AJX, AROW, BIF, DISCA, EBGEF, FRAF, FCVSX, GDO, KMI, KW, MIN, MS, NKSH, NMFC, OFS, PDM, SCA, SJR, TRP

Economy: 

The BLS reported that the economy added 638K jobs last month. The unemployment rate declined to 6.9%. Jobs report October 2020  The numbers for August and September were revised up by 15K. Average hourly earnings rose 4 cents. Th U-6 number declined to 12.1% from 12.8% in September. Employment Situation Summary; Table A-15. Alternative measures of labor underutilization

ADP reported that private payroll jobs increased by 365K last month vs. the consensus estimate of 600K and below the 753K reported in September. ADP report October 2020: Private payrolls increase by 365,000 vs. 600,000 estimate

New Weekly jobless claims  751K

Fed decision November 2020: Interest rates steady near zero

+++

Markets and Market Commentary: 

S & P 500 P/E Ratios (as of 11/6/20): 

GAAP Trailing 12 Months: 39.81

Non-GAAP Estimated Forward 12 months:  25.15

Sourced: P/E & Yields

The S & P chart currently looks like it is in a topping formation. 

The move off the March lows hit an all time closing high of 3,580.84 on 9/2, with an all time high intraday at 3,588.11. 

The index then sank to a 3,236.92 close on 9/23. 

The ensuing rally stop short of the 9/2 highs, closing at 3,534.22 on 10/12. 

The next down move stopped at 3,269.96 on 10/30. 

Intraday support was located around 3235 which I previously identified as the nearest support level. 

The rally since 10/30 so far has not gone above the 10/12 high, with the index closing at 3,509.44 yesterday.     

I have stepped up my paring some. 

JPM publishes a quarterly "Guide to the Markets" that can be downloaded here. That publication has a number of interesting and important information. At page 10, there is a chart that compares the performance of value and growth stocks which shows value is historically cheap vs. growth.  

Arizona, Montana, New Jersey and South Dakota approved recreational marijuana sales. 

Warren Buffett's favorite indicator, margin levels and technicals agree: This stock market could be in trouble - MarketWatch

Painful sell-off is running out of steam: market bull Ed Yardeni Ed Yardeni still believes the bull market, which started in 2009, is still ongoing. He views the market plunge in March 2020 and last month as the 66th and 67th panic attack suffered by investors since March 2009. Yardeni is forecasting that the S & P 500 will reach 3,800 by the middle of next year.  

The next bear market will be the worst in at least 78 years, warns co-founder of Soros’s legendary Quantum Fund - MarketWatch

It's time to take your profits from tech stocks, J.P. Morgan says- MarketWatch A more appropriately worded headline would be JPM recommends to start taking some profits in technology stocks. 

The U.S. could split up, Gundlach says. Here's how he'd invest for that. - MarketWatch The U.S. is not going to split up. 

Oreo maker Mondelez says demand for its snacks remains 'elevated' - MarketWatch I eat two of the snack products:  belVita Soft Baked Breakfast Biscuits, Banana Bread Flavor, 6 Boxes of 5 Packs (1 Biscuit Per Pack) and A Belvita Cinnamon Brown Sugar Breakfast Biscuits, 6 Boxes of 5 Packs (4 Biscuits Per Pack) 

Some Closing ETF Prices 11/6/20: 

KRE $41.36 -0.96 -2.27%: SPDR S&P Regional Banking ETF 

IEF $120.50 -$0.41 -0.34%: iShares 7-10 Year Treasury Bond ETF 

SKYY $84.04 +$0.78  +0.94%: First Trust Cloud Computing ETF 

FDN $205.62  +$0.66  +0.32%: First Trust DJ Internet Index ETF 

EBIZ $29.87 +$ 0.29  +0.98%: Global X E-commerce ETF 

Of those ETFs, I own SKYY, FDN and EBIZ. 

Interest rates rose yesterday, so the decline in regional bank stocks can not be explained using that movement. 

Instead, the explanation that fits a decline in regional bank stocks and the rise of stocks benefiting from the stay-at home, work-at-home is the recent rapid acceleration in daily confirmed Covid -19 infections, increasing hospitalizations and deaths now averaging over 1,000 per day. 

A second possible explanation, possibly just additive to the first, is renewed concerns that the republican senate will obstruct another stimulus package or Pelosi will refuse to take what she can get from them. I suspect Mitch McConnell will just do what he does best when a Democrat is President or about to assume that office when the republicans still control the senate.  

Pipeline stocks were hit yesterday based on concerns about demand for energy products and a lackluster earning report from Pembina (PBA). Pembina Pipeline Corporation Reports Third Quarter Results I own a few shares. 

PBA $20.53 -$1.35 -6.17% 

+++

Trump: 

Sayonara Demagogue Don-hopefully.   

For now, it is best for the non-Trumpsters to just ignore Donald and all of his cult members. Perhaps Showboat Rudy can take his hand outside of his pants and place it over his mouth.  

