Economy:
January CPI: +.3% seasonally adjusted
Annual Y-O-Y at 1.4% non-seasonally adjusted
Raising minimum wage to $15 would cost 1.4 million jobs, CBO says Anyone making this kind of estimate is guessing. IMO, there would initially be jobs losses but the long term impact would be to generate increased consumer spending that would end up creating more jobs.
New unemployment claims for the W/E 2/6/21 at 793K with the previous week being revised up to 812K from 779K. DOL News Release
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Markets and Market Commentary:
Close on 2/12/21: VIX 19.97 -1.28 -6.02%: CBOE Volatility Index That is the first close below 20 since 2/21/20. VIX Historical
The VIX close below 20 has some importance in my Vix Asset Allocation model explained in these posts. Vix Asset Allocation Model - South Gent | Seeking Alpha (10/17/14); Vix Asset Allocation Model Explained Simply With as Few Words as Possible (5/17/2009 Post)
After increasing my stock allocation during the VIX spikes last year, I have kept my stock allocation relatively constant give or take $20K waiting for the VIX to return to below 20 movement before deciding whether to change the allocation.. I will wait a few more days to see whether the VIX can maintain daily closes below 20 before deciding on a course of action. The decision will be influenced by a lack of alternatives to stocks.
Shiller PE Ratio = 35.83
S & P 500 P/E Ratios as of 2/12/20:
TTM GAAP: 44.94
Non-GAAP Estimated Forward 12 months: 22.84
Treasury Yield Curve February 2021:
Consumer credit growth slowed in December - MarketWatch
So far, the perception that intermediate and longer term interest rates will continue up, while short term rates will be anchored near zero through ZIRP, has benefited banks and life insurance company stocks. Utility and telephone stocks have been pressured to the downside.
Through 2/12/21, YTD return for KRE was +17.57% compared to 5.02% for SPY. SPDR® S&P 500 ETF Trust (SPY) Performance; SPDR® S&P Regional Banking ETF (KRE) Performance The promised land for regional banks is an increased NIM applied to more loans with loan losses falling due to a stronger economy. MetLife, Inc. has a YTD total return of 21.09%.
CoreLogic Enters into Definitive Agreement to Be Acquired by Stone Point Capital and Insight Partners for $80 Per Share in Cash I own 4 CoreLogic 7.55% SU bonds maturing in 2028, originally issued by First American. Bond Detail I took a snapshot yesterday of the 2 owned in my Fidelity taxable account:
I do not like owning bonds issued by a company that goes private; but this bond is so hard to sell that I may end up owning 3 of them until maturity. I will check periodically to see whether there is someone willing to buy my small lots at an acceptable price. These CoreLogic bonds are leftovers from my Junk Bond Ladder Strategy implemented in 2011-2012. The bonds are still rated in junk territory.
The Biden Stock Market Won’t Be Like the Trump Market. What to Expect. | Barron's This article is an interview with the Bank of American investment strategist Savita Subramanian, who has been that firm's chief strategist since 2011. She has a modest 3,800 target for the S& P 500 this year. Savita is predicting that a rise in inflation and interest rates will result in a contraction of growth stock multiples: "In 14 of the past 14 recessions, the recovery was led by value and cyclical. So, we’re going to see a value cycle. Growth stocks are overly discounting this low-rate, low-growth environment." She is recommending an overweight in value stocks that are sensitive to an economic recovery including financials, industrials, energy and health care. I do not see health care as part of that grouping. She is also expects small caps to outperform large caps for several years.
Bond yields are surging. But here’s the bigger threat to stock markets, according to SocGen strategists - MarketWatch The ten year treasury yield has "surged" since hitting .52% on 8/4/20. However, the current yield near 1.2% is still non-threatening as an alternative to stocks. Yields have simply moved from extremely abnormally low to one that is somewhat less extreme. 10 Year Treasury Rate since 1870 Note that the yield was significantly higher in the Great Depression than now.
24 bank stocks with dividends of at least 3.57%, three times what 10-year Treasurys pay - MarketWatch I currently own 15 of the 24.
Junk Bonds Now Yield Less Than 4%, a Record Low. What That Means for Investors. | Barron's
The fifth commodity supercycle has started, says highly-regarded JPMorgan strategist - MarketWatch
The small-cap stock rally is here to stay. Why these analysts say it’s bad news for the S&P 500 - MarketWatch Over the past six months, the total return spread of Russell 2000 over the S & P 500 went over 25% for the 8th time since 1960. In the prior 7 times this has happened, the small caps continued to significantly outperformed large caps.
Earnings Reports-owned stocks:
Bristol Myers Squibb (BMY) Reports Fourth Quarter and Full-Year Financial Results for 2020 (Non-GAAP E.P.S. of $1.46, up from $1.22 in the 2019 4th quarter; 2020 Non-GAAP at $6.44; 4th quarter GAAP E.P.S. reported at ($4.45) which includes "costs and expenses resulting from the IPRD charge related to the MyoKardia asset acquisition, purchase price accounting from the Celgene Acquisition, contingent value rights fair value adjustments, equity investment gains, intangible assets impairment charges and other acquisition and integration expenses"; revenues at $11.068B; Y-O-Y Pro Forma Revlimid +18% to $3.28B; Eliquis + 12% to $2.269B; Opdivo +2% to $1.763B; Orencia + 9% to $867M; Pomalyst/Imnovid +21% to $835M; Sprycel +3% to $564M; Yervoy +22% to $471M; 2021 GAAP 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 assume current exchange rates"; "expects significant cash flow generation of $45-$50 billion dollars from 2021 -2023." Messy quarter with acquisition related charges that will continue into 2021)
Gilead Sciences (GILD) Announces Fourth Quarter and Full Year 2020 Financial Results {Non-GAAP E.P.S. at $2.19 vs. consensus at $1.986 according to Fidelity (excludes charges in the fair value of GILD's investment Galapagos and acquisition related charges; see also Gilead Sciences Announces 4.4 Percent Increase in First Quarter 2021 Dividend to $.71 per share}
Landmark Bancorp (LARK) Announces Record Earnings for the Fourth Quarter and Year Ended (E.P.S. at $1.18, up from $.67 in the 2019 4th quarter; NIM at 3.87%, up from 3.61% in the 2019 4th quarter; ROE = 18.1%; ROA = 1.93%; gains on sale of loans = $4.194M, up from $1.41M in the 2019 4th quarter; NPA Ratio = 1.03%; NPL Ratio = 1.47%; Coverage Ratio = 83.45%)
MetLife (MET) Announces Full Year and Fourth Quarter 2020 Results (GAAP E.P.S. at $.14, adjusted to $2.03 ex items vs consensus non-GAAP at $1.516 according to Fidelity; fees, premiums and other revenues up 15% Y-O-Y; life insurance company accounting is far too complicated to grasp and is certainly beyond my ability to understand)
National Bankshares, Inc. Reports 2020 Earnings (NKSH)(4th Q. E.P.S. $.77, up from $.74 in the 2019 4th quarter; consensus 1 analyst at $.55 according to Fidelity; NPA Ratio = .68%; Coverage Ratio = 230.15%; Efficiency ratio = 50.4%; NIM 2.98%, down from 3.22% in the 2019 4th Q; ROA = 1.33%; ROE = 9.77%; repurchased 57,444 shares in the 4th Q; total diluted shares as of 12/31/20 = 6.464+M)
