BK, EBGEF, EBIX, FMAT, IDA, IGR, IS, LGND, MJ, OMIC, SAIC, SCM, VTRS

Economy: 

The government's estimate for second quarter real GDP growth was revised to 6.6% from 6.5%. The consensus was that the number would be revised to 6.7%. 

Hospitalizations hit 100,000 in United States for first time since January - The Washington Post (8/26/21)

More taper talk from FED officials was probably the primary contributor to yesterday's decline. Dollar jumps after Fed official's taper talk stirs markets; Fed’s Kaplan worried about inflation, wants to announce taper in September

Earlier today, the government released its "Personal Income and Outlays" report for July: 

The personal consumption price index increased by 4.2% Y-O-Y.   

The personal savings rate in July was 9.6%.   

Personal Income and Outlays, July 2021 | U.S. Bureau of Economic Analysis (BEA)

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Markets and Market Commentary: 

Berkshire Hathaway Was a Net Seller of Stocks in the Second Quarter | Barron's

City Office REIT (CIO) Announces Agreements to Sell Life Science Portfolio for $576 Million I no longer own the common stock but still have a position in CIOPRA, an equity preferred stock. City Office REIT Inc. 6.625% Cumulative Preferred Series A; Item # 1.A. Bought 20 CIOPRA at $20.6; 5 at $19.14; 5 at  $18.6; 5 at $18.35; 5 at $17.5; 5 at $15.15; 5 at $13.56; 10 at $16.5 (3/28/20 Post). The issuer has the option to call this preferred stock on or after 10/4/21 at par value plus accrued and unpaid dividends. Prospectus Supplement The current price reflects an investor consensus opinion that this issue will be called in October with only 1 more quarterly dividend.  

Russia is pumping less natural gas to Europe as Nord Stream 2 nears completion

Water funds attract $35 billion as drought drains reservoirs. A new report asks if they are worth it - MarketWatch The largest water ETF is probably the 5 star rated Invesco Water Resources ETF (PHO)-Morningstar. I recently bought 2 shares of the 5 star rated First Trust Water ETF (FIW)- Morningstar.

Opinion: Why stock market bulls may be right to push valuations so high - MarketWatch

Housing price bubble will wipe out wealth, Peter Boockvar warns

A correction or a bear market can happen at any time now. There are certainly a number of potential catalysts that are percolating in the real world which have been, and continue to be ignored and dismissed by stock investors. 

With my current stock allocation, I would be comfortable with a 50% decline in the S & P 500 and would welcome it.  

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Earnings Reports-Owned Stocks: 

American Finance Trust (AFIN) SEC Filed Earnings Press Release (FFO of 25.1M or $.23 per share; AFFO per share = $.26, up 35.4%; "collected approximately 100% of original cash rent in second quarter 2021, including 100% in single tenant portfolio, 100% in the multi-tenant portfolio, and 100% among the top 20 tenants"; annual rent escalators of weighted average 1.2% per year: "portfolio consisted of 939 net lease properties located in 46 states and the District of Columbia and comprised 19.9 million rentable square feet as of June 30, 2021."; 94.9% leased with 8.6 years remaining weighted-average term) 

Bluerock Residential Growth REIT  (BRG) Announces Second Quarter 2021 Results (Core FFO at $6M or $.16 per share, compared to $5.1 million, or $0.15 per diluted share, in the prior year period. This year's results continue to be impacted by additional capital on the balance sheet."; portfolio occupancy = 96.2%; rental revenues = up 4.2% to $49.7M; $244.5M in unrestricted cash; average rental rate = $1,351)

Duke Energy (DUK) SEC Filed Earnings Release (Non-GAAP E.P.S. of $1.15 with the consensus at $1.097 per Fidelity; GAAP E.P.S. at $.96; reaffirms 2021 non-GAAP E.P.S. guidance of $5 to $5.3 and long term E.P.S. growth of 5 to 7% through 2025; revenues = $5.758B, up from $5.421 in the 2020 second quarter"; "Duke Energy is executing an aggressive clean energy strategy to create a smarter energy future for its customers and communities – with goals of at least a 50% carbon reduction by 2030 and net-zero carbon emissions by 2050. The company is a top U.S. renewable energy provider, on track to operate or purchase 16,000 megawatts of renewable energy capacity by 2025. The company also is investing in major electric grid upgrades and expanded battery storage, and exploring zero-emitting power generation technologies such as hydrogen and advanced nuclear.")

Fidelity National Financial (FNF) SEC Filed Earnings Press Release ("diluted EPS from continuing operations of $1.90 and adjusted diluted EPS from continuing operations of $2.06 versus diluted EPS from continuing operations of $1.09 and adjusted diluted EPS from continuing operations of $1.08 in the second quarter of 2020; those numbers are juiced by recognized gains of "$232 million in the second quarter versus $162 million in the second quarter of 2020 primarily due to mark to market accounting treatment of equity and preferred stock securities whether the securities were disposed of in the quarter or continue to be held in our investment portfolio"; Excluding "recognized gains", diluted E.P.S. was $.87 from continuing operations + $.02 from discontinued operations; the title business had "revenue of $3.0 billion versus $2.2 billion in total revenue in the second quarter of 2020"; "total Retail Annuity Sales of $1.6 billion in the second quarter, an increase of 80% to the prior year, and an increase of 9% over the sequential quarter") While I am not 100% certain, it appears that the analyst estimates include gains whether or not the gains are actually realized, which I would not do. The consensus estimate was at $1.425 with Fidelity showing the actual at $2.06. Fidelity National Financial, Inc. Announces 11% Increase in Quarterly Cash Dividend; Fidelity National Financial, Inc. Announces New Three-Year, 25 Million Share Repurchase Program

