Economy:
The government's first estimate for 3rd quarter real GDP growth was reported at a 2% annualized rate, a significant slowdown from the 2nd's quarter's unsustainable 6.7% growth. Gross Domestic Product, Third Quarter 2021 (Advance Estimate) | U.S. Bureau of Economic Analysis (BEA) The PCE price index increased by 5.3% with the core rising at 4.5%. The personal savings rate was estimated at 8.9%. PCE expenditures declined to +2% from 6.7% in the second quarter. Spending on automobiles plunged at a 53.9% annualized rate, the steepest decline in more than 40 years, due most likely to supply chain problems. Part of the slowdown is attributable IMO to less government money showered on American households and a return to more normal spending patterns. This report will be revised in the coming weeks.
New orders for durable goods declined by .4% in September.
Labor shortage, supply constraints and inflation hold back economy trying to emerge from pandemic
Apple (AAPL) Q4 2021 earnings (supply chain issues cost the company an estimated $6B in revenue)
New single family home sales increased by 14% in September. Census Bureau Press Release.pdf The median sales price for news homes was reported at $408,800. Can median income households afford a median price new home now?
Personal Income and Outlays-September 2021:
Sourced: BEA.pdf Note the increase in the personal consumption price index.
Cathie Wood disputes Jack Dorsey's hyperinflation warning, says prices will fall after holidays Both are guessing. Hyperinflation is not a possibility IMO over the near or intermediate term, but will become possible when and if the USD is no longer viewed as a store of value, or the reserve currency, and plummets in value, possibly accompanied by multiple failed treasury auctions where the FED has no choice but to monetize the U.S. debt to avoid a default. Problematic inflation currently exists. It is possible that problematic inflation will remain a systemic and longer term issue due to major CBs refusing to address it through monetary policies. I would generally define problematic inflation as ranging between 3% to 10%, becoming more serious as it moves above 5% toward 10%.
Jeffrey Gundlach says inflation will stay above 4% through 2022 (and he says inflation will stay above 5% for the remainder of 2021, which is a reasonable prediction given the recent spike in energy prices)
CEO of paint-maker PPG says predicting sales is a challenge because of supply chain woes
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Markets and Market Commentary:
Inflation Is Transitory, Much Like the Dinosaurs | Barron's
David Tepper doesn't think stocks are a great investment here, but says it all depends on rates
Amazon (AMZN) earnings Q3 2021 (results and forecast hurt by consumers return to brick and mortar retailers and supply chain problems)
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What the Trump Books Teach Us - The Atlantic One of the best sentences ever written about Disgusting Don is quoted in this article and was written by the British writer Nate White: "He has no class, no charm, no coolness, no credibility, no compassion, no wit, no warmth, no wisdom, no subtlety, no sensitivity, no self-awareness, no humility, no honor, and no grace". British Writer Pens The Best Description Of Trump I’ve Read - London Daily All of those traits were obvious before Don the Con became President.
Twitter algorithm amplifies right-leaning politics more than left, internal study finds - MarketWatch According to a recent Pew Research poll, 90% of Republicans believe social media censor their "conservative" viewpoints. Pew Research Center Studies have shown, including the ones done internally by Facebook, that social media companies amplify extremist right-wing opinions, hate speech, fact free conspiracy theories and other false information, consequently increasing political polarization in the U.S. How Facebook Failed the World - The Atlantic
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Earnings Reports-owned Stocks:
For regional bank stocks bought last year, I am slowly and methodically paring positions until my average cost per share is below the most current tangible book value per share. This is a variation of my capital preservation objectives that underlies the small ball trading strategy.
In this post, I highlight a few stocks where that goal has already been achieved, highlighting both my AC per share and tangible book value per share numbers.
Associated Banc-Corp (ASB) SEC Filