ABBV, AEP, BHP, BMY, CSWC, DISCA, ERIC, GRX, IRM, KR, MRK, ORRF, PSEC, REYN, SJI

Economy: 

New home sales in January rise-MarketWatch

+19.3% over January 2020

+4.3% over December 2020

Sourced from Census Bureau Press Release.pdf

Stimulus checks spark 2.4% surge in consumer spending and boost economy in early 2021 - MarketWatch

Personal Income and Outlays, December 2020 | U.S. Bureau of Economic Analysis (BEA)

House passes $1.9 trillion coronavirus stimulus bill (all republicans voted no, true to form in their limitless hypocrisy);  Who qualifies for a $1,400 stimulus payment under the House bill 

++++++

Markets and Market Commentary: 

S & P 500 P/E Ratios as of 2/26/21: 

TTM GAAP : 43.74

Estimated Forward 12 months Non-GAAP: 22.47

Sourced: P/E & Yields

Shiller PE Ratio - 150 Year Chart | Longtermtrends

Shiller PE Ratio = 34.51

Market Cap to GDP-The Buffett Indicator-Updated Historical Chart | Longtermtrends: 1.933

Verizon commits more than $45 billion to 5G spectrum bid  AT & T spent $23.4B. 

Why stock investors are starting to really worry about rising bond yields

U.S. bonds: Treasury yields rise to highest level in more than a year (2/25/21)

Treasury Yield Curve February 2021: 

Daily Treasury Yield Curve Rates

Utilities Offer Yield and a Way to Play Green Energy. And Their Stocks Are Cheap. | Barron's Of the stocks mentioned in that article, I currently own 7. I thought there were 2 glaring omissions: AGR and IDA.   

Earnings Reports from Owned Stocks: 

Bluerock Residential Growth REIT (BRG) Announces Fourth Quarter 2020 Results (core FFO per share $.18 vs. $.21 in the 2019 4th quarter; as of 1/31, collected 97% of January rents; portfolio occupancy at 95.4% as of 12/31/20;  repurchased 2,851,975 shares at an average cost of $9.81; added a $16.4M provision for a credit loss on a preferred equity investment)

Columbia Property Trust (CXP) 2020 4th Quarter Supplemental (4th quarter normalized FFO at $.32 reduced by a charge; GAAP net income of $.87 juiced by a $175.272M gain on the sale of real estate; normalized FFO guidance for 2021 is between $1.23 to $1.3 per share; collected 97.9% of 4th quarter rents) 

Covanta Holding Corporation (CVA) Reports 2020 Fourth Quarter and Full Year Results and Provides 2021 Guidance (E.P.S. at $.09 vs. consensus at -$.013 according to Fidelity; 4th Q adjusted EBITDA at $103M; guides 2021 to free cash flow of $100M to $140M, up from $95M in 2020)

Easterly Government Properties (DEA) Reports Fourth Quarter and Full Year 2020 Results (FFO and Adjusted FFO per share = $.32 and $.30 respectively; CAD per share = $.23; quarterly dividend at $.26; maintained "guidance for 2021 FFO per share on a fully diluted basis in a range of $1.28 - $1.30"'; "wholly owned 79 operating properties in the United States encompassing approximately 7.3 million leased square feet, including 77 operating properties that were leased primarily to U.S. Government tenant agencies and two operating properties that were entirely leased to private tenants.")

Enbridge (ENB) Reports Strong 2020 Financial Results (GAAP E.P.S. at C$.88; Adjusted E.P.S. at C$.56; distributable cash flow C$2.209B and at C$9.4B for the year)  

Fortis Inc. (FTS) Reports 2020 Results (Adjusted E.P.S. at C$.69 for the 4th Q, up from C$.62 in the 2019 4th quarter; 2020 4th Q net income at C$320M; "targeting average annual dividend growth of approximately 6% through 2025")

Healthcare Trust of America, Inc. (HTA) Reports 2020 Results and 2021 Earnings Guidance ("Funds From Operations ("FFO") as defined by NAREIT of $0.43 per diluted share, an increase of 4.9% compared to Q4 2019"; occupancy at 89.1% with leased at 89.8%; Funds Available for distribution reported at $80.3M or $.362 per share using diluted share count of 222,099M) 

