, possibly "tougher intellectual-property protections for U.S. companies." Note the vagueness starting with the word "considering".
U.S. may roll back tariffs on $112 billion in Chinese imports: report - MarketWatch The U.S. is "considering" removing tariffs on $112B of China's exports in exchange for some kind of concession from China, possibly "tougher intellectual-property protections for U.S. companies." Note the vagueness starting with the word "considering".
++++++
Markets and Market Commentary:
Morgan Stanley Predicts Dismal Returns For The Next Decade
The ‘mother of all bubbles’ could blow up the economy if profits don’t improve, warns Blackstone strategist - MarketWatch The "mother of all bubbles" is not a reference to the stock market but to sovereign debt.
The Marketwatch article is referring to this commentary which is worth reading: Joe Zidle: Recession Signals - Still Time for Outperformance - Blackstone I would agree with Mr. Zidle that abnormal central bank monetary policies are not the solution for anemic growth now.
Those policies were helpful for several years after the Near Depression but are a net negative for growth now.
Morgan Stanley Predicts Dismal Returns For The Next Decade
The ‘mother of all bubbles’ could blow up the economy if profits don’t improve, warns Blackstone strategist - MarketWatch The "mother of all bubbles" is not a reference to the stock market but to sovereign debt.
The Marketwatch article is referring to this commentary which is worth reading: Joe Zidle: Recession Signals - Still Time for Outperformance - Blackstone I would agree with Mr. Zidle that abnormal central bank monetary policies are not the solution for anemic growth now.
Those policies were helpful for several years after the Near Depression but are a net negative for growth now.
Warren Buffett's Berkshire Hathaway reports a $128 billion cash pile
There are a number of governance issues among cannabis companies. This is just one recent example: Cronos paid $300 million for a small CBD company, and CEO’s private-equity firm stands to collect $120 million of it - MarketWatch; Cronos gets US foothold by buying CBD beauty brand Lord Jones
There are a number of governance issues among cannabis companies. This is just one recent example: Cronos paid $300 million for a small CBD company, and CEO’s private-equity firm stands to collect $120 million of it - MarketWatch; Cronos gets US foothold by buying CBD beauty brand Lord Jones
+++++
Trump:
At a UFC event, Trump receives second round of boos in a week To be fair, a UFC event is likely to have a lot of Trump fellow travelers in attendance. The Duck did receive some cheers, unlike what happened at the World Series game when there was nothing but boos and a brief chant "Lock Him Up".
What kind of White House press secretary calls her boss’s critics human scum? Stephanie Grisham.
At a UFC event, Trump receives second round of boos in a week To be fair, a UFC event is likely to have a lot of Trump fellow travelers in attendance. The Duck did receive some cheers, unlike what happened at the World Series game when there was nothing but boos and a brief chant "Lock Him Up".
What kind of White House press secretary calls her boss’s critics human scum? Stephanie Grisham.
Trump calls Chicago ‘embarrassing to us as a nation’- MarketWatch (Trump:“It’s embarrassing to us as a nation. All over the world they’re talking about Chicago. Afghanistan is a safe place by comparison.”) Chicago's main sin in TrumpWorld is that it has not accepted Donald as the savior.
Smugglers are sawing through new sections of Trump’s border wall Donald has assured us that the wall is impenetrable.
In Trump’s Twitter Feed: Conspiracy-Mongers, Racists and Spies - The New York Times
Trump’s Twitter Presidency: 9 Key Takeaways
++
Impeachment Inquiry:
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo - The New York Times
The raving hypocrite Lyndsey Graham (R-SC) claimed in an interview that he would support impeachment provided there was proof of a quid pro quo. What it would take for Graham to consider impeachment
Graham said he would not even bother to read the deposition transcripts, having decided that they were a "bunch of B.S.". Graham Won’t Read Transcripts | Talking Points Memo
Arguably, Trump committed "bribery", one of the specific grounds for impeachment listed in the Constitution, based on the Founding Father's definition of that term or even the definition contained in the federal criminal statute. Self-Dealing in Ukraine: The Core of the Impeachment Inquiry - Lawfare (refers to the U.S. criminal statute codified at 18 U.S.C. § 201. The Founding Fathers had a broader definition of bribery that had no limitation to a "thing of value". The impeachable offense Trump may have committed-The Washington Post
4 takeaways from Gordon Sondland’s and Kurt Volker’s testimonies
Top national security aide Robert Blair won't citing White House order
Just more stonewalling built on a frivolous legal argument. 4 White House officials won't testify in Trump impeachment probe Monday
U.S. career diplomats testify that State Department was misused for domestic politics Republicans are okay with that provided Democrats are the ones being targeted, even when the result is contrary to the national security interest, but their outrage would know no boundary when and if a Democrat President used the State Department to further a personal political agenda that could interfere with the national security interest. The hypocrisy is just stunning and omnipresent.
The republican politicians who are supporting Donald's version of what happened will lose their credibility among non-brain washed voters capable of forming fact based opinions.