New Jersey Resources (NJR) Reports First-Quarter Fiscal 2021 Results ("net financial earnings (NFE), a non-GAAP financial measure, of $44.7 million, or $0.46 per share, compared with $34.9 million, or $0.38 per share, in the first quarter of fiscal 2020; Reaffirmed NFE per share (NFEPS) guidance of $1.55 to $1.65 for fiscal 2021; Increased NFEPS guidance for fiscal 2022 by $0.15 to a range of $2.20 to $2.30; GAAP E.P.S. reported at $.84 which includes a large unrealized gain on derivative instruments and related transactions)
Principal® (PFG) Announces Fourth Quarter and Full Year 2020 Results (GAAP Net Income at $472.6M or $1.7 per share; non-GAAP E.P.S. at $1.48; consensus non-GAAP at $1.424 according to Fidelity; GAAP E.P.S. include realized gains on securities of $63M; declared first quarter dividend of $.56 per share with ex date on 2/26/21)
Prudential Financial, Inc. (PRU) Announces 2020 Results (usual potpourri of numbers for a life insurance company; "after-tax adjusted operating income of $1.183 billion or $2.93 per Common share versus $915 million or $2.24 per share for the year-ago quarter"; consensus at $2.57 according to Fidelity and viewed as a $.33 beat on that basis; net income attributable to Prudential Financial, Inc. of $819 million or $2.03 per Common share": "Book value per Common share of $167.81"; "adjusted book value per Common share of $94.79"; authorized the repurchase of up to $1.5B in 2021; declared a quarterly dividend of $1.15 per share or a 4.5% increase over the 2020 level)
STAG Industrial (STAG) Announces Fourth Quarter And Full Year 2020 Results ("$0.49 of Core FFO per diluted share for the fourth quarter of 2020, an increase of 4.3% compared to fourth quarter 2019 Core FFO per diluted share of $0.47"; "Cash Available for Distribution of $64.0 million for the fourth quarter of 2020, an increase of 16.4% compared to the fourth quarter of 2019 of $55.0 million.")
Unum (UNM) Group Reports Fourth Quarter 2020 Results {"net income of $135.4 million ($0.66 per diluted common share) for the fourth quarter of 2020; after-tax adjusted operating income was $235.3 million ($1.15 per diluted common share), in-line with prior outlook despite elevated December COVID-19 related mortality levels."; consensus at $1.19 probably based on adjusted operating income; "book value per common share of $53.37 grew 8.7 percent over the year-ago quarter; included in GAAP net income is "an after-tax reserve increase of $119.7 million ($0.59 per diluted common share) in the long-term care product line of our Closed Block segment" and a $.07 per share charge for the closed pension block segment)
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Bond Redemptions in Fidelity Taxable Account:
Even when a bond prospectus has a make whole provision, the issuer is generally allowed to redeem without making that premium payment to par value within a short period prior to maturity. That period is usually 1 month but some are as long as 2 or 3 months.
Several corporate bonds owned in my Fidelity account were scheduled to mature on 3/15/21 and have now been redeemed early at par value plus accrued and unpaid interest.
I do not want more cash in my brokerage accounts, but that is where bond redemptions proceeds are ending up due to a lack of investment opportunities that meet my criteria and goals.
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Covid:
Reopening indoor dining is a 'reckless decision,' virologist says
U.S. plays catch-up in detecting new coronavirus variants - MarketWatch
Republican Rep. Ron Wright of Texas is first sitting member of Congress to die of Covid
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New details about Trump-McCarthy shouting match show Trump refused to call off the rioters
Republican politicians will be censored by their party for doing what is right. Liz Cheney becomes latest House Republican to be censured by state party for her vote to impeach Trump; State Republican Parties Blast Members Of GOP Who Voted To Impeach Trump
In its censure letter, the Wyoming republican party claimed that it was not Trump supporters who stormed the capitol but antifa members who wanted to harm Donald and the republican party. Wyoming GOP Censures Liz Cheney For Voting To Impeach Trump : NPR
Those republicans claimed that video evidence provided "ample" proof that the attack was "instigated by Antifa and BLM radicals." There is no evidence supporting that claim but then Trumpsters never need evidence to support their reality creations. All of the evidence, including the arrests of known Trump supporters, proves that the Wyoming's republican party members, who voted for that censure resolution, are living in an alternate reality that can not be pierced with accurate information.
The Oregon republican party called the capitol riot a "false flag" operation. Oregon Republican Party calls Capitol riot a 'false flag' operation to discredit GOP, silence Trump supporters
Michigan State Senator Mike Shirkey (R) Falsely Calls U.S. Capitol Attack A Hoax; Top Michigan Republican stands by Capitol 'hoax' comments - ABC News Shirkey is the republican majority leader in Michigan's state senate. Shirkey was recently censured by Michigan republicans, not for calling the capitol attack a hoax and a staged event, but voting for a resolution banning automatic weapons in the state capitol. Remember that the Trumpsters brought their automatic weapons into Michigan's state capitol last year; and there was later an effort later to kidnap Michigan's democrat governor. In Michigan, a Dress Rehearsal for the Chaos at the Capitol on Wednesday - The New York Times
Just bizarre.
Strong Trump Supporters Picked to Head Michigan Republican Party - The New York Times
GOP senator Johnson (R-WIS) claims Nancy Pelosi to blame for Capitol riot
Why Republicans haven’t abandoned Trumpism; republished at MSN: Why Republicans Haven't Abandoned Trumpism-The Washington Post The GOP remains Trump's party. Any republican politician who strays from acknowledging that fact or dares to criticize Donald will be censured and ostracized.
State Republican Parties Are Putting Trump Worship Above All Else | Vanity Fair
Breaking With G.O.P., Top Conservative Lawyer Says Trump Can Stand Trial - The New York Times
Georgia election officials formally launch investigation into Trump phone calls - ABC News; Georgia DA opens criminal probe of Trump call to secretary of state
Senator Mike Lee (R) refers to Trump's incitement of Capitol riot as a 'mulligan'
How the G.O.P. Allied Itself With Militants - The New York Times
It is difficult to comprehend why anyone listens to Tucker Carlson. Tucker Carlson Says Authorities Are 'Lying' About COVID Vaccine; Judge rules Fox News' Tucker Carlson is not a credible source of news.
In 2 weeks after it called the election, Fox News cast doubt on the results nearly 800 times ("The network’s most prominent figures relentlessly attempted to subvert democracy by fueling conspiracy theories and spreading misinformation, rhetoric. . .")
Misinformer of the Year: Fox News
I am awarding my 2020 Toadie of the Year to Senator Lindsey Graham (R-SC)
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1. Small Ball-All About Risk Control :
A. Bought 10 WPC at $66.79; 2 at $65.9:
Quote: W. P. Carey Inc. (WPC)
I mentioned buying WPC in a 1/21/21 comment.
