Economy:
ADP National Employment Report | January 2020 This was a robust jobs report. ADP estimates that the economy added 291,000 private sector jobs in January. ADP Moody's private payrolls January 2019 nearly double expectations
ADP National Employment Report | January 2020 This was a robust jobs report. ADP estimates that the economy added 291,000 private sector jobs in January. ADP Moody's private payrolls January 2019 nearly double expectations
Manufacturers grew in January for first time in six months, ISM finds - MarketWatch; January 2020 Manufacturing ISM® (50.9, up from 47.8; new orders at 52, up from 47.6)
China is doing whatever it can now to contain the coronavirus outbreak and to cushion the impact on its economy.
China is doing whatever it can now to contain the coronavirus outbreak and to cushion the impact on its economy.
Researchers say the coronavirus may be more contagious than current data shows
China virus claims second life off mainland, Macau casinos told to close - Reuters
Coronavirus live updates The World Health Organization played down reports that there was an effective vaccine.
China virus claims second life off mainland, Macau casinos told to close - Reuters
Coronavirus live updates The World Health Organization played down reports that there was an effective vaccine.
++++++
Markets and Market Commentary:
Trump touts stock market's record run, but who benefits? - Reuters (84% of stocks owned by U.S. households are held by the wealthiest 10%)
I have substantially reduced my stock allocation. I still own enough stocks to meaningfully increase my total portfolio return provided the market continues higher and I am successful in short term trading. I will continue to be a net seller into the stock parabola.
Macy's to close 125 stores, cut 2,000 corporate jobs, in hunt for growth
Ford (F) earnings Q4 2019 (lost $1.67B)
Nike warns of financial impact from coronavirus outbreak - Reuters
Trump touts stock market's record run, but who benefits? - Reuters (84% of stocks owned by U.S. households are held by the wealthiest 10%)
I have substantially reduced my stock allocation. I still own enough stocks to meaningfully increase my total portfolio return provided the market continues higher and I am successful in short term trading. I will continue to be a net seller into the stock parabola.
Macy's to close 125 stores, cut 2,000 corporate jobs, in hunt for growth
Ford (F) earnings Q4 2019 (lost $1.67B)
Nike warns of financial impact from coronavirus outbreak - Reuters
Coronavirus will ‘shake markets out of their buy-the-dip’ mentality, says El-Erian - MarketWatch; El-Erian says coronavirus to 'paralyze China,' don't buy stock dips: CNBC
‘Gamechanger’ — billionaire investor David Tepper just got a lot less bullish on the market - MarketWatch The gamechanger according to Tepper is the coronavirus.
The Stock Jocks are not concerned about the coronavirus epidemic.
There were two days since the outbreak started that they suffered extremely mild anxiety attacks, but quickly recovered from those brief expressions of some concerns.
Notwithstanding the current ambivalence and consensus opinion that this epidemic is a non-event for U.S. stocks with limited exceptions, the final verdict of the economic impacts is still in doubt IMO.
The most devastating pandemic was the Spanish Flue that killed an estimated 50+M worldwide. 1918 Pandemic (H1N1 virus) | Pandemic Influenza (Flu) | CDC Between January 1918 and September 2019, the DJIA rose from around 80 to 111. Dow Jones - DJIA - 100 Year Historical Chart | MacroTrends (uncheck "inflation" adjusted box to review nominal numbers) The economy did receive a massive stimulus between 1914 through 1918, first from European purchases of U.S. goods for WWI and then U.S. military spending upon joining the war effort in 1917. U.S. Economy in World War I The U.S. was also far less interconnected to the global economy.
The rally yesterday was in part due a perception that the Democrats are in disarray and are unlikely to field a candidate who will beat Trump in November. The Stock Jocks love Donald and would like to have at least 20 more years of the Duck being President since he will in their consensus estimation make the trains run on time.
The Democrats proved in the Iowa caucus meltdown that they are fully capable of screwing up an election without Russia giving them a push off the cliff. And, nominating a candidate loaded with baggage and high unfavorability ratings (e.g. Hillary) is the Democrats' forte.
If you add up the ages of Bernie, Joe B. and Elizabeth W, the total, when subtracted from 2020, will almost take you back to 1776. Adding to that total the age of Mike Bloomberg will bring you closer to the middle ages.
Did Hillary lose because she was a moderate? The liberals in that party seem to think so which explains the drive to elect the next George McGovern. No, she lost because she was an awful candidate and then made far too many mistakes during her campaign given her strong unfavorability ratings and considerable and heavily weighted baggage. It did not help that she voted for the Iraq War Resolution, which is also a problem for Joe Biden among likely Democrat voters.