The more sensible approach for republican incumbents who may lose to a Democrat in 2020 would be acknowledge what actually happened; call Donald's action "inappropriate"; then argue "no harm, no foul" and express a willingness to vote for a censure resolution rather than impeachment as the remedy for what actually happened.
For that strategy to work in 2020, Donald would have to lay off attacking them, but those at risk republicans know that Demagogue Don would berate them endlessly for being "traitors" and having committed "treason". Caught between a rock and hard place, they will continue supporting Donald's alternate reality, lose their credibility among many non-brain dead voters capable of forming fact based opinions who voted for them in the last election and will go down in defeat in 2020 for embracing and coddling Donald no matter what he does.
++
Conspiracy Theory-Ukraine Hacked the DNC Computer:
The Republican mind is particularly susceptible to conspiracy theories.
Those who hatch the conspiracy theories may be Russian intelligence operatives or Americans who have discovered that considerable sums can be earned from peddling them through media outlets (FOX, Alex Jones) or in book form.
Russia is the most likely source of the conspiracy theory accepted by Donald that it was Ukraine rather than Russia who hacked the DNC's email server. This convenient for Russia conspiracy theory has no evidentiary basis and is counter to the facts discovered by U.S. intelligence.
Facts can not kill conspiracy theories since the True Believers almost invariably prefer reality creations to facts and are far more likely to disbelieve what is true and believe in what is demonstrably false. (e.g Poll: Two-Thirds of Trump Backers Think Obama Is Muslim; Poll: Persistent Partisan Divide Over 'Birther' Question - NBC News-Only 27% of republicans believed that Obama was born in the U.S.)
Trump asked Zelensky to investigate this claim in the 7/25 telephone conversation.
A recent news story indicated that it was Paul Manafort who tried to convince Trump initially that it was Ukraine rather than Russia. Manafort pushed conspiracy theory blaming Ukraine for election hacking as far back as 2016
In Trump’s Twitter Feed: Conspiracy-Mongers, Racists and Spies - The New York Times
Trump’s Twitter Presidency: 9 Key Takeaways
++
Impeachment Inquiry:
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo - The New York Times
The raving hypocrite Lyndsey Graham (R-SC) claimed in an interview that he would support impeachment provided there was proof of a quid pro quo. What it would take for Graham to consider impeachment
Graham said he would not even bother to read the deposition transcripts, having decided that they were a "bunch of B.S.". Graham Won’t Read Transcripts | Talking Points Memo
Arguably, Trump committed "bribery", one of the specific grounds for impeachment listed in the Constitution, based on the Founding Father's definition of that term or even the definition contained in the federal criminal statute. Self-Dealing in Ukraine: The Core of the Impeachment Inquiry - Lawfare (refers to the U.S. criminal statute codified at 18 U.S.C. § 201. The Founding Fathers had a broader definition of bribery that had no limitation to a "thing of value". The impeachable offense Trump may have committed-The Washington Post
4 takeaways from Gordon Sondland’s and Kurt Volker’s testimonies
Top national security aide Robert Blair won't citing White House order
Just more stonewalling built on a frivolous legal argument. 4 White House officials won't testify in Trump impeachment probe Monday
U.S. career diplomats testify that State Department was misused for domestic politics Republicans are okay with that provided Democrats are the ones being targeted, even when the result is contrary to the national security interest, but their outrage would know no boundary when and if a Democrat President used the State Department to further a personal political agenda that could interfere with the national security interest. The hypocrisy is just stunning and omnipresent.
The republican politicians who are supporting Donald's version of what happened will lose their credibility among non-brain washed voters capable of forming fact based opinions.
The more sensible approach for republican incumbents who may lose to a Democrat in 2020 would be acknowledge what actually happened; call Donald's action "inappropriate"; then argue "no harm, no foul" and express a willingness to vote for a censure resolution rather than impeachment as the remedy for what actually happened.
For that strategy to work in 2020, Donald would have to lay off attacking them, but those at risk republicans know that Demagogue Don would berate them endlessly for being "traitors" and having committed "treason". Caught between a rock and hard place, they will continue supporting Donald's alternate reality, lose their credibility among many non-brain dead voters capable of forming fact based opinions who voted for them in the last election and will go down in defeat in 2020 for embracing and coddling Donald no matter what he does.
++
Conspiracy Theory-Ukraine Hacked the DNC Computer:
The Republican mind is particularly susceptible to conspiracy theories.
Those who hatch the conspiracy theories may be Russian intelligence operatives or Americans who have discovered that considerable sums can be earned from peddling them through media outlets (FOX, Alex Jones) or in book form.
Russia is the most likely source of the conspiracy theory accepted by Donald that it was Ukraine rather than Russia who hacked the DNC's email server. This convenient for Russia conspiracy theory has no evidentiary basis and is counter to the facts discovered by U.S. intelligence.
Facts can not kill conspiracy theories since the True Believers almost invariably prefer reality creations to facts and are far more likely to disbelieve what is true and believe in what is demonstrably false. (e.g Poll: Two-Thirds of Trump Backers Think Obama Is Muslim; Poll: Persistent Partisan Divide Over 'Birther' Question - NBC News-Only 27% of republicans believed that Obama was born in the U.S.)