IDACORP, Inc. (IDA) Announces Fourth Quarter and Year-End 2020 Results, Initiates 2021 Earnings Guidance (E.P.S. at $.741 vs. consensus at $.675 according to Fidelity; E.P.S. at $4.69 for 2020, up from $4.61 in 2019; GAAP E.P.S. guidance for 2021 between $4.6 to $4.8; IDACORP Financial Services, Inc. had $3M less income in the 2020 4th quarter compared to the year ago quarter due to  "a decrease in distributions from the sale of low-income housing properties"; at Idaho Power, customer "growth increased operating income by $3.2 million in the fourth quarter of 2020 compared with the fourth quarter of 2019, as the number of Idaho Power customers grew by 2.7 percent during the twelve months ended December 31, 2020."; usage by commercial customers decreased 2% at Idaho Power due to the pandemic) There is no good reason IMO why IDA needs to exist as an independent company. The company needs to be acquired by a larger utility.  

Piedmont Office Realty Trust (PDM) Reports Fourth Quarter and Annual 2020 Results (core FFO per share at $.46:"collected over 99% of billed tenant receivables for the year ended December 31, 2020"; "sold a portfolio consisting of its final three assets located in New Jersey:  600 Corporate Drive and 200 and 400 Bridgewater Crossing, for approximately $130 million, or $176 per square foot, resulting in a gain of $14.6 million.")

PPL Corporation Reports 2020 Earnings (adjusted E.P.S. of $.59, up from $.57 in the 2019 4th quarter; consensus at $.61; selling its U.K. utility business this year remains on track; declared regular quarterly dividend of $.415 per share) When and if PPL completes the sale of its U.K. utility, the company will be a U.S. focused regulated electric and gas operations in Kentucky and Pennsylvania and may then become an acquisition target. 

TC Energy (TRP) reports record earnings again in 2020 (4th quarter net income at C$1.1B or C1.2 per share; adjusted to C$1.15; consensus at C$1 per share) 

Vornado Realty Trust (VNO) Announces Fourth Quarter 2020 Financial Results (4th quarter FFO at $.72, down from $1.63 in the 2019 4th quarter; "adjusting for the items that impact period-to-period comparability. . .FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarters ended December 31, 2020 and 2019 was $127,217,000 and $171,030,000, or $0.66 and $0.89 per diluted share, respectively.")  

Tennessee Municipal Bond Payments 3/1/21-Fidelity Account: 

+++

1. Small Ball-all about risk mitigation: 

Last month was noteworthy for widespread short squeezes among heavily shorted stocks. I discuss below selling some stocks into those artificial, non-fundamentally driven price pops. 

Short position information can be found at Yahoo Finance by clicking the "Statistics" tab. 

A. Eliminated KR in Schwab Account-Sold 20+ at $38.65:   

Quote: Kroger Co (KR)

Closing Price 2/26: KR $32.21 -$0.20 -0.62% 

KR | Kroger Co. Analyst Estimates | MarketWatch

KR SEC Filings

I mentioned this sell in a 1/27/21 comment. 

Profit Snapshot: +$137.43

Last Discussed: I discussed the last earnings report in this post: Item # 2.C. Added to KR in Vanguard Taxable Account-Bought 2 at $30.64 and 10 at $30.5 (12/5/20);  SEC Filed Press Release The next report will be issued in a few days. I still own shares in my Vanguard and Fidelity taxable accounts.

Kroger Stock Has a New Critic. Here's Why. | Barron's The Bank of America/Merrill Lynch analyst downgraded Kroger to underperform from neutral and reduced the PT to $28 from $40. The analyst viewed the stock as expensive at about 10 times the TTM E.P.S. ($3.23 per share vs. 2.19 for the prior TTM) The rationale is that Kroger was a beneficiary of the pandemic and expenditures for scaling up online sales will be a headwind. BofA Turns Bearish On Kroger Ahead Of Tough Comparisons | Benzinga  The E.P.S. consensus for the current fiscal year is at $2.7. The next earnings report is scheduled for release on 3/4/21. This will be for the F/Y ending in late January or early February 2021. The 2020 F/Y ended on 2/1/2020. 2020 F/Y Annual Report 

The Y-O-Y earnings comparison critique for companies whose revenues and profits increased due to the pandemic is a common refrain among analysts. The fundamental problem IMO with the analysis is that it results in an incorrect opinion about the valuation using normalized earnings growth. Even if the $2.7 E.P.S. for the 2022 F/Y proves spot on, and I suspect it will be too low, that is still a $.51 per share increase from the $2.19 number for the F/Y ending 2/1/20 or +23.29%.  

