AHTPRI, AXPRA, DPG, EAF, FFBC, HBAN, ING, RDS/B, RF,

Publications Schedule: I eliminating my weekday post and will only be publishing one post a week, either on Saturday or Sunday.

If I have something to say during the weekdays, I will leave a comment. 

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Economy: 

The Atlanta Fed's GDP model is currently forecasting 2.6% growth in the first quarter. GDPNow - Federal Reserve Bank of Atlanta

The New York Fed's GDP model is currently forecasting 2.1% growth. Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK

Consumer confidence rises less than expected as perception of current conditions wavers The Conference Board's consumer confidence index for February was reported at 130.7, up from 130.4 in January but below the consensus estimate of 132.6. 

US existing home January 2020 (-1.3% seasonally adjusted); Existing-Home Sales Drop 1.3% in January | www.nar.realtor

Larry Kudlow: Falling bond yields don't reflect US economy's fundamentals

Why stock-market investors fear a ‘supply shock’ that central bankers can’t fix - MarketWatch A substantial number of companies that source parts from China have already warned about actual or potential supply chain disruptions.

The coronavirus will negatively impact U.S. corporate earnings for numerous companies and U.S. GDP for the first quarter. It remains unclear how severe those impacts will be and whether the negative repercussions will extend into subsequent quarters. Travel and tourism related industries, including hotels and airlines, are now suffering significant hits.  

Coronavirus Live Updates: Potential New Paths of Transmission Put Global Authorities on Edge Donald blamed the Democrats and what he calls the "Fake News Media" for overstating the threat. The media hyped the epidemic in TrumpWorld by simply reporting statements made by Trump administration officials, the World Health Organization and confirmed infections in various countries. 

Russ Limbaugh claimed that reporting the news was a conspiracy among liberal elites and democrats to take down Trump. Despite CDC warnings, Rush Limbaugh dismisses coronavirus as effort ‘to bring down Trump’ 

Trump's Chief-of-Staff, Mick Mulvaney, and Fox news personalities made similar brain dead claims. Mick Mulvaney: Media uses coronavirus coverage to 'take down' Trump; Conservative pundits seek villains to blame amid coronavirus outbreak - The Washington Post 

{The mainstream media including the Washington Post incorrectly calls Limbaugh, Tucker Carlson and Laura Ingraham "conservative" pundits; nor are their followers properly labelled as conservatives}
  
Coronavirus Mortality Rate: How COVID-19 Fatalities Compare to Ebola, SARS COVID-19 will have a significantly higher fatality rate than the flu and will cause fatalities in a wider population segment than just the elderly and individuals with compromised immune systems or otherwise in frail health. There will also be far more cases requiring incubation. It is worrisome that the virus can be transmitted by infected persons who have no symptoms. That fact will dramatically increase the number of confirmed infections. Only a very limited number of persons with symptoms are being tested and results take two days to complete. There is also a shortage in the U.S. of test kits. Preparing for coronavirus in the US: Why the US needs better testing, and fast - Vox
  

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Markets and Market Commentary: 

Mohamed El-Erian warns against buying coronavirus dips: CNBC; El-Erian says ‘continue to resist’ buying the stock-market dip after virus-inspired plunge - MarketWatch

This simple math means stock-market returns will be anemic over the next decade - MarketWatch The argument, which has been made for several years now, is that profit margins are unsustainably high. The more likely cause for anemic returns is that multiples have increased to levels that will not be justified by earnings growth, which will result in a valuation reset that substantially lowers total return potential over the next several years compared to the past ten.  

‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist - MarketWatch This article has a chart, prepared by Bank of America Merrill Lynch, that shows energy stocks are at the lowest price relative to the S & P 500 since Pearl Harbor was attacked in December 1941. 

US coronavirus outbreak increasingly likely and could drag markets, Jefferies says

Guggenheim's Scott Minerd says 'we've reached a tipping point' with the coronavirus outbreak

Microsoft update on Q3 FY20 guidance MSFT does not expect to meet  its prior "quarterly revenue guidance for our More Personal Computing segment between $10.75 and $11.15 billion" due to coronavirus outbreak. All other components of its prior guidance remained unchanged for now. 