Trump asked Zelensky to investigate this claim in the 7/25 telephone conversation.
A recent news story indicated that it was Paul Manafort who tried to convince Trump initially that it was Ukraine rather than Russia. Manafort pushed conspiracy theory blaming Ukraine for election hacking as far back as 2016
Manafort is about as trustworthy as Donald, meaning both are 100% untrustworthy.
The interesting angle is that it was Manafort pushing this conspiracy theory.
Manafort lost his best paying gig when the Russian sponsored leader of Ukraine, Viktor Yanukovych, was forced to leave. How Paul Manafort Helped Elect Russia's Man in Ukraine | Time
Manafort also had numerous links to Russia. The more relevant question is whether Manafort was pushing this conspiracy theory to Donald at some Russian's request.
The Russian Konstantin Kilimnik, a long-time associate of Manafort, who is identified as a Russian intelligence agent by U.S. intelligence, was identified as a source for this conspiracy theory. (Manafort also delivered internal Trump polling data to this Russian-Mueller believes Manafort fed information to Russian with intel ties - CNN)
+++
Trump insults the intelligence and knowledge of his cult members on a daily basis.
The following tweets were published last Sunday:
The interesting angle is that it was Manafort pushing this conspiracy theory.
Manafort lost his best paying gig when the Russian sponsored leader of Ukraine, Viktor Yanukovych, was forced to leave. How Paul Manafort Helped Elect Russia's Man in Ukraine | Time
Manafort also had numerous links to Russia. The more relevant question is whether Manafort was pushing this conspiracy theory to Donald at some Russian's request.
The Russian Konstantin Kilimnik, a long-time associate of Manafort, who is identified as a Russian intelligence agent by U.S. intelligence, was identified as a source for this conspiracy theory. (Manafort also delivered internal Trump polling data to this Russian-Mueller believes Manafort fed information to Russian with intel ties - CNN)
+++
Trump insults the intelligence and knowledge of his cult members on a daily basis.
The following tweets were published last Sunday:
Maybe Donald does need to read the call summary to the American public in real time-a fire side chat just like the ones FDR used to give the public during the Great Depression. Trump may read summary of Ukraine call in 'fireside chat': interview - Reuters;
In a recent rally, the True Believers were outfitted with "Read the Transcript" T-shirts and situated behind the Duck during his fact free rants to the faithful. Kentucky Trump Rally Features 'Read the Transcript' Shirts - Rand Paul Goes After Whistleblower
Of course, anyone with internet access can read the document in a few minutes and compare Trump's false version of it with the real thing.
Of course, Donald never had any intention of drawing more attention to that summary by reading it on national television.
He was just trying to convince the brain dead that his willingness to read the summary proved somehow that the call was, as he has repeatedly claimed ad nauseam, "perfect".
The tweets do shown one of Demagogue Don's most effective persuasion techniques-constant repetition of demonstrably false statements.
In the most recent poll asking voters about Trump's honesty, 68% of republicans said he was extremely, very or moderatley honest. Assessing Trump’s Performance | APNORC.org | APNORC.org Overall, 56% of voters classified him as either not very honest or not at all honest (85% of democrats and 62% of the independents).
Donald is clearly and unarguably "not at all honest". He has negative credibility without question which simply means that the reasonable assumption is that he is lying until proven with reliable evidence, as distinguished from reality creations and bad faith arguments, that he is telling the truth.
+++++
1. Canadian Reset Equity Preferred Stocks:
A. Bought 50 SLFPRJ at C$13 (C$1 IB Commission):
Prospectus Excerpt:
Prospectus documents | Sun Life Financial (see series 9QR)
Ratings: Investment Grade:
Dividends: Non-Cumulative and Paid Quarterly
Par Value: C$25
Coupon: 1.41% Spread to the Canadian 3 month T Bill
Resets: Every 3 Months
Last Ex Dividend: 8/27/19
The yield will fluctuate with the 3 month bill rate.
If I assumed by way of illustration only that this bill's yield remained constant at 1.5%, the coupon would be 2.91% which produces a 5.6% dividend yield of at a C$13 total cost per share. (C25 par value x. .0291%= C$.7275 annual dividend per share ÷ $C13 total cost per share = 5.6%).
If I raise the constant 3 month Canadian T Bill yield to 4%, the yield at a C$13 total cost per share would become 10.4%. (C$25 par value x. 0541% coupon = C$1.3525 annual dividend per share ÷ C$13 total cost per share = 10.4%)
Here is the way that I look at it. This security is only interesting to me given its huge price discount to par value which will juice the yield numbers.
The current yield is decent for an investment grade preferred stock.
There is of course some risk that the three month bill will continue to fall lower which explains the current large discount to par value.
There is also a potential benefit that the rate will rise that would increase the coupon.
The reset equity preferred stocks that I have been discussed have been pummeled in price due (1) to the decline in Canadian government interest rates (3 month bill or 5 year bond as the case may be) and (2) to the consensus perception that the decline will at best remain at or near present levels or more likely fall further. The recent small uptick in prices is probably related to some doubts about the consensus perception about the future being too pessimistic.