++++++
‘Gamechanger’ — billionaire investor David Tepper just got a lot less bullish on the market - MarketWatch The gamechanger according to Tepper is the coronavirus.
The Stock Jocks are not concerned about the coronavirus epidemic.
There were two days since the outbreak started that they suffered extremely mild anxiety attacks, but quickly recovered from those brief expressions of some concerns.
Notwithstanding the current ambivalence and consensus opinion that this epidemic is a non-event for U.S. stocks with limited exceptions, the final verdict of the economic impacts is still in doubt IMO.
The most devastating pandemic was the Spanish Flue that killed an estimated 50+M worldwide. 1918 Pandemic (H1N1 virus) | Pandemic Influenza (Flu) | CDC Between January 1918 and September 2019, the DJIA rose from around 80 to 111. Dow Jones - DJIA - 100 Year Historical Chart | MacroTrends (uncheck "inflation" adjusted box to review nominal numbers) The economy did receive a massive stimulus between 1914 through 1918, first from European purchases of U.S. goods for WWI and then U.S. military spending upon joining the war effort in 1917. U.S. Economy in World War I The U.S. was also far less interconnected to the global economy.
The rally yesterday was in part due a perception that the Democrats are in disarray and are unlikely to field a candidate who will beat Trump in November. The Stock Jocks love Donald and would like to have at least 20 more years of the Duck being President since he will in their consensus estimation make the trains run on time.
The Democrats proved in the Iowa caucus meltdown that they are fully capable of screwing up an election without Russia giving them a push off the cliff. And, nominating a candidate loaded with baggage and high unfavorability ratings (e.g. Hillary) is the Democrats' forte.
If you add up the ages of Bernie, Joe B. and Elizabeth W, the total, when subtracted from 2020, will almost take you back to 1776. Adding to that total the age of Mike Bloomberg will bring you closer to the middle ages.
Did Hillary lose because she was a moderate? The liberals in that party seem to think so which explains the drive to elect the next George McGovern. No, she lost because she was an awful candidate and then made far too many mistakes during her campaign given her strong unfavorability ratings and considerable and heavily weighted baggage. It did not help that she voted for the Iraq War Resolution, which is also a problem for Joe Biden among likely Democrat voters.
++++++
Trump:
Trump approval hits new high in Gallup poll, despite impeachment Donald's approval rating among republicans is at 94% according to the latest Gallup poll. Donald owns the republican party, which is not news.
Trump makes divisive reelection pitch in State of the Union - CNN
++
Republicans refused to hear testimony from fact witnesses including John Bolton and others that had direct knowledge on matters central to the impeachment "trial".
Yet when they voted to impeach Clinton for lying about an extramarital affair with Monica, they made her sit for a videotaped deposition during the impeachment trial.
Republicans also took deposition from Vernon Jordan, a Clinton friend, and Clinton's aide Sidney Blumenthal during the impeachment trial.
Yes, every past impeachment trial included witnesses. Baldwin hits mark with Trump-related claim | PolitiFact Wisconsin
How the senators voted on impeachment -- February 12, 1999
I would add that a republican president who lied about the justifications for a war that resulted in over 100,000 deaths and over $2 trillion in borrowed money is not impeachable either. Casualties of the Iraq War; Iraq Body Count; Financial cost of the Iraq War The hypocrisy is stunning of course, but is normal and easily predictable.
Trump Access Hollywood Tape: “And when you’re a star, they let you do it. You can do anything.” Yes, Trump can do anything with no boundaries on everything.
All the times Trump said the constitution let's him do whatever he wants - YouTube
++
Trump signed the new trade deal with Canada and Mexico and made the usual grandiose claims about the agreement:
Trump signs USMCA trade deal to replace 'nightmare NAFTA'
Only a few Americans have factual information sufficient to even compare the old NAFTA and the new trade USMCA (United States-Mexico-Canada Agreement) Trump knows that is true and consequently is fully aware that he can say anything about NAFTA and USMCA without ever providing specifics or accurate justifications for his claims.
Accurate knowledge about trade agreements among voters is understandably non-existent or at best incomplete, which provides Trump, a shameless demagogue, the opportunity to deliberately mislead voters about those agreements.
The primary benefit of USMCA is that avoids an acceleration of the trade war started by Trump with America's two largest trading partners.
And, that is a relief and a positive development.