Excerpt Annual Report for the F/Y ending 2/1/20:

Page 21

Other stocks are experiencing the same myopic downgrades including General Mills and Hologic (HOLX). But the consensus negative vibe from analysts will likely continue to restrain price appreciation and pressure prices to the downside.    

I am buying more on grocery items sold by Amazon, with free delivery to my house the next day, and less from Kroger. I do view that as a negative for Kroger, due in part to the costs necessary to duplicate that online service. I don't believe Amazon has duplicated the fuel point benefit that I receive from Kroger, the selection is substantially less at Amazon and the costs for Amazon groceries are generally higher.   

B. Pared IRM in Fidelity Taxable-Sold 2 at $35.63; 5 at $36.8: 

Quote: Iron Mountain Inc (IRM)

Closing Price 2/26/21: IRM $34.79 +$0.19  +0.55% 

Website: Data & Records Management | Shredding | Iron Mountain

SEC Filings

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

I mentioned this sell in a 1/27/21 comment. As of 1/15/21, the short position as a percentage of the float was at 23.86%. The price rise last month was probably linked to a short squeeze.  

Profit Snapshot: $54.15

New Average Cost this Account: $25.83

Snapshot after pares Intraday 1/27/21

Last Buy Discussion: Item # 2.E. Started IRM in Schwab Taxable Account-Bought 10 at $26.8; 5 at $25.8; 5 at $25.25; 5 at $24.9 (12/5/20 Post) I discussed the 2020 third quarter earnings report in that post. 

Other recent buy discussions: Item # 1.B. Added 3 IRM at $22.99; 2 at $22.31 (6/20/20 Post)(discussed 2020 first quarter report therein); Item # 2.F. Added to IRM in Fidelity Taxable-Bought 1 at $26.88; 2 at $26.2; 1 at $25.7; 1 at $25.52; 1 at $24.96 (12/5/20 Post)(no substantive discussion); Item # 2.A. Added 1 IRM at $26.46; 1 at $26.07; 1 at $25; 2 at $23.95; 1 at $23.3; 1 at $23.76; 1 at $24.33; 1 at  $22.61; 1 at $24.33; 1 at $22.6 and 1 at $21.79 (5/2/20 Post) 

Average Cost Per Share in Fidelity Account: $25.83 (34+ shares)

Dividend: Quarterly at $.618 per share ($2.472 annually)

Iron Mountain - Stock - Dividend History and Tax Treatment

Yield at AC =  9.57%

Last Earnings Report (Q/E 12/31/20): Released after my pare. Iron Mountain Reports Fourth Quarter and Full Year 2020 Results or SEC Filed Press Release The 4th quarter GAAP earnings included a $299.248M gain on the sale of real estate. The FFO and AFFO calculations exclude that gain. Iron Mountain Announces Industrial Sale-Leaseback Transaction with Blackstone Real Estate Income Trust (12/3/20)

2021 Guidance:

The investor response to this report has been positive. 

Other Sell Discussions: 

Item # 1.B. Pared IRM-Sold 15 at $33.04 (2/22/20 Post); Item # 1.F. Sold 10 IRM at $32.1 (2/12/20 Post); Item # 1.C. Sold 10 IRM at $33.91-Used Commission Free Trade (12/26/18 Post); Item # 3 Sold 50 IRM at $33.82 Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha 

The largest gain was a 50 share flip in 2016: 

2016 50 shares +$398.06 

IRM Trading Profits to Date: $529.3 

C. Eliminated DISCA-Sold 10 shares at $42.68: 

Quote: Discovery Inc. Series A  (DISCA)

Closing Price 2/26/21: DISCA  +$53.03 +$1.71 +3.33% 

DISCA Analyst Estimates

DISCA SEC Filings

Profit Snapshot: +$215.08

I mentioned this sell in a 1/27/21 comment. As of 12/31/20, the short position as a percentage of the float was at 35.3%. The stock pop in January was probably due to a short squeeze. 

Buy Discussions: 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); Item # 3.I. Added 1 DISCA at $20.7; 1 at $20.58; 1 at $20.35; 1 at $19.47 (11/7/20 Post)

Last Earnings Report (Q/E 12/30/20): Released after my sell. SEC Filed Press Release  

Discovery launched a subscription streaming service called "discovery +" earlier this year. discovery+ | Stream 55,000+ Real-Life TV Episodes (monthly at $6.99 ad free). As of 2/22/21, the company had over 11M subscribers and may exceed 12M by month's end. I have no interest in subscribing to it. 

