Economy:
Inflation: The housing market is on fire. The Fed keeps adding gasoline
Key inflation indicator posts biggest year-over-year gain in nearly three decades This article is referring to the personal consumption expenditure ("PCE") price index that the FED prefers over the CPI index. The PCE price number is released monthly as part of the Personal Income and Outlays report, which was released earlier today. Personal Income and Outlays, May 2021 The annual PCE price increase through May 2021 was reported at +3.9% with the core PCE price index rising 3.4%.
WHO says the Covid Delta variant is the fastest and fittest and will 'pick off' most vulnerable
Architecture billings continue historic rebound - AIA (a leading indicator for construction)
New home sales for May were reported at a seasonally adjusted annual rate of 769K, down from the revised April annual rate of 817K, but 9.2% above the May 2020 estimate. Census Report.pdf
+++++++
Markets and Market Commentary:
10 Promising Stocks to Consider | Morningstar (of the stocks mentioned, I currently own BMRN, CRM, INCY, and VRTX.)
10% to 20% correction may be underway due to inflation: Mark Zandi
As Lumber Prices Fall, the Threat of Inflation Loses Its Bite - The New York Times For a commodity, the cure for a high price is the high price as demand wanes and supply continues to ramp up.
3 Dividend Ideas to Protect Your Portfolio Against Inflation | Barron's Of the stocks mentioned in that article, I currently own ABBV, BMY CVX, KMB, MMM, PFE, and PRU.
3 Things Investors Can Learn From Warren Buffett | Morningstar
+++
+++
Rudy Giuliani skips Dominion, Powell, MyPillow-Lindell hearing after law license suspended; Rudy Giuliani is suspended from practicing law due to false statements about the election
How the Republican States Are Expanding Their Power Over Elections - The New York Times
PolitiFact | Trump lost. Yet the 2020 election falsehoods live on in Arizona
Michigan Republicans Debunk Voter Fraud Claims in Unsparing Report - The New York Times ("The 55-page report, produced by a Michigan State Senate committee of three Republicans and one Democrat, is a systematic rebuttal to an array of false claims about the election from supporters of former President Donald J. Trump.")
Conservative Outlets Advance Unfounded Theory About Capitol Attack - FactCheck.org It is important to quit calling these people conservatives.
‘Italygate’ election conspiracy theory was pushed by two firms led by a woman who also falsely claimed a $30 million mansion was hers - The Washington Post This article exposes the propagators of the conspiracy theory that an Italian defense contractor and the CIA had conspired to change Trump votes via satellite. Trump partisans have been advancing this claim including "Maria Strollo Zack, a Republican operative from Georgia", the woman who falsely claimed that she owned the $30M mansion; Daniele Capezzone, known as the Italian Sean Hannity; and a self-described intelligence expert who claims to be a former CIA operative.
Leader of Michigan’s Republican Party Ron Weiser calls top Democratic women ‘witches’ who should be "ready for the burning at the stake"Chicago Tribune; Trump's influence on Republicans faces key test in Michigan He "joked" about assassinating two Republican congressmen who voted to impeach Trump. GOP chair Weiser rebuffs attacks on the assassination, 'three witches' quips; Watch: Ron Weiser calls Michigan leaders 'three witches;' quips about the assassination of colleagues Weiser said he would not be "canceled". Has Ron Weiser been ‘canceled’?
The Co-Chair of Michigan's Republican party, Meshawn Maddock, suggested that Michigan needs to succeed from the U.S., GOP co-chair Maddock suggests Michigan should secede from U.S. | News Hits Her husband, Matt Maddock (R), introduced legislation requiring fact-checkers to register with the state and to post a bond of $1M. If someone does not like the fact check, they can file a civil action against the fact-checker to claim that $1M bond and be entitled to treble damages and attorney fees upon winning the lawsuit. 2021-HIB-4813.pdf Mr. Maddock is only attempting to preserve the conservative values embodied in the First Amendment by making it cost-prohibitive for anyone to challenge Republican reality creations.