This kind of security, when bought at a deep discount to par value, is a hedge against unexpected inflation that forces the Bank of Canada and other central banks to raise their benchmark rates which will flow through into short term government bill yields.
2. Bought Back 100 CJREF at $3.73-Commission Free:
Quotes:
Corus Entertainment Inc. Cl B NV (U.S. Pink Sheets)
Corus Entertainment Inc. Cl B NV (Canada: Toronto)
Closing Price Yesterday: CJREF US$3.9100 +$0.0295 +0.76%
CJREF is the ordinary shares, rather than an ADR, that trades on the U.S. pink sheet exchange and is priced in USDs. Any symbol that ends in a "F" indicates that the security is a non-ADR foreign stock priced in USDs. A symbol ending in "Y" would indicate a foreign ADR traded on the pink sheets or the grey market.
Website: Corus Entertainment
Dividend: Quarterly at C$.06
Dividends - Corus Entertainment
Next Ex Dividend Date: 12/17
Last Sell Discussion: Item # 5.A. Sold 100 CJREF at $4.35 (10/16/19 Post)(Profit Snapshot = $60.99)
I received one quarterly dividend payment on that 100 share lot and bought the shares back before the next dividend ex date at a prior lower than my prior purchase. In Small Ball, that is viewed as a win.
The current yield is decent for an investment grade preferred stock.
There is of course some risk that the three month bill will continue to fall lower which explains the current large discount to par value.
There is also a potential benefit that the rate will rise that would increase the coupon.
The reset equity preferred stocks that I have been discussed have been pummeled in price due (1) to the decline in Canadian government interest rates (3 month bill or 5 year bond as the case may be) and (2) to the consensus perception that the decline will at best remain at or near present levels or more likely fall further. The recent small uptick in prices is probably related to some doubts about the consensus perception about the future being too pessimistic.
This kind of security, when bought at a deep discount to par value, is a hedge against unexpected inflation that forces the Bank of Canada and other central banks to raise their benchmark rates which will flow through into short term government bill yields.
2. Bought Back 100 CJREF at $3.73-Commission Free:
Quotes:
Corus Entertainment Inc. Cl B NV (U.S. Pink Sheets)
Corus Entertainment Inc. Cl B NV (Canada: Toronto)
Closing Price Yesterday: CJREF US$3.9100 +$0.0295 +0.76%
CJREF is the ordinary shares, rather than an ADR, that trades on the U.S. pink sheet exchange and is priced in USDs. Any symbol that ends in a "F" indicates that the security is a non-ADR foreign stock priced in USDs. A symbol ending in "Y" would indicate a foreign ADR traded on the pink sheets or the grey market.
Website: Corus Entertainment
Dividend: Quarterly at C$.06
Dividends - Corus Entertainment
Next Ex Dividend Date: 12/17
Last Sell Discussion: Item # 5.A. Sold 100 CJREF at $4.35 (10/16/19 Post)(Profit Snapshot = $60.99)
I received one quarterly dividend payment on that 100 share lot and bought the shares back before the next dividend ex date at a prior lower than my prior purchase. In Small Ball, that is viewed as a win.
Last Buy Discussion: Item # 1.B. Bought 100 CJREF at $3.74 (9/7/2019 Post)
Category: Lottery Ticket Basket Strategy/Small Ball Trading
Last Earnings Report (Q/E 9/30/19): Corus Entertainment Announces Fiscal 2019 Fourth Quarter and Year End Results
The market reacted negatively to the last earnings report. While I initially agreed with the negative reaction, a second review of the earnings report which focused on free cash flow rather than GAAP E.P.S. resulted in this LT purchase.
"Net income attributable to shareholders for the fourth quarter of fiscal 2019 includes business acquisition, integration and restructuring costs of $6.8 million ($0.02 per share, net of income taxes). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $27.9 million ($0.13 per share basic) for the quarter."
3. Small Ball Pares- All Commission Free Trades:
I am in an exceptionally strong capital preservation mode. I have no financial need to take any risks.
Small ball trades are primarily designed to preserve capital, recognize some trading gains as I reduce my average cost per share and thereby increase my dividend yield.
The trading is highly structured and disciplined by strict rules to lessen losses during the next market meltdown or to have ample capital to invest during the next Catastrophic Event in the stock market.
While the foregoing profits are insignificant, short term trading profits do add to be a meaningful sum during the course of the year and are viewed as a supplement to my dividend and interest income.
I will likely step up my short term trading when the market is overvalued, as it is now IMO, and my risk exposures will be small and managed tightly within narrow price ranges.
I am not concerned in the least about missing another major jaunt higher having participated meaningfully already in the stock bull market that started in March 2009.
I am only concerned about having meaningful amounts of money incinerated by another stock market Catastrophic Event.
When that happens and it will happen, then I will have more of a cushion than I have now and will become more adventuresome.
I am resisting the temptation to reduce my stock allocation by at least 50% and then simply wait for the next Catastrophic Event.