Last Sell Discussion: Item #1.J. and 1.K.(12/25/20 Post)(profit snapshots = $50.57) 

Most of my past exposure has been in Discovery's senior unsecured debt.  

D. Pared SJI-Sold 5 at $23.91: 

Quote: South Jersey Industries Inc

SJI - South Jersey Industries Inc Profile | Reuters

SJI Analyst Estimates | MarketWatch

SJI SEC Filings

Profit Snapshot: +$4.55

Last Discussed: Item # 3.A. Started SJI-Bought 5 at $23; 5 at $22.6; 5 at $22.2; 5 at $20.87; 5 at $20.5 (1/1/21 Post) 

New Average Cost per share this Account: $21.54, down from $21.83 prior to the pare

Dividend: Quarterly at $.3025 per share ($1.21 annually)

SJI Raises Dividend for 22nd Consecutive Year

Yield at $21.54 AC = 5.62%

Next Ex Dividend: 3/16/21

Last Earnings Report (Q/E 12/31/20) Released after my pares. SEC Filed Press Release

GAAP E.P.S. = $.69

Non-GAAP = $.62

Consensus at $.537 according to Fidelity 

"SJI invested $84.0 million in traditional clean energy investments in 2020, recognizing $21.3 million in investment tax credits (ITCs)."

E. Pared SJI in Fidelity Taxable Account-Sold 5: 

See Item # 1.G. Above

2 shares sold at $25.63: 

Profit Snapshot = +$11.68

New Average Cost this account:  $21.2 (15+ shares)

Yield at AC = 5.71%

F. Started ORRF-Bought 10 at $18.15; 5 at $17.5; 5 at $17.25: 

Quote: Orrstown Financial Services Inc. 

Closing Price 2/26/21:  ORRF $19.48 -$0.02 -0.10% 

"With $2.75 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services through offices in Cumberland, Dauphin, Franklin, Lancaster, and Perry Counties, Pennsylvania and Anne Arundel, Baltimore, Howard, and Washington Counties, Maryland." 

ORRF Analyst Estimates | MarketWatch

SEC Filings 

Average Cost Per Share: $17.76 (20 shares)

Dividend: Quarterly at $.18 per share ($.72 annually), raised from $.17 effective for the 2021 first quarter payment. 

Yield at AC = 4.05%

Last Ex Dividend: 1/29/21

Last Earnings Report (Q/E 12/30/20): SEC Filed Press Release 

Tangible Book Value Per Share = $19.93, up from $17.65 as of 12/31/19

E.P.S. = $.91 (beat by $.32)

2020 E.P.S. = $2.4 

TTM P/E at AC of $17.76 = 7.4

ROA = 1.47%

ROE = 17.01%

NIM = 3.73%

Efficiency Ratio = 58.5%

NPL Ratio = .52%

NPA Ratio = .37%

Coverage Ratio = 195%

Total Risk Based Capital Ratio = 15.6% (holding co.)

"As of December 31, 2020, the Bank had active COVID-19 related deferred loans totaling $18.2 million, or 1.15% of its total loan portfolio, excluding PPP loans. This compared to $78.4 million, or 5.0% of total loans, excluding PPP loans, at September 30, 2020 and $239.3 million in active COVID-19 deferrals, or 15.1% of total loans, excluding PPP loans, at June 30, 2020."

F. Started ERIC-Bought  10 at $12.25:

Quote: Telefon AB L.M. Ericsson ADR 

Closing Price 2/26/21: ERIC $12.53 -$0.13 -1.03% 

ERIC Analyst Estimates | MarketWatch

Company Website: Ericsson - Helping to shape a world of communication

Results are reported in Swedish Krona. 

Swedish Krona to US Dollar Rates

Ordinary Share Quote: Telefon AB L.M. Ericsson Series B (Sweden: Stockholm) 

1 ADR = 1 Ordinary Share 

This purchase was in response to a stronger than expected 2020 4th quarter report. SEC Filing 

Actual E.P.S. USD-ADR = $.266

Consensus E.P.S. in USDs-ADR = $.213

Two Main Business Segments: 

Dividends are paid semi-annually in an inconsequential amount. Dividend and record dates 2020 - Ericsson

ERIC is a beneficiary of the 5G rollout. 