Devin Nunes (R-CA) Family Farm Workers Must Produce Citizenship Documents
+++
1. Pared CVA-Sold 102 at $17.51:
Quote: Covanta Holding Corp.
Total Ash Processing - Covanta
Home | Covanta Environmental Solutions
Profit Snapshot: +$276.29 (6/10/21 sale only)
New AC per share after pare = $8.49 (17+ shares)
 |
| Snapshot Intraday on 6/10/21 after pare |
I am probably done paring this position.
Dividend: Quarterly at $.08 per share
The dividend was slashed from $.25 per share effective for the 2020 third-quarter payment. The stock was originally purchased primarily for the $1 per annual dividend payout. The reduction to a $.32 per share annual payout consequently removed the primary reason for owning the stock.
Dividend reinvestment has been turned off.
Yield at new AC of $8.49 = 3.77%
SEC Filed Earnings Earnings Call Slides
SEC Filed Earnings Press Release for the Q/E 3/31/21 I discussed that report in Item # 3.K.
1 Year Chart as of 6/11/21: The uptrend in price started on 10/30/2020 after closing at $7.62 on 10/29/20, with another gap breaking higher on 6/9/21.
The 2020 third-quarter earnings report was released after the close on 10/29/20: SEC Filed Press Release
10 Year Chart: Indicates that a trading strategy is needed to produce adequate total returns. A long term hold started with purchases anywhere near the current price would have led to substantial subpar returns compared to index ETFs:
Prior Sell Discussions: Item # 3.K. Pared CVA in Fidelity Account-Sold 13+ at $15.07 (6/4/21 Post)(profit snapshot = $4.05); Item # 1.A. Eliminated CVA in Schwab Account-Sold 70 at $12.76 and Item #1.B. Eliminated CVA in Vanguard Taxable-Sold 44+ at $13.19 (12/19/20 Posts)(profit snapshots = $176.67)
CVA has been a problem child, though trading and averaging down has produced an overall satisfactory total return given my limited expectations going into the investment. The realized gain is currently at $547.01 with an unrealized gain on the lowest cost remaining shares. Any future purchases will require consideration only when and if they can be made at prices below my current AC per share.
54 ETFs with Covanta Holding Corporation (CVA) exposure | ETF.com
2. Small Ball:
A. DNNGY-Bought 5 DNNGY at $46.2 and Sold 5 at $47.36:
Bought 5 at $46.2:
Sold 5 at $47.36:
Quotes:
USD: Oersted A/S ADR (pink sheet exchange)
DKK: Oersted A/S (Denmark: OMX)
Renewable Energy Solutions to Fight Climate Change | Ørsted
Green Energy Solutions | Ørsted
I changed my mind quickly on this stock. I am still interested in starting a position but will need a lower starting price.
I reevaluated the cost risk associated with repairing critical cables at 10 of its offshore wind farms. The problem which will be expensive to fix is that underwater rocks are scrapping against the cables. Earnings were hit in the last quarter due to warranty costs associated with that problem and lower wind speeds. Wind Power Giant Ørsted Has a Major Undersea Headache. Will It Hurt the Stock? | Barron's (4/30/21 article)(early assessment of the financial cost to fix the cable problem was then at DKK3B. DKK to USD -Danish Krone to US Dollars (about US$489M)
This article was published the day after I sold my position. Ørsted Is Under Pressure. Why Now Is the Perfect Time To Buy the Green Stock. | Barron's The article references a recommendation made by a UBS analyst.
Profit Snapshot: +$5.79
Last Earnings Report (Q/E 3/31/21): Interim financial report Q1 2021.PDF
B. Pared PRU-Sold 2 at $108.34- Vanguard Taxable:
Quote: Prudential Financial Inc.
Position Before Pare this account: 7 shares
Sold 2 of the highest-cost lot bought on 8/4/20 at $63.82.
Profit Snapshot: +$89.04
New AC per share this account: $63.19
Dividend: Quarterly at $1.15 per share ($4.6 annually), last raised from $1.10 effective for the 2021 first-quarter payment.