A. Sold 10 IDV at $32.05 (highest cost lot):
Quote: iShares International Select Dividend ETF
Sponsor's Website: iShares International Select Dividend ETF (expense ratio =.49%
Profit Snapshot: +$12.14
Item # 1.A Bought 10 IDV at $30.82 (11/25/18 Post)
The 10 share lot which was sold generated 4 quarterly in the total amount of $1.81 per share.
Lowest Cost Lot = $28.3
Purchase Restriction: Small Ball Rule
Last Discussed: Item # 4.A. Added 5 IDV at $29.65; 5 at $29 and 5 at $28.3 (12/29/2018 Post)
Last Sell Discussion: Item # 5 Sold 51+ IDV at $33.58 (2/15/18 Post)
Maximum Position: 100 Shares
Dividends: Quarterly at a variable rate
Last Ex Dividend Date: 9/24/19
B. Sold 15 LRGF at $32.47:
Sponsor's Website: iShares Edge MSCI Multifactor USA ETF | LRGF
Expense Ratio: .2%
Profit Snapshot: $14.34
Item 5.B. Bought 5 LRGF at $30.68 (5/18/19 Post); Item # 3.B. Bought 10 LRGF at $31.93 (5/1/19 Post)
Buy Back 15 Shares Range: $28.5-$29
C. Sold 10 EWL at $38.53:
Quote: iShares MSCI Switzerland ETF Overview
Profit Snapshot: $28.96 (about a 8.13% return)
Item # 4.B. Bought 10 EWL at $35.64 (4/20/19 Post)
D. Sold 20 QQQX at $23.38:
Quote: Nuveen NASDAQ 100 Dynamic Overwrite Fund
QQQX Nuveen NASDAQ 100 Dynamic Overwrite CEF-Morningstar
Sponsor's Website: QQQX - Nuveen Nasdaq 100 Dynamic Overwrite Fund | Closed-End Fund | Nuveen
QQQX Page at CEF Connect
Profit Snapshot: $34.37
Item # 3.A. Bought 20 QQQX at $21.63 (11/21/18 Post)
This was a dividend harvest buy where any profit on the shares would be viewed as a victory.
The strategy was based on this CEF's performance during 2018 when I bought this lot, which suggested that a trading strategy may be needed to harvest a total return in excess of the dividend. Nuveen NASDAQ 100 Dynamic Overwrite (QQQX) Total Returns | Morningstar
I received 4 quarterly dividends which came to $1.59 per share or $31.8 for 20 shares. The total return was $66.17 or 15.34% based on my total cost in less than 1 year.
Dividend: Quarterly at $.39 per share, reduced from $.42 when I bought this lot.
4. Short Term Bond/CD Ladder Basket Strategy:
I mentioned that I was not going to buy any more treasury bills at auction since the yields were too low. I went ahead and participated in Monday's auction to my dismay. Now I am done-hopefully.
This kind of change is precipitated by constant disputes among the 3 Head Traders here at HQ: Old Geezer, Left Brain and Right Brain.
The OG is in control now and is simply chanting "preserve capital, preserve capital, preserve capital".
The LB correctly responds that capital is not preserved at these yields but is slowly being incinerated through inflation and taxes, whereupon the OG continues chanting "preserve capital, preserve capital".
There is an important distinction between preserving a nominal capital amount and the purchasing power of capital adjusted for taxes and inflation.
A. Bought at Auction 3 Treasury Bills Maturing on 2/6/2020:
1.551% IR
B. Bought 2 Treasury Bills Maturing on 5/7/2020:
1.573%IR
Auction Results:
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.
Coty Inc. Cl A
ReplyDelete$13.12 +$1.66 +14.49%
Last Updated: Nov 6, 2019 at 11:15 a.m. EST
https://www.marketwatch.com/investing/stock/coty
The price bump is due to the earnings report released earlier today.
https://www.businesswire.com/news/home/20191106005264/en/Coty-Reports-Fiscal-Quarter-2020-Results
Report Summarized at
https://www.marketwatch.com/story/coty-beats-profit-expectations-but-sales-falls-shy-2019-11-06
I do not view the enthusiasm as related to the Non-GAAP E.P.S. number of 7 cents, beating the consensus estimate by 1 cent. Instead, there were some green shoots and what may be viewed as more upbeat guidance for 2020.
One green shoot is the reported improvement in gross margins:
"gross margin of 62.0% increased by 180 bps from the prior-year period, while the adjusted gross margin of 62.0% increased by 160 bps, driven by the mix shift toward the higher-margin Luxury and Professional Beauty divisions, as well as significant margin expansion in both divisions reflecting easier comparables, improved price and mix in Professional Beauty and improved COGS productivity in Luxury."
I am dumping some of my losers that have moved back into profit territory. So I eliminated COTY this morning by selling 103+ shares at $13.17. The position moved into profit territory by about $80 with today's price spurt.
After successfully trading small lots of Coty, I reentered a small ball buying program at what turned out to be a too high price based on subsequent events. That triggered a series of small ball adds that culminated in a 20 buy at $8.73 on 8/26/19.