Junk-bond issuance stops ‘dead in its tracks’ on coronavirus fears - MarketWatch

Goldman sees 'no earnings growth' for S&P 500 companies this year - MarketWatch

Major bank economist says the coronavirus market reaction ‘boggles the mind’ - MarketWatch

China PMI: Factory activity shrank at fastest rate on record in February

Investment firms face customer fury over tech glitches during one of the most stressful market weeks in recent history - MarketWatch Of my brokers, I am having the most difficulty with Fidelity. 

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Trump:

HHS whistleblower says workers without protection or training assisted coronavirus evacuees from Wuhan China on US military bases - The Washington Post; When this whistleblower brought this negligence to Donald's leaders at HHS, the reaction of the Trumpsters was to reassign her to a nothing job. If she did not accept that reassignment, she would be terminated. HHS whistleblower: US workers received coronavirus evacuees without training or protection 

Did Trump Fire the US Pandemic Response Team?  Yes, he did. CDC to cut by 80 percent efforts to prevent global disease outbreak - The Washington Post

Trump administration has dragged its feet on safety regulations that would protect health-care workers against coronavirus - MarketWatch

Trump says the coronavirus is Democrats' new 'hoax' Trump's concern is that the decline in the stock market may hurt his reelection chances.   

Trump called the attorney for the Ukraine whistleblower, Mark Zaid, "a sleazeball" who was one of the "bad people" who are trying to "rip the guts out of our country". 

Shortly thereafter, a Trumpster sent Zaid an email with this language: “All traitors must die miserable deaths. Those that represent traitors shall meet the same fate. We will hunt you down and bleed you out like the pigs you are. ”'All traitors must die': Feds charge man for threatening whistleblower attorney - POLITICO   

Regarding the Trump's ouster of Joseph Maguire as Director of National Intelligence, retired Admiral William H. McRaven noted that "good men and women don't last long" in Trump's administration. William McRaven: If good men like Joe Maguire can’t speak the truth, we should be deeply afraid - The Washington Post

Trump Accuses Schiff of Leaking Intelligence on Russia’s 2020 Interference Donald accused Schiff of leaking this information even though he has no proof. Donald views evidence and facts as so passé.  

Fact-checking claims Trump made in defending Roger Stone 

Obama in 2016: Trump Is a Fascist - The Atlantic; Obama called Trump a 'fascist' during phone call, Sen. Kaine says in new Clinton film Trump is not yet a fascist per se IMO, as traditionally defined.  Is Donald Trump a Fascist? (interview with Professor Jason Stanley, Yale University, and author of "How Fascism Works: The Politics of Us and Them"; see also: How Democracies Die written by two Harvard professors) He is simply a demagogue with strong authoritarian tendencies and a clear malignant narcissistic personality disorder, who uses us vs. them and false narratives to manipulate. 

Fact-checker counts 16+K false, misleading claims by Trump in three years | TheHill; 

Can Americans Stop a Demagogue?-The American Prospect:

Demagoguery and Democracy: Patricia Roberts-Miller:-Amazon.com: Books; 

Demagoguery vs. democracy: How "us vs. them" can lead to state-led violence | Salon.com; 

Trump’s Demagoguery Is an Old American Tradition | The Nation; 

Trump’s authoritarian style is remaking America - The Washington Post; 

Narcissistic Personality Disorder | Psychology Today

Donald will suppress facts that he does not like by falsely claiming that the information is protected by either executive privilege or national security interests. Trump wants to block Bolton’s book, claiming most conversations are classified - The Washington Post If Bolton publishes his book, Trump will IMO cause Barr to file criminal charges against him, even if it is obvious that there is nothing in Bolton's book that divulges classified information. Bolton is cognizant of that threat. 

