AXPRA, ENB, FHN, OXY, PBA, RLJ TEF

REAL ID | Transportation Security Administration FYI, everyone will need a REAL ID compliant driver's license to fly starting on 10/1/2020. The REAL ID license will have a star on the top of the card. 

To secure one from Tennessee, I will need to present a variety of documents to the Tennessee Department of Safety including a compliant birth certificate. 

I have now in my possession a non-compliant photocopy of my birth certificate. A few days ago, I ordered online for a compliant copy that will be stamped with a raised red seal.  

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Economy: 

China 2019 and Q4 GDP Up 6.1% This was in line with expectations but down from +6.6% in 2018. The GDP growth rate last year was the slowest since 1990.  

Senate passes USMCA trade deal, sends it to Trump Canada still needs to approve the new trade agreement before it takes effect. 

China trade truce is seen as 'fragile' with analysts still seeing more tariffs as a possibility

U.S.-China trade pact doesn’t clarify thorny disputes in emerging technologies - MarketWatch

U.S., China tiptoe around holes in new trade agreement - Reuters

I do not expect a Phase 2 trade deal this year. Most of the tariffs are still in effect. Trump Signs 'Phase 1' China Trade Deal, But Most Tariffs Remain In Place : NPR

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Markets and Market Commentary: 

The last time this ‘clear danger sign’ flashed in the stock market was in 1999, and we all know what happened next - MarketWatch (chart showing the percentage of IPOs that are under water)

BlackRock CEO Larry Fink says climate change will soon reshape markets

KKR doesn’t expect much from the S&P 500 in 2020 — but says there are plenty of opportunities - MarketWatch

Fed’s Kaplan worries that investors got green light to take more risk from recent interest-rate policy - MarketWatch

Last year’s rate cuts may need to be reversed, Fed’s George says - MarketWatch She is one of the more hawkish members since she has some concerns about inflation. 

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Trump: 

U.S. commanders at al-Asad base believe Iranian missile barrage was designed to kill - The Washington Post; 

Iran intended to kill U.S. personnel in missile attack: Chairman of the Joint Chiefs of Staff Mark Milley - Reuters

Fortunately, no U.S. citizen was killed in the Iran missile attack. If 1 had been killed, the U.S. would now be in a hot war with Iran, though most likely limited in scope. 

++ 

Trump planning to divert additional $7.2 billion in Pentagon funds for border wall Congress appropriated these funds for other uses. 

Will the republicans raise constitutionally based complaints when and if a Democrat President declares a national emergency on climate change and appropriates money from the Pentagon to address that emergency.  

The issue is the constitutional limits on a President's power. The political party affiliation of the President is irrelevant. 

Maintaining the separation of powers with 3 co-equal branches is necessary to maintain checks and balances as envisioned by the founders. 

Is it the true conservative position that Trump has the constitutional power to usurp Congresses control over the purse when Congress has specifically refused to authorize the spending. The answer is a resounding no, but then the GOP is not a conservative party.   

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Analysis: John Bolton’s testimony looks increasingly likely There are the usual 2 to 4 GOP senators who are making sounds like they want to hear testimony. Maybe they will translate their coy talk into action. 

GOP senators do not want more evidence since more only makes guilt more apparent.   

The end result in the Senate was never in any doubt. 

There has never been 67 Senate votes to convict Trump and never will be, even if Bolton and other fact witnesses prevented by Trump from testifying are allowed to give evidence that is unquestionably damaging to Donald. 

Maybe more damning evidence would peel off 1 or 2 GOP senators but I doubt it. Voting to impeach Trump would be political seppuku. Rand Paul on Senate trial: 'I don’t think any Republicans are going to vote for impeachment'   There is no daylight between Trump and the republican party. They are one and the same. 

The message conveyed by republican House and Senate members is that Donald is above the law because he is a republican president.

White House hold on Ukraine aid violated federal law according to the Government Accounting Office, a nonpartisan federal agency; 

Watchdog Says Trump Administration Broke Law in Withholding Ukraine Aid - The New York Times; 

B-331564, Office of Management and Budget—Withholding of Ukraine Security Assistance The GAO's conclusion was the only one possible based on the law. Republican senators have already rejected the GAO's report since they do not like the conclusion.  