Item # 1.E. Added 20 COTY at $8.73:
https://tennesseeindependent.blogspot.com/2019/09/observations-and-sample-of-recent_7.html
BlackRock TCP Capital Corp. (TCPC)
ReplyDelete$14.10 +$ 0.26 +1.88%
Last Updated: Nov 6, 2019 at 1:44 p.m. EST
https://www.marketwatch.com/investing/stock/tcpc
So far investors are responding positively to the 3rd quarter earnings report released earlier today.
https://www.prnewswire.com/news-releases/blackrock-tcp-capital-corp-announces-third-quarter-2019-financial-results-including-net-investment-income-of-0-43-per-share-30-consecutive-quarters-of-dividend-coverage-300952452.html
"Net investment income for the quarter ended September 30, 2019 was $25.3 million, or $0.43 per share on a diluted basis, exceeding the dividend of $0.36 per share."
"Net asset value per share at September 30, 2019 was $13.59 compared to $13.64 at June 30, 2019."
"As of September 30, 2019, the weighted average annual effective yield of our debt portfolio was approximately 10.6% following decreases in LIBOR during the quarter"
"Net unrealized losses for the three months ended September 30, 2019 were $6.7 million, or $0.11 per share, comprised primarily of markdowns of $5.7 million on our investment in Fidelis, $3.2 million on our investment in Hylan and $3.0 million on our investment in AGY, partially offset by a gain of $5.2 million on our investment in Edmentum as well as a gain of $3.3 million on our investment in Snaplogic. We also earned prepayment income of $0.6 million on the disposition of our loan to SnapLogic during the quarter. Net realized losses for the three months ended September 30, 2019 were $0.2 million."
As previously discussed, Fidelis recently became a problem loan.
Item # 2.B Bought 10 TCPC at $13.17
https://tennesseeindependent.blogspot.com/2019/09/observations-and-sample-of-recent.html
I noted there an abundant amount of skepticism on TCPC's prior marks for that loan.
The loan marks as of 9/30/19 can be reviewed in the 10-Q which was filed today:
https://www.sec.gov/Archives/edgar/data/1370755/000137075519000035/tcpc930201910-q.htm
The Fidelis loan, which has not yet been marked down to zero, remains on accrual (page 6).
Kentucky went blue! Just the governorship and just because the current one was unpopular... but that's cause he embraced Trump's policy of removing health care.
ReplyDeleteMore pressure on the Trump-gop.
Next up, they'll complain that hearings are too public and should be done behind closed doors.
Trump never met Bevin of course. He's already blamed it on Bevin and distanced himself.
Stocks seem to be stalled at the moment.
Land: I am supporting moderate Democrats with campaign contributions.
DeleteThere are no moderate republicans left in Washington, though the news media applies that tag to a few undeservedly IMO. I have voted for a few republicans in Tennessee who were among the last remaining conservatives in the GOP.
I donated to Andy Beshear who is a moderate. The GOP candidate is a Trump clone.
The election did confirm a worrisome trend for the GOP. Bevin lost 2 of the 3 traditional republican counties (Kenton, Campbell and Boone) that are part of Cincinnati's greater metropolitan area. The suburbs have been moving away from the GOP down ballot since Trump was elected.
Another factor was that Bevin IMO motivated Democrats to go to the polls. Beshear was helped by heavy turnout in the Democrat strongholds Louisville and Lexington.
The election trend among suburban areas is also showing up in Virginia as the Democrats won control over both the State House and Senate yesterday.
Trump may win the next election but his transformation of the GOP into his image are permanently alienating large and growing segments of the population.
During the depositions, the GOP House representatives in attendance complained that information, including the prepared written statements, were being made public while complaining publicly that the depositions were closed. Hypocrisy and inconsistency is part of their DNA.
Yep, now the complaint is about making the hearings public. Wed is the start of public hearings, where we will get the grand standing spectacle that will be the entirety of their "defense."
DeleteIt's still so stunning that he ever got elected, and that GOP tied themselves to this for power, money, blackmail, job security or whatever the reasons.
Power Financial Corporation (PWF.TO)
ReplyDelete$32.08 +C$0.38 (+1.20%)
As of 2:27PM EST
https://finance.yahoo.com/quote/PWF.TO?p=PWF.TO
Power Financial Corporation (POFNF)
I own the USD priced shares traded on the U.S. pink sheet exchange (POFNF) and the CAD priced shares traded in Toronto.
The slight uptick today is probably due to BMO raising the price target of the CAD priced shares to C$34 from C$32.
Third quarter results will be reported tomorrow.
TCG BDC, Inc. (CGBD)
ReplyDeleteThe decline was in response to the third quarter report.
https://www.globenewswire.com/news-release/2019/11/05/1941610/0/en/TCG-BDC-Inc-Announces-Third-Quarter-2019-Financial-Results-and-Declares-Fourth-Quarter-2019-Dividend-of-0-37-Per-Share.html
"Net investment income for the three month period ended September 30, 2019 was $26,755, or $0.45 per share, as compared to 27,971, or $ 0.46 per share, for the three month period ended June 30, 2019."