There are some relatively minor improvements in USMCA.
For example, the old NAFTA treaty required automakers to produce 62.5% of a vehicle's content in North America (U.S., Canada, and Mexico).
The USMCA raises that threshold to 75%. Note that this provision is aimed at Mexican factories sourcing too many parts from Europe and Asia, not from factories located in Mexico.
There is a provision extending copyright protection to 70 years from 50.
Perhaps the most important change is that 40 to 45% of the parts for any tariff free vehicle must come from a factory that pays a minimum of $16 per hour in average salaries to factory workers. This was a provision demanded by the Democrats. The U.S. automakers claimed that the provision will raise the cost of cars sold to U.S. consumers, slowing the growth of the auto market and hurting the economy. Trump’s Trade Moves Put U.S. Carmakers in a Jam at Home and Abroad - The New York Times
In TrumpWorld, the NAFTA agreement was the most horrendous trade agreement ever negotiated while Donald's USMCA rectifies all wrongs and is the best deal ever negotiated in world history. The reality is that the net effect is possibly positive, but barely so.
+++
Kansas City - Google Maps
I checked to see whether Kansas City residents will pay less taxes after being moved to Kansas from Missouri. Hard to say.
Kansas Department of Revenue - Selected Kansas Tax Rates with Statutory Citation
Individual Income Tax Year Changes
+ ++
Missouri book ban could jail librarians for loaning 'inappropriate' content The GOP has strong authoritarian tendencies which is manifested in a variety of policy proposals, their support for the imperial presidency, and their overwhelming support for Donald who has brazenly obvious authoritarian tendencies.
Conservatives spread false claims on Twitter about electoral fraud as Iowans prepare to caucus The mainstream media keeps calling Trumpsters conservatives which is an inaccurate label. No real conservative would knowingly spread false claims. Dishonesty is not a conservative value.
Trump approval hits new high in Gallup poll, despite impeachment Donald's approval rating among republicans is at 94% according to the latest Gallup poll. Donald owns the republican party, which is not news.
Trump makes divisive reelection pitch in State of the Union - CNN
++
Republicans refused to hear testimony from fact witnesses including John Bolton and others that had direct knowledge on matters central to the impeachment "trial".
Yet when they voted to impeach Clinton for lying about an extramarital affair with Monica, they made her sit for a videotaped deposition during the impeachment trial.
Republicans also took deposition from Vernon Jordan, a Clinton friend, and Clinton's aide Sidney Blumenthal during the impeachment trial.
Yes, every past impeachment trial included witnesses. Baldwin hits mark with Trump-related claim | PolitiFact Wisconsin
How the senators voted on impeachment -- February 12, 1999
I would add that a republican president who lied about the justifications for a war that resulted in over 100,000 deaths and over $2 trillion in borrowed money is not impeachable either. Casualties of the Iraq War; Iraq Body Count; Financial cost of the Iraq War The hypocrisy is stunning of course, but is normal and easily predictable.
Trump Access Hollywood Tape: “And when you’re a star, they let you do it. You can do anything.” Yes, Trump can do anything with no boundaries on everything.
All the times Trump said the constitution let's him do whatever he wants - YouTube
++
Trump signed the new trade deal with Canada and Mexico and made the usual grandiose claims about the agreement:
Only a few Americans have factual information sufficient to even compare the old NAFTA and the new trade USMCA (United States-Mexico-Canada Agreement) Trump knows that is true and consequently is fully aware that he can say anything about NAFTA and USMCA without ever providing specifics or accurate justifications for his claims.
Accurate knowledge about trade agreements among voters is understandably non-existent or at best incomplete, which provides Trump, a shameless demagogue, the opportunity to deliberately mislead voters about those agreements.
The primary benefit of USMCA is that avoids an acceleration of the trade war started by Trump with America's two largest trading partners.
And, that is a relief and a positive development.
There are some relatively minor improvements in USMCA.
For example, the old NAFTA treaty required automakers to produce 62.5% of a vehicle's content in North America (U.S., Canada, and Mexico).
The USMCA raises that threshold to 75%. Note that this provision is aimed at Mexican factories sourcing too many parts from Europe and Asia, not from factories located in Mexico.
There is a provision extending copyright protection to 70 years from 50.
Perhaps the most important change is that 40 to 45% of the parts for any tariff free vehicle must come from a factory that pays a minimum of $16 per hour in average salaries to factory workers. This was a provision demanded by the Democrats. The U.S. automakers claimed that the provision will raise the cost of cars sold to U.S. consumers, slowing the growth of the auto market and hurting the economy. Trump’s Trade Moves Put U.S. Carmakers in a Jam at Home and Abroad - The New York Times
In TrumpWorld, the NAFTA agreement was the most horrendous trade agreement ever negotiated while Donald's USMCA rectifies all wrongs and is the best deal ever negotiated in world history. The reality is that the net effect is possibly positive, but barely so.
+++
 |
| Did the Duck move Kansas City to Kansas? Maybe he issued a Sub Silentio Executive Order. |
I checked to see whether Kansas City residents will pay less taxes after being moved to Kansas from Missouri. Hard to say.
Kansas Department of Revenue - Selected Kansas Tax Rates with Statutory Citation
Individual Income Tax Year Changes
+ ++
Missouri book ban could jail librarians for loaning 'inappropriate' content The GOP has strong authoritarian tendencies which is manifested in a variety of policy proposals, their support for the imperial presidency, and their overwhelming support for Donald who has brazenly obvious authoritarian tendencies.
Conservatives spread false claims on Twitter about electoral fraud as Iowans prepare to caucus The mainstream media keeps calling Trumpsters conservatives which is an inaccurate label. No real conservative would knowingly spread false claims. Dishonesty is not a conservative value.
+++++++
All trades are commission free except as otherwise noted.
1. Small Ball Trades:
A. Added 10 BHB at $22.8; 3 at $22.5 (partial fill of 10 share limit order) and 7 at $22:
Closing Price Yesterday: BHB $22.82 +$0.33 +1.47% (light trading of only 23,478 shares)
Investment Category: Regional Bank Basket Strategy
BHB SEC Filings
Last Discussed: Item # 1. A. (1/25/20 Post)
Subsequent to this purchase, BHB released its 2019 4th quarter report that had extraordinary items that reduced GAAP E.P.S. by 29 cents. Those items were "primarily related to the one-time costs associated with the acquisition and balance sheet optimization initiatives that were part of the strategic review." BHB
"On October 25, 2019, the Company completed the previously announced acquisition of eight branches within Central Maine and closed five branches effective December 31, 2019, as part of its strategic review."
"Following the completion of the Central Maine branch acquisition, the Company used the net deposit proceeds to extinguish approximately $140 million of higher cost FHLB borrowings."
SEC Filed Press Release
Core E.P.S. = $.56
NIM: 2.88% without purchase loan accretion (up from 2.65% Q/E 9/30/19)
NIM: 2.95% with purchase loan accretion
Charge Off Ratio: .08%
Core ROA = .96%
0.44% non-performing loans to total loans, down from 0.65%
98% loan to deposit ratio, improved from 103% (it is better to be dependent on customer deposits rather than brokered ones)
Tangible Book Value Per Share = $17.3
Overall, this report was better than I expected under the circumstances.
Dividend: Quarterly at $.22 per share
Bar Harbor Bankshares Declares Quarterly Cash Dividend
Next Ex Dividend Date: 2/14/20
Yield at $ Average Cost of $23.08 = 3.81%
Current Position: 70 Shares
Maximum Position: 100 shares
Purchase Restriction: Small Ball Rules (averaging down only in 10 share lots, probably in tight ranges from previous buys)
BHB Trading Profit: +$4,187.54
B. Sold 10 JCAP at $20.05 (highest cost lot Fidelity Account):
Quote: Jernigan Capital Inc. (JCAP)
Website: Jernigan Capital
Profit Snapshot: +$8.78
Average Cost Before Pare = $18.44
Average Cost After Pare = $18.35
 |
| Snapshot Intra-Day 1/28/20 |
Last Substantive Buy Discussions: Item # 1.A. Bought 10 JCAP at $18.9 and 30 at $18.78 (10/19/19 Post); Item # 3. Bought 50 JCAP at 19.83 (7/27/19 Post)(this 50 share lot has been sold).
The upcoming management internalization will result in a dividend cut. Jernigan Capital, Inc. Announces Agreement to Internalize External Manager The next quarterly dividend will be $.23, down from $.35.
I have a 61+ share position in my Schwab account, where my average cost per share is lower at $17.5 per share:
Most Recent Analyst Action (1/24/20): KeyBanc raised its PT to $23 from $20 and reiterated its overweight weighting.
The next earnings report is not expected until late this month.
I have a 61+ share position in my Schwab account, where my average cost per share is lower at $17.5 per share:
 |
| Snapshot at close on 2/4/20 |
The next earnings report is not expected until late this month.
C. Initiated Small Ball "Buying Program" in PK -Bought 10 at $23; 5 at $22.6; 5 at $22.45; 5 at $22 and Sold 10 at $23.05
Sold 10 at $23.05-bought at $23:
Closing Price Yesterday: PK $22.99 +$0.78 +3.51%
Hotel REITs are not out of the woods. Hotels in NYC and other destinations for Chinese tourists will take significant hits in the 2020 first quarter. Coronavirus in N.Y.: Without Chinese Tourists, Business Sags - The New York Times
Quote: Park Hotels & Resorts Inc.
Website: Park Hotels & Resorts
Park's "portfolio consists of 62 premium-branded hotels and resorts with approximately 34,000 rooms located primarily in prime U.S. markets with high barriers to entry. Over 85% of our portfolio is in the luxury or upper upscale segment and approximately 99% is located in the U.S., including locations in 14 of the top 25 markets." About Park
SEC Filings
Recent Hotel Sales:
Park Hotels & Resorts Inc. Announces the Sale of the Le Meridien New Orleans for $84M in gross proceeds (12/23/19 Press Release)
Park Hotels & Resorts Inc. Announces the Sale of the Ace Hotel Downtown Los Angeles for gross proceeds of $117M (12/20/19 Press Release)
Park Hotels & Resorts Inc. and Partners Announce the Sale of the Conrad Dublin for €116.4M in gross proceeds (11/13/19)(gross of $61M to Park)
Acquisition of Chesapeake Lodging Trust for $2.5B:
Park Hotels & Resorts Inc. Completes Acquisition of Chesapeake Lodging Trust
Hurricane Issues:
Hurricanes Irma and Maria in September 2017 put 3 hotels out of commission.
5 Year Chart-Bear Market: Unknowable duration and depth
Dividend: Quarterly at $.45 per share (regular dividend only)
PK has been paying an annual special dividend.
The REIT needs to cease doing so IMO given the cash flow numbers discussed below.
The last special dividend was for 10 cents per share and went ex dividend in last December.Dividends & Tax Information – Park Hotels & Resorts
Dividend Yield at $22.35 (based on regular dividend Only)= 8.05%
Last Ex Dividend Date: 12/30/19
Last Earnings Report (Q/E 9/30/19):
SEC Filed Earnings Report
Debt:
The 4th quarter earnings release is scheduled to be released after the market closes on 2/26.
During the 3rd quarter, Park spent $184M for capital expenditures and equipment. Page 30
Those expenditures substantially exceed that quarter's $140M in adjusted FFO.
About 4% of PK's hotel revenues are reserved for renovations and maintenance. Page 29 (last sentence)
I did not see any breakdown of those capital expenditures. The standard AFFO NAREIT definition would require the deduction of routine capital expenditures (typically understood to be maintenance) from FFO to arrive at AFFO or funds available for distribution. Glossary of REIT Terms | Nareit
As with other hotel REITs, PK does not attempt to even provide a AFFO number.
My theory for this omission is that it would become apparent that deducting cash maintenance expenditures would cause the payout ratio to exceed 100%.
I did not see any information that would allow me to break out routine maintenance expenditures, which would be substantial for hotel REITs, from capital expenditures that improved the value of the property and generally would increase rental revenues and the fair market value.
Nor did I see any information that would allow me to separate the unusual capital expenditures to repair the 3 hurricane damaged hotels from more usual capital expenditures.
In short, reporting by hotel REITs needs SEC intervention. I do not view the adjusted FFO number to be meaningful since there is downward adjustment for cash expenditures.
Maximum Position: 100 shares
Current Position: 15 Shares
Purchase Restriction: Small Ball Rule (next purchase has to be below $22)
Website: Park Hotels & Resorts
Park's "portfolio consists of 62 premium-branded hotels and resorts with approximately 34,000 rooms located primarily in prime U.S. markets with high barriers to entry. Over 85% of our portfolio is in the luxury or upper upscale segment and approximately 99% is located in the U.S., including locations in 14 of the top 25 markets." About Park
SEC Filings
Recent Hotel Sales:
Park Hotels & Resorts Inc. Announces the Sale of the Le Meridien New Orleans for $84M in gross proceeds (12/23/19 Press Release)
Park Hotels & Resorts Inc. Announces the Sale of the Ace Hotel Downtown Los Angeles for gross proceeds of $117M (12/20/19 Press Release)
Park Hotels & Resorts Inc. and Partners Announce the Sale of the Conrad Dublin for €116.4M in gross proceeds (11/13/19)(gross of $61M to Park)
Acquisition of Chesapeake Lodging Trust for $2.5B:
Hurricane Issues:
5 Year Chart-Bear Market: Unknowable duration and depth
PK has been paying an annual special dividend.