Donald simply wants to suppress information that casts him in an unfavorable light. Before becoming President, his favorite tactic to suppress criticism was through filing or threatening to file frivolous libel suits. Donald J. Trump Is A Libel Bully But Also A Libel Loser He can now use the powers of the Presidency to suppress speech. Trump Suggests More Lawsuits Against Media For Expressing 'Wrong' Opinions 

Dana Rohrabacher Confirms He Offered Trump Pardon To Julian Assange Rohrabacher was a republican congressman when the made this offer. He denies however that he was acting at Trump's specific direction. After making the pardon offer, Rohrabacher notified General Kelly who was then Donald's Chief-of-Staff. The pardon was conditioned on Assange providing evidence that it was not Russia who hacked the DNC emails, but the DNC staffer Seth Rich. This is one of the fact free conspiracy theories that some republicans hatched in response to the consensus opinion among U.S. intelligence agencies that Russia hacked the email. Numerous republicans have postulated that Seth Rich's murder was a DNC hit to cover up that nefarious scheme. 

A similar fact free conspiracy theory had Bill and/or Hillary murdering Vince Foster to cover up something or another. Foster shot himself in the mouth and his death was ruled a suicide. 

Republicans still think Barack Obama was born in Kenya 

E. Jean Carroll Says Elle Magazine Fired Her After Trump Rape Accusation

Trump dismisses intelligence official’s assessment of Russian preference for him as Democratic ‘hoax’

According to the Netherlands, there is no question that a Russian military unit (53rd Air Defense Brigade) shot down and murdered 298 men, women and children aboard Flight MH17. How Bellingcat tracked a Russian missile system in Ukraine-CBS News Russia will never acknowledge responsibility. So who lies more, Putin or the Duck?   

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Portfolio Management: 

The recent slide in stocks have made major indexes only slightly more attractive to me and most of that is due to declining yields from treasury bills, CDs and other "safe" as to return of principal securities.   

In a 2/19/20 post, I made the following statement: "I am barely able to keep myself from selling all stocks currently owned." Stocks, Bonds & Politics

I then noted in that 2/19 post the following statistics   

Trailing 12 Month GAAP P/E Ratios as of 2/14: 
DJIA: 22.89
Dow Utilities: 27.34
Nasdaq 100: 29.15
S & P 500: 25.74
Russell 2000: 55.45
S & P 500 Dividend Yield: 1.79%

Sourced: P/E & Yields

Shiller P/E Ratio: 32.23
S&P 500 Price to Sales Ratio: 2.42
S&P 500 Price to Book Value: 3.73
Total market cap to GDP 158.1%
The Q Ratio: 1.96 as of 1/31/20 (previous all time high at 2.17 since 1900) 

The ratios went down some in last week's carnage. 

As of 2/28/20: 

S & P 500 P/E Trailing 12 months GAAP = 22.75

S & P 500 P/E Forward 12 months Non-GAAP ESTIMATES = 16.82 

The spike in the VIX last week will probably result in a Trigger Event (TE) as defined by my Vix Asset Allocation Model. Vix Asset Allocation Model Explained Simply With as Few Words as Possible; VIX Chart from 2007: Alerts and Triggers Major Disruption of Cyclical Stable Bull VIX Pattern; Parallels to VXO 1987-1988 (sell signal prior to October 1987 crash); Vix Charts from 2004 2005 2006 Stable VIX Patterns Phase 1 and Phase 2; VIX and S & P Compared 1990 to 1997

The TE creates the Unstable Vix Pattern (UVP), a potentially more dangerous and volatile stock market that has a lot of up and down chop going nowhere from the high water mark hit during the Stable Vix Pattern (SVP). The UVP has historically been a trader's market, with buy and hold investors in major indexes unlikely to generate positive total returns in major stock indexes until the UVP ends and another SVP starts. 

The most important Trigger Event was in August 2007 which was thereafter validated as a sell signal by multiple Confirmation Events or what I previously characterized as the clearest signal to get out of Dodge. 

VIX Volatility Index - Historical Chart | MacroTrends

Recent Volatility Spikes: 

CBOE Volatility Index-St. Louis Fed

I will continue to buy common stocks into the volatility spike using the small ball purchase restriction. When there is a return to below 20 movement in the VIX, and I am able to sell my highest cost shares profitably, I will likely sell the highest cost lots for whatever profit may be available. 