Fidus Investment Corporation (FDUS) Announces Second Quarter 2021 Results (NII per share = $.26, adjusted to $.42 by pretending the capital gains incentive fee will not be paid to the external manager; net asset value per share = $17.57; "For the three months ended June 30, 2021, the total net realized gain/(loss) on investments, net of income tax (provision)/benefit on realized gains, was $2.2 million"; "On August 2, 2021, our board of directors declared a base dividend of $0.32 per share, a supplemental dividend of $0.06 per share, and a special dividend of $0.04 per share for the third quarter." "estimated spillover income (or taxable income in excess of distributions) as of June 30, 2021 of $25.5 million, or $1.04 per share.")

Kraft Heinz (KHC) Reports Second Quarter 2021 Results (Non-GAAP E.P.S. = $.78 with the consensus at $.722 per Fidelity; GAAP E.P.S. at ($.02); revenues at $6.615B; free cash flow for the first 6 months at "$1.6 billion, down 18.4 percent versus the comparable prior year period due to lower net cash provided by operating activities and higher capital expenditures versus the prior year period.")

Manulife (MFC) reports 2Q21 net income of C$2.646 billion and core earnings of C$1.682 billion driven by continued growth in Asia and Global Wealth and Asset Management {E.P.S. at C$1.33; Core earnings of C$.83 per share with core E.P.S. consensus at C$.781 per Fidelity; Core ROE = 13.9%; efficiency ratio = 46.8%; MFC is my second largest Canadian life insurance stock holding (114 shares) behind Power Corporation of Canada (150 shares); last discussed at Item # 2.D. Bought 100 MFC at $11.41 in Schwab Account and Item #2.C. Bought 14 shares of MFC in Fidelity Account at an average cost per share of $9.84 (5/9/2020)}

MetLife (MET) Announces Second Quarter 2021 Results (Adjusted earnings of $2.1B with a Non-GAAP E.P.S. of $2.37, with the consensus at $1.623 per Fidelity; GAAP E.P.S. at $3.83; ROE of 21.2%; Adjusted ROE, excluding AOCI other than FCTA, of 17.5%; "Holding company cash and liquid assets of $6.5 billion at June 30, 2021, which is well above the target cash buffer of $3.0 - $4.0 billion.")

PennantPark Floating Rate Capital (PFLT) (Net Income per share = $.27, in line, with dividends at $.285; Net asset value per share = $12.81, adjusted to $12.62 as explained in the release; yield on debt investments as of quarter's end = 7.5%; "As of June 30, 2021, our portfolio totaled $1,035.8 million, which consisted of $883.2 million of first lien secured debt (including $140.9 million in PSSL), $17.6 million of second lien secured debt and $135.0 million of preferred and common equity (including $50.5 million in PSSL). Our debt portfolio consisted of 98% variable-rate investments. As of June 30, 2021, we had two portfolio companies on non-accrual, representing 2.8% and 2.7% of our overall portfolio on a cost and fair value basis, respectively.") 

Prudential Financial, Inc. (PRU) Announces Second Quarter 2021 Results ("after-tax adjusted operating income of $1.514 billion or $3.79 per Common share versus $740 million or $1.85 per share for the year-ago quarter" with the consensus on that basis at $3.109 per Fidelity; GAAP net income of $2.158 billion or $5.40 per share; "Capital returned to shareholders of $1.335 billion in the quarter, including $875 million of share repurchases and dividends of $1.15 per Common share, representing a 4% yield on adjusted book value, versus $441 million in the year-ago quarter.")

Regeneron (REGN) SEC Filed Earnings Press Release (non-GAAP E.P.S. of $25.80 with the consensus at $17.527 per Fidelity; GAAP E.P.S. higher at $27.97; revenue = $5.139B, up 163%; revenues and profits juiced by $2.59B in revenues from REGN-COV, a dual antibody cocktail for  treating Covid patients, with the doses manufactured for the U.S. government; free cash flow = $478.2M)   

Shore Bancshares (SHBI) SEC Filed Earnings Press Release (GAAP E.P.S. of  of $4.031 million or $0.34 per diluted common share; Non-GAAP at $.37 with the consensus at $.325; NPL Ratio = .19%; NPA Ratio = .23%; net recovery; NIM = 2.91%, down from 3.41% in the 2020 second quarter; "The decline in net interest margin in the second quarter of 2021 when compared to the first quarter of 2021 and the second quarter of 2020 was primarily due to excess liquidity, which has been partially invested in investment securities at lower yields and the remainder yet to be invested. Absent excess liquidity of $100 million, we estimate our margin for the second quarter of 2021 would have been 3.07%.; non-GAAP efficiency ratio 60.9% excludes some merger related expenses; tangible book value per share = $15.29)

SLR Investment (SLRC) SEC Filed Press Release (net investment income per share of $.37 with consensus at $.366 per Fidelity; net asset value per share of $20.29; "As of June 30, 2021, the Company’s portfolio was 100% performing."; Net debt-to-equity: 0.73x)