The REIT needs to cease doing so IMO given the cash flow numbers discussed below.
The last special dividend was for 10 cents per share and went ex dividend in last December.Dividends & Tax Information – Park Hotels & Resorts
Dividend Yield at $22.35 (based on regular dividend Only)= 8.05%
Last Ex Dividend Date: 12/30/19
Last Earnings Report (Q/E 9/30/19):
SEC Filed Earnings Report
During the 3rd quarter, Park spent $184M for capital expenditures and equipment. Page 30
Those expenditures substantially exceed that quarter's $140M in adjusted FFO.
About 4% of PK's hotel revenues are reserved for renovations and maintenance. Page 29 (last sentence)
I did not see any breakdown of those capital expenditures. The standard AFFO NAREIT definition would require the deduction of routine capital expenditures (typically understood to be maintenance) from FFO to arrive at AFFO or funds available for distribution. Glossary of REIT Terms | Nareit
As with other hotel REITs, PK does not attempt to even provide a AFFO number.
My theory for this omission is that it would become apparent that deducting cash maintenance expenditures would cause the payout ratio to exceed 100%.
I did not see any information that would allow me to break out routine maintenance expenditures, which would be substantial for hotel REITs, from capital expenditures that improved the value of the property and generally would increase rental revenues and the fair market value.
Nor did I see any information that would allow me to separate the unusual capital expenditures to repair the 3 hurricane damaged hotels from more usual capital expenditures.
In short, reporting by hotel REITs needs SEC intervention. I do not view the adjusted FFO number to be meaningful since there is downward adjustment for cash expenditures.
Maximum Position: 100 shares
Current Position: 15 Shares
Purchase Restriction: Small Ball Rule (next purchase has to be below $22)
D. Initiated Small Ball "Buying Program" in RF-Bought 10 at $15.54:
SEC Filings
Closing Price Yesterday: RF $16.26 +$0.40 +2.52%
I have not dabbled much in RF common shares. Item # 1. Sold 50 RF @ 6.57 (11/9/2010 Post)-Bought Lottery Ticket in 50 shares of RF at $3.47 (3/12/2009 Post) The bank almost imploded during the Near Depression period so I classified this prior purchase as a Lotto Ticket.
Max Chart:
Starting in 2018, the stock has been in a channel trading pattern mostly between $15 to $20.
Dividend: Quarterly at $.155 per share ($.62 annually)
Dividend History | Regions Financial Corporation
Dividend Yield at $15.54 = 3.99%
Last Ex Dividend Date: 12/5/19
Last Earnings Report (Q/E 12/31/19):
Non-GAAP E.P.S. = $.40 vs. $.38 in the 2018 4th quarter
Net income is trending down however.
E.P.S. is higher due to significant share buybacks.
Financial Metrics:
NIM was reported at 3.39%, down from 3.52% in the 2018 4th quarter.
NIM compression is currently the major headwind to earnings growth.
"During the fourth quarter, the company repurchased 7.8 million shares of common stock for a total of $132 million through open market purchases and declared $149 million in dividends to common shareholders. The company’s loan-to-deposit ratio at the end of the third quarter was 85 percent."
SEC Filed Press Release
I have owned a 8.875% preferred stock that was redeemed several years ago (Bought 50 RFPRZ at $24.49)
I have also owned 1 RF junior bond with a $1K par value:
That bond was rated in junk territory (Ba3/BB+) when I bought it. Item # 1 (12/2/2010 Post)
Regions Financial's senior unsecured debt is currently rated Baa2/BBB+.Credit Ratings | Regions Financial Corporation
Closing Price Yesterday: RF $16.26 +$0.40 +2.52%
I have not dabbled much in RF common shares. Item # 1. Sold 50 RF @ 6.57 (11/9/2010 Post)-Bought Lottery Ticket in 50 shares of RF at $3.47 (3/12/2009 Post) The bank almost imploded during the Near Depression period so I classified this prior purchase as a Lotto Ticket.
Max Chart:
Dividend: Quarterly at $.155 per share ($.62 annually)
Dividend History | Regions Financial Corporation
Dividend Yield at $15.54 = 3.99%
Last Ex Dividend Date: 12/5/19
Last Earnings Report (Q/E 12/31/19):
Non-GAAP E.P.S. = $.40 vs. $.38 in the 2018 4th quarter
E.P.S. is higher due to significant share buybacks.