I am gingerly adding to regional bank stocks that have been hit harder last week than most other sectors. The reason is understandable given the yield curve inversion, but dividend support and valuations did become more attractive during the selloff. The impact on bank earnings is not entirely negative since deposit costs are rapidly declining as CD rates reset at lower levels and bank investments in fixed coupon securities are likely rising in value.   

I have restarted purchases in several leveraged bond CEFs after accidentally buying 10 shares of GDO in my account rather than in a family member's account at Fidelity, which I discussed in a recent comment. I will be discussing some of those trades in subsequent posts. 

There are several reasons for starting new small ball CEF "buying programs": (1) the cost of leverage has been declining and may decline further with additional cuts in the federal funds rate; (2) dividend yields are attractive and becoming more so as interest rates decline; and (3) I am running out of options for reinvesting the proceeds of maturing treasury bills, CDs and bonds.  

I am also buying back shares, where I eliminated the position by selling at a price at least 10% higher than the current price. 

I may also increase my preferred stock holdings.  

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All trades are commission free except as otherwise noted.

The reasons for selling the highest cost lots first are (1) to reduce my income tax obligation resulting from a sell; (2) to generate a total return in excess of the dividend payments; (3) to increase my dividend yield on the remaining shares; (4) to take advantage of normal up and down volatility by selling the highest cost lots profitably and then by buying when the price falls below the lowest price paid in the chain; (5) to make it more likely that I will buy during a meltdown after selling higher cost shares (psychological); and (6) to mitigate risk through less at risk monetary exposure. Risk is also controlled through small odd lot trades. 

I am not concerned about the dollar value of the profit provided I am in achieving the objectives set out above. 

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All trades are commission free except as otherwise noted.  

1. Small Ball Trades:  Small Ball Rules 

A.  Bought 10 EAF at $10.4; 10 at $9.66; 10 at $8.95; 5 at $8.56 and 5 at $7.42-Restart of Small Ball "Buying Program" in Fidelity Account:

Quote GrafTech International 
EAF | GrafTech International Ltd. Analyst Estimates 

Closing Price Last Friday: EAF $8.16 +$0.36 +4.62% 

The adds have switched from 10 shares to 5 shares based on an assessment that risks have increased.  The price plunge confirms the risk increase, which may later be proved to be justified or irrational based on subsequent events that are not knowable now.  

This one is not working. The fear is that the coronavirus outbreak will hurt demand for EAF's products and make it more likely that the company will have to adjust its take-or-pay contracts. 

I recently eliminated my position in this account by selling 27 shares at $11.2: Item # 2.B. (2/12/20 Post)

In that post, I discussed the 4th quarter earnings report in Item #2.A. That was in connection with a 50 share purchase in another account where I now own 100 shares.

Current Position This Account: 40 Shares

Average Cost per share this Account: $9.25

Maximum Position-All Accounts: 200 shares

Current Position-All Accounts: 140 shares

Purchase Restriction: Small Ball Trading Rules in Fidelity Account (next purchase will be 10 shares at less than $9.66)

Dividend: Quarterly at $.085 per share ($.34 annually)

GrafTech Announces First Quarter 2020 Cash Dividend 

Dividend Yield at $9.25 = 3.68%

Last Ex Dividend Date: 2/27/20 (all but the last 5 shares were owned prior to the ex dividend date) 

The downdraft after my discussion in the 2/12/20 post may be due to the coronavirus outbreak and a RBC downgrade to market perform with a PT slash from $14 to $11. 

I do not have access to that report. 

A newswire summary quoted the analyst as saying "we believe the near-term catalysts for growth are limited given lower steel production rates and the increased potential for renegotiation of EFA's [long-term agreements] resulting in near-term volumes and earnings headwinds."  

There is a potential that some customers may need relief from those long term agreements to avoid bankruptcy. It is speculative IMO to draw a conclusion on how seriously any such future renegotiation will have on cash flow and earnings.  

B. Sold 50 ING at $11.8:  

Quote: ING Groep N.V. ADR Overview

Closing Price Last Friday:  ING $9.49 -$0.09 -0.94% 

Profit Snapshot: +$91.98

Item # 5 Added 50 ING at $9.96 (10/11/19 Post)

I previously sold my highest cost 50 shares at $11.7. Item # 3.B. Sold 50 ING at $11.7 (11/20/19 Post)- Item # 2 Bought 50 ING at $10.49 (10/5/19 Post)(this post contains my most detailed discussion)

Rationale: The 4th quarter earnings report, discussed below, was unfavorable IMO.

Another factor was the ongoing decline in the EUR/USD exchange rate. EUR/ USD Currency Chart The ordinary shares are priced in Euros. A decline in the EUR/USD exchange rate will cause the USD priced ADR to underperform the ordinary shares price in Euros. If the EURO priced shares are declining when the Euro is losing value against the USD, then the ADR owners suffers a Double Whammy.

Last Earnings Report (Q/E 12/31/20):

As net interest margins remained compressed and depressed by the ECB's Monetary Jihad, European banks are having to substantially increase their regulatory compliance costs. ING reported that its regulatory costs last year surpassed €$1B. For the 2019 4th quarter, ING said that its regulatory cost expense rose to €303M from €266M in the 2018 4th quarter.

Dividend: Paid in Euros

The dividend yield is the primary reason for dabbling in the shares. The next semi-annual ex dividend date is 4/5/20. 

This lot is eligible for repurchase now since the price has fallen below my lowest price paid for the recent purchases. 

ING 5 Year Chart: Bear Market since January 2018

The ADR traded at $45+ in 2007 (expand interactive chart link to "max")

Maximum Position: 200 shares

Current Position: None

I am behind in discussing sells made prior to last week's decline. 

C. Added 2 RDS/B at $50.41; 1 at $49.25, 1 at $47.44; 1 at $46.21; 1 at $44.7 and 1 at $42.46:

Quote: RDS.B | Royal Dutch Shell PLC ADR B Overview

Closing Price Last Friday: RDS-B $44.53 +$0.39 +0.88% 

This one is probably not going to work anytime soon. 

I am reasonably confident that the total return will be acceptable given enough time and may even live to see it happen. 

At least I am not going broke by buying 1 share lots. 

Last Substantive Discussion: Item # 1.E. (2/2/20 Post) I discussed the 4th quarter earnings report in that post.

Dividend: Quarterly at $.94 per share ($3.96 annually)

Last Ex Dividend: 2/13/20

Dividend Reinvestment: Yes

Current Position:  34 shares

Maximum Position: 50 shares 

Average Cost Per Share: $54.03

Dividend Yield at Average Cost = 7.33%

Last Earnings Report (Q/E 12/31/19): SEC Filed Press Release

Purchase Restriction: Small Ball Rule

My current inclination would be to buy the remaining 16 shares left in the 50 share maximum limit in one lot, when and if the price breaks below $40, rather than continuing to buy 1 share lots. 

D. Added 5 FFBC at $23.6; 5 at $22.95, 5 at $22.58 and 5 at $20.9: 

Falling Knife Pattern, but most stocks were in that pattern last week. 
Quote: First Financial Bancorp (Ohio)

FFBC Analyst Estimates | MarketWatch
2020 Consensus E.P.S. = $2.03

Investment Category: Regional Bank Basket Strategy

Last Substantive Discussion: Item # 1.D. (1/25/20 Post) I discussed the last two earnings reports in that post. 

Last Elimination: Item # 3.A. Sold 84+ FFBC at $28.1 (3/24/17 Post)(profit snapshot = $1,129.21)

Average Cost: $ 24.24 

Dividend Quarterly at $.23 per share ($.92 annually)

Dividend Yield at $24.24  = 3.8% 

The stock was ex dividend yesterday.  