Closing Price 2/12/21: WPC $70.39 +$1.34 +1.94% WPC reported 4th quarter results before the market opened yesterday so investors reacted positively to it.
"W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $19 billion and a diversified portfolio of operationally-critical commercial real estate that includes 1,243 net lease properties covering approximately 144 million square feet as of December 31, 2020."
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
This purchase was made in my Fidelity taxable account where I will take the position up to 100 shares provided each subsequent purchase is at the lowest price in the chain.
I have previously bought 5 shares in 2 other accounts and will just leave those positions as they are and will not be reinvesting the dividends.
Item # 3.F. Bought 5 at WPC at $43 in Schwab Taxable Account (4/25/20 Post) That purchase was made on 3/19/20. Needless to say now, it would have been better to buy more then.
Average Cost Fidelity Account: $66.64 (12 shares)
Dividend: Quarterly at $1.046 per share ($4.184 annually)
Yield at AC = 6.28%
Last Ex Dividend: 12/30/20
W. P. Carey Inc. Increases Quarterly Dividend to $1.046 per Share
Tax Treatment of 2020 Dividends:
Most of the dividend was classified as non-qualified ordinary income with the next classification being capital gains.
W. P. Carey Announces Tax Treatment of 2020 Dividends
Last Bond Sale: $500M of 2.4% SU Notes Maturing in 2031 (rated at Baa2/BBB)
Last Earnings Report (Q/E 12/30/20). Released on 2/12/21. W. P. Carey Inc. Announces Fourth Quarter and Full Year 2020 Financial Results
AFFO per share = $1.2
Sourced from SEC Filed Supplemental
"collection rate of 99% for 2020 fourth quarter rent due and 98% for January 2021 rent due"
Occupancy = 98.5%
Weighted Average Lease Term = 10.6 years
"AFFO for the 2020 full year was $4.74 per diluted share, down 5.2% from $5.00 per diluted share for the 2019 full year. The Real Estate segment generated AFFO of $4.60 per diluted share, primarily reflecting the impact of the COVID-19 pandemic and to a lesser extent lower lease termination and other income, which in aggregate more than offset the accretive impact of net investments and rent escalations. The Investment Management segment generated AFFO of $0.14 per diluted share, reflecting the Company’s continued move out of this business, primarily through the management internalization by CWI 1 and CWI 2 during the 2020 second quarter."
"2021 AFFO guidance range of $4.79 to $4.93 per diluted share announced, including Real Estate AFFO of between $4.66 and $4.80 per diluted share and assuming full year investment volume totaling between $1.0 billion and $1.5 billion."
I currently own 4 WPC SU bonds:
Item # 3.B. Bought 2 WPC 4.25% SU Bonds Maturing on 10/1/26 at a TC of 99.682 (3/3/19 Post); FINRA Bond Detail WPC 4.25% SU Maturing on 10/1/26
Item # 4.A. Bought 2 WPC 4% SU Bonds Maturing on 2/1/25 at 98.477 (4/19/18 Post); FINRA Bond Detail WPC 4% SU Maturing on 2/1/25
B. Added to MIN-Bought 15 at $3.77:
Quote: MFS Intermediate Income Trust Overview- A CEF
Expense Ratio: .64%
Investment Category: Bond Substitute
As of 12/31/20:
Average Effective Duration: 4.11 years
Average Maturity in Years: 4.56
MFS (last SEC filed shareholder report for the period ending 10/31/20)
Data Date of 1/13/21 Trade:
Closing Net Asset Value Per Share: $3.93
Closing Market Price: $3.77
Discount: -4.07%
Sourced from: MIN-CEF Connect
Last Buy Discussion: Item #1.B. (11/7/2020 Post)
Average cost per share this account: $3.72 (372+ shares)
Dividend: Monthly at $.028 per share (supported by ROC)
Trending down some. (click "Distributions" tab at CEF Connect)
Last Ex dividend: 1/19/21
Next Ex Dividend: 2/16/21
Yield at AC = 9.03% (assuming $.336 annually)
Goal: Harvest dividends and sell the shares at either breakeven or whatever profit is available using the original tax cost basis before ROC adjustments. The first 100 MIN share lot was bought on 6/11/20 and will be the first one sold, probably using a GTC limit order at the $3.85 price originally paid for the lot. The tax cost basis for that lot is currently at $3.75 with ROC adjustments through 2020.
The total return for MIN is not calculated by adding the profit generated by the ROC adjustments + the dividend payments since that is double counting.
C. Started IDA as a Placeholder-Bought 1 at $89.7; 1 at $87.5; 1 at $86.5 :
Placeholder status is assigned due to the P/E multiple and low yield. Positives that justify IMO initiating a position include dividend growth in a low yield environment and an optimal geographic service area for clean energy generation. The company announced in 2019 that it plans to achieve 100% clean energy generation by 2045. IDACORP, Inc. - Home
I would describe my approach here as braindead small ball. The next buy would be 1 share at $85.5.
Quote: IDACORP Inc.
Investment Category: Bond Substitute
Stock Information as of 2/12/21:
Generation: 62% hydro in 2019
IDA Analyst Estimates | MarketWatch
Dividend: Quarterly at $.71 per share ($2.84 annually)
Recent Dividend History:
AC Per Share: $87.9 (3 shares)
Last Ex Dividend: 2/4/21
5 year Chart:
Last Earnings Report (Q/E 9/30/20): SEC Filed Press Release
E.P.S. at $2.02 up from $1.78 in the 2019 3rd Q.
Electric operating revenues increased to $424.17M from $385.028M. 10-Q at page 22
For the 9 months ending 9/30, E.P.S. was reported at $3.95 up from $3.68.
The 2020 4th quarter report is scheduled to be released on 2/18 with the consensus E.P.S. at $.68.
Purchase Restriction: Each subsequent purchase, other than through dividend reinvestment, must be at the lowest price in the chain.
Maximum Position All Accounts: 50 shares
D. Started MHGVY-Bought 5 at $21.56:
Quotes:
USD: Mowi ASA ADR
NOKs: Mowi ASA (Norway: Oslo)
ADR ratio 1 to 1
Closing Price 2/12/21: MHGVY $22.69 +$0.20 +0.89%
Convert NOK/USD. Norway Krone to United States Dollar
"Mowi ASA is one of the largest seafood companies in the world, and the world’s largest producer of Atlantic salmon."
Earnings have been hurt by the pandemic due to lower revenues generated by restaurant customers. Covid 19 restrictions resulted in spot prices declining in all markets due to lower demand. Increased sales through retail outlets offset some of the demand shortfall from restaurants. The company is based in Norway.
I am playing here the all will be well soon scenario which I have not yet accepted. The MOWI stock price does not yet reflect IMO the Stock Jock consensus blue sky scenario reflected in major market index levels.
Products - Mowi Company Website
This is a new name for me.
Dividends: Currently suspended but decent during normal times.
Dividend - Mowi Company Website ("The quarterly dividend level shall reflect the present and expected future cash flow generation of the Company. To this end, a target level for net interest bearing debt is determined, reviewed and updated on a regular basis. When the target is met, at least 75% of the annual free cash flow after operational and financial commitments will be distributed as dividends.")