Financial Metrics:
NIM compression is currently the major headwind to earnings growth.
"During the fourth quarter, the company repurchased 7.8 million shares of common stock for a total of $132 million through open market purchases and declared $149 million in dividends to common shareholders. The company’s loan-to-deposit ratio at the end of the third quarter was 85 percent."
SEC Filed Press Release
I have owned a 8.875% preferred stock that was redeemed several years ago (Bought 50 RFPRZ at $24.49)
I have also owned 1 RF junior bond with a $1K par value:
Regions Financial's senior unsecured debt is currently rated Baa2/BBB+.Credit Ratings | Regions Financial Corporation
E. Added 10 PBCT at $15.82 and 10 at $15.48:
Quote: People's United Financial Inc (PBCT)
PBCT Consensus Analyst E.P.S. Estimates
Closing Price Yesterday: PBCT $15.83 +$0.25 +1.60%
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 1.D. Bought 10 PBCT at $16.03 (1/29/20 Post)
Average Cost: $15.77 per share
 |
| $15.82 Shorty Before the Ex Dividend Date |
 |
| $15.48 Shortly After the Ex Dividend Date |
PBCT Consensus Analyst E.P.S. Estimates
Closing Price Yesterday: PBCT $15.83 +$0.25 +1.60%
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 1.D. Bought 10 PBCT at $16.03 (1/29/20 Post)
Average Cost: $15.77 per share
Dividend: Quarterly at $.1775 per share ($.71 annually)
Dividend History | People's United Bank
Dividend Yield at Average Cost = 4.5%
Last Ex Dividend Date: 1/30/20
Current Position: 30 Shares
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rules
Last Elimination: Item # 3.A. Eliminated PBCT-Sold 101+ at $17.57(5/22/19 Post)
S & P currently assigns a 3 star rating to PBCT with a $17 twelve month PT. The S & P quality rating is "A". S & P estimates that 2020 operating E.P.S. will be $1.4.
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.
Menlo Therapeutics Inc. (MNLO)
ReplyDelete$5.13 +$0.48 +10.32%
VOLUME: 65.8K
65 Day Avg.: 147.4K
MARKET CAP $111.53M
Last Updated: Feb 5, 2020 at 10:17 a.m. EST
https://www.marketwatch.com/investing/stock/mnlo
MNLO does not need a reason to bungee jump. Today's action is predicated on a news release.
https://www.globenewswire.com/news-release/2020/02/05/1980249/0/en/Menlo-Therapeutics-Announces-Publication-of-Phase-2-Results-for-Serlopitant-for-the-Treatment-of-Pruritus-Associated-with-Psoriasis-in-the-Journal-of-the-American-Academy-of-Dermat.html
It is interesting to see how many patients receiving the placebo claim to see a benefit.
+++
Preferred Apartment Communities Inc
$11.34 -$0.2198 -1.90%
Last Updated: Feb 5, 2020 at 10:24 a.m. EST
While I have no interest in this REIT, yesterday's announcement about the management internalization plan was met with a thumbs down response, whereas investors were pleased with the terms of JCAP's internalization plan which is now near completion.
APTS is paying a lot to internalize management:
https://www.prnewswire.com/news-releases/preferred-apartment-communities-inc-announces-internalization-transaction-300997411.html
The generous dividend was not covered by free cash flow before this cash payment to the external manager.
https://www.prnewswire.com/news-releases/preferred-apartment-communities-inc-reports-results-for-third-quarter-2019-300951106.html
The dividend needs to be cut by at least 50% IMO.
New Residential Investment Corp. (NRZ)
ReplyDelete$17.55 +$ 0.595 +3.51%
VOLUME: 7.8M
65 Day Avg. - 3.5M
Last Updated: Feb 6, 2020 at 12:28 p.m. EST
The enthusiasm today is based on a better than expected 4th quarter report:
https://www.businesswire.com/news/home/20200206005334/en/
NRZ earnings releases are classified by me as a "black box" and that is apparent when looking at the line items.
I currently own 52+ shares with an average taxable cost per share of $14.96. My out-of-pocket cost would be somewhat higher due to ROC adjustments that have reduced my tax cost basis.
For example, my highest cost lot in the current chain was bought at $16.18 (commission free) and the tax cost basis for that lot is now at $15.74.