Prudential Financial, Inc. - Stock Information - Dividends
Yield at AC this account = 7.28%
Last Earnings Report (Q/E 3/31/21): Prudential Financial, Inc. (PRU) Announces First Quarter 2021 Results
GAAP E.P.S. = $6.98
Non-GAAP E.P.S. = $4.11
Non-GAAP Consensus E.P.S. = $2.763 per Fidelity
"Book value per Common share of $145.05 versus $152.45 per share for the year-ago; adjusted book value per Common share of $100.49 versus $99.71 per share for the year-ago."
C. Started HZO-Bought 5 at $47:
Quote: MarineMax Inc.
HZO is the "largest recreational boat and yacht retailer in the United States", with "77 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington and Wisconsin". The company sells "new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories" and provides "repair, maintenance, and slip and storage services; we arrange related boat financing, insurance, and extended service contracts."
Website: New, Used Boats for Sale | Boat Dealerships, Marinas | MarineMax
HZO Analyst Estimates | MarketWatch (as of 6/18/21, average E.P.S. estimate for 2021 was $5.56; $5.45 for 2022; and $5.25 for 2023, with 2020 actual at $2.66).
HZO Annual Report for the F/Y Ending 9/30/20 (retail location list starts at page 28)
5 Year Historical:
 |
| Page 33 Annual Report |
Last Earnings Report (F/Q ending 3/31/21): MarineMax Reports Record Fiscal 2021 Second Quarter Results
"Revenue increased 70%, or over $214 million, to $523.1 million for the quarter ended March 31, 2021 from $308.5 million in the comparable period last year. Same-store sales grew over 45% on top of a 1% increase in the comparable quarter last year. The growth was driven by an increase in comparable new units sold driven by the strong demand for boating. The Company’s significant geographic and product diversification and the effective utilization of its digital platform have driven growth over the past several years. These factors, along with increased industry demand, resulted in net income and earnings per diluted share rising more than sevenfold to $38.9 million and $1.69, respectively. This compares to net income of $5.1 million and earnings per diluted share of $0.23 in the comparable period last year."
Updated 2021 Guidance: "Based on current business conditions, retail trends and other factors, the Company is raising its fiscal year 2021 guidance for earnings per diluted share to the range of $5.50 to $5.65, which is increased from its previously provided guidance of $4.00 to $4.20 per diluted share. This compares to a non-GAAP adjusted, but fully taxed, earnings per diluted share of $3.42 in fiscal 2020."
D. Started CTT-Bought 10 at $11.56:
Quote CatchMark Timber Trust Inc. - A Timber REIT
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
 |
| Current Timberland Assets as of 3/31/21 at p. 13 |
2020 Annual Report
Dividend: Quarterly at $.135 per share ($.54 annually), last raised from $.125 effective for the 2016 4th quarter payment.
Yield at $11.56 = 4.67%
Last Ex-Dividend: 5/27/21
Last Earnings Report (Q/E 3/31/21): SEC Filed Press Release
 |
| 10-Q, page 18 |
Purchase Restriction: Average down only, increasing the dollar expenditures in the $8 to $10 range. I am concerned about the debt level taking into account the commodity nature of this REIT's business.
Maximum Position: 100 shares
The REIT currently has a .21% in the Invesco MSCI Global Timber ETF (CUT) and a 1.07% weighting in the iShares Global Timber & Forestry ETF (WOOD). I own 2 shares of both ETFs as Placeholders. I briefly discuss the WOOD purchase in Item # 1.O.
E. Pared GNL Again in Fidelity Taxable-Sold Highest Cost 10+ Shares at $19.91:
I sold all remaining shares in this account that had a tax cost basis of over $17 per share.
Quote: Global Net Lease Inc.