As noted in the snapshot, the Board did not declared a third quarter dividend due to the pandemic's impact and uncertainty created thereby.
 |
| Footnotes Omitted due to sizing issue |
E. Pared FHN in Fidelity Taxable-Sold 30 at $15.37 (used specific identification-lots among the highest cost shares):
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 3.H. Added to FHN-Bought 5 at $8.56; 5 at $7.7; 1 at $7.41 (4/11/20 Post)
Profit Snapshot: $44.74
New Average Cost Per Share: $12.62 (108+ shares)
 |
| Snapshot Intraday 1/14/21 after pare |
Dividends - First Horizon Corporation
Yield at $12.62 AC = 4.75%
Last Ex Dividend: 12/10/20
Last Earnings Report (Q/E 12/30/20): SEC Filed Press Release
Net income: $234M
E.P.S. $.40 which includes merger related expenses. First Horizon National Corporation and IBERIABANK Corporation Complete Merger of Equals
Non-GAAP E.P.S. = $.46
F. Started HE-Bought 5 at $33.67:
Quote: Hawaiian Electric Industries Inc. (HE) - A holding company
Investment Category: Bond Substitute
Closing Price 2/12/21: HE $34.72 +$0.31 +0.90%
Main Subsidiaries:
Electric: Hawaii Electric Light Company, and Maui Electric are regulated electric public utilities that provide electric service to approximately 95% of Hawaii’s population
Bank: American Savings Bank is "one of the largest financial institutions in the State of Hawaii (based on total assets), with assets totaling approximately $7.2 billion as of December 31, 2019."
HE Analyst Estimates | MarketWatch
HE Recent Dividend History:
Yield at $33.67 = 4.04%
Next Ex Dividend Date: 2/24/21
Last Earnings Report (Q/E 9/30/20): SEC Filed Press Release
E.P.S. at $.59, up from $.58 in the 2019 3rd Q.
G. Added to CRM-Bought $50 at $215.96:
CRM Analyst Estimates | MarketWatch
CRM 10-Q for the 3rd Fiscal Q/E 10/31/20
Last Discussed: Item # 1.J. (1/9/21 Post)
H. Eliminated ONB-Sold 15+ at $17.87:
Quote: Old National Bancorp (ONB)
Investment Category: Regional Bank Basket Strategy
Profit Snapshot: $79.97
Last Earnings Report (Q/E 12/30/20): SEC Filed Press Release
E.P.S. Actual $.44, up from $.29 in the 2019 4th quarter
Non-GAAP at $.46
ONB Realized Gains to Date: $865.78
Other Sell Discussions: Item # 1 Sold 100 ONB at $13 (8/22/12 Post); Item # 1 Sold 50 ONB at $14.12 (7/16/13 Post); Item # 6 Sold 50 ONB at $13.05-Update For Regional Bank Basket Strategy As Of 6/6/16 - South Gent | Seeking Alpha; Item 2.A. Eliminated ONB-Sold 50 Shares at $18.55 (2/27/17 Post); Item # 4.A. Sold 10 ONB at $19.66 (7/29/18)
I. Pared FDUS in Fidelity Taxable-Sold 2 at $13.6 (part of highest cost lot):
Quote: Fidus Investment Corp.- A BDC
2019 Annual Report (risk factor summary starts at page 24 and ends at page 46)
Website: Fidus
Fidus Investment Corporation Prices Offering of $125 Million of 4.75% Notes Due 2026 (12/16/20); Prospectus; FINRA Bond Detail
Management: External
Profit Snapshot: $3.21
The 2 share lot was part of a 5 share lot bought at $11.99.
New Average Cost Per Share: $9.05 (30+ shares)
 |
| Snapshot Intraday 1/15/21 After Pare |
Dividend: Quarterly at $.31 (regular only)
The regular rate was reduced from $.39 effective for the 2020 second quarter payment.
Special dividends have been paid as well. The most recent number has been $.04 per share that was paid in 2020, 2019, 2018, 2017, 2016, 2015 and 2013. A $.10 special dividend was paid in 2014. Dividend History | Fidus Investment Corporation
The next quarterly payment will include a 7 cent per share special dividend. Fidus Investment Corporation Declares First Quarter 2021 Dividend
Yield at AC = 13.7% (regular only)
Last Ex Dividend: 12/3/20
Next Ex Dividend: 3/11/21
Last Buy Discussion: Item # 3.C. Bought Back FDUS in Fidelity Account Bought 20 at $13.7; 5 at $11.99; 5 at $11.5; 5 at $9, 2 at $8.56, 2 at $5.98, 1 at $4.65 (3/28/20 Post)
5 Year Chart:
Net Asset Value Per Share History: Good for an externally managed BDC
9/30/20: $15.94
12/31/19: $16.85
9/30/19: $16.47 10-Q
12/30/18: $16.47
9/30/18: $16.41
3/30/18 $16.28
12/31/17 $16.05
12/31/16 $15.76
12/31/15 $15.17
12/31/14 $15.16
12/31/13 $15.35
12/21/12 $15.32
IPO at $15 June 2011
Last Earnings Report (Q/E 9/30/20): 10-Q for the Q/E 9/30/20
Discussed in Item #1.L.
The 2020 4th quarter report will be released on or near 2/25.
Sell Discussions: Item # 2.O. Continued Paring FDUS -Sold Highest Cost Lots in Fidelity Taxable Account at $13.75 (11/28/20 Post)(sold at cost); Items 1.L, 1.M; 1.N (11/30/20 Post)(3 profit snapshots= $11.77, each transaction barely profitable); Item 1.D. and E. Pared FIDUS in Schwab Account-Sold 50 at $15.34 and Sold 20 FDUS (Fidelity Account) at $15.4 (2/22/20 Post)(profit snapshots +$68.44 and +$18.07 respectively, total at $86.51); Item # 1.C. Pared FDUS-Sold 52 at $15.15 (3/6/19 Post)(profit snapshot = $32.88)
Goal: Any Total return excess of the dividends paid.
J. Pared FDUS in Schwab Taxable-Sold 13 at $14.01:
See Item 1.I above.
I sold my highest cost lot that was not purchased with dividends (10 shares) and most of a lot purchased with a dividend payment.
The 10 share lot was purchased at $12.17 on 3/9/20:
After this purchase, BDC stocks, which includes FDUS, collapsed in price. FDUS hit bottom intraday on 3/23 at $4.45. Just a reminder about what can happen.
Profit Snapshot: +$25.51
Average Cost Before Pare = $10.44
Average Cost After Pare = $9.36
 |
| Snapshot Intraday on 2/11/21 after pare |
Yield at $9.36 = 13.25% (regular dividend only)
FDUS Realized Gains to Date = $159.88 ($131.16 in prior transactions)
So far I have been selling my highest cost lots profitably, except for the highest cost lots purchased with dividends that can not not currently be sold profitably.