I will remember Donald as the most prolific liar and spreader of fact free conspiracy theories in world history, whose statements are widely disseminated, and as a person believed to be honest by 81% of republicans and almost 1/3rd of independents. (Question 11: National (US) Poll-June 18, 2020; ask yourself how is that even possible and the answer does not bode well for the future)  When the WP next updates its catalog of Trump false and misleading statements since his inauguration, the number will easily exceed 25,000. 

Donald is currently in his natural rage state, suffering from an acute case of narcissistic injury. Understanding Narcissism and Narcissistic Rage | Psychology Today

It is also noteworthy that over 70M Americans voted to give an obviously malevolent, demagogic sociopath with strong authoritarian tendencies another 4 years as President. Biden will probably end up winning the popular vote by around 5M. 

And, importantly, Donald and his allies have done more to undermine U.S. democratic processes than Putin could ever dream of doing. 

Since I started writing this blog back in 2008, I have maintained that the primary threat to American democracy and freedoms comes from within the U.S. 

The powerful reactionary forces in the U.S., infrequently burdened with accurate information, adopting and fomenting fact free conspiracy theories, and at best barely tethered to what has made America great, are far more powerful than those who have balance, exercise judgment based on facts and have an abiding loyalty to the Constitution that goes beyond the Second Amendment.  

Trump's success has  confirmed my prior observations as accurate. 

A lying demagogue who constantly tries to undermine institutions necessary for a properly functioning democracy can achieve and hold national power in the U.S., as Donald has proven beyond any doubt now, and the GOP will not do anything to stop the next one emerging from their ranks which will be the most likely source. Instead, republican politicians nourished, protected and enabled a sociopathic demagogue with strong authoritarian impulses and that will happen again. 

The fight is only in its first inning, maybe not even that far. The coaches are just identifying the lineups for the umpire. 

Even if Biden ultimately prevails, Mitch McConnell and the Senate republicans will do everything possible to derail and undermine him, even if that damages their constituents, as they did when achieving a senate majority during the Obama administration. 

It needs to be remembered that almost all republican House and Senate members voted against the Obama stimulus package in 2009 that addressed a more serious and deeper economic crisis than the temporary one resulting from the pandemic. About 1/3rd of that stimulus plan consisted of tax credits and tax cuts. American Recovery and Reinvestment Act of 2009-Wikipedia No House republican voted for that bill. H.R. 1 (111th): American Recovery and Reinvestment Act of 2009- GovTrack.us Only 3 republican senators voted for it (Susan Collins and Olympia Snowe from Maine and Arlen Specter from PA. who later switched parties.) U.S. Senate: U.S. Senate Roll Call Votes 111th Congress-1st Session

Yet, when there was a republican President, and an upcoming election, most of the republican senate and house members voted for stimulus packages whose cost was about 350% greater than the one they voted against in 2009 when the problems were far more serious. The key to understanding what is actually happening is to simply identify whether the President is a republican or a democrat, not whether the country and Americans need the stimulus to avoid catastrophes, both personal and economic. 

The U.S. Senate is an unrepresentative institution that provides a built in advantage for republicans. Five states for example, Idaho, South and North Dakota, Wyoming and Montana have ten senators compared to California's two; and yet the population of just Los Angeles county is more than the combined population of those 5 states. 

The Russians have no need to spread misinformation. Trump and his allies are doing it for them

The two dominant forces in the GOP now are those who believe fact free conspiracy theories (QAnon and the Obama Birther conspiracy being just 2 examples) and evangelicals who will vote for just about anyone who claims to be against abortions including someone who is fundamentally evil. 

The following are links to interesting opinion pieces that discusses how fact free conspiracy theories have come to dominate Trump's party. Opinion | Trump Lives in a Hall of Mirrors and He’s Got Plenty of Company - The New York Times;  Opinion | Trump’s Tweeting Isn’t Crazy. It’s Strategic, Typos and All. - The New York Times; Open Future - Conspiracy theories are dangerous—here’s how to crush them | Open Future | The Economist; and see also A Lot of People Are Saying: The New Conspiracism and the Assault on Democracy - Kindle edition by Rosenblum, Nancy L., Muirhead and Belief in conspiracy theories: Basic principles of an emerging research domain

++++

Covid-19 Updates: 

As of 11/6/2020

For Don the Authoritarian to lose the 2020 election, it took an enormous effort from those opposed, energized by 4 years of outrageous acts and comments, plus an incompetently managed pandemic by Trump and the resulting recession. Even then, almost all of his enablers won reelection and Trump almost won. 

U.S. counts record 121,200 cases in a single day - MarketWatch (Thursday 11/5/20 with 1,108)

U.S. daily coronavirus cases top 100,000 for the first time (102,831 new cases last Wednesday) 

Texas poised to hit 1 million Covid-19 cases, the most in the nation (11/6/20)

US Daily Deaths | The COVID Tracking Project

U.S. headed for ‘most deadly phase’ of pandemic, says Dr. Birx, contradicting Trump’s insistence it has rounded a corner - MarketWatch (11/3/20)

More than 61,000 children got Covid-19 last week, a record (11/2/20). 

Ozarks public health workers feel 'hated' in Covid-19 spike - CNN Video Virtually no one wears a mask. Those who do are shamed, hated, and labelled as Democrats who want to take away everyone's freedom.    

Study links Trump rallies to more than 700 Covid deaths - POLITICO

Better handling of coronavirus crisis means safest election trade is in Asia, not U.S., says JPMorgan - MarketWatch

Mark Meadows, Trump’s Chief of Staff, Has the Coronavirus - The New York Times Just another Trumpster who frequently flouted simple safety precautions.  

+++++

1. CEF Bond Funds: 

For both GDO and MIN discussed below, I view the position as a temporary holding pond for cash earning .01% in my Schwab sweep account. The general idea is to harvest several monthly dividends, sell some shares profitably on price pops, and buy some to reduce my average cost per share and thereby increase my dividend yield. The ultimate goal is to exit the position with a total return in excess of the dividends paid. 

A. Started GDO (Schwab Taxable)-Bought 100 at $16.72:

Recent GDO History this Account: 

Quote: Western Asset Global Corp Defined Opportunity Fund Inc.  (GDO)

I mentioned this purchase in a 10/5/2020 comment. 

The fund is currently scheduled to liquidate on or about 12/2/2024. 

The only reasons why I would own this fund is to generate income. 

Sponsor's website: WA Global Corporate Defined Opportunity Fund Inc. | Legg Mason

Dividends: Monthly at $.101 per share ($1.212 annually)

Yield at $16.72: 7.25%

Last Ex Dividend: 10/22 (owned as of)

Next Ex Dividend: 11/19/20

Goal: Harvest several dividends and sell at whatever profit may exist. I view this leveraged bond CEF as a temporary risk alternative to cash earning .01%.  

Last Discussed: I last discussed a pare in my Fidelity taxable account that reduced my average cost per share to $15.4. Item # 1.F. Pared GDO-Sold Highest Cost 15 Shares-10 at $17.41; 5 at $17.43 (9/5/2020 Post); Item # 2.A. Added 35 GDO at $16.78; 5 at $15.6: 5 at $14.34; 5 at $13.75; 5 at $12.3; 5 at $11.4 (4/11/20 Post)

Last Elimination: Item # 1.B. Eliminated GDO-Sold 224+ at $16.47-Used Commission Free Trade (3/3/19 Post)

Data Date of 10/5/20 Trade:  

Closing Net Asset Value Per Share: $18.08 

Closing Market Price: $16.76

Discount: -7.3% 

Average 5 Year Discount:  -7.42%

Sourced: GDO  CEF Connect 

B. Recent Adds to MIN (Schwab Account):  

Quote: MFS Intermediate Income Trust (MIN)

Sponsor's website: MIN: MFS® Intermediate Income Trust

SEC Filings

Effective Duration as of 9/30/20: 4.12 years

Portfolio Composition as of 4/30/20 (sourced from semi-annual report):

Last Discussed: Item # 1 Bought 100 MIN at $3.85; 100 at $3.8 and 100 at $3.73-Schwab Taxable (7/28/20 Post) 

SEC Filing: Holdings as of 7/31/20 

Last SEC Filed Shareholder Report: Period ending 4/30/20 

Dividends: Variable  (supported by ROC)

Yield at AC = 8.97%  (using about a $.0284 average and rounding to $.34 per share annually)

MFS® Intermediate Income-CEF Connect

Next Ex Dividend: 11/17/20

I have not reduced my average cost much with these adds. 

2. CEF Stock Funds: 

A. Bought 100 BIF (Vanguard Taxable) at $10.08; 10 at $9.85: 

Quote: BIF | Boulder Growth & Income Fund Inc. Overview 

I mentioned this purchase in a 10/5/2020 comment. 

Sponsor's Website: Boulder Funds - Home

BIF SEC Filings 

Last SEC Filed Shareholder Report (semi-annual for the period ending 5/31/20)

Top 10 Holdings as of 5/31/20: 

Last SEC Filing of Holdings (as of 8/31/20): Cost at $558.565M; Value then at $1.234+B

Significant Shareholders: 

Last Discussed: Item # 1.H.  Restarted BIF (Fidelity Taxable Account)- Bought 10 at $9.26; 10 at $8.75(4/4/20 Post) 

Last Elimination: Item # 3.E. Eliminated BIF-Sold 156+ at $11.42 (12/18/19 Post)

Recent News: Boulder Growth & Income Fund, Inc. Announces $225 Million Issuance of Senior Unsecured Notes (11/5/2020) I do not recall another CEF creating leverage through issuing senior unsecured notes. When a CEF uses leverage, it is generally through bank loans or equity preferred stock.  The bank bank loans generally float at a spread over 1 month Libor which is near zero now. Leverage costs through those loans are running under 1% now. The debt issued by BIF have the following maturities and coupons: "The 10-, 12-, and 15-year series will pay interest semi-annually at the rate of 2.62%, 2.72%, and 2.87%, respectively. Interest on the Notes is payable semiannually, on the 5th day of May and November in each year, commencing on May 5, 2021."

I would add that this does not make much sense to me when the fund has a large dollar amount invested in low yielding treasuries and cash reserves. 

Numbers as of last report: 

$149.88+M as of 8/31/20

Advisory Fee Based on net assets plus the total principal amount of leverage:

Invest that money before issuing bonds that have a higher interest rate. The money received from selling those bonds does increase the assets subject to the external managers compensation.  

Dividend: Quarterly at $.102 per share ($.408 annually)

Yield at $10.06 AC = 4.06%

The manager of BIF is a buy and hold investor. I would not anticipate any dividends beyond the regular quarterly rate. The regular quarterly dividend will be supported in part, most of the time, with capital gains. There could be on occasion a regular dividend with some ROC support. 

That buy and hold approach has led to a huge unrealized gain. 

Last Ex Dividend: 10/22/20 (owned as of) 

Dividend Reinvestment: Yes given the discount 

Data Date of 10/5/20 Trade: 

Closing Net Asset Value Per Share: $12.25

Closing Market Price: $10.07

Discount: -17.8% 

Sourced:  BIF CEF Connect 

Prior Round-Trips: Item # 3.C. Sold 50 BIF at $11.28 (11/13/19 Post); Item # 3.B. Eliminated BIF: Sold 116+ (2/16/17 Post)(profit snapshot = $137.25, with snapshots of prior 2013 and 2016 round-trips realizing a $284.19 profit).

BIF Trading Profits to Date: $550.27

3. Small Ball: 

A. Restarted MS- Bought 1 at $47.97; 1 at $46.93: 

Quote: Morgan Stanley (MS) 

Stock Information as of 11/6/20:

I have assigned a Placeholder status to MS for now. 

MS Analyst Estimates | MarketWatch

MS SEC Filings 

Recent News: Morgan Stanley to Acquire Eaton Vance (10/8/20) MS has been increasing its investment management business since the Near Depression as part of its "strategic transformation".  EV has close to $500B under management. This acquisition is anticipated to close in the 2021 second quarter. 

MS completed its acquisition of ETrade Financial last month. Morgan Stanley Closes Acquisition of E*TRADE 

Average Cost Per Share = $47.45

Dividend: Quarterly at $.35 per share ($1.4 annually)

Last Ex Dividend: 10/29/20 (owned as of)

Yield at AC: 2.95%

Most of my MS security purchases have been senior unsecured bonds and equity preferred stocks. The bonds are no longer of any interest to me due to their low yields. 

My most productive MS equity preferred stock trade was in MSPRA which I no longer own. This post contains round-trip trade snapshots for that one. Advantages and Disadvantages of Equity Preferred Floating Rate Securities

5 Year Financials: 

2019 Annual Report at page 23 

5 Year Chart: 

Last Sold (Way Too Soon):

2012 MS 50 Shares +$105.1

I have been wary of investment banks since Lehman and Bear Stearns collapsed in 2008.  

Last Earnings Report (Q/E 9/30/20): SEC Filed Earnings Press Release 

E.P.S. $1.66 vs consensus at $1.28

Report discussed at Morgan Stanley's stock ticks up after profit, revenue rise above expectations on strong trading performance - MarketWatch and Morgan Stanley (MS) earnings 3Q 2020

Broker Reports (available to Schwab customers): 

Morningstar (10/15/20): 3 stars with a FV of $56

Credit Suisse (10/15/20): Outperform with a $60 PT

Argus (10/15/20): Buy with a $60 PT (12 times this firm's 2021 E.P.S. estimate, noting that wealth management constituted about 57% of revenue after completing the ETrade acquisition and before completing the EV acquisition)  

S & P (10/15/20): 5 stars with a 12 month PT of $60

B. Added to TRP-Bought 1 at $41.92; 1 at $39.59; 1 at $39: 

Quote: TC Energy Corp. (U.S.: NYSE)

Stock Information as of 11/6/20: 

Last Discussed:  Item # 1.G. Added to TRP-Bought 1 at $40.26; 1 at $38.49; 1 at $34.2; 1 at $33c  (4/18/20 Post) 

TC Energy — Operations — Natural Gas Map

TC Energy — Oil and Liquids

TC Energy — Power and Storage 

TC Energy — Operations Maps

Average Cost Per Share: 

Dividend: Quarterly at C$.81 per share (C$3.24 annually)

For the next payment, the conversion rate has apparently already been set as US$.608

TC Energy declares quarterly dividends 

Next Ex Dividend Date: 12/30/20

Dividend Yield (before Canada's withholding):   (assumes no change in US dollar quarterly penny rate of $.608 per share or $2.43 annually per share; the actual yield will vary with the CAD/USD exchange rate and any change in the CAD dividend rate)  

5 Year Chart: 

Last Earnings Report (9/30/20): TC Energy reports robust third quarter financial results 

The following table makes adjustment to the net income and E.P.S. numbers provided in the preceding table:  

One adjustment relates to risk management activities: 

SEC Filed Management Discussion and Analysis 

SEC Filed Third Quarter Financial Statements 

Other Material Recent News: 

TC Energy Awards More Than $1.6 billion in American Contracts to Build Keystone XL, Project to Create Over 8,000 Union Jobs in 2021 (10/28/20)

TC Energy announces offer to acquire all outstanding common units of TC PipeLines, LP 

Broker Reports (available to Schwab customers): 

Morningstar (11/2/20): 4 stars with a FV of $52 (expects strong dividend growth over "the next five years"; narrow moat rating)

S & P (8/5/20): 3 stars with a $47 PT (at page 5, the analyst discusses the third quarter report and maintains the 3 star rating and 12 month PT of $47). 

Other Reports (not available to me): 

RBC (10/20/20):  Outperform but lowers PT from C$81 to C$75

CAD Price Quote: TC Energy Corp. (Canada: Toronto) 

Goldman Sachs (10/15/20):  Upgrades to buy from neutral 

C. Started KMI-Bought 10 KMI at $12.5; 5 at $12.32; 2 at $11.95 : 

Quote: Kinder Morgan Inc 

Stock Information as of 11/6/20:

KMI SEC Filings 

Kinder Morgan - Investor Relations

Kinder Morgan Existing Asset Map (pipelines and terminals)

Kinder Morgan Projects

Kinder Morgan History

Average Cost Per Share: $12.38 (17 shares)

Dividend: Quarterly at $.265 ($1.06 annually), raised from $.25 effective for the 2020 2nd quarter payment

Kinder Morgan Dividend History

Dividend Yield at AC = 8.56%

Last Ex Dividend Date:  10/30/20 (owned 17 shares as of) 

5 Year Chart: 

Last Earnings Report (9/30/20; Released after purchases): Kinder Morgan Announces Results for Third Quarter of 2020; Maintains $0.2625 Per Share Dividend or SEC Filed Press Release 

"KMI is reporting third quarter net income attributable to KMI of $455 million, compared to net income attributable to KMI of $506 million in the third quarter of 2019; and distributable cash flow (DCF) of $1,085 million, a 5% decrease from the third quarter of 2019."

Discussed at Kinder Morgan swings to Q3 profit but sees full-year DCF below plan-Seeking Alpha

I started KMI with a 5 share buy at $14.3 earlier this year, but changed my mind fairly quick and sold that lot for a $.65 profit. 

That was my only prior trade in a Kinder Morgan security. 

D. Started AJX-Bought 10 at $8:

Quote: Great Ajax Corp. 

Stock Information as of 11/6/20: 

Great Ajax - Company Info - Company Profile

AJX is a REIT that focuses "primarily on acquiring, investing in and managing a portfolio of RPLs secured by single-family residences and commercial properties and, to a lesser extent, NPLs. In addition to our continued focus on residential RPLs, we also originate and acquire small-balance commercial loans ("SBCs") secured by multi-family retail/residential and mixed use properties and acquire multi-family retail/residential and mixed use and commercial properties.." 

I would classify AJX as an atypical mortgage REIT. 

RPL = Re-performing Loan (borrower was more than 90 late but has resumed making mortgage payments) "RPLs are mortgage loans on which at least five of the seven most recent payments have been made, or the most recent payment has been made and accepted pursuant to an agreement, or the full dollar amount to cover at least five payments has been paid in the last seven months."

NPL = Nonperforming Loan. "NPLs are loans on which the most recent three payments have not been made."

REO = Real estate owned by a lender that was acquired through foreclosure. 

UPB = Unpaid Principal Balance

Loans are purchased at discounts to par value.  

Investment Category: Lottery Ticket Basket

AJX SEC Filings 

2019 Annual Report (risk factor summary starts at page 13 and ends at page 41)

Dividend: Quarterly, currently at $.17 per share ($.68 annually), reduced from $.32 effective for the 2020 second quarter payment. Great Ajax Corp. Common Stock (AJX) Dividend History  

Yield at AC = 8.5%

Next  Ex Dividend: 11/15/20 

5 Year Chart: Not an optimal time to pursue this investment strategy. 

Last Earnings Report (Q/E 9/30/20): Released after my purchase. 

E.P.S. $.23 

Book Value Per Share: $15.35

"purchased 244 re-performing mortgage loans ("RPLs") for $41.2 million, with UPB of $46.3 million and collateral values of $65.3 million, one non-performing mortgage loan ("NPL") for $0.5 million, with UPB of $0.5 million and an underlying collateral value of $0.7 million, and originated two small-balance commercial loans ("SBCs") with UPB of $1.9 million and underlying collateral values of $3.9 million, to end the quarter with $1.1 billion in net mortgage loans."

As of 9/30/20, "approximately 74.5% of portfolio based on current UPB made at least 12 out of the last 12 payments."

 

"On November 5, 2020, our board of directors declared a cash dividend of $0.17 per share, to be paid on November 30, 2020 to stockholders of record as of November 16, 2020."

Great Ajax Corp. Announces Results for the Quarter Ended September 30, 2020 | Business Wire

SEC Filed Investor Presentation for the 3rd Q 

Purchase Restriction: Each purchase, other than through dividend reinvestment, must be at the lowest price in the chain. 