SA claims that the NII number beat estimates by 5 cents.
https://seekingalpha.com/news/3514904-tcg-bdc-nii-beats-0_05-beats-total-investment-income
I did not double check.
The problem is the continued destruction of net assets. Net asset value per share declined to $16.58 from $17.08.
" Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments for the three month period ended September 30, 2019 was $(35,744), or $(0.60) per share, as compared to $(18,214), or $(0.29) per share, for the three month period ended June 30, 2019".
The decline is a black box, "driven by changes in various inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, market spreads, leverage multiples and borrower ratings, and the impact of exits."
The transcript of the earnings call is not yet available at SA.
The 10-Q has been filed but I have only glanced at it. Footnote 9 next to the loan description indicates that it is on non-accrual.
https://www.sec.gov/Archives/edgar/data/1544206/000154420619000059/cgbd-3q2019_10q.htm
The black box valuation measures used by BDCs is one reason why I am circumspect about this niche income category. It is hard for even well informed investors to know what is really happening with the loans or to know whether the loan valuations are even in the ballpark. It is not uncommon to see a loan go sour within a few months after being valued near cost.
CenterPoint Energy Inc. (CNP)
ReplyDelete$ 28.23-0.54 (-1.88%)
As of 9:37AM EST
https://finance.yahoo.com/quote/CNP?p=CNP
Centerpoint Energy reported results that beat the consensus non-GAAP E.P.S. by 11 cents and the consensus GAAP E.P.S. by 5 cents.
https://www.businesswire.com/news/home/20191107005242/en/
GAAP $.47
Non-GAAP at $.53
The difference involves items related to CNP’s recent acquisition of Vectren.
I started a small ball “purchase program” with a 20 share buy at $27.72 and a 10 share buy at $27.39. I have not purchased more shares since the price has gone up.
August 28, 2019 Post
Item 1.A.
https://tennesseeindependent.blogspot.com/2019/08/observations-and-sample-of-recent_28.html
I have been selling the lower yielding Centerpoint Energy Houston Electric mortgage bonds. Houston Electric is a major wholly owned subsidiary of CNP.
Intermediate and longer term interest rates are moving higher this morning due to optimism about a partial trade deal with China.
U.S. 10 Year Treasury Note
1.888% 0.078%
Last Updated: Nov 7, 2019 at 9:23 a.m. EST
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
A continuation of the recent uptrend in longer term rates will weigh on utility stocks. Most barely grow E.P.S. and their dividend yields have fallen significantly due to share price increases.
The total return of the Utilities Select Sector ETF (XLU) was 21.54% through yesterday, with a dividend yield at yesterday's close of about 3%.
https://www.morningstar.com/etfs/arcx/xlu/quote
TriplePoint Venture Growth BDC Corp. (TPVG)
ReplyDelete$15.52 -$1.35 (-7.97%)
As of 9:49AM EST
https://finance.yahoo.com/quote/TPVG?p=TPVG
According to SA, TPVG missed the consensus net investment income by $.14. TriplePoint Venture Growth NII misses by $0.14, misses on total investment and other income
https://seekingalpha.com/news/3515728-triplepoint-venture-growth-nii-misses-0_14-misses-total-investment-income
"For the third quarter of 2019, the Company recorded net investment income of $7.1 million, or $0.29 per share, as compared to $10.0 million, or $0.46 per share, for the third quarter of 2018. The decrease between periods was primarily driven by a decrease in prepayment and other income and an increase in interest expense, partially offset by a higher total investment income as a result of an increase in the average portfolio balance between periods."
I quoted the preceding excerpt from the press release as another example of a BDC black box.
Press Release:
https://www.businesswire.com/news/home/20191106005953/en/
The Board declared the regular quarterly dividend of $.36 per share.
Net asset value per share was reported at $13.47.
There was a $13.47M reduction in the unrealized gain from TPVG’s public stock portfolio. The equity interests were acquired prior to the IPO. The two public companies that caused that reduction are CrowdStrike (CPWD) and Farfetch (FTCH).
As mentioned in the press release, another portfolio company, Medallia (MDLA) had its IPO and TPVG now has an equity interest in that company.
Until the equity interests in public companies are sold, their price changes up and down can have a significant impact on net asset value for this small cap BDC.
Equity interests are acquired when the companies are private and are an add on to TPVG’s loans. This company has had significant success with its equity interests, either through IPOs or buyouts while the company is still private (E.G. Amazon buying Ring)
“The weighted average annualized portfolio yield on debt investments for the third quarter was 13.0%, including the impact of prepayments, and 12.8% excluding the impact of prepayments.”
I have sold my position down to just 20+ shares with an average cost per share at $11.4.
The last transaction was to sell my highest cost 14 shares at $15.61.
Item # 2.A.
https://tennesseeindependent.blogspot.com/2019/09/observations-and-sample-of-recent.html
I have netted so far $699.27 in profits + the dividends.
While I view TPVG as one of the better externally managed BDCs, I am not inclined to purchase shares at a premium to net asset value per share.
I have not reviewed the earnings call transcript since I have no interest in buying or selling my remaining shares.