GNL SEC Filings; 2020 Annual Report (list of properties starts at p. 33)
GNL Website: Overview | GNL
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Buy Discussions: Item # 1.I. Added to GNL-Bought 5 at $16.9 (1/23/21 Post); Item # 1.E. Bought 1 GNL at $13.19 and 1 at $12.61 (5/23/20 Post); Item # 4.A. Added 5 GNL at $17.65; 5 at $16.87, 5 at $16.3; 5 at $14.6; 5 at $14; 10 at $13.5; 5 at $12.94; 2 at $12.66; 2 at $12.1; 2 at $11; 1 at 10.1; 4 at $11.48 and 2 at $10.8 (4/4/20 Post)
Profit Snapshot: $17.61 (6/7/21 sale only)
New Average cost per share this account: $14.21 (97+ shares)
 |
| Snapshot Intraday on 6/7/21 after pare |
Dividend: Quarterly at $.40 per share
Yield at New AC = 11.26%
I discussed the last earnings report in this post: Item # 1.J. Pared GNL in Fidelity Taxable- Sold 20 GNL at $19.49 (5/16/21 Post)
Other sell discussions: Item # 1.A. Pared GNL-Sold 20 at $19.1 (3/20/21 Post); Item # 1.E. Sold 10 GNL at $21.51 (2/19/20 Post); Item # 2.B. Pared GNL-Sold Highest Cost 50 Shares at $20.05 (12/11/19 Post)
F. Started OGN as a Placeholder-Bought 2 at $31.2; 1 at $29.9; 1 at $29.2; 1 at $29.7; 3 at 28.7; 2 at $28.4; :
Quote: Organon & Co.
Average Cost Per Share = $29.42 (12 shares)
Product Revenues 1st Quarter 2020 and 2021:
A number of those drugs have lost patent exclusivity and are referred to as "Established Brands" in the preceding snapshot. OGN stated in its last 10-Q filing that those compounds as "generally" beyond "market exclusivity". The primary drug which still has patent protection is Nexplanon, a contraceptive that produced $680M in revenues last year (p.59) and $183M in the 2021 first quarter.
OGN also has a biosimilar business. One of those compounds, "Hadlima", is a biosimilar for Humira:
 |
OGN was recently spun out of Merck. Merck Announces Completion of Organon & Co. Spinoff As part of that arrangement, MRK received $9B, funded by debt that was assumed by OGN: "During the second quarter of 2021, Merck issued an aggregate of $
OGN Analyst Estimates | MarketWatch (As of 6/19/21, the average estimate is for $5.98 in 2021; $6.11 in 2022; and $6.35 in 2023.
I discussed the first 2 share purchase in a 6/7/21 comment.
My MRK tax cost basis was revised down about $3.5+ per share to account for the Organon spinoff. This is a snapshot of the revised tax cost numbers for the 7 MRK shares owned in my Vanguard taxable account:
The lot with the $74.44 revised tax cost basis was bought at $78.12. Item # 1.I.
Since I did not own 10 MRK shares in that account, I received a $20.7 cash payment for my allotment of a fractional Organon share.
Organon Stock: This Former Merck Company Could Have Big Potential. | Barron's In March 2021, Merck predicted that OGN would generate between $6.1B to $6.4B in revenues this year.
OGN Stock: Merck Spinoff Organon Will Do Well Over Time | InvestorPlace
Merck Investor Presentation on Organon.pdf
Dividend: OGN plans to pay a dividend but has not yet declared one.
Last Earnings Report (Q/E 3/31/21): 10-Q This report reflects OGN's operations prior to its separation from Merck and its assumption of $9B in debt. The report consequently does not reflect the interest payments for that new debt.
This is a summary of the outstanding debt as of 3/31/21:
Organon Announces Proposed Senior Notes Offering (4/6/21)
E.P.S. = $1.58 includes $.02 from discontinued operations
Revenues: $1.506B
Net Income from continuing operations = $395M
The company attributes the Y-O-Y decline in profits and revenues to the pandemic.
G. Bought 5 VABK at $32.6:
This is a new name for me.
Quote: Virginia National Bankshares Corp.