Quote: Ares Capital Corp.- An Externally Managed BDC
Investment Category: Bond Substitute
Profit Snapshot: $16.52
 |
| Sold Highest Cost Lot Bought on 3/11/20 at $15.7 |
Average Cost After Pare this account: $12.88
Dividend: Quarterly at $.40 per share (regular only)
Yield at $12.88 AC = 12.42% (regular only)
Next Ex Dividend: 3/12/21
Last Discussion Item # 3.C. Pared ARCC-Sold 20 at $17.44 and 3.D. Pared ARCC in Fidelity Taxable Account-Sold 5 at $17.32 (1/1/21 Post)(profit snapshots = $39.52). I discussed the 2020 third quarter earnings report in that post. That post also contains snapshots of prior trades and links to prior sell discussions (Item #3.D.)
Last Buy Discussion: Item # 4.C. Added 5 ARCC at $14.3; 5 at $14; 5 at $13.67; 5 at $12.5; 5 at $12.4; 5 at $12; 5 at $11.74; 5 at $10.44; 5 at $9.4 (4/4/20 Post)
5 Year Chart:
Net Asset Value Per Share History:
9/30/19: $17.26 10-Q
9/30/18: $17.16
12/21/17: $16.65
9/30/17: $16.49 10-Q
12/30/16: $16.45
9/30/16: $16.59
6/30/16: $16.62
3/31/16: $16.5
12/31/14: $16.82
9/30/13: $16.35
3/31/12: $15.47
6/30/10: $14.11
12/31/09: $11.44 10-K
9/30/09: $11.16 10-Q
12/31/08: $11.27
6/30/08: $12.83 10-Q
12/31/07: $15.47 10-K at page 57
9/30/07: $15.74
3/31/05: $14.96
Last Earnings Report (Q/E 12/30/20): This report was released after my pares discussed in this post. Ares Capital Corporation Announces December 31, 2020 Financial Results and Declares First Quarter 2021 Dividend of $0.40 Per Share
On 2/10/21, the stock price rose $.48 or 2.66% in response to this better than expected result, closing at $18.5 during regular hours. Ares responded with a stock offering announced after the close. Ares Capital Corporation Announces Public Offering (2/10/21) I have no objection to a BDC raising funds through a stock offering priced in excess of the then prevailing net asset value per share, which will be the case here.
NII per share = $.54, up from $.45 in the 2019 4th Q.
Net Asset Value Per Share: $16.97, down from $17.32 as of 12/31/19
Goal: In all accounts, any total return in excess of the dividend payments is viewed as a win.
L. Pared ARCC in Fidelity Taxable Account-Sold 14 at $17.77:
See Item # 1.K above.
New Average Cost Per Share this account: $11.12:
 |
| Snapshot Intraday on 2/3/21 after Pare |
Yield at $11.12 (regular dividend only) = 14.39%
M. Pared ARCC Vanguard taxable-Sold 2 at $18.09 :
Recent History this account:
Profit Snapshot: +$8.34
New Average Cost this Account: $13.83
Yield at AC = 11.57% (regular dividends only)
ARCC Realized Gains to Date: $772.47
N. Eliminated SLG in Fidelity Account-Sold 6+ at $61.27 and Sold 2+ in Vanguard Account:
Quote: SL Green Realty Corp. (SLG)
Website: SL Green Realty- NYC’s Largest Commercial Landlord
Profit Snapshost: +$128.97 + $49.44 = $178.41
Last Buy And Sell Discussion: Item # 1.H. Added to SLG-Bought 2 at $45.59; 1 at $44.23; 1 at $43; 1 at $42.5; 1 at $0; 1 at $38, 1 at $35.5 and Sold 5 at $50; 2 at $52.19 and 1 at $61.54 (6/20/20 Post)
Dividends: Monthly at $.3033
Dividend History | SL Green Realty Corp.
In addition to the regular monthly dividend, I received a special dividend of $1.6967 per share, paid in stock. SL Green Realty Corp. Announces Special Dividend and Increase to Ordinary Dividend
Last Earnings Report (Q/E 12/30/20): SL Green Realty Corp. Reports Fourth Quarter 2020 EPS of $3.43 Per Share; and FFO of $1.56 Per Share
I still own 2 SU bonds. Item # 3.C. Bought 2 S L Green Operating L.P. 3.25% SU Bonds Maturing on 10/15/22 at a TC of 99,579 (6/20/20 Post); Bond Detail
O. Eliminated AKBA in Schwab Account-Sold 15 at $4.21:
Quote: Akebia Therapeutics Inc.
Closing Price 2/12/21: AKBA +4.6100 -$0.1600 -3.35%
Profit Snapshot: +$19.75
Lottery Ticket Basket Strategy
I mentioned this sell in a 2/4/21 comment. I did not previously discuss this purchase.
I still own 25 shares in my Fidelity taxable account as a Lotto: Item # 2.I. Bought 10 AKBA at $3.18; 5 at $3; 5 at $2.9 (12/25/20 Post)(last substantive discussion); Item # 1.O. Added to AKBA-Bought 5 at $2.8 (1/16/21 Post)
I discussed a recent developments in a 2/3/21 comment. AKBA's main drug vadadustat is being studied as a treatment for COVID patients. Researchers receive DOD funding to expand study of investigational drug to prevent ARDS in COVID-19 patients - UTHealth News
ARDS = Acute Respiratory Distress Syndrome
JPM downgraded the stock late last month to underweight from neutral. I do not have access to that report.
AKBA LOTTO Ticket Realized Gains: +$336.44
Current At Risk Capital in AKBA = $75.30 (25 shares)
When I am in a pure gambling mode, the general idea is to play with the house's money whenever possible.
Prior Realized Gain Snapshots:
Item # 2.B. Sold 105 AKBA at $6.35(1/2/20 Post)
Item # 4.A. Sold 30 AKBA at $15.27 (8/22/17 Post)
P. Started VTRS-Bought 1 at $17.63; 4 at $17.35; 2 at $17.15; 1 at $16.91:
Quote: Viatris Inc.
Closing Price 2/12/21: VTRS $18.24 0.00 0.00%
Investment Category: Lottery Ticket Basket
Viatris is a recent creation resulting from the merger of Mylan and Pfizer's Upjohn division that housed PFE's legacy drugs that no longer had patent protection. Pfizer Completes Transaction to Combine Its Upjohn Business with Mylan (11/16/20)
VTRS Analyst Estimates (as of 2/5/21, the 2021 average E.P.S. estimate was $4.09 and at $4.13 for 2021).
Website: Viatris | Global Healthcare Company
Average Cost Per Share this account: $17.28 (8 shares)
I discussed purchasing this stock in a 2/3/21 comment.
VTRS has not issued yet a standalone quarterly report.
The company has promised to pay out at least 25% of free cash flow as dividends, but has not yet declared a dividend for the first quarter.
Viatris Inc. Announces Additional Details of Previously Disclosed Global Restructuring Initiative (12/11/20)
Mylan Wins Summary Judgment in EpiPen® Litigation Brought by Sanofi
S & P has a 4 star rating as of 12/9/20 and a $19 twelve month price target.
Q. Eliminated GLUU-Sold 45 at $12.55:
GLUU is going to be acquired for $12.5 per share in cash. Electronic Arts to Acquire Glu Mobile, Creating a New Global Leader in the Largest and Fastest Growing Gaming Segment (2/8/21)
Investment Category: Lottery Ticket Basket
Profit Snapshot: +$153.06
Item # 1.P. Added to GLUU- Bought 5 at $8.7 and 5 at $8.55 (1/16/21 Post); Item 1.F. Started GLUU-Bought 10 at $9.6; 10 at $9.4; 5 at $9.19; 5 at $9; 5 at $8.9 (1/9/21 Post)
Investment Category: Lottery Ticket Basket Strategy
I discussed this acquisition in a 2/9/21 comment.
The 4th quarter earnings report was a good one. Glu Reports Fourth Quarter and Full Year 2020 Financial Results
IMO, the $12.5 per share was too low.
R. Eliminated EAF-Sold 53+ at $12.37:
Quote: GrafTech International Ltd.
Closing Price 2/12/21: EAF $12.01 -$0.30 -2.44%
Company Website: GrafTech International Ltd. - Home
EAF Analyst Estimates | MarketWatch
Profit Snapshot: +$110.97
Other Sell Discussions: Item # 3.I. Eliminated EAF in Fidelity taxable account-Sold 46+ at $9.94 (1/1/21 Post); Item # 2.B. Sold 27 EAF at $11.2 (2/12/20 Post); Item #3.C. Sold 25 at $14.48 (12/18/19 Post); Item # 2.A. Sold 110 EAF at $13.48 (11/20/19 Post)
Last Earnings Report (Q/E 12/30/20): GrafTech International (EAF) Reports Unaudited Fourth Quarter and Full Year 2020 Results (4th Q Net income = $125.096M with E.P.S. at $.47; revenues $338.01M; Credit Suisse has a PT of $15 and an outperform rating; CS claims free cash flow at $142M during quarter and about a 20% free cash flow yield)
EAF Realized Gains = $370.42 ($259.45 in prior trades)
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.
Pfizer paid a $.39 per share dividend in the 2021 1st quarter.
ReplyDeleteThat indicates that it is now anticipated that VTRS will pay its first dividend in the second quarter. When that dividend is declared, Pfizer has said that it will reduce its dividend to a level where the Pfizer and VTRS combined dividend amount would equal the $.39 per share quarterly payment
The estimate is that PFE would cut the annual dividend rate by 10 cents. If that estimate proves accurate, the annual dividend rate will fall from $1.56 to $1.46 starting in the next quarter.
Pfizer News Release:
"It is expected that Viatris will begin paying a quarterly dividend in the second quarter of 2021, at which time Pfizer’s quarterly dividend will be reduced such that the combined dividend dollar amount received by Pfizer shareholders, based upon the combination of continued Pfizer ownership and approximately 0.124079 shares of Viatris which were granted for each Pfizer share in the spin-off, will equate to Pfizer’s dividend amount in effect immediately prior to the initiation of the Viatris dividend."
https://investors.pfizer.com/investor-news/press-release-details/2020/Pfizer-Declares-First-Quarter-2021-Dividend/default.aspx
As I have said previously, one estimate is that Pfizer's annual dividend will be cut by 10 cents per share.
https://www.barrons.com/articles/how-a-growth-stock-pfizer-will-pay-out-its-dividend-51606343494
At a $1.46 annual rate, and last Friday's closing price of $34.72, the yield would be about 4.205% which still qualifies as a bond substitute in my book. I am waiting for a lower price before deciding whether or not to commence a small ball purchase "program".
The Xeljanz safety news compared to alternative drugs for RA has caused me to become more cautious about a PFE position.
https://www.fiercepharma.com/pharma/pfizer-s-xeljanz-hits-competitive-hurdle-race-against-abbvie-s-rinvoq-failure-safety-study
Pfizer is not a buyout target IMO. The small price rise last Friday was probably due to Biden's announcement that the U.S. would buy another 100 million doses of its Covid vaccine.
https://www.nbcnews.com/politics/joe-biden/biden-administration-finalizes-deal-200-million-vaccine-doses-pfizer-moderna-n1257560
The PFE stock price popped last year in response to the efficacy data but that rise was short lived and deservedly so in my opinion.
ABBV is now being suggested by Crammer. Also Match or Bumble (which is not earning yet but high growth) dating sites.
ReplyDeleteThe overall news doesn't seem that different than it's been.
But under 20 VIX? The model is helpful after an initial spike. Now that it's in UNstable, hard to tell if this is headed to stable over three months, or about to spike again. In 2018, it went under 15 which was unusual in the recovery phase, and turned out to correlate with not going into a deeper catastrophic crash. So how low it goes and for how long, could be useful to watch.
SPY is comfortably above moving averages, and in an upperward channel. IWM is actually leveled off, could go either way.
https://finviz.com/quote.ashx?t=iwm&ty=c&ta=1&p=d
Generally I don't see any indications of a pullback of any size, except for valuations. And that hasn't bothered buyers for a while. Only bad virus news would matter.
There's no rate inversion in sight.
So now another $50 of CRM. Soon you'll have a whole share!
Next barrier are lawsuits. I'm tired of hoping something works. But still maybe something will put this private citizen in jail where he belongs. I hear McConnell agrees. How can grown people be this afraid? I've been surprised there weren't subpoenas served already.
I now qualify for the vaccine! There aren't any doses, not even hints.
If there are restaurant groups with divs that haven't been overbought, that's where I see room for value buys. Media's talking value is the place to go... but growth is still getting the buying attention.
Land: The problem with ABBV is that Humira will lose U.S. patent protection in 2023. The company is doing a good job IMO in preparing for that patent cliff with the Allergan acquisition and new drugs.
ReplyDeleteAs to the VIX Model, there is no way to know whether there will be sufficient movement below 20 to form a Stable Vix Pattern or whether the UVP will reassert itself with another major volatility spike resulting in a correction or worse. The Model is agnostic on that question, but simply cautions that there is meaningful risk of another major spike until the SVP forms. The Model does suggest that consideration be given to lightening up when the VIX finally moves below 20 after a Trigger Event which occurred last March. That is just a suggestion for consideration. Probably the more relevant suggestions are to refrain from reducing the stock allocation during and after the Trigger Event until the Recovery Period starts and to buy the huge spikes in volatility. Each event needs to be independently evaluated in the then existing context. As mentioned here, I increased my stock allocation during the Trigger Event period and subsequent volatility spikes last year.
I am probably not going to do anything different from what I have been doing since I already have a huge cash cushion available for redeployment when opportunities develop; and increasing that cash allocation which generates almost no income is not much of an option particularly when I am already conservatively positioned.
As far as I am concerned, Trump was obviously guilty and remains the most powerful enemy to America's democracy. I am more concerned now that 74M Americans voted to give him another 4 years as President when it was obvious beyond any doubt that he was a lying, sociopathic, demagogic, authoritarian.
The ten year treasury is currently at 1.278%, up .068% today.
ReplyDeletehttps://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page
The impact is having IMO a meaningful impact on certain stock sectors that are most sensitive to directional changes in interest rates.