TCG BDC (CGBD) SEC Filed Earnings Press Release (NII per share = $.38; net asset value per share of $16.14, up from $15.7 as of 3/21/21; Board declared a regular quarterly dividend of $.32 per share plus a special dividend of 6 cents per share) 

Viacom (VIAC) SEC Filed Press Release (adjusted E.P.S. = $.97 with consensus at $.963; revenues = $6.564B, up 8% from the 2020 second quarter; GAAP E.P.S. = $1.50; global streaming revenue increased by 82% Y-O-Y; Paramount + added 6 million subscribers during the quarter, increasing the number of subscribers to over 42M)  

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Federal judge sanctions Sidney Powell, Kraken team over election case The Court ordered that those lawyers to pay the legal fees incurred by Michigan and Detroit in defending against the frivolous lawsuit and also referred them to state disciplinary boards.  (link to Court's opinion and order: gov.uscourts.pdf); What Will Happen to Lin Wood, Sidney Powell After Sanctions?

The main anchors on the Fox "news" network (Tucker Carlson, Sean Hannity and Laura Ingraham), have been recommending that people inject Ivermectin for Covid, which has led to a substantial increase in calls to poison control agencies. Fox News Hosts Push People To Animal Anti-Parasite Drug As Covid Medicine-YouTube (includes video clips of those prime time Fox anchors pushing Ivermectin); Warning from Mississippi Health Department.pdf Ivermectin is used to treat parasitic worms in large animals like horses and cows. The FDA Is Begging You Not to Take Horse Dewormer for Covid-19 

It seems the Trumpsters will put just about anything in their body other than the Covid vaccine. 

Transcript of Trump Statements on 6/26/21:  "I started the process. All the troops are coming back home. They couldn’t stop the process. 21 years is enough. Don’t we think? 21 years. They couldn’t stop the process. They wanted to, but it was very tough to stop the process when other things…yeah. Thank you. Thank you. It’s a shame. 21 years, by a government that wouldn’t last. The only way they last is if we’re there. What are we going to say? We’ll stay for another 21 years, then we’ll stay for another 50. The whole thing is ridiculous. So we’re bringing our troops back home from Iraq. We’re bringing troops come from Afghanistan." Donald Trump Wellington, Ohio Rally Speech Transcript: First Rally Since Leaving Office - Rev    

Senator Lindsey Graham (R-SC) stated that he wants to impeach President Biden if 1 American soldier dies in the evacuation effort, or any Afghan who helped Americans during the 20 year war is left behind. Oh so now Lindsey Graham wants to impeach a president? Graham voted to acquit Donald twice.  

The U.S. spent over 2 trillion dollars in Afghanistan over the past 20 years which includes some future related costs.  Afghanistan war cost more than $2T and 240,000 lives, report finds 

The cost of the Iraq War will probably exceed $3 trillion before the final tally is done. Some have the cost much higher for both wars. US has spent $6.4 trillion on wars in Middle East, Asia since 2001: Study 

Graham needs to impeach himself for repeated malfeasance as a Senator, including his support for that 20 year war and the Iraq Invasion. 

So what will be the inevitable long term impact on national security  that will result from the U.S. borrowing and spending $6.4T on those two wars started by George Bush?  

Republicans will now simply try to gain a partisan political advantage by castigating Biden rather than having a fact based and legitimate discussion of what really went wrong which would cast a spotlight on them. Opinion | Let’s Not Pretend That the Way We Withdrew From Afghanistan Was the Problem - The New York Times; Presidents' policies on Afghanistan from Bush to Biden; Why did Biden pull US military troops out of Afghanistan? - Vox

Elise Stefanik (R-NY), who replaced Liz Cheney in the GOP's leadership, asserted that Biden had blood on his hands and was unfit to be be Commander-In-Chief. 

That will be a common claim among Republicans at least through the 2024 Presidential election. 

The bottom line is that most U.S. politicians and a majority of voters learned nothing from the Vietnam, Afghanistan and Iraq Wars and will learn nothing from the next one, the one after that and so on for as long as the U.S. is a nation.  

Interestingly, Biden tried to convince Obama to resist Republican efforts to send in more troops back in 2009, but Obama went ahead and sent in 30,000 more troops (the 2009 "surge"). What Happens After the Kabul Attacks? - The Atlantic; Afghanistan shattered Joe Biden’s faith in American military power - The Washington Post (2/18/20); 2009-2010: Afghanistan Surge

Georgia Gov. Kemp (R)  signs order letting businesses ignore local Covid-19 rules 

Texas city councilman Scott Apley’s covid-19 death sparked calls for vaccination — but also bitter divides - The Washington Post He refused to be vaccinated but that did not stop other Texas Republicans from claiming that the vaccine caused his death.   

The dark history of the "Great Replacement": Tucker Carlson's racist fantasy has deep roots | Salon.com Carlson is one of Fox "news" weekday prime time anchors. 

Trump-friendly Cyber Ninjas refused to comply with House probe of Arizona election audit

Opinion | Why Are So Many Hesitant to Get the Covid Vaccine in This Arkansas Town? - The New York Times This is an excellent video account of why people justify their vaccine refusal even when after they become infected and are hospitalized. One of the patients interviewed died of Covid 9 days later. Almost 1/2 of the hospital's staff refuse to be vaccinated. Generally, I would just characterize the belief, which is core to the modern day Republican Party and part of their DNA, as freedom from responsibility. There is no other way to explain it. 

Ron DeSantis, facing record covid deaths in Florida, says Biden should follow his lead - The Washington Post Just another demagogic mini-Trump.  

COVID patients overwhelm Texas hospitals, amid 'hair on fire' crisis - ABC News

Facts Are No Match For Trump Supporters | The Daily Show - YouTube

Misinformation About Face Masks - FactCheck.org

GOP Lawmaker Heidi Sampson Compares Vaccine Policy to Josef Mengele Nazi Experiments - YouTube The policy was that all healthcare workers had to be vaccinated by 10/1. A Maine Republican compared the governor to Nazi Josef Mengele over vaccine requirement for health-care workers - The Washington Post

Conservative talk show host Phil Valentine dies after battle with Covid-19, his employer says Valentine was based in Nashville. 

I am hearing more from unvaccinated Trumpsters that Biden is to blame for the resurging pandemic. If only Donald was still President, Covid would have been wiped out by now, at least in TrumpWorld, and everyone who wanted to leave Afghanistan could have left peacefully and without much trouble. Donald's competence, knowledge, integrity, honesty, and attention to detail, not to mention being an Extremely Stable Genius, so evident in his handling of the pandemic, would have saved the nation from all of the recent misfortunes, at least in TrumpWorld which goes without saying.    

After the Democrat McAuliffe opened a 9 point lead against the Trumpster republican Youngkin, Republicans filed suit to remove McAuliffe from the ballot so no one would be able to vote for him unless they go to the trouble of writing his name. McAuliffe holds 9-point lead in Virginia governor's race: poll | TheHill; Virginia GOP sues to disqualify McAuliffe from governor's race | TheHill The Republicans are only trying to protect the "integrity" of the upcoming election by seeking to remove McAuliffe's name from the ballot. 

Donald Trump: Actually, Osama bin Laden Wasn’t That Bad | Vanity Fair

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1. Canadian Reset Equity Preferred Stocks: 

A. Eliminated EBGEF-Sold 50 at US$21.38: 

Quote: EBGEF (U.S. Grey Market)

Last Sell Discussion: Item # 1.B. Sold 100 EBGEF at US$20.85 (5/28/21) 

I am concerned about whether this issue will continue trading in the U.S. Grey Market due to the recent SEC Rule change previously described. 

Investment Category: I classify the Canadian reset equity preferred with U.S. floating rate equity preferred and fixed-to-floating rate equity preferred stocks. All of those stocks are grouped in this post: Advantages and Disadvantages of Equity Preferred Floating Rate Securities I view these securities as a niche income category where the primary objective is to harvest dividends and to sell for whatever profit may be available. So far, I have booked $27,918.61 in realized gains taking small positions in these securities. 

I include the Synthetic Floaters, which pay interest rather than dividends, in a separate category. Synthetic Floaters

Profit Snapshot:  US+$281.49

Item #1.B. Added to EBGEF at US$19.15 (4/24/21 Post); Item # 4.A. Added to EBGEF -Bought 5 at US$15.4; 5 at US$15.25 (11/7/20 Post); Item # 2.A. Added to EBGEF-Bought 5 at US$16.5 and 5 at US$16.23 (9/12/20 Post); Item # 3.B. Bought 10 EBGEF at US$14.81 (7/3/20 Post); Item # 2.C. Added 10 EBGEF at US$13.1 (5/23/20 Post)

Security Description: Canadian Reset Equity Preferred Stock

Par Value = US$25

Priced in USDs

Issuer: Enbridge Inc. 

Dividends: Paid in USDs Quarterly, Cumulative 

Coupon: 2.82% Spread to the 5 year U.S. Treasury

Current Coupon: 5.36%; $.35596 per share ($1.34 rounded annually)

Resets Every 5 Years

Next Reset: March 2024

I decided to keep for now the 400 ENPPRP shares, another ENB reset equity preferred stock that trades in Toronto: Item # 1.A. Added to ENBPRP:CA-Bought 100 at C$17.14 (4/24/21 Post); Item # 3.A. Added to ENBPRP:CA Bought 50 at C$11.98 and 50 at C$11.76 (6/13/20 Post); Item # 2.A. Bought 50 ENBPRP at C$15.68 (11/27/19 Post); Item # 4.A. Bought 100 ENBPRP:CA at C$16.5 (3/20/19 Post)(quote: ENB-PP.TO with a current coupon of 4.35% to but excluding 3/1/24 with a reset at 2.5% spread to the 5 year Canadian government bond) 

Credit Ratings - Enbridge Inc.

2. Small Ball:   

A. Eliminated BK-Sold 4 in Fidelity Account at $51.87; 10 in Vanguard Account at $51.63; 5 in Schwab Account at $51.75: 

Quote: Bank of New York Mellon Corp.

Investment Category: Regional Bank Basket Strategy

BK SEC Filings

BK Analyst Estimates | MarketWatch

Last Buy Discussions: Item # 1.L. Added to BK-Bought 3 at $34.81 (10/3/20 Post); Item # 1.G. Bought 5 BK at $36.9; 1 at $35.98; 1 at $35.77 (9/12/20 Post)

Profit Snapshots: 

Fidelity: $69.55 (8/4/21 Sale Only, 4 shares):  

Schwab and Vanguard = $241.42

Vanguard 10 shares + $155.72 

Schwab 5 Shares +$85.7

I discussed the second quarter earnings report in Item # 2.J. 

BK Realized Gains to Date = $343.15

B. Pared SCM-Sold 8.558 Shares at $13.19:

Quote: Stellus Capital Investment Corp. (SCM)- a BDC

BDC stocks will be hyper sensitive to changes in investor perceptions about the strength of the U.S. economy. All of them crashed and burned in March 2020 and became multiple baggers off those lows as the U.S. economy recovered from the pandemic induced recession. They crashed and burned during the Near Depression period in 2008 and early 2009.   

Website: Stellus Capital

SEC Filings; 2020 Annual Report

Profit Snapshot =  $45.73  (8/4/21 sale only)

Last Substantive Buy Discussions: Item # 1.E. Bought 5 SCM at $7.41 in Fidelity Account (8/15/20 Post); Item # 3.J. Added 10 SCM at $7.85; 5 at $7.65; 10 at $7.5 (7/18/20 Post); Item # 2.B. Added 10 SCM at $7.8; 2 at $6.26, 3 at $5.30; 5 at $7.53 (5/9/20 Post)

New Average Cost this account = $7.4 (55 shares) 

Snapshot Intraday on 8/4/21 

Dividend: Monthly at 9 cents per share (regular only)

In the last dividend declaration, the company declared a 1 cent per share special dividend for 3 months.

Stellus Capital Investment Corporation Increases Regular Dividend to $0.27 Per Share and Declares Supplemental Dividends

Yield at new AC this account = 14.59%  (regular only)

Next Ex Dividend: 8/30/21: Regular 9 cents per share + 1 cent special

Net Asset Value per share history: 

 6/30/21:    $14.07

 3/31/21:    $14.03  10-Q for the Q/E 3/31/21 at page 3 

12/31/20:  $14.03   10-K at page 74 
12/31/19:   $14.14
12/31/18:   $14.09
12/31/17:   $13.81
12/31/16    $13.69
12/31/15:   $13.19
12/31/14:   $13.94
12/31/13:   $14.54

November 2012: IPO at $15 ($14.46 after underwriters discount)

Discount to 6/30/21 NAV per share at AC of $7.4 = 47.41%

5 year chart: 

Last Earnings Report ( 6/30/21): Stellus Capital Investment Corporation (SCM) Reports Results for its Second Fiscal Quarter Ended June 30, 2021 and  10-Q for the Q/E 6/30/21 with list of investments starting at page 6

Net investment income per share = $.28 with core NII at $.30; 

Net asset value per share at $14.07; 

"On July 20, 2021, our Board declared a regular monthly dividend of $0.09 per share for each of July, August and September for an aggregate of $0.27 per share for the quarter, which is an increase of $0.02 for the quarter as compared to the prior quarter.  In addition, the board declared a supplemental dividend of $0.01 for each of the months of July, August and September."

Sell Discussions: Item # 2.G. Pared SCM in Vanguard Taxable-Sold 10 at $13.2 (6/19/21 Post)(profit snapshot = $11.33); Item # 1.C. Pared SCM in Fidelity Taxable -Sold 13 at $12.46 and 13+ at $13.25 (4/17/21 Post)(profit snapshot = $69.04); Item # 1.F. Pared SCM in Fidelity Taxable-Sold 20 at $11.08 and Item #1.G. Pared SCM in Vanguard Taxable-Sold 20 at $11.17 (12/19/20 Post)(profit snapshots = $14.23); Item # 3 Sold 50 SCM at $13.72 (9/21/19 Post)(eliminating position as of that date; profit snapshot = $3.75); Item # 1.I. Sold 20 SCM at $7.61 (8/22/20 Post)(contains snapshots of prior trades; profit snapshot = $10.84); Item # 1.B. Sold 32+ SCM at $14.22-Used Commission Free Trade (2/2/19 Post)(profit snapshot = $78.09); Item # 1.A. Sold Highest Cost Lot-50 Shares at $12.63 (5/3/18 Post)(profit snapshot = $34.24); Item 2.B. Sold 100 SCM at $14.23 (2/27/17 Post)(profit snapshot=$285.96); Item # 2 Sold 100 SCM at $13.02 (1/12/17 Post)(profit snapshot= $141.96) 

SCM Realized Gains to Date: $695.17

Goal: Any total return in excess of the dividends paid. 

C. Bought 10 IS at $8.55: 

Quote: ironSource Ltd. 

Closing Price 8/26/21: IS $9.59 -$0.95 -9.01% (bungee jumper)

ironSource "is a leading business platform that enables mobile content creators to prosper within the App Economy. App developers use ironSource’s platform to turn their apps into successful, scalable businesses, leveraging a comprehensive set of software solutions which help them grow and engage users, monetize content, and analyze and optimize business performance to drive more overall growth." 

Investment Category: Lottery Ticket Basket Strategy

Prospectus

SEC Filings 

I discussed this purchase in a 8/2/21 comment. 