Current Position: 40 Shares 

Maximum Position: 100 Shares + shares bought with dividends 

FFBC Realized Gains to Date = $1,933.06

E.  Restarted DPG in Roth IRA: Bought 10 at $13.35: 

Quote: DPG | Duff & Phelps Utility & Infrastructure Fund Inc. Overview 

Sponsor's Website: Duff & Phelps Utility and Infrastructure Fund Inc.

I recently discussed eliminating the position in this Roth IRA. Item # 2. Eliminated DPG in Roth IRA Account-Sold 123+ at $15.76 (2/19/20 Post

SEC Filings

Last SEC Filed Shareholder Report: Duff & Phelps Global Utility Income Fund Inc. (annual for F/Y period ending 10/31/19)

Holdings as of 10/31/19:

Performance has been dragged down starting in 2014 by the energy infrastructure stocks.

Leveraged: Yes (based on short term rates, see pages 20-21 of the shareholder report linked above)  

Data Date of Purchase (2/28/20): 
Closing Net Asset Value Per Share = $ 14.98 
Closing Market Price = $13.73 
Discount at $13.73 = - 8.34%

Duff & Phelps Utility and Infrastructure Fund Inc.

Dividend: Quarterly at $.35 per share (mostly ROC support)

Next Ex Dividend: 3/13/20 

Dividend Yield at $13.35 = 10.49%

F. Added 5 RF at $15; 5 at $14.7; 5 at $14.15 and 5 at $13.63:

Snapshot RF Closing Price on 2/28/20

On 2/25, I bought 5 shares first at $15 and then later another 5 at $14.7, so I was following the small ball purchase restriction. 

Quote: Regions Financial Corp.

RF Analyst Estimates
2020 Consensus E.P.S.: $1.62 as of 2/28 

SEC Filings

Investment Category: Regional Bank Basket Strategy

I have nothing to add to my recent discussion, where I discussed the last earnings report. Item # 1.D. (2/5/20 Post) 

Current Position: 35 Shares 

Average Cost Per Share: $14.71

Dividend: Quarterly at $.155 per share ($.62 annually)

Dividend History | Regions Financial Corporation

Last Ex Dividend Date: 12/5/19

Dividend Yield at TC of $14.71 = 4.21%

Maximum Position: 100 shares 

Purchase Restriction: Small Ball Rule 

G. Added 10 HBAN at $12.9 and 10 at $11.95: 

Closing Price Last Friday: HBAN $12.27 -0.08 -0.65% 

HBAN | Huntington Bancshares Inc. Analyst Estimates | MarketWatch
2020 Consensus E.P.S. as of 2/28 = $1.29


Recent Discussion: Item # 1.D. (2/2/20 Post) I discussed the last earnings report in that post. SEC Filed Earnings Press Release

I have nothing to add to those recent discussions. 

Investment Category: Regional Bank Basket Strategy

Current Position: 80 Shares

Average Cost Per Share:  $13.86

Dividend: Quarterly at $.15 per share

Dividend Yield at $13.86 = 4.3%

Next Ex Dividend: 3/17/20 

HBAN was recently upgraded by Bank of America/Merrill Lynch to buy from neutral with the PT increased to $16 from $15. I do not have access to that report. 

2. Canadian Reset Equity Preferred Stocks:

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

Quote: AX-PA.TO

Issuer: Artis REIT (AX-UN.TO)

Last Discussed: Item # 4.A. Bought 50 AXPRA at C$23 (1/18/20 Post)

The downtrend in interest rates provoked me to buy another 50 shares.

Par Value: C$25

Coupon: Currently at 5.662%

Yield at C$23 = 6.15%

Dividends: Cumulative

Coupon Resets Every 5 Years at a 4.06% spread to the 5 year Canadian government bond

Next Reset: 9/2022

Dividends: Quarterly

Last Ex Dividend: 12/30/19

3. U.S. Equity REIT Preferred Stocks:

A. Pared AHTPRI-Sold Highest Cost 50 Shares at $22.4 ($1 IB Commission):

Quote:  AHT-PI: 7.5% Coupon Equity Preferred Stock

Profit: +$3.22

Item # 5 Bought 50 AHTPRI at $22.3 (6/26/19 Post)

Closing Price Last Friday: AHT-PI $19.76 -$0.49 -2.42% 

I would attribute the decline from my sell price to fears about credit risks in the coronavirus pandemic scenario. 