SPDR S&P Regional Banking ETF
$62.60 +$1.52 +2.49%
Last Updated: Feb 16, 2021 10:49 a.m. EST
https://www.marketwatch.com/investing/fund/kre?mod=over_search
Fidelity MSCI Utilities Index ETF
$40.31 -$0.37 -0.91%
https://www.marketwatch.com/investing/fund/futy?mod=over_search
Vanguard Real Estate ETF
$88.57 -$1.02 -1.14%
Last Updated: Feb 16, 2021 10:51 a.m. EST
https://www.marketwatch.com/investing/fund/vnq?mod=over_search
Why are rates increasing? The stimulus and good economic reports?
DeleteOver the weekend I worked a lot on finances. Got a better picture of what I have, and my plan or distribution I want. Hopefully that will help me be faster at checking out ideas and moving on them. Still have lots of checking out to do.
In the process I realized the problem isn't low rates. It's that the spread between rates and inflation is non-existent.
My original plans for how much I need to pay for retirement, didn't assume a certain rate, but assumed a spread of 4%. Or at least 2%.
I can't even figure out what inflation rate really is currently.
Land: The rise in intermediate and long term rates is consistent with the Stock Jock consensus that the economy will be stimulated into overdrive through an additional $1.9T in stimulus and the pandemic becoming a rear view mirror event.
DeleteI view it as important that rates are nowhere near a level that would cause the Stock Jocks to flee into bonds or reconsider the multiples being paid for growth stocks.
That is in absolute terms with the 10 year treasury nearing 1.3%.
The 10 year TIP is currently yielding -.954%:
https://www.cnbc.com/quotes/US10YTIP
The Bond Ghouls current consensus for inflation over the next ten year is the breakeven spread for the 10 year TIP, calculated by subtracting the nominal 10 year yield from the real yield. That spread is currently at 2.24% which means an average annual 2.25% increase in CPI over the next 10 years for the 10 year TIP buyer to breakeven with the buyer of the 10 year non-inflation protected treasury.
That number has been moving up:
https://fred.stlouisfed.org/series/T10YIE
The current inflation number is estimated monthly by the BLS. The last Y-O-Y increase was 1.4% on a non-seasonally adjusted basis. I link those reports every month in the blog. The last link is in this blog at the top.
Other CPI measures which are relevant on the sticky CPI and median CPI.
Sticky:
https://www.frbatlanta.org/research/inflationproject/stickyprice/
Median:
https://www.clevelandfed.org/our-research/indicators-and-data/median-cpi.aspx
So currently interest rates increases are anticipating, rather than responding to borrowing pressure (supply & demand directly).
DeleteI think on CPI what leaves me confused is all the various numbers. With big purchases (like cars) or not. Seasonally adjusted vs. non-adjusted. Adjustments to prior released numbers. With and without energy.
Now adding sticky and median to the list.
BLS - I thought there were other variations from other orgs too. Maybe that's just GDP that everyone and his uncle estimates. And unemployment that there are multiple gov't and private orgs estimating.
So the 10 year is used. I was wondering if it's that or 30 year. Then TIP vs non-inflation protected is a way to see what inflation bond buyers are building in for long term.
In the short term, 10 year treasury at 1.3 is hoovering near YOY CPI of 1.4%
Seems like now I have a better feel for the figurings on this!
Land: I left out the inflation measure that is the most important to the FED's decision making process.
DeletePersonal Consumption Expenditure (PCE) Price Index for goods and services
https://www.advisorperspectives.com/dshort/updates/2021/01/29/cpi-and-pce-two-measures-of-inflation-and-fed-policy
That number is published monthly as part of the "Personal Income and Outlays" release.
The last report was for December. The annual rate for core PCE was at 1.5% and 1.3% for all items included in that measurement.
There are problems with the BLS CPI number as an inflation index. One of the most significant from my perspective is the weighting given to "owners equivalent rent" in the calculation.
https://www.investopedia.com/terms/o/owners-equivalent-rent.asp
Owner's equivalent rent attempts to reflect what a homeowner would pay for his house if it was rented rather than owned.
That number has close to a 24% weighting in CPI.
https://www.bls.gov/news.release/cpi.t01.htm
The weighting is much lower in the PCE price index while PCE has a higher weighting for medical expenses.
Owners equivalent rent has no relevance to me as a current expenditure inflation number. A rise in my home's value is relevant only in the profit that I will realize when I sell.
Personal Consumption Expenditures - added to the list! Currently at a similar rate.
DeleteSo my savings accounts are losing 1% real value. (Discover and First Foundation are down to around .5 or.6%.)
Land: Short term rates from CDs, treasury bills, savings accounts are in negative real yield territory before taxes and are expected to remain so for an extended period.
DeleteOf the inflation indicators, the PCE price index is probably the most important since that is the one used by the FED when making monetary policy decisions.
The CPI number is important primarily for its widespread use (e.g. in the tax code and in financial instruments like treasury inflation protected securities).
The breakeven spread for the TIPS are important since they represent the current consensus opinion about the annual average CPI over the next 5, 10, 20 and 30 years.
If the Bond Ghouls prove to be correct about the 2.24% breakeven spread for the 10 year TIP, then the nominal treasury bought at a 1.3% yield will be deep in negative real yield territory before taxes, close to an annual average of -1%. That is not a way to pay for one's nursing home expenses.
I wish there was an easy way to save this comment to my bookmarks with the inflation links.
DeleteWait, actually I can add a bookmark to a file. (If I bookmarked the whole page, I wouldn't know what spot I was bookmarking for.)
I think bond ghouls are underestimating. I expect rates to climb into a more normal range as the economy gets better - after a good while & whatever valuation bubble bursting is needed. Whether I have any clue or am clueless, I can be sure that 1.3% on 10 year bought now is a weak idea.
I may still need a nursing home. My last test showed no more problem cells in the bone marrow. That's in the 2 ways they assess that. That was unexpected. There's still a spleen problem. And I'm on a good choice of med for it. I'm told that the side effect symptoms tend to wear off after a month so a few more weeks. (I found a report that it's 2-3 months so docs may be being optimistic.) I'm also told I'm being unique - my side effects are not the usual. A new one since last night is a runny nose and sneezing constantly. Good thing I have a tissue supply. If I don't get my brain back by them wearing off, we'll play with dose or when it's taken. So far it's smoother (less reaction) when taken with food. I need to figure out snacks to keep by my bed for the early dose. The problem is once there, I tend to eat them. And then they aren't there when I need them. I'm getting lined up finally to see the specialist I'm mostly to be switching to (since my doc left practice.) There has to be a way to transfer records more quickly. It's been days of calls, and emails, and forms. If there are products out there for properly managing records, they will make money.
I was trying to see why the market dipped again today. It doesn't look like any reason in particular other then 3 pts below 20 for the VIX was too much.
There's an article I read about how VIX is changing - there's more demand for betting so it's getting more flooded. I have to find it again. I figured it didn't effect the model because it's (effectively not purposefully) based on human patterns that remain the same.
Walmart's drop off earning yesterday took me by surprise. It's one of my stocks that flew up. It wasn't off actual earnings, but off their future estimates.