Last Earnings Report (Q/E 6/30/21): ironSource Announces Record Second Quarter 2021 Results 

GAAP E.P.S. = $.01

Revenues: $135.036M, up from $73.958M in the 2020 second quarter

Cash as of 6/30/21:  $701M  

Adjusted EBITDA at $46M, up 124% Y-O-Y

Guidance: 

D. Eliminated FMAT -Sold 5 at $46.68:

Quote: Fidelity MSCI Materials Index ETF Overview 

Sponsor's Website: FMAT | ETF Snapshot - Fidelity

Expense Ratio = .08%

Profit Snapshot: +$35.89 

Last Discussed: Item # 1.C. Bought 5 FMAT at $39.5 (1/23/21 Post) 

Dividends: Quarterly at a variable rate

Last Ex Dividend: 6/18/21

Like BDC stocks, the stocks owned by this ETF will be hyper sensitive to changes in investor perceptions about the economy's strength. 

E. Added 1 SAIC at $84.3: 

Quote: Science Applications International Corp. 

SAIC Analyst Estimates | MarketWatch

SAIC SEC Filings

SAIC Annual Report F/Y ending 1/29/21

Last Discussed: Item # 1.C. Added to SAIC-Bought 1 at $87.5 (7/15/21 Post); Item # 3.C. Bought 1 SAIC at $88.17 (5/14/21 Post) I discussed the last two earnings reports in those posts and having nothing further to add here. 

Dividends: Quarterly at $.37 per share

Last Ex Dividend:  7/15/21

Current Position this account: 3 shares

Average Cost per share = $86.66

Yield at AC = 1.71%

Maximum Position: 10 Shares

Purchase Restriction: 1 share lots with each subsequent purchase having to be at the lowest price in the chain. 

F. Added 2 VTRS at $13.79: 

Quote: Viatris Inc.

Closing Price 8/26/21: VTRS $14.29 -$0.23 -1.58% 

VTRS Analyst Estimates | MarketWatch

VTRS SEC Filings

VTRS 2020 Annual Report

Last Buy Discussions: Item # 3.J. Bought 8 VTRS at $13.28 in Fidelity Account and Item #3.K. Bought 8 VTRS in Vanguard Account at $13.34 (5/14/21 Post) 

Dividend: Quarterly at $.11 per share 

Average cost per share Fidelity account: $14.89  (22 shares) 

Yield at AC: 2.96%

Last Ex Dividend: 8/23/21, last Monday. 

Last Earnings Report (Q/E 6/30/21): SEC Filed Press Release 

Non-GAAP E.P.S. = $.98

Consensus non-GAAP at $.873

Revenues = $4.58 vs. consensus at $4.38B

Free cash flow = $470.1M

Raised 2021 Free Cash Flow guidance to $2.2B - $2.4B

Raised 2021 Revenue Guidance to $17.5B-17.9B 

Paid down $1.15B in debt during the first half 

G. Added 1 LGND at $108.90: 

Quote: Ligand Pharmaceuticals Inc. 

LGND SEC Filings

10-Q for the Q/E 6/30/21 

LGND Analyst Estimates | MarketWatch

Ligand Pharmaceuticals Inc. Profile | Reuters

2020 Annual Report

Last Discussed: Item # 2.D. Bought 1 LGND at $119.5 (7/23/21 Post) 

Average Cost:  $114.20 (2 shares)

Dividend: None and none expected  

The stock has been a bungee jumper as of late. 

I suspect that the cause, discussed below, relates to investors changing their opinion about Captisol revenues, a compound used in the manufacture of Gilead's remdesivir. 

Captisol is "a patent protected, uniquely modified cyclodextrin, with a chemical structure that was rationally designed to enable the creation of new products by significantly improving solubility, stability, bioavailability and dosing of active pharmaceutical ingredients (APIs)." Captisol-Ligand Pharmaceuticals Incorporated (LGND); Ligand’s Captisol Technology Plays Key Role in the Manufacture of Gilead’s Remdesivir, the First FDA-Approved COVID-19 Treatment (10/23/20)

Last Earnings Report (Q/E 6/30/21): SEC Filed Press Release

Forward guidance was disappointing and the stock has been in a downtrend since the report. 

Reported Diluted E.P.S. = $1.79

Diluted Adjusted E.P.S. = $1.63 

Consensus at $1.362 per Fidelity

There are a number of adjustments to the GAAP E.P.S. number: 

The largest add backs were share based compensation and amortization related to acquisitions and intangible assets.  

The largest subtraction to GAAP was $2.05 per share for the "fair value of contingent" liabilities. This accounting entry resulted in operating income of $34.1M that "represented a non-cash valuation adjustment recorded during the quarter to reduce the Pfenex CVR liability due to an expected lower probability of achieving the required milestone under the Pfenex CVR Agreement." As noted in my prior discussion, LGND acquired Pfenex, paying $429.6M in cash upon consummation and a contingent payment of up to $77.8M based on achieving certain milestones. Ligand Completes Acquisition of Pfenex Inc.

Disaggregation of Revenues: 

P. 12, 10-Q

Captisol is used in the manufacture of remdesivir which experienced a sales surge due to the pandemic. LGND reported $62.509M in Captisol sales in the 2021 2nd quarter, up from $31.272M in the 2020 first quarter.  