Maximum out-of-pocket investment: $1K for a Lottery Ticket  

E. Added to SJR-Bought 2 at $18; 1 at $17.95; 1 at SJR at $16.61; 1 at $16.2: 

Quote: Shaw Communications Inc. Cl B NV (SJR)

Company Website: About Shaw

Dividends: Monthly at C$0.09875 per Class B Non-Voting Participating Share (C$1.185 annually) SJR is the USD priced Class B shares traded in the U.S.   

Shaw Declares Monthly Dividends for December, January and February 

Next Ex Dividend: 11/12/20 

Last Buy Discussion:  Item # 3.D. Added 5 SJR at $16.88; 5 at $16.4; 5 at $15.8; 1 at $12.48 (4/11/20 Post) 

Only Sell Discussion: Item # 3.B. Sold 50 SJR at $20.85-Highest Cost Lot (11/27/19 Post)

Last Earnings Report (9/30/20): This report was released on Friday 10/30/20. SEC Filed Press Release 

Adjusted EBITDA Calculation

Guidance: 

F.  Passing the Time of Day with OFS: 

Quote: OFS Capital Corp 

Stock Information as of 11/6/20:

Investment Category: Lottery Ticket Basket

OFS SEC Filings 

10-Q for the Q/E 9/30/20 (list of investments and basic terms starts at page 8)

2019 Annual Report (risk factor discussion starts at page 27 and ends at page 55) There is something to be said for ignoring a stock that takes that many single spaced pages to summarize the risks. ,  

I have been playing with OFS in several accounts. The following snapshot consists of trades my in my Vanguard taxable account.

Average Cost Per Share: $4.18 (40 shares)

Dividend: Quarterly, currently at $.18 per share  

Yield at $4.18 = 17.22% (low reliability IMO)

Net Asset Value Per Share: $11.18 as of 9/30/20

The quarterly dividend was recently slashed from $.34 to $.17 per share and was raised to $.18 for the next payment. 

Some shares as noted in the preceding snapshot were sold at a higher price: 

Profit Snapshot: $11.62 (35 shares ) 

I do not mention here most of the small ball trades where I am simply passing the time of day and honing my trading skills. After OFS reported earnings yesterday, I mentioned in a comment that I would discuss recent trades in one taxable account. I discussed the third quarter earnings report in that comment. OFS Capital Corporation Announces Third Quarter 2020 Financial Results & Increases Quarterly Cash Distribution; OFS Capital's (OFS) CEO Bilal Rashid on Q3 2020 Results - Earnings Call Transcript | Seeking Alpha 

I view this stock to be high risk. That is confirmed by the chart.

For now at least, investors are being compensated for taking a risk through a rich dividend yield and a large discount to the net asset value per share reported by the company. 

5 Year Chart: Floundering into the depths of ugly

Last Sell Discussions: Item # 3.B. Sold 10 OFS at $12.04(11/30/19 Post); Item # 4.B. Sold 60 shares at $12 (11/13/19 Post)

Last Buy Discussion: Item # 1.K. Added 5 OFS at $4.5 -Fidelity Taxable- (8/8/20 Post) 

 

OFS Trading Profits to Date: $148.64

I will add any previously net realized gains to the $1K out-of-pocket expenditure for a lottery ticket stock.  

G. Restarted NKSH-Bought 5 at $26: 

Quote: National Bankshares Inc.  (NKSH)

"National Bankshares, Inc. is a community bank holding company with headquarters in Blacksburg in Southwest Virginia. National Bankshares is the parent company of National Bank, a community bank with over a century of service in the area. National Bank currently operates 25 full service office locations and one loan production office throughout Southwest Virginia. .. National Bankshares also operates an insurance and brokerage subsidiary, National Bankshares Financial Services, Inc., which does business as National Bankshares Insurance Services and National Bankshares Investment Services." National Bankshares Home | National Bankshares, Inc 

Stock Information as of 11/6/20: 

Investment Category: Regional Bank Basket Strategy

NKSH SEC Filings

Dividend: Semi-Annually. The last two payments totaled $1.39 per share. 

National Bankshares, Inc. Common Stock (NKSH) Dividend History | Nasdaq The dividend history is not adjusted for a 2 for 1 stock split paid in April 2006. 

Dividend Yield at $1.39 per share ÷  $26 cost = 5.35% (calculation assumes no change in the penny rate from previous two payments)

National Bankshares, Inc. (NKSH) Company Profile & Key Data | Seeking Alpha (5 year annual dividend growth rate at 4.23%)

Properties as of 12/31/19: 

5 Year Financial History: 

2019 Annual Report at page 18 

5 Year Chart: 

Last Earnings Report (9/30/20): SEC Filed Press Release 

GAPP E.P.S. $.64

Coverage Ratio: 233.98% 

H. Started FRAF-Bought 5 at $22.8; 5 at $22:

Quote: Franklin Financial Services Corp. (FRAF) 

Stock Information as of 11/6/20: 

"Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County (Pennsylvania) with assets of more than $1.5 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-two community banking locations in Franklin, Cumberland, Fulton and Huntingdon Counties."