The amount of the dividend classified as ROC is not taxable in the year paid, but is used to reduce the tax cost basis of the lots that generated the dividend. The ROC classification will not impact my realized total return when I sell the ROC adjusted lots but may impact my after tax return when the shares are held long term rather than sold for a short term capital gain.
I can sell that 5 share lot now and realize a long term capital gain which, for me, will be taxed at 15% compared to the higher applicable tax rate for a short term capital gain. I view the later as being taxed at my highest marginal rate since I choose to realize the non-taxed favored gain rather than postponing the sell until I receive the lower long term capital gains rate.
I have turned off the reinvestment option and may sell that 5 share lot today.
One consideration for lowering my average cost is that the book value was reported at $16.21, down from $16.26 as of 9/30/19:
https://www.sec.gov/Archives/edgar/data/1556593/000114036119019019/ex99_1.htm
Kellogg Co.
ReplyDelete$63.46 -5.90 -8.51%
https://www.marketwatch.com/investing/stock/k
I have pared my K position down to 30 shares from 60.
The last pare was at $69.3:
Item # 2
https://tennesseeindependent.blogspot.com/2020/01/pofnf-pwfca.html
The average cost for the remaining 30 shares is $55.19 and realized gain from selling 30 out of 60 shares is $332.24.
I have not reinvested the dividends since I viewed the likely reinvestment price as unattractive as discussed when I pared 10 at $66.3:
Item 2.C.
https://tennesseeindependent.blogspot.com/2019/12/feny-hta-igr-k-tef.html
The downdraft today was caused by the soft 2020 guidance contained in today's earnings report.
https://www.marketwatch.com/story/kellogg-stock-falls-after-weak-guidance-2020-02-06?mod=mw_quote_news
SEC Filed Press Release Q/E 12/28/19
https://www.sec.gov/Archives/edgar/data/55067/000162828020001125/exhibit991q42019.htm
I did not see anything in this report that would cause me to sell my remaining shares or to buy more after the price decline today. I would probably start buying back shares only when the price declines below my average cost per share provided there are no intervening and material negative developments.
It needs to remember that Kellogg sold its Keebler cookie business and other products last year, so Y-O-Y numbers will be negatively impacted by those divestitures.
"Kellogg's fourth quarter 2019 GAAP (or "reported") net sales decreased by approximately 3% year on year. The absence of results from divested businesses reduced net sales in the quarter by nearly 6%. On an organic basis, net sales increased by nearly 3%."
While I eliminated my position in the BDC PennantPark Investment (PNNT), I still have a small position in the PennantPark Floating Rate Capital (PFLT).
ReplyDeleteI sold out of PNNT for several reasons including the failure to cover the dividend with net investment income. That failure was repeated in the 2019 4th quarter:
http://www.globenewswire.com/news-release/2020/02/06/1981419/0/en/PennantPark-Investment-Corporation-Announces-Financial-Results-for-the-Quarter-Ended-December-31-2019.html
PNNT's NII was reported at $.15 per share. The quarterly dividend is at $.18. Net asset value per share did increase to $8.79 from $8.68 as of 9/30/19. PNNT's net asset per share history places it in my "borderline deservedly hated" BDC category .
See net asset value history set out in Item #2.B.
https://tennesseeindependent.blogspot.com/2019/09/observations-and-sample-of-recent_21.html
PennantPark Floating Rate Capital (PFLT) reported after the yesterday and the stock barely reacted today to that report:
PFLT: $12.26 -$0.02 -0.16%
https://www.marketwatch.com/investing/stock/pflt
At least this BDC covered its dividend with NII, though just barely:
https://www.globenewswire.com/news-release/2020/02/05/1980577/0/en/PennantPark-Floating-Rate-Capital-Ltd-Announces-Financial-Results-for-the-Quarter-Ended-December-31-2019.html
Net asset value per share was reported at $12.95.
Earnings Call Transcript:
https://seekingalpha.com/article/4322161-pennantpark-floating-rate-capital-pflt-ceo-art-penn-on-q1-2020-results-earnings-call?mod=mw_quote_news
PFLT nosedived in price last May after reporting several new non-accrual loans, a well understood and known hazard for BDC investors. Given that surprise, I do not view it likely that the price will exceed book value per share unless and until the BDC starts to increase its net asset value per share. I would likely sell at over $13 without any improvement. I view PFLT as a hold at the current price. Dividends are paid monthly at $.095 per share. I have no expectation of an increase given the recent NII numbers.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/02/fitb-hta-ivz-jcap-prosy-sjr.html