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Donald Trump Is Promising ‘Big Action’ on School Prayer to Rally Evangelical Voters

Days before Europeans warned Iran of nuclear deal violations, Trump secretly threatened to impose 25% tariff on European autos if they didn’t - The Washington Post  

2019 capped the hottest decade on record, say NASA and NOAA - The Washington Post In Trumpworld, science is Fake News. 

Giuliani associate Parnas says Trump 'knew exactly what was going on'

Donald Trump says he doesn't know Lev Parnas. Parnas says he has pictures with Trump

Analysis: 4 takeaways from the Lev Parnas interview and revelations


Dem lawmaker says Nunes threatened to sue him over criticism 

Former Rep. Chris Collins sentenced to just over two years in federal prison Collins was 1 of 2 republican congressmen who were indicted before the 2018 election and nonetheless were reelected with enthusiastic Trumpster support. The other GOP congressman to win in 2018 after being indicted was Duncan Hunter. Congressman Duncan D. Hunter Pleads Guilty to Stealing Campaign Funds | USAO-SDCA | Department of Justice

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The Trumpster Senator Martha McSally (R-AZ) blew up at a reporter who simply asked her whether she would vote for more evidence in the Senate trial. Martha McSally’s vicious outburst shows the corruption of Trump’s defenders - The Washington Post; Blitzer slams lawmaker's smear of CNN reporter: Disgusting  

McSally used the video of her misbehavior to raise money from republicans nationwide who responded with boatloads of campaign contributions to her. Martha McSally insults reporter’s integrity, reaps windfall - The Washington Post

She was appointed to the Senate to finish out McCain's term and faces a tough election opponent in 2020, so she has now done a mind/body meld with the Duck since she can not afford to lose republican votes. Dem Mark Kelly Continues To Dominate Sen. Martha McSally on Fundraising Front-The Tucson Weekly's Daily Dispatch The latest poll has Kelly up by 4 points. 

Ex-White House Ethics Chief Calls McConnell A 'Perjurer' After Senator Takes Impeachment Oath: He Said 'The Exact Opposite' McConnell just took an oath that he would do impartial justice, but previously made it clear that he was not impartial. Mitch McConnell On Trump Impeachment: 'I'm Not Impartial': NPR It is a close call whether McConnell or Trump's Toady # 1 Senator Lindsey Graham are the biggest hypocrites in the Senate 

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All trades are commission free except as otherwise noted. 

1. Bought 50 FHN at $16.18: 

Quote: First Horizon National Corp. (FHN)

Consensus 2020  E.P.S. Estimate: $1.54 as of 1/15/20
P/E at $16.18 Price = 10.51

I mentioned this purchase in two comments to my last post. 
The stock responded positively last Friday to the 4th quarter earnings report released before the open. 

Closing Price 1/17/20: FHN $17.27 +$0.71 +$4.29% 

First Horizon National Corp. Analyst Estimates | MarketWatch

5 Year Chart as of 11/15/20:

Last Elimination: Item # 5.B. Sold 21+ FHN at $16.4  (9/28/19 Post) 

Last Buy Discussion: Item # 1.A. Bought 10 FHN at $14.59 and 10 at $12.62-Used Commission Free Trades (1/5/19 Post)

Investment Category: Regional Bank Basket Strategy

Maximum Position: 100 shares

Purchase Restriction: Small Ball Rule (10 share lots)

I thought that recent developments warranted a restart of a small position. Those two developments are the proposed acquisition of Iberiabank and the purchase of 30 Suntrust branches that it had to sell as a result of its acquisition by the bank formerly known as BB&T, now called Truist Financial (TFC). 

First Horizon to Expand Branch Network in Key Growth Markets ("The branches are being divested to satisfy regulatory requirements in connection with the previously announced merger of equals between SunTrust and BB&T.") The majority of the branches are located in Winston-Salem and Durham/Chapel Hill in North Carolina. 

First Horizon National Corporation and IBERIABANK Corporation to Combine in Merger of Equals to Create a Leading Regional Financial Services Company The claim is that the merger will be "approximately 16% EPS accretion to First Horizon and approximately 22% EPS accretion to IBERIABANK by year-end 2021." 

First Horizon has its roots in Tennessee. The bank was formerly known as First Tennessee. The operating bank name was recently changed to First Horizon Bank to reflect in much larger geographic service areas. 