The headquarters is located at  20 South Main Street Chambersburg, PA. Google Maps

Franklin County, PA. - Google Maps

Investment Category: Regional Bank Basket Strategy

FRAF SEC Filings 

Dividend: Quarterly at $.30 

Dividend Yield at $22.8 = 5.26%

Last Ex Dividend: 11/5/20 (owned as of)

5 Year Chart: 

Properties as of 12/31/19: 

Last Earnings Report (9/30/20): This report was released after my purchase.  SEC Filed EarningsRelease 3Q 2020 

Tangible Book Value Per Share: $29.97

The main negative IMO is the Y-O-Y decline in NIM from 3.65% as of 9/30/19 to 3.02% as of 9/30/20. 

Charge Off Ratio: .02% (excellent)

Total Risk Based Capital Ratio: 17.62% (solid) 

"The Bank has $1.9 million of PPP fees remaining to be recognized at September 30, 2020." 

Sourced from page 15 Investor Presentation for 2020 3rd quarter 

I. Added to DISCA-Bought 1 at $20.7; 1 at $20.58; 1 at $20.25; 1 at $19.47: 

Quote: Discovery Inc. Series A  (DISCA)

DISCA Analyst Estimates

DISCA SEC Filings

Stock Information as of 11/6/20: 

Last Discussed: Item # 1.K Restarted DISCA-Bought 1 at $22.8; 2 at $22.3;  2 at $21.62; 1 at $21.32 (9/19/20 Post)  

Average Cost Per Share: $21.32 (11 shares)

Dividend: None

Last Earnings Report (Q/E 9/30/20, released on 11/5/20): Released after my purchases.  

SEC Filed Press Release

Revenue Breakdowns: 

U.S. 

International 

"Cash provided by operating activities decreased to $860 million from $951 million in the prior year quarter. Free cash flow decreased to $787 million from $884 million, primarily attributable to lower operating results due to the negative impact of COVID-19 on revenues and higher capital expenditures. Capital expenditures increased due to investments in technology infrastructure, software development, and facilities."

Advertising revenues continued to decline reflecting lower demand related to the ongoing pandemic. 

Maximum Position: 50 shares 

Purchase Restriction: Each subsequent purchase must lower my average cost per share 

J. Added to KW-Bought 1 at $14.26; 1 at $13.81; 1 at $13.2: 

Quote: Kennedy-Wilson Holdings Inc.

Stock Information as of 11/6/20: 

Investment Categories: Equity REIT Common and Preferred Stock Basket Strategy/Bond Substitute/Contrarian Value

SEC Filings

Home | Kennedy Wilson

Investors | Kennedy Wilson

2019 Annual Report

KW - Kennedy-Wilson Holdings Inc Profile | Reuters

KW - Kennedy-Wilson Holdings Inc Key Developments | Reuters

Last Discussed: Item # 1.F. Started KW-Bought 10 at $14.89 (8/8/20 Post)

Recent News: Kennedy Wilson Expands Existing $250 Million Share Repurchase Program to $500 Million (11/4/2020)(the "Board of Directors has approved expanding the company’s existing share repurchase program from $250 million to $500 million. As of September 30, 2020, approximately 12.9 million shares of Kennedy Wilson’s common stock, totaling $232 million, have been repurchased since the program was initially authorized in March 2018.")

Average Cost Per Share: $14.48  (13+ Shares)

Dividend: Quarterly at $.22, last raised from $.21 effective for the 2019 4th quarter payment. Dividend Information | Kennedy Wilson

Yield at AC = 6.08%

5 Year Chart: 

Last Earnings Report (Q/E 9/30/20): This report was released after my purchases and is not viewed by me favorably which is the same reaction that I had to the last one. 

Developments in Progress: 

Subsequent Events: 

SEC Filed Press Release 

K. Started PDM (Vanguard Taxable Account)-Bought 10 at $11.45: 

Quote: Piedmont Office Realty Trust Inc. Cl A  (PDM)

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy/Bond Substitute

Dividend: Quarterly at $.21 per share 

Dividend History | Piedmont Office Realty Trust, Inc.

Dividend Yield at $11.45 = 7.34%

Next Ex Dividend: 11/25/20

I discussed this office REIT in my last post and have nothing further to add here. Item # 1.H. (10/31/20 Post) 

L. Added 5 AROW at $26.6 (Schwab Account): 

Quote: Arrow Financial Corp.

AROW SEC Filings 

2019 Annual Report 

AROW Analyst Estimates

I mentioned the first purchase in this account here: Item # 1.L. Bought 5 AROW at $27.33 (10/31/20) The main discussion was in Item #1.K.  to the same post.  I discussed the third quarter report there. 

Average Cost this account : $26.97

Dividend: Quarterly at $.26 per share ($1.04 annually)

Arrow increases the dividend by issuing 3% stock dividends once per year over the past 12 years.