Corporate Profile | Virginia National Bankshares Corporation
Dividend: Quarterly at $.30 per share
Virginia National Bankshares Corporation Announces Cash Dividend
As far as I can tell, this was the first cash dividend paid by VABK. There have been stock dividends paid in the past.
Last Ex-Dividend: 6/10/21
Yield at $32.6 = 3.68%
Shortly before buying this 5 share lot, I was curious about what had happened to Fauquier Bankshares, which I had owned in the past, and discovered that VABK has acquired it. Virginia National Bankshares Corporation Completes Merger (4/1/21) I then looked at VABK and liked it better than Fauquier so I took a starter-type position.
The last financial report for VABK does not include Fauquier's operations. As of 3/31/21, "Fauquier had total assets of $911.3 million, net loans of $616.4 million and total deposits of $817.5 million." SEC Filed Earnings Press Release
2021 1st Quarter Results:
E.P.S. = $.55
NIM = 2.83%, down from 3.2% in the 2020 first quarter
Diluted Shares Outstanding: 2.727+M
NPA Ratio: .04%
NPL Ratio: 0% (Fauquier had issues relating to NPLs)
Charge Off Ratio: .12%
Total Risk-Based Capital Ratio: 15.49%
Loan-to-Deposit Ratio: 77.23%
Tangible Book Value Per Share = $29.07 (excludes $.26 per share in intangible assets)
"As of March 31, 2021, $57.5 million in loan balances, or 97.4% of the total loan deferments approved, have returned to normal payment schedules and are now current, leaving a remaining balance of deferments of $1.5 million. Of this remaining balance, $1.2 million, or 77.3%, are 100% government-guaranteed loans for which the deferrals were approved by the United States Department of Agriculture; and $349 thousand, or 22.7%, are student loans, which are private student loans not subject to potential federal forgiveness."
Excluding merger-related expenses, ROA and ROE were .71% and 7.73%, both being too low and meaningful negatives IMO.
H. Pared NMFC in Fidelity Account-Sold All Fractional Shares purchased with dividends at $13.69:
Quote: New Mountain Finance Corp. (NMFC)- externally managed BDC
10-Q for the Q/E 3/31/21 (summary of investments starts at page 7)
5 Year Financials: Page 61
Last Buy Discussion: Item # 3.M Added to NMFC-Bought 5 at $9.48 (11/7/20 Post)
Profit Snapshot: +$13.74
New Average Cost per share this account = $8.33 (28 shares)
 |
| Snapshot Intraday on 6/9/21 after pare |
Dividend: Quarterly at $.30 (regular only), reduced from $.34 effective for the 2020 second quarter payment.
Yield at $8.33 AC = 14.41%
Last Ex-Dividend: 6/15/21
Net Asset Value Per Share History:
03/31/21: $12.85
12/31/20: $12.62
12/31/19: $13.26
12/31/18: $13.22
12/31/17: $13.63
12/31/16: $13.46
12/31/15: $13.08
12/31/14: $13.83
12/31/13: $14.38
12/31/12: $14.06
IPO May 2011-Prospectus: Public Offering Price at $13.75 (all expenses including the sales load paid by the management company)
Last Earnings Report (Q/E 3/31/21): SEC Filed Press Release
NII per share = $.30
Sell Discussions: Item # 3.G. Pared NMFC in Fidelity Taxable-Sold 20 at $12.27 (1/1/21 Post); Item # 2 Eliminated NMFC-Sold 102+ at $14.2 (1/25/20 Post); Item # 2.A. Sold 50 NMFC at $13.95 (1/15/20 Post); Item # 1.B. Eliminated NMFC-Sold 60 at $13.96 and 50 at $13.94 (2/9/19 Post); Item # 1 A. Sold 50 NMFC at $14.06 (8/19/18 Post); Item # 1 Sold Remaining 50 Shares of NMFC at $14.63 (11/1/14 Post); Sold 100 of 150 NMFC at $14.4773 (10/23/14 Post); Item # 8 Sold Highest Cost NMFC Lot at $15.37 (9/14/2014 Post)
NMFC Realized Gains to Date: $262.85 ($249.11 in prior trades)
Goal: Total return in excess of the dividend payments.