The dividend paid on 1/15/20, which went ex dividend on 12/30/19, will be included in the 1099 for 2020. The ROC adjustment made next January will increase the profit number shown above slightly. That dividend will likely be classified as 100% ROC. 

I sold my highest cost lot. I sold the lot at a profit before the ROC adjustment which was my limited objective for high risk securities.

Investment Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks part of Equity REIT Common and Preferred Stock Basket Strategy

Security:

Issuer: Ashford Hospitality Trust Inc (AHT)-A HOTEL REIT
AHTPRI Prospectus
Par Value: $25
Coupon: 7.5%
Optional Call by Issuer: At par value plus accrued and unpaid dividends on or after 11/17/22
Capital Structure: Senior only to common stock
Stopper Clause: Yes (enforces preferred shareholders superior claim to cash vs. common shareholders only)
Dividends: Quarterly, Cumulative and Non-Qualified (pass through entity)

Preferred Stock Risk Level: High Risk IMO  

Last Ex Dividend Date: 12/30/19

Last Purchase Discussions (shares still owned): Item # 1.A. Bought 50 AHTPRI at $21.54 (11/30/19 Post); Item 1.B. Bought 30 AHTPRI at $21.86-Used Commission Free Trade (12/26/18); Added 20 AHTPRI at $18.52 Used Commission Free Trade (12/29/18 Post)

Last Round-Trip: Item # 3.B. Sold 50 AHTPRI at $23.16 (4/20/19 Post)

4. Short Term Bond/CD Ladder Basket Strategy: 

March Maturities: 

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: Treasuries Bought Commission Free at Below Par value

2 Kimberly Clark 1.85% SU 3/1/20 (bought 1/18)
2 Rockwell Automation 2.05% SU 3/1 (bought 8/18) 
2 Ryder Systems 2.65% SU 3/2 (bought 3/18; 11/18)

2 American Express 2.2% SU 3/3 (bought 8/18)
5 Treasury 3Mo Bill 1.592%IR 3/5 (bought at auction)
2 Treasury 6MO Bill 1.873% IR 3/6 (bought at auction)

2 Marsh & McLennan 2.35% SU 3/6 (bought 1/18)

1 Royal BK. Canada 2.15% 3/6 SU (bought 8/18)
10 Treasury 56 Day Bill 1.544%IR 3/10 (bought at auction) 

2 Analog Devices 2.85% SU 3/12 (bought 11/18)
3 Treasury 6MO Bills 1.873%IR 3/12 (bought at auction)

2 American Express BK 1.9% CDs 3/12 (30 Month CDs) 
5 Treasury 3Mo Bill 1.557% IR 3/12 (bought at auction)

2 Treasury 1.625% 3/15 (secondary market)

2 Abbott Labs 2% SU 3/15 (bought 1/18)

2 Smucker 2.5% SU 3/15 (bought 1/19)
1 Pinnacle 2.45% CD 3/16 (9 month CD)

2 Wells Fargo 2.5% CDs MI 3/16 (2 year CDs)
20 Treasury 28 Day 1.588%IR 3/17 (bought at auction)
5 Treasury 3Mo 1.572%IR 3/19 (bought at auction)

1 Ford Motor Credit 2.4% SU 3/20 (bought 3/17)
5 Treasury 2.443% IR 1 Year T Bill 3/26 (bought at auction)
2 Treasury 6MO Bill  1.909%IR (bought at auction)

3 Wells Fargo 2.5% CDs MI 3/27 (13 month CDs)
3 Santander BK 1.75% CDs 3/27 (3 month CDs)

2 Quest Diagnostics 2.5% SU 3/30 (bought 2/18)

3 GATX 2.6% SU 3/30 (bought 2/18; 5/18; 10/18) 

2 Georgia Power 2 % SU 3/30 (bought 2/19)

1 Wells Fargo 2.55% CD 3/20 MI (2 Year CD)
3 Royal BK 1.8 CDs 3/30 (3 MO)

2 Treasury 2.25% 3/31 (secondary market purchases) 

$101K  

I am no longer discussing short term CD and treasury bill purchases, but will include the purchases in the list of maturing securities. 