Land: So far the move up in interest rates has not negatively impacted high multiple growth stocks. I suspect that an increase in interest rates caused by robust economic growth will result in small caps outperforming the high multiple growth stocks which has been the case recently. Financials have been outperforming technology stocks YTD.
DeleteE.G. XLK is up 4.79% YTD through yesterday:
https://www.morningstar.com/etfs/arcx/xlk/quote
FNCL is up 8.95%.
https://www.morningstar.com/etfs/arcx/fncl/quote
FNCL includes a broad range of financial stocks.
KRE is up 19.02% YTD through yesterday and is up strongly so far today:
https://www.morningstar.com/etfs/arcx/kre/quote
I am continuing to pare my regional bank basket but still own about 50 stocks in that financial sub sector.
Immunogen Inc. (IMGN)
ReplyDelete$8.62 -$1.91 -18.14%
https://www.marketwatch.com/investing/stock/imgn?mod=over_search
I sold my Lotto position of 15 shares last Friday at $10.5. Volume accelerated to 17.666+M. The stock had closed last Thursday at $8.08.
https://finance.yahoo.com/quote/IMGN/history?p=IMGN
The pop in price was due to what I considered a misinterpretation of the 4th quarter earnings report.
At first glance, IMGN smashed the consensus estimate for revenues and even reported a $.16 per share profit.
https://www.sec.gov/Archives/edgar/data/855654/000155837021000930/imgn-20210212xex99d1.htm
However, both the revenue and profit numbers were based on accounting rules rather than real earnings from products during the quarter.
For example, the company reported non-cash royalty revenue from global sales of Kadcyla. Note the term "non-cash". IMGN has already sold it right to receive royalties for that drug, with all or most of that money already spent. This is now just an accounting entry and means nothing.
The other major part of the revenues and income, is recognizing in the 4th quarter the upfront fee of $60.5 previously received from Jazz Pharmaceuticals. Recognition of that revenue and fee was postponed as previously divulged in IMGN's reports. A $75M upfront fee was received from Jazz in 2017:
Page 12
https://www.sec.gov/Archives/edgar/data/855654/000155837018001641/imgn-20171231x10k.htm
My point is that 2020 4th quarter was an accounting convention result not a real one. The money has already been spent.
The key near term development is still unresolved and that involves the Mirvetuximab compound.
See my discussion in Item 2.B.
Restarted IMGN-Bought 10 at $5.85; 5 at $5.45:
https://tennesseeindependent.blogspot.com/2020/12/agr-dpg-ebmt-flgb-fraf-glq-imgn-ipay.html
Dilution is ongoing:
"During the quarter ended December 31, 2020, the Company sold approximately 20 million shares of its common stock through its At-the-Market (ATM) facility, generating gross proceeds to the Company of approximately $100 million. In January 2021, the Company sold an additional 4.5 million shares of its common stock through its ATM facility, generating additional gross proceeds of approximately $35 million."
My brain has been trained to sell the pops on this one. And, I view Lottos as equivalent to playing blackjack but with the odds more in my favor over an extended period.
Nice pop to take advantage of!
DeleteBerkshire Hathaway disclosed in a SEC filing that it has substantially increased its positions in VZ and CVX.
ReplyDeleteAt the end of the 3rd quarter, Berkshire owned 58.4M VZ shares and owned 146.7M as of 12/31/20.
The CVX stake went from 44M to 48.5.
Discussed at
https://www.barrons.com/articles/warren-buffetts-mystery-investment-is-verizon-and-chevron-51613515554?mod=hp_LEAD_1
I recently mentioned buying 5 VZ share near what I viewed as a $54 support level and added a few more below $54. I do not own CVX.
The news lifted VZ in after hours:
Verizon Communications Inc.
$55.80 $1.65 +3.05%
After Hours Volume: 2.3M
https://www.marketwatch.com/investing/stock/vz?mod=over_search
As previously mentioned, I will not be discussing the VZ purchases in the blog. I have been discussing the stock in comments with the most recent comments attached to the last post.
Berkshire eliminated its stake in Pfizer. I discuss that stock in my first comment above.
The company increased its ABBV stake by 20% to 25.5M shares and its BMY stake by 11.2% to 33.3M shares.
Berkshire also increased its stake in KR by 34.3% to 33.5M shares.
I own BMY, ABBV and KR.
BMY had some bad news over the weekend.
https://www.reuters.com/article/us-bristol-myers-sanofi-plavix/bristol-myers-sanofi-ordered-to-pay-hawaii-834-million-over-plavix-warning-label-idUSKBN2AF1YI
This seems overdone to me, with a $1k fine for every prescription written for Plavix over a 12 year period in Hawaii, but I am not familiar with the case. BMY and SNY plan to appeal.
That bodes well for my VZ and CVX.
DeleteI'm holding CVX, but still waiting to decide whether and when to sell VZ.
I don't know what label warnings Plavix was supposed to have. Nor whether it was actually needed. The users of course will not receive most of that $1k.
My VYM was up today while other indices were down. Value held up. Total World VT was up slightly too.
LAZ which is 18% underwater for me, popped 3.3% today. It's ex-div tomorrow. But it's been on a steady climb during the market "recovery."
I'm 51% in the market with my investing money. (Rainy day is separate.)
As I look at how much in large, small, value, growth, ... I decided to separate out Tech as in QQQ and other hot-tech into a new category same as large vs. small.
VIX is back up to 21.46 today, with 7.46% raise. that's a big move for a market that didn't really decline much. (1.46 over 20.)
VZ up over 5% today. CVX over 3%. I'm going to hold VZ looking for the higher part of the range.
DeleteTOT rallied off it too. Shell-b not so much.
I'm thinking that whether the stimulus is 1.2T that GOP might go for or 1.9T that Biden wants... will not make a difference in the market's rally over the stimulus.
VIX 21.50. I expect another run below 20.
Rigel Pharmaceuticals Inc.
ReplyDelete$5.42 +$0.89 +19.54%
Last Updated: Feb 18, 2021 at 10:05 a.m. EST
https://www.marketwatch.com/investing/stock/RIGL?mod=over_search
I own 100 shares of this Lotto bought at $1.71 and have been discussing in comments recent developments.
Today's development was a surprise.
"Lilly and Rigel Enter Strategic Collaboration to Develop RIPK1 Inhibitors for the Potential Treatment of Immunological and Neurodegenerative Diseases"
https://www.prnewswire.com/news-releases/lilly-and-rigel-enter-strategic-collaboration-to-develop-ripk1-inhibitors-for-the-potential-treatment-of-immunological-and-neurodegenerative-diseases-301230502.html
"Under the terms of the agreement, Lilly will pay an upfront cash payment to Rigel of $125 million. Rigel may also be eligible to receive up to $835 million in potential development, regulatory, and commercial milestone payments, as well as tiered royalties ranging from the mid-single digit to high-teens that will vary depending upon Rigel's clinical development investment."
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2021/02/bhb-cc-csco-ebix-erc-fax-hbnc-hcmly-kc.html
Like usual 50% of my funds are in small caps.
ReplyDeleteI hadn't bought more or trimmed the tiny amount I'd bought of banks. They're leading the market, so may climb more. But I can't buy here.