Last Dividend Date: 10/1/2020 

G. Added to ABBV- Bought 1 at $103.25: 

Quote: AbbVie Inc.

Closing Price 2/26/21: ABBV $107.74  +$0.41 +0.38% 

ABBV  Analyst Estimates | MarketWatch

ABVV SEC Filings

Investor Overview | AbbVie

Pipeline - Our Science | AbbVie

ABBV experienced a small and temporary price increase when Berkshire Hathaway announced a significant increase in its position.  The Berkshire SEC filing was for the 2020 4th quarter and showed a 20% increase in the ABBV position to 25.5M shares. Warren Buffett’s Berkshire Hathaway Bought Verizon and Chevron. Here’s What Else It Traded. | Barron's

Last Discussed: Item # 1.E. Started ABBV as a Placeholder-Bought 1 at $106.62 (1/23/21 Post) As noted in that post and elsewhere, the main problem confronting ABBV is the Humira U.S. patent expiration in 2023. Humira revenues last year were reported at $19.8B.

AC  this account = $104.94 (2 shares)

Dividend: Quarterly at $1.3 per share ($5.2 annually)

AbbVie Declares Quarterly Dividend

Yield at AC = 4.96%

Next Ex Dividend = 4/14/21

Last Earnings Report (Q/E 12/30/20): This report was released after this purchase. AbbVie Reports Full-Year and Fourth-Quarter 2020 Financial Results

Consensus at $2.85 Non-GAAP according to Fidelity 

I discussed this report in a 2/3/21 comment. As noted there, investors responded positively to this report, most likely due to revenues generated by ABBV's new drugs and their projected growth. 

This statement was made during the earnings conference call: "We expect to combine contribution from Rinvoq and Skyrizi to nearly double in 2021 to approximately $4.6 billion based on their continued strong uptake in RA and psoriasis as well as Rinvoq anticipated approvals in PSA, ankylosing spondylitis and atopic dermatitis later this year." 

Key Product Revenues: 

Several brokers increased their price targets in response to this report. 

Mizuho from $117 to $126, reiterates buy. 

SVB Leerink from $128 to $140, maintains overweight

RBC Capital from $129 to $135, maintains outperform. 

H. Started GRX-Bought 10 at $12.27; 10 at $12.14: 

Quote: Gabelli Healthcare & Wellness Trust Overview-A CEF 

Closing Price 2/26/21: GRX $12.09 +$0.03 +0.25% 

The fund owns healthcare and consumer staple stocks. I prefer to invest in individual stocks in those two sectors; and consequently my purchases of this CEF will be limited to no more than 100 shares. 

SEC Filings 

Sponsor's Website: GAMCO

Top 10 Holding as of 12/31/20: 

Leveraged: Yes with preferred stock. The fund recently redeemed its Series B preferred stock that had a 5.875% coupon, funding the purchase with the private placement of a 4% coupon preferred series C stock which is subject to a mandatory redemption on 12/18/24. Gabelli Healthcare & WellnessRx Trust Announces the Issuance of $40 Million of 4.00% Series C Cumulative Preferred Shares 

Average Cost Per Share: $12.21 (20 shares)

Dividend: Quarterly at $.15 per share 

Recent dividends have not been sourced from ROC. Capital gains provide must of the dividend support.   

Yield at AC = 4.91%

Last Ex Dividend: 12/10/20 

Data Date of 2/2/21 Trade: 

Closing Net Asset Value Per Share: $14.13

Closing Market Price: $12.20 

Discount: -13.66%

Sourced: GRX- CEF Connect (click "pricing information" tab)

Gabelli Healthcare & WellnessRx Trust- Last SEC Filed Shareholder report for the semiannual period ending 6/30/20 

Rated 1 star by Morningstar

I. Restarted MRK-Bought 1 at $78.12; 1 at $75.9; 1 at $75.13; 2 at $74.5; 1 at $73.49: 

Quote: Merck & Co. Inc. (MRK)

Closing Price 2/26/21: MRK $72.62 -$2.00 -2.68% 

SEC Filings 

Pipeline - Merck.com

2020 Annual Report (information on patent expirations can be found at page 14; 2020 drug approvals are listed at pp. 4-6)

Investment Categories: Bond Substitute/Dividend Growth/Contrarian Value 

Average Cost Per Share: $75.27 (6 shares)

Dividend: Quarterly at $.65 per share ($2.6 annually); last raised from $.61 effective for the 2021 first quarter payment. 

Yield at AC = 3.45%

Next Ex Dividend: 3/12/21

Last Round-Trips: 

Item # 2.A. Sold 10 MRK at $61.3 (7/15/18 Post)(profit snapshot = $65.7)-Item # 5.B. Bought 10 MRK at $54.53 (2/15/18 Post) When discussing the sell, I made the following comment: "I still view the investment case for Merck to be confined largely to Keytruda's growth."  

Item 1.C. Sold 10 MRK at $61.2 (1/28/18 Post)(profit snapshot $69.17)-Item # 2.A. Bought 10 MRK at $54.29 (12/7/17 POST)

ITEM # 2.B. Sold 113 MRK at $65.28 (2/19/17 Post)(profit snapshot = $741.19)

Last Earnings Report (Q/E 12/30/20): Merck Announces Fourth-Quarter and Full-Year 2020 Financial Results 

Non-GAAP E.P.S. at $1.32 

Consensus Non-GAAP E.P.S. at $1.379 according to Fidelity

Full Year Non-GAAP at $5.94

Full Year GAAP at $2.78, reflecting charges related to acquisitions, collaborations, and intangible asset impairments. 

2021 Outlook: Full Year GAAP E.P.S. between $5.52 and $5.72; non-GAAP at between $6.48-$6.58 

Expects Organon Spin-off in late second quarter (about 14% of revenues; slower growth drugs; MRK expected to receive a $8.5B to $9B special dividend)

Main Product Revenues: 

In 2020, Keytruda worldwide revenues increased by 30% to 14.4B, or approximately 30% of total sales that grew only 2% to $48B Y-O-Y. 

Merck failed in its first Covid-19 vaccine effort.  

Merck disclosed in its 10-K filing, not in a press release, that the FDA wanted more data on MK-7110 that improved outcomes for Covid-19 hospitalized patients. FDA tells Merck to show more data for its OncoImmune COVID-19 drug as EUA pushed back | FierceBiotech Merck acquired that drug in a $425M buyout of OncoImmune. Merck inks $425M OncoImmune buyout to bag COVID-19 drug | FierceBiotech The decline in MRK's stock price yesterday may be due to that disclosure and/or the announcement mentioned below. 

Merck announced last Thursday that it will acquire Pandion Therapeutics (PAND) for $60 per share or approximately $1.8B. Merck to Acquire Pandion Therapeutics - Merck.com (2/26/21)

I would hope that Merck ends up spending the cash flow from Keytruda on drugs that are approved and provide decent returns on capital. I am not sure that will happen, so buying is tepid even as the price continues to decline. 

Broker Reports: 

Morningstar (2/5/21): 4 stars with a FV of $100

Argus (11/9/20): Buy with a $95 PT 

S & P (1/25/21): 4 stars with a $90 PT

The next earnings report is expected on 4/29. 

Merck experienced several trial failures of potentially major drugs and that has considerably cooled my interest. (e.g. Merck Discontinues Development of SARS-CoV-2/COVID-19 Vaccine Candidates; Continues Development of Two Investigational Therapeutic Candidates (1/25/21); Merck BACE1 drug fails in prodromal Alzheimer’s phase 3 | FierceBiotech (2/14/18);  Merck Provides Update on Anacetrapib Development Program (Will not submit FDA application)(10/11/17) 

K. Started BHP-Bought 2 at $66.95:

Quote: BHP Group Ltd. ADR 

Investor centre | BHP

BHP Profile | Reuters

BHP Key Developments | Reuters

Closing Price 2/26/21: BHP $75.91 -$2.13 -$2.73% 

BHP Analyst Estimates | MarketWatch

BHP sees robust China demand, declares dividend bonanza | Reuters (2/15/21)

Last Earnings Report: BHP Results for the half year ended 31 December 2020 

Note the dividend at US$1.01 per share. 

Ex on 3/4/21  Dividend payments | BHP

L. Eliminated CSWC in Schwab Taxable-Sold 10 at  $18.8: 

History this Account: 

Quote:  Capital Southwest Corp.- A BDC

Closing Price 2/26/21: CSWC $21.90 +$0.42 +1.96% 

CSWC SEC Filings

Management: Internal

Profit Snapshot: +$58.5

I still own 20 shares in another taxable account. Item # 1.B. Added 10 CSWC at $12.9(8/8/20 Post); Item # 4.F. Started CSWC-Bought 10 at $13.3 (6/27/20 Post)

2020 Dividend Tax Classifications: 

SEC Filed Press Release

Next Dividend: Quarterly at $.52 per share consisting of a regular at $.42 per share and a special of $.10. 

Ex Dividend: 3/12/21

Last Earnings Report (Q/E 12/31/20):  SEC Filed Press Release

NII per share = $.45

NII Pre-Tax per share = $.52 (quarter had an extraordinary tax event related to writing off a deferred tax asset of an acquisition) I view this NII number to be the relevant one. 

NAV Per Share = $15.74

"One credit investment currently on non-accrual with a fair value of $0.7 million, representing 0.1% of the total investment portfolio"

10-Q 

M. Added to BMY in Fidelity Taxable-Bought 1 at $59.9; 3 at $59.7: 

Quote: Bristol Myers Squibb Co.

Closing Price 2/26/21: BMY $61.33 -$0.77 -1.24% 

BMY Analyst Estimates | MarketWatch

BMY SEC Filings

2020 Annual Report 

Investment Categories: Bond Substitute/Dividend Growth/Contrarian Value

Last Buy Discussions: Item # 3.A. Started BMY in Schwab Taxable account-Bought 5 at $63; 1 at $61.5; 1 at $61.24; 2 at $61 and 2 at $60.4 (12/19/20 Post); Item #3.M. Added to BMY in Fidelity Taxable- Bought 2 at $61.05 (1/1/21 Post)

Key Product Sales 2020 4th Quarter: 

Average Cost per share this account: $61.01 ( 15+ shares )

Dividend History: 

Dividend: Quarterly at $.49 per share ($1.96 annually)

Yield at AC = 3.21%

Last Ex Dividend: 12/31/20

Last Earnings Report (Q/E 12/30/20): SEC Filed Press Release This was a messy quarter with charges related to recent acquisitions. 

GAAP Loss of $4.46 per share

Non-GAAP E.P.S. = $1.46

"2021 GAAP EPS guidance in the range of $3.12-$3.32 and is increasing its non-GAAP EPS guidance range from $7.15 - $7.45 to $7.35 - $7.55". Both GAAP and Non-GAAP guidance assumes constant exchange rates. 

Revlimid, a drug acquired by BMY through its Celgene acquisition, accounted for $3.28B in worldwide revenues for the quarter.  Comprehensive patent expiration expires in 2022. BMY is entering into settlements that allow generic manufacturers to sell limited quantities starting in 2022, with restrictions remaining in place until 1/31/2026. The amounts that be sold starting in 2022 are not being disclosed by BMY. Bristol Myers Squibb - Bristol Myers Squibb Announces Settlement of U.S. Patent Litigation for REVLIMID® (lenalidomide) with Cipla; Bristol Myers Squibb - Bristol Myers Squibb Announces Settlement of U.S. Patent Litigation for REVLIMID® (lenalidomide) With Dr. Reddy’s Investors are in the dark about how much generic sales will eat into Revlimid revenues  starting in 2022. 

Given the importance of Revlimid, and its upcoming generic competition, investors are pricing BMY's stock at significantly less than 10 times 2021 non-GAAP guidance. A similar approach is being taken with ABBV due to the upcoming patent expiration for Humira.  

BMY plans to submit this quarter a new drug application for mavacamten, a drug acquired through BMY's recent acquisition of  MyoKardia. Mavacamten shines in phase 3 trial; Mavacamten Favorably Impacts Cardiac Structure in Obstructive Hypertrophic Cardiomyopathy | Circulation; Mavacamten for treatment of symptomatic obstructive hypertrophic cardiomyopathy (EXPLORER-HCM): a randomised, double-blind, placebo-controlled, phase 3 trial - The Lancet.