Last Earnings Report Before Purchase (Q/E 9/30/19): First Horizon Reports Third Quarter Results and Highlights

Charge Off Ratio: .19%
NIM: 3.21%
NPL Ratio: .55%
Coverage Ratio: .62%
Adjusted Efficiency Ratio: 58.49%

Last Earnings Report (Q/E 12/30/19): The report was released after I purchased this 50 share lot. First Horizon Releases 2019 Fourth Quarter and Full Year Financial Results

Adjusted E.P.S. $.47 vs. $.42 consensus
NIM: 3.26%
Charge Off Ratio: .04%
NPL Ratio: .52%
Total Capital Ratio: 11.22%
Adjusted ROE = 12.52%
Adjusted ROA = 1.4%

GAAP net income for the quarter included "$15.7 million of pre-tax acquisition-related expenses largely associated with the pending merger of equals with IBERIABANK Corporation. (“IBKC”), $11.0 million of pre-tax expense related to charitable contributions, $9.1 million of pre-tax rebranding expenses, and $1.2 million of pre-tax restructuring-related expenses associated with efficiency initiatives." The adjusted E.P.S. number excludes those cost items.   

Dividend: Quarterly at $.14 per share ($.56 annually)

First Horizon Declares Quarterly Dividends

Last Ex Dividend: 12/12/19

Dividend Yield at a $16.18 TC = 3.46%

2. Eliminated PBA-Sold 100 at $38.69: 

Quotes: Pembina Pipeline Corp. (U.S.); Pembina Pipeline (Toronto)

Profit Snapshot: +$435.78

Item # 1 Bought 100 PBA at $34.34(12/11/19 Post)

Closing Price Yesterday: 

I mention this sell in a comment which explained my primary rationale for harvesting a quick profit. 

Last Round-Trip: Item # 5 Sold 100 PBA at 33.19 (10/3/13 Post)(profit snapshot =$383.72)-Item # 3 Bought 100 PBA at $29.22 (2/20/13 Post)

3. Small Ball Trades: 

A. Pared OXY-Sold 10 at $45.33 and 10 at $46.5: 

Quote: Occidental Petroleum Corp.
OXY Analyst Estimates
SEC Filings
10-Q for the Q/E 9/30/19
OXY 5 Year Chart: Ongoing Bear Market

Closing Price Yesterday: OXY $45.83 -0.84 -1.80% 

Profit Snapshot:  $54.21 

Item # 2.C. Added 2 OXY at $40.28, 2 OXY at $40.77 and 3 at $41.34 (10/26/19 Post); Item 2.A. Initiated Small Ball Purchase Program in OXY: Bought 10 at $45 and 3 at $42.67 (10/8/19 Post) 

Position Before Pare: Average cost = $42.34

Position After Pare: Average Cost = $38.01

This stock is a risky bungee jumper IMO. 

Purchase Restriction: Small Ball Rule (next purchase has to be below $37.41. Small Ball Rules 

Dividend: $.79 per share ($3.16 annually)

Last Ex Dividend: 12/9/19 (all shares participated)

Occidental Announces Dividend

Dividend Reinvestment: Yes at less than $50   

Dividend Yield at $38.01 Cost = 8.31%

I discussed the third quarter report in this post: Item # 5.A. Bought 1 OXY at $36.64, 1 at $38.2 and 1 at $37.77 (11/23/19 Post) I viewed the report unfavorably. SEC Filed Earnings Press Release for the 2019 Third Quarter

B. Pared ENB-Sold 17 at $40.21: 

Quotes: 

Priced in USDs: Enbridge Inc. (U.S.: NYSE) 
Priced in CADs: Enbridge Inc. (Canada: Toronto) 

Closing Price Yesterday: ENB $40.52 +$0.03  +0.07% 

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

Last Sell Discussions: Item # 1.B Pared ENB Sold 15 at $37.61 (2/20/19 Post); Item # 3 Sold 50 ENB at $39.03 (12/21/17 Post); Sold 10 ENB at $40.14 (1/5/18 Post)

ENB hit a new 52 week on the day I elected to par the position. I sold all shares with a $35 or higher cost basis using the specific identification method. This pare included shares recently acquired with dividends.  

One goal of small ball trading is to sell shares bought with dividends at a profit, thereby enhancing their original dollar value.  