Transcript:
https://seekingalpha.com/article/4303515-triplepoint-venture-growth-bdcs-tpvg-ceo-jim-labe-q3-2019-results-earnings-call-transcript
FS KKR Capital Corp. (FSK)
ReplyDeleteAFTER HOURS
$5.96 +0.21 +3.65%
After Hours Volume: 541.1K
The volume number indicates that the stock price may carry through into tomorrow's trading.
FSK reported its third quarter results after the close:
https://www.prnewswire.com/news-releases/fsk-reports-third-quarter-2019-results-and-declares-regular-distribution-for-fourth-quarter-300954261.html
FSK reported GAAP net investment income of $.22, beating the consensus estimate by 3 cents according to SA.
That number is 3 cents about the quarterly dividend rate which is a positive.
Net asset value per share was reported at $7.86, down only 2 cents from 6/30/19.
The percentage of investments on non-accrual was 1.7% as of 9/30/19.
The Board declared the regular quarterly dividend of $.19 per share.
I have been buying FSK at $5.75 (the closing price today) or below recently.
At $5.75, the dividend yield would be about 13.22% and the discount to the 9/30/19 net asset value per share would be -26.84%.
I thought that the third quarter earnings report released by Power Financial was okay.
ReplyDeletehttps://www.newswire.ca/news-releases/power-financial-reports-third-quarter-2019-financial-results-808912710.html
"Net earnings attributable to common shareholders were $0.88 per share or $584 million, compared with $0.74 per share or $523 million in 2018." (in C$)
The consensus E.P.S. estimate was at C$84 according to YF Canada:
https://ca.finance.yahoo.com/quote/PWF.TO/analysis/
The ordinary shares trade on the U.S. pink sheet exchange, priced in USDs, under the POFNF symbol which is not liquid. No shares have been traded today in the U.S.
POFNF started an uptrend in mid-August when the price was near $20.5:
https://www.marketwatch.com/investing/stock/pofnf
The CAD priced shares traded in Toronto are down slightly at C$32.01:
https://www.marketwatch.com/investing/stock/pwf?countrycode=ca
https://www.marketwatch.com/investing/stock/pwf?countrycode=ca
The POFNF price will depend on the CAD price converted into USDs.
At the moment, the CAD/USD exchange rate is at 0.7562 so multiply that number by C$32.01 to arrive at a USD price for POFNF which is about US$24.21.
Schwab has the ask quote at US$24.25 at the moment.
I bought at US$20.96 on 8/6/19 which is discussed in the blog. I also own the CAD priced shares traded in Toronto.
The dividend yield is good.
Enbridge Inc.
ReplyDelete$37.73 +$1.00 +2.72%
Last Updated: Nov 8, 2019 at 11:32 a.m. EST
https://www.marketwatch.com/investing/stock/enb
The Stock Jocks are reacting favorably so far to the third quarter earnings report released earlier today.
https://www.prnewswire.com/news-releases/enbridge-inc-reports-strong-third-quarter-2019-results-300954574.html
Summarized at
https://seekingalpha.com/news/3517152-enbridge-tops-q3-earnings-view-sees-full-year-dcf-guidance-midpoint
I have pared my ENB position down to 48+ shares with an average cost per share of $34.08.
I have been buying several of the higher yielding Enbridge reset equity preferred stocks that currently yield close to 7%.
I havent' been doing anything. If I'd bought that day when I said "I should be buying today"... that would have been a good idea.
ReplyDeleteI should be looking to sell a few losers for the upcoming recession. But I can't even be sure a recession is coming. I am wondering how much the big investors are simply assuming it's coming.
Land: Given the economy's current momentum, a recession starting before the 2020 third quarter is not likely IMO. Maybe the odds are 10%.
DeleteThere is a good chance that no recession will be ongoing in November 2020 which may be sufficient to propel Donald to another 4 year term, even though he would lose the popular vote again by over 4+ million (all illegal immigrants in Trumpworld, everyone one of whom voted for the Democrat with Donald not getting 1) That is what he said about the popular vote in the last election.
see my post:
https://tennesseeindependent.blogspot.com/2017/02/trump-and-massive-voter-fraud.html
There are weak sectors in the U.S. economy but the overall GDP and job growth is consistent with an ongoing late stage expansion. That is why the Stock Jocks have not been that concerned about the trade war.
I am selling some positions that have recently become profitable after spending time as unrealized losses. I discuss one of those, SNR, in today's post.
I am also selling highest cost lots in stock and stock fund positions.
I have no financial need to stick my neck out and am not inclined to take on much risk.
I am content to wait for the next blood in the streets meltdown. In the meantime, I will just play small ball.
I am seeing inflation in the last month or so. Food is up. Other items too. I bought a vaporizer and there wasn't a cheap version. Well what I bought was the cheap version, but the price is 2xs what I expected.
ReplyDeleteSo it looks like tariffs are causing inflation. I had thought we need inflation to move this economy or show that it's moving... but to be sure that's not a healthy inflation?
I don't know if food costs are directly related to tariffs. But so much of my regular foods are up by .30, or even more.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/11/observations-and-sample-of-recent_9.html