I will be far less inclined to redirect those proceeds into newly purchased treasury bills or CDs given the decline in rates. 

Fidelity as of 2/28/20  

February 2020 Treasury Yields

Note the decline in the short term bills. The Bond Ghouls are now anticipating further cuts in the FF rate and the probabilities are being expressed in the short term treasury bill yield declines. Daily Treasury Yield Curve Rates

Probabilities FF Rate after March 2020 Meeting

Countdown to FOMC: CME FedWatch Tool

I am extremely overweight in high quality bonds, but am wondering multiple times each day whether my unrealized profits will continue to rise and whether I need to accelerate selling to book profits now. Those bonds are providing me with an acceptable to me level of cash flows which is impeding profit taking at the moment. 

In my Fidelity taxable account (1 of 4), I received the following interest payments from Tennessee municipal bonds as of 3/1/20: 

Plunging rates in the US are rewriting the history books

5. Sold 1 Centerpoint Energy Houston Electric 2.25% General Mortgage Bond Maturing on 8/1/2022 at 100.822: 

FINRA Page: Bond Detail (prospectus linked)

Profit Snapshot: +$23.94

Bought 1 at a Total Cost of 98.238 (2/10/17 Post) 

YTM at 100.822 = 1.87%
Proceeds at 100.722 (after $1 Fidelity commission)

I still own one of these bonds in my IB account that I will hold until redeemed by the issuer. 

I am slowly transitioning away from low yielding general mortgage bonds issued by CNP's Houston Electric subsidiary to the higher yielding CNP common stock. I currently own 86+ CNP shares at a $26.26 average cost per share. CenterPoint Energy Inc. (CNP) CNP went ex dividend on 2/19 and I am reinvesting the dividend for as long as the reinvestment price lower my average cost per share. The dividend yield at my average cost per share number is 4.32%. 

Electric utility stocks suffered significant declines last Thursday and Friday, notwithstanding their bond like quality.   

Houston Electric's general mortgage bonds are junior in priority to a $102M 9.5% first mortgage bond that matures next year. (Page 146) When that FM bond matures, the general mortgage bonds will become first mortgages.   

The common stock is more risky, as shown recently by the stock plunge in response to a punitive retail rate decision for CNP's Houston Electric subsidiary which I have discussed in prior posts. Before that punitive rate decision could be implemented, CNP entered settlement discussions that resulted in an agreement approved by the Texas utilities commission. CenterPoint reaches unopposed settlement in Texas rate case | S&P Global Market Intelligence; Texas regulators OK CenterPoint rate hike, but customers will pay less - Houston Chronicle  

I am adding in small lots using the small ball purchase restriction.    

6. Optional Redemptions with Make Whole Payments: 

In a previous comment, I mentioned that Liberty Property exercised its optional redemption right to redeem its 3.75% SU bond maturing on 4/1/2025. 

I owned 1 bond in my Fidelity account: 

To exercise that right now, the issuer had to make a make whole payment in addition to the $1K par value per bond calculated using this prospectus provision: 

The end result was that Liberty had to pay a 9+% premium to par value in order to exercise its optional redemption right. 

Profit Snapshot: +$94.27

Item # 4.B. Bought 1 Liberty Property 3.75% SU Bond Maturing on 4/1/25 (4/5/18 Post) 

Bought at a Total Cost of 99.752 (cost includes $1 commission)

Liberty Property was acquired recently by Prologis. Prologis Completes $13 Billion Acquisition of Liberty Property Trust Prologis recently sold the following bonds and will use the proceeds to redeem some Liberty Property Trust bonds. 

Prologis debt is currently rated A3 by Moody's.  

I anticipate that Liberty's 2023 bond will be called with a make whole payment as well. I own 3 of those bonds and will discuss in a future post when and if that occurs.  

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.