I. Bought 5 AMOM at $35.48 as a Placeholder:
Quote: QRAFT AI-Enhanced U.S. Large Cap Momentum ETF Overview
Sponsor's Website: QRAFT AI-Enhanced U.S. Large Cap Momentum ETF Summary
"Optimized and actively managed by AI technology, Qraft AI-Enhanced U.S. Large Cap Momentum ETF seeks to invest in U.S. large cap momentum stocks by capitalizing on the movement of existing market trends."
AI is only as good as the inputs used to successfully capture momentum trends. I would define success as beating the after-tax returns of a low-cost S & P 500 ETF.
Compare SPDR® S&P 500 ETF Trust (SPY) Performance with QRAFT AI-Enhanced US Large Cap Mmntm ETF (AMOM) Performance
Expense Ratio: .75%
A similar ETF, Invesco S&P 500® Momentum ETF (SPMO), has a .13% expense ratio but has underperformed AMOM since March 2020 as shown in a comparison chart at the sponsor's website.
Dividends: Semi-annually
Short-term trading last year led to a $7.7589 per share short-term capital gain. That is most tax-inefficient.
Top 10 Holdings (may not reflect current holdings and weightings):
J. Pared OPI Fidelity Taxable-Sold All Fractional shares bought with dividends:
Last Buy Discussion: Item # 2.D. Bought 5 OPI at $20.25, 2 at $18.95; 3 at $17.9 (11/13/20 Post)
Profit Snapshot: $2.29 (.336 share)
Average cost after the pare this account: $19.29 (10 shares)
 |
| Snapshot Intraday 6/10/21 after pare |
Dividend: Quarterly at $.55 per share ($2.2 annually)
Yield at $19.29 = 11.4%
Last Ex-Dividend: 4/23/21
Last Earnings Report (Q/E 3/31/21): SEC Filed Supplementals
K. Eliminated BAM-Sold 7 at $49.43:
Quote: Brookfield Asset Management Inc. Cl A (BAM)
BAM Analyst Estimates | MarketWatch
Investor Relations: Brookfield Asset Management Inc
BAM SEC Filings (foreign issuer SEC forms)
2020 Annual Report (management discussion)
Last Buy Discussions: Item # 1.J. Added 1 BAM at $30.2- Vanguard Taxable ( ); Item # 4.G. Restarted BAM-Bought 5 at $32.21; 1 at $31.78 (8/29/20 Post)
Profit Snapshot: +$122.54
Dividend: Inconsequential at $.13 per share, paid quarterly
Distribution History – Brookfield Asset Management Inc
Last Earnings Report (Q/E 3/31/21): Brookfield reports $6.4 billion of Investment Gains in First Quarter on $13 billion of Asset Sales
L. Bought 10 HTBK at $11.52:
This is a new name for me.
Quote: Heritage Commerce Corp.
HTBK Analyst Estimates | MarketWatch
5 Year Financials:
 |
| Page 63 |
Last Earnings Report (Q/E 3/31/21) SEC Filed Press Release
E.P.S. = $.19
NIM: 3.22% down 103 basis points from the 2020 1st quarter "primarily due to declines in the average yields on loans, investment securities, and overnight funds, partially offset by a decline in the cost of interest-bearing liabilities and higher interest income and fees on PPP loans. The FTE net interest margin increased seven basis points for the first quarter of 2021 from 3.15% for the fourth quarter of 2020."
Efficiency Ratio: 62.38%
NPA Ratio= .11%
Coverage Ratio: 791.99%
Loan to deposit ratio: 63.21%
$1.4M in net recovery from previously established loan loss reserves.
Capital ratios are currently good:
 |
| Page 66 10-Q |
M. Sold 1 IBM at $151.33:
 |
| Snapshot Intraday 6/11/21 after pare |
The AC was reduced from $108.07.
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 sale 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 my family members.