Short Term Investments: Note the exercise of warrants in Viking Therapeutics Inc. (VKTX) 

H. Pared IGR Again-Sold 2 at $9.09: 

Quote: CBRE Clarion Global Real Estate Income Fund Overview - a Leveraged CEF

Borrowings as of 6/30/21: .75% spread to the Federal Funds Rate

IGR SEC Filings

2020 Annual Report

Sponsor's Website: Global RE Income Fund - CBRE 

Top 10 Holdings as of 6/30/21: 

Sourced: IGR Fact Sheet Q2 2021 (leverage at 20.36%)

Profit Snapshot: $6.29  (8/5/21 sale only)

New Average Cost per share this account = $5.14 (180 shares)

Snapshot Intraday on 8/5/21 after pare

Dividend: Monthly at $.05 per share (ROC support)

Yield at New AC = 11.67%

Data Date of 8/5/21 Trade: 

Net Asset Value Per Share: $9.82

Closing Market Price: $9.01

Discount: -8.25%

Average 5 Year Discount: -13%

Sourced: IGR-CEF Connect (click "Pricing Information" tab)

Recent Buy Discussions: Item # 1.D. Added to IGR-Bought 10 at $5.79; 5 at $5.59 (11/21/20 Post); Item # 1.E. Added 5 IGR at $3.75; 50 at at $5.69; and 10 at $5.1 (5/16/20 Post)

2021 Sell Discussions: Item #3.H. Sold All IGR Shares Purchased with Dividend (6/12/21 Post)(profit snapshot = $49.1); Item # 1.R. Sold 42+ IGR at $8.1  (4/17/21 Post)(profit snapshot = $43.23); Item # 1.A. Pared IGR-Sold 100 at $7.64 (4/9/21 Post)(profit snapshot = $63.6) 

Other Prior Sell Discussions: Item # 1. I. Eliminated IGR Vanguard Account-Sold 100 at $5.95 and Eliminated IGR in Schwab Account-Sold 100 at $5.96 (6/13/20 Post) (profit snapshots = $113.32); Item # 1.C. Sold 9 IGR at $8.33 (2/19/20 Post)(profit snapshot = $4.99); Item # 2.A. Sold 100 IGR at $8.01 (12/28/19 Post)(profit snapshot = $42.98); Item # 1 Sold 283 IGR at $7.89+ (8/24/13 Post)(profit snapshot on all 2013 sales = $77.62) 

Caveat Emptor: As of 6/30/21, this fund had a loss carryforward of $93.234+M. REITs have performed well over the past ten years so that kind of loss easily calls into question the competence of the fund's managers. The total annual average return of the Vanguard Real Estate ETF (VNQ) was 11.57% through 8/20/21 with two mid-single digit down years during that 10 year period.  

Even when IGR has a realized net long term capital gain during a year, the gain is not available to support the dividend since it is offset against the existing capital loss carryforward. So, it is possible to have the dividend fully supported by dividends and capital gains but the accounting results in part of the dividend being classified as a return of capital ("ROC"). 

{as long as the stepped up cost basis rules remain in effect for inherited property, there is some tax benefit to holding shares until death, when  the original cost basis was meaningfully reduced by ROC. The owner is not taxed on the dividends  classified as ROC while alive and the heirs are not taxed either since the cost basis is stepped back up to the market value at the time of death. I will own a few CEFs with a near zero cost basis} 

The total annual average total return for the CBRE Clarion Global Real Estate Income Fund (IGR) over the same 10 year period was not much worse than VNQ at 10.05%

Part of the problem relates back to what happened to leveraged CEFs during the 2008-March 2009, when prices the S & P 500 declined by almost 50% and many REITs suffered greater declines. 

When borrowing money, those funds had to agree to asset coverage ratios which required forced selling of security positions at the worst possible time, harvesting losses, since waiting for a recovery in prices was not an option. Waiting for a recovery in prices would be an option for unleveraged stock CEFs. 

For example, IGR had +$3.291B in assets with a cost basis of $2.343+B as of 6/30/2007. After deducting the the leveraged amount and other liabilities, the assets were worth $2.238. 2007 SemiAnnual Report As of 6/30/2009, the total investment cost was at $933+M with a value of $588M with only $22+M in leverage, down from over $900M in mid-2007. 2009 Semi-Annual Report

The same dynamic may have come into play last year, at least to a lesser extent, when the fund reported a $50.9+M capital loss. Page 18 Annual Report 

Leverage works both ways which is important to keep in mind. When REIT common and preferred stocks are in an uptrend, and the fund's borrowing costs are significantly lower than the dividend yield, capital appreciation and the dividends paid to the  funds shareholders will generally be greater than an unleveraged fund. But the unleveraged CEF fund is not forced into liquidating positions at the worst possible time.

I. Eliminated IDA-Sold 3 shares at $106.3: 

Quote:  IDACORP Inc. 

IDA SEC Filings

IDA Analyst Estimates | MarketWatch As of 8/24/21, the consensus E.P.S. was $4.9 for this 2021; $5.01 in 2022 and $5.18 in 2023. The anticipated E.P.S. growth for 2022 over 2021 is only 2.24%. It is difficult for me to accept the P/E ratio given the P.E.G.  Price/Earnings-to-Growth 

IDA 2020 Annual Report

Investment Category: Bond Substitute

Profit Snapshot: +$55.2 

Last Buy Discussion: Item # 1.C. Started  IDA as a Placeholder in my Vanguard Taxable Account- Bought 1 at $89.7; 1 at $87.5; 1 at $86.5 (2/13/21 Post)

Prior Sell Discussion: Item # 1.F. Eliminated IDA in Fidelity Taxable-Sold 3+ at $101.18, 2 at $93.5; 1 at $92.87 (4/8/21 Post)(profit snapshot = $61.22) The stock has been a beneficiary of the recent downtrend in interest rates. 