Profit Snapshot: $68.18

Average Cost Before Pare: $34.03

Average Cost After Pare: $33.02

Snapshot Intraday 1/13/20

Dividend: Quarterly at C$.738 per share, converted into USDs for the owners of ENB. 

Dividends and Common Shares - Enbridge Inc.

Enbridge Increases Dividend by 9.8%, Announces 2020 Financial Guidance and Provides Update on Strategic Priorities

The new rate will be C$.81 per share or C$3.24 annually, effective March 1, 2020. 

Next Ex Dividend: 2/13/20

Dividend Reinvestment: Turned off after last payment 

Last Earnings Report: Enbridge Inc. Reports Strong Third Quarter 2019 Results

SEC Filed Earnings Press Release  

Other Recent News: 

Enbridge Closes the Federally Regulated Portion of the Previously Announced Sale of Natural Gas Gathering & Processing Assets in Northern British Columbia to Brookfield Infrastructure

Enbridge and Enterprise Products to Jointly Develop Deepwater Port; Enbridge moves forward with development of new Houston-area storage Terminal

ENB Reset Equity Preferred Stocks: 

I currently own two ENB reset equity preferred stocks that pay cumulative dividends.   

100 shares of the USD priced EBGEF, traded on the U.S. Grey Market. Item # 1.A. (5/26/19 Post) 

150 shares of ENBPRP traded in Toronto. Item # 2.A. Bought 50 ENBPRP at C$ 15.68 (11/27/19 Post); Item # 4.A. Bought 100 ENBPRP:CA at C$16.5 (3/20/19 Post); quote Enbridge Preferred Series P (ENB-PP.TO); 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.

I include snapshots of the round-trip  Canadian reset equity preferred stocks in the Advantages and Disadvantages of Equity Preferred Floating Rate Securities post. 

C. Added Another 10 shares TEF: 

Price $6.765

Quote: TEF | Telefonica S.A. ADR Overview | MarketWatch

Closing Price Yesterday: TEF $6.84 +$0.06  +0.88%

Average Cost Per Share: $7.18 (reduced from $7.22)

Last  Discussions: Item # 1.B. (1/11/20 Post); Item # 1.A.  (12/28/19 Post); Item # 1.A. (9/25/19 Post)

I have nothing substantively to add to those posts. 

Purchase Restriction: Small Ball Rules

Maximum Position: 150 shares

Current Position: 120 shares (adds in 10 share lots, averaging down only)

D. Added 10 RLJ at $16.6: 

Quote: RLJ Lodging Trust (RLJ)

I discussed my first purchase in the last post and have nothing substantively to add here. Item # 2 B. Bought 20 RLJ at $16.85

Closing Price Yesterday: RLJ $16.98 +$0.07 +0.41% 

Maximum Position: 100 shares

Current Position: 30 shares

Purchase Restriction: Small Ball Rules

Average Cost Per share = $16.77

Dividend Yield at Cost = 7.87%

4. Canadian Reset Equity Preferred Stocks: 

A. Bought 50 AXPRA at C$23 (C$1 commission): 

Quote: AX-PA.TO

Security: Equity Preferred Stock (senior in the capital structure to common shares only)

Par Value: C$25

Coupon: Currently at 5.662% per annum, paid quarterly

Resets Every 5 Years at a 4.06% spread to the 5 year Canadian Bond

Last Reset: September 2017

Based on the coupon rate of 5.662%, the 5 year Canadian bond was at 1.602% on the reset calculation date.

Canada 5 Year Government Bond Overview | MarketWatch

Next Reset: September 2022:

Current Dividend Yield at TC of C$23.02 per unit = 6.149%

I recently discussed the issuer when I bought 50 shares of the common. Item # 1.A. Added 50 ARESF at $8.86 (12/22/19 Post)

USD Priced Common Shares ARESF (pink sheet exchange)
CAD Priced Common Shares AX-UN.TO

I also own 50 shares of AXPRI which I may sell somewhere over C$26. Item # 3.A. Bought 50 AXPRI at C$23 (12/16/18 Post); quote at AX-PI.TO

I would anticipate that this reset equity preferred stock will outperform a similarly rated fixed coupon preferred stock when and if the five year Canadian bond yield moves up as the reset date approaches.

As with other 5 year reset Canadian preferred stocks, the issuer has the option to call the security only on the reset date.  

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.