Other News Since Last Discussion: 

Bristol Myers Squibb Receives European Commission Approval for Inrebic® (fedratinib) for Adult Patients with Newly Diagnosed and Previously Treated Myelofibrosis (2/8/21)

Adjuvant Treatment with Opdivo (nivolumab) Demonstrates Statistically Significant and Clinically Meaningful Improvement in Disease-Free Survival in Patients with Muscle-Invasive Urothelial Carcinoma in Phase 3 CheckMate -274 Trial (2/8/21) 

U.S. Food and Drug Administration Approves Bristol Myers Squibb’s Breyanzi (lisocabtagene maraleucel), a New CAR T Cell Therapy for Adults with Relapsed or Refractory Large B-cell Lymphoma (2/5/21)

Broker Reports: 

Morningstar (2/4/21): 3 stars with a FV of $68

Argus (2/5/21): Buy with an $83 PT

S & P (2/5/21): 4 stars with a $75 PT 

N. Added BMY in Schwab Taxable Account-Bought 1 at $59.77: 

See Item # 1.M. Above. 

Average Cost this Account = $61.55 (17+ shares)

Yield at AC this account = 3.18%

O. Added 1 AEP at $75.66: 

Quote: American Electric Power Co.

Closing Price 2/26/21: AEP $74.85 -$1.45 -1.90% 

AEP Analyst Estimates | MarketWatch

AEP SEC Filings

Investment Categories: Bond Substitute/Dividend Growth

Last Discussed Item # 1.M. Added to AEP-Bought 1 at $77.58 (2/6/21 Post) 

Average Cost Per Share: $77.61 shares (3 shares)

Dividend: Quarterly at $.74, last raised from $.70 effective for the 2020 4th quarter payment. 

Yield at AC = 3.81%

Last Ex Dividend: 2/9/21

Last Earnings Report (Q/E 12/30/20): AEP Reports Strong 2020 Earnings; Raises 2021 Operating Earnings Guidance or SEC Filed Press Release 

GAAP E.P.S. at $.88 ($435.5M)

Operating E.P.S. at $.87

Consensus at $.789 according to Fidelity 

"raises 2021 operating earnings (non-GAAP) guidance range to $4.55 to $4.75 per share; maintains 5% to 7% long-term growth rate based on new guidance."

Revenues for the 4th quarter = $3.6B

Purchase Restriction: 1 share lots for now with each purchase at the lowest price in the chain. Utility stocks are being hammered by the rise in interest rates.  

P. Multiple Small Ball Purchases of PSEC-Sold 105 and Kept 42+: 

Quote: Prospect Capital Corp.  (PSEC) -A Disfavored BDC

Closing Price 2/26/21: PSEC $7.29 +$0.01 +0.14% 

SEC SEC Filings 

Investment Category: Bond Substitute

I have classified PSEC in the past as a deservedly hated BDC. This company has a long history of net asset value destruction and dividend cuts. Recent results have been mildly encouraging however. I will trade the stock when my gut informs me that the price has fallen to a level where I have a decent shot at realizing a total return in excess of the monthly dividends.  

Profit Snapshot: $38.88

Net Asset Value Per Share History: 

12/30/20 =  $8.96

12/3/19    =  $8.66

6/30/19   =  $9.01       10-K at p. 67 

6/30/18   =  $9.35

6/30/17   =  $9.32

6/30/15   =  $10.31

6/30/14   =  $10.56    PSEC 2014 10-K

6/30/09  =  $12.40    Form 10-K at page 46

6/30/08  =  $14.55

6/30/06   =  $15.31

IPO in July 2004 at $15   

Average Cost Remaining Shares: $5.12 (42+ shares)

Remaining Shares: 

Discount to $8.96 NAV per share at $5.12 =  -42.86%

Compare with the premium price for CSWC discussed above. 

Dividend: Monthly at $.06 per share ($.72 annually)

Dividend History: Note the downtrend. 

Yield at AC = 14.06%

Last Ex Dividend: 2/25/21

Last Earnings Report (Q/E 12/30/20): SEC Filed Press Release

NII Per Share: $.21

Net Asset Value Per Share: $8.96

Non-Accrual Loans as a % of Total Assets: .7% (calculated at "fair value")

Q. Added to REYN Schwab Taxable-Bought 2 at $27.9; 2 at $27.67:

Quote: Reynolds Consumer Products Inc. (REYN)

Last Discussed: Item # 1.J. Started REYN in Schwab Taxable Account-Bought 5 at $29.95; 5 at $28.95; 2 at $28.58 (2/20/21 Post) I discussed the 2020 4th quarter earnings report in that post. 

New Average Cost Per Share = $28.93 (16 shares)

Dividend:  Quarterly at $.23 ($.92 annually)

Yield at AC = 3.18%

Last Ex Dividend: 2/22/21 

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.