Dividend: Quarterly at $.71

IDA Dividend History | Nasdaq

Last Ex Dividend: 8/4/21

Last Earnings Report (Q/E 6/30/21):  IDACORP (IDA) SEC Filed Earnings Press Release

E.P.S. $1.38 with the consensus at $1.23 per Fidelity

Increased 2021 E.P.S. guidance to $4.7 from $4.9 from $4.6 to $4.8. 

SEC Filed Slides for Conference Call

J. Added to MJ-Bought 2 at $16.8; 1 at $16.52; 1 at $15.95: 

Quote:  ETFMG Alternative Harvest ETF Overview

Investment Category: Lottery Ticket Basket Strategy

Sponsor's website: MJ - ETFMG®

Expense Ratio: .75%

Based on reasonably forecasted earnings over the next few years, marijuana stocks are IMO overvalued but have experience significant short term rallies that I have previously traded successfully. Those rallies are generally tied to individual investor enthusiasm about legalization efforts. 

Last Discussed: Item # 2.E. Restarted MJ-Bought 2 at $17.71, 1 at $17.27 (8/12/21 Post) 

The last semi-annual report was for the period ending on 3/31/21. G.W. Pharmaceuticals was then the largest weighted position at 10.4% which is no longer a public company. MJ_Semi.pdf; Jazz Pharmaceuticals Completes Acquisition of GW Pharmaceuticals plc (5/5/21) ("Under the terms of the agreement, holders of GW ADSs, which each represented 12 GW ordinary shares, will be entitled to receive $220.00 for each GW ADS, consisting of $200.00 in cash and $20.00 in Jazz ordinary shares."; Jazz Pharmaceuticals plc (JAZZ) I would hope that this acquisition generated a meaningful capital gain for MJ.  

The largest weighted positions as of 6/30/21 were GrowGeneration Corp. (GRWG) at 9.66% and Tilray, Inc. - Class 2 (TLRY) at 9.43%. Due to price changes since 6/30/21, the price weightings were as follows on 8/21/21: 

Three tobacco companies with interests in marijuana are among the top ten holdings: Altria Group, Inc. (MO), Philip Morris International Inc. (PM) and Vector Group Ltd. (VGR). 

MJ has been paying a variable quarterly dividend. ETFMG Alternative Harvest ETF (MJ) Dividend History | Nasdaq One source for income is derived from lending its owned securities. 

5 Year Chart: 

Price performance has been highly erratic with the last three annual period producing meaningful losses. ETFMG Alternative Harvest ETF (MJ) Performance - ARCX | Morningstar The best annual return so far was in 2017 at 39.18% based on price and 38.87% based on net asset value.  

K. Bought 1 OMIC at $13.89:

Quote: Singular Genomics Systems Inc.

OMIC SEC Filings

10-Q for the Q/E 6/30/21 (cash and short term investments at $371.668M, page 2)

The IPO was in May 2021 with a public offering price of $22. Prospectus 

Last Discussed: Item # 2.G. Bought 2 OMIC at $16.87 (8/12/21 Post) I discussed the last earnings report in that post and nothing further to add here.

Investment Category: Lottery Ticket Basket Strategy

Current Position: 3 shares with a 10 share maximum. 

L. Restarted Lotto EBIX-Bought 2 at $27.3: 

Quote: Ebix, Inc.

Investment Category: Lottery Ticket Basket Strategy

Current Position: 2 shares 

Maximum Position: 5 shares 

Purchase Restriction: Any additional purchases will have to be at the lowest price in the chain. 

EBIX SEC Filings

EBIX Historical Stock Prices

10-Q for the Q/E 6/30/21 

Description of Businesses from 10-Q at p. 10: 

Website: Ebix

Playing with the House's Money:  $110.14 in prior realized gains

Last Buy Discussion: Item # 2.N. Started EBIX-Bought 8 at an AC of $20.72 and Sold  3 at $28.05 (11/13/20 Post)(profit snapshot = $19.71)

Sell Discussions: Item # 2.N. Sold 2 EBIX at $36.28 (6/25/21 Post)(profit snapshot = $18.86); Item # 1.D. Eliminated EBIX-Sold 4 at $30 (3/13/21 Post)(profit snapshot = $40.05); Item # 1.M. Sold 1 EBIX at $53 (1/20/21 Post)(profit snapshot = $31.51). 

There was about a 40% price decline on 2/22/21 due to a spat with the accountants who had resigned in a huff, as previously discussed in more detail. 

Even though the company has hired new accountants who signed off on the financials, this episode does create IMO considerable uncertainty since there is no way for an investor to know which accounting firm was right. 

I view this episode as a long term dark cloud with the cockroaches being invisible at the moment but possibly still present. 

Another uncertainty is the outcome of the class action lawsuits filed against the company.   

5 Year Chart: 

 

Dividend: Quarterly at $.075 per share

Last Ex Dividend: 6/1/21

Last Earnings Report (Q/E 6/30/21): SEC Filed Press Release; Ebix, inc (EBIX) Q2 2021 Earnings Call Transcript | The Motley Fool

Company claims GAAP E.P.S. of $.51 and non-GAAP E.P.S. at $.76

Revenues of $246.3M

Reconciliation of GAAP to Non-GAAP: 

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.