Yield at $26.97:  3.86%

Next Ex Dividend Date: 12/1/20

M. Added to NMFC (Fidelity Taxable)-Bought 5 at $9.48: 

Quote: New Mountain Finance Corp. (NMFC)

NMFC SEC Filings

Stock Information 11/6/20: 

In my last post, I discussed starting a NMFC position in my Schwab taxable account. Item # 1.J. Started NMFC (Schwab Taxable Account)-Bought 10 at $9.61; 5 at $9 (10/31/20 Post). NMFC reported earnings after the publication of that post.  

Average Cost Per Share Fidelity Account: $9.63 (50+ shares)

I restarted a position in this account too early as shown in this chain, reflecting purchases made between 3/10/20 and 3/23/20: Item #4.F. Restarted NMFC; Bought 10 at $11.45; 10 at $11.15; 10 at $11.15; 10 at $9.85; 5 at $8.3; 2 at $7.36; 3 at $5.96; 1 at $5.94; 2 at $4.95 (4/4/20 Post)

Dividend: Quarterly at $.30 

Yield at AC this account: 12.46%

Next Ex Dividend Date: 12/15/20

Net Asset Value Per Share as of 9/30/20: $12.24

Discount at $9.63 AC = 21.32%

Last Earnings Report (9/30/20): New Mountain Finance Corporation Announces Financial Results for the Quarter Ended September 30, 2020 

"third quarter net investment income of $0.30 per weighted average share. At September 30, 2020, net asset value (“NAV”) per share was $12.24, compared to $11.63 at June 30, 2020."

Investment Portfolio Composition: 

Investment Quality Ratings: 10-Q at pages 109-110 

N. Added $50 to FCVSX at $36.01:

Close 11/6/20: FCVSX $38.59 +$0.23 +0.60% 

Convertible funds like this one are loaded with technology convertible bonds and preferred stocks. 

4. Canadian Reset Equity Preferred Stocks: 

A. Added to EBGEF-Bought 5 at $15.4; 5 at $15.25: 

Quote: EBGEF

Last Discussions: Item # 2.A. Added to EBGEF-Bought 5 at $16.5 and 5 at $16.23 (9/12/20 Post); Item # 3.B. Bought 10 EBGEF at $14.81 (7/3/20 Post); Item # 2.C. Added 10 EBGEF at US$13.1 (5/23/20 Post)

Average Cost Per Share: $18.65  (140 shares)

Security: Cumulative, reset equity preferred stock issued by Enbridge Inc priced in U.S.D.s and traded on the U.S. Grey Market. 

Link to all ENB Preferred Shares and Hybrid Securities-Enbridge Inc. (prospectuses are linked)

Par Value: US$25 

Current Coupon: 2.82% spread to the 5 year U.S. treasury note, resets every five years As with other Canadian resets, a fixed coupon was initially paid.  

Daily Treasury Yield Curve Rates

The quarterly fixed coupon penny rate was $.275 (.044 x.  $25 par value =  $1.1 annually 4 quarters =  $.275)

When the coupon reset for five years effective for the 2019 second quarter, the new quarterly penny rate was $.33596 or a 22.17% increase

Current Coupon Penny Rate: Quarterly at $.33596 per share (or $1.344 rounded annually) The coupon is about 5.36% at that penny rate. The U.S. five year note would have been close to 2.56% on the reset date. 2019 Daily Treasury Yield Curve Rates The weakness in the price is mostly attributable IMO to a belief that the coupon will reset in March 2024 at much lower rate. 

Current Yield at $18.78 = 7.21%

Yield at $15.4 (price last purchase) = 8.73%

Next Reset: 3/1/24

Next Ex Dividend: 11/12/20

The price for this security is depressed IMO based on a fear that the coupon will reset in March 2024 at a much lower rate. 

5. Exchange Traded Bonds: 

A. Added 10 SCA at $24.69 (Vanguard Taxable Account): 

Quote: SCA | Stellus Capital Investment Corp. 5.75% Notes due 9/15/2022 Overview 

Issuer: Stellus Capital Investment Corp. (SCM)

Investment Category: Exchange Traded Baby Bonds

Security: Prospectus
Par Value: $25
Maturity Date: 9/15/22
Optional Call: At par on or after 9/15/19
Capital Structure Placement: Senior unsecured bond
Interest: Quarterly 
Last Ex Interest Date: 8/31/20

Next Ex Interest Date: 11/30/20

Dividend History for 5.75% Notes 09/15/2022/Stellus Capital Investment Corp (NYSE:SCA)
Trades Flat

I discussed this purchase in an 11/4/20 comment.

My previous discussions were small ball purchases in my Schwab taxable account. Item # 7.A.  Bought 10 SCA at $19.1 (5/9/20 Post); Item # 4.A. Added To SCA at $23 (7/18/20 Post) 

This brings me up to 15 shares in this account with an average cost of $21.9. 

Yield at AC (Vanguard Account) = 6.56%

Issuer Earnings Report for the Q/E 9/30/20: Stellus Capital Investment Corporation Reports Results for its Third Fiscal Quarter Ended September 30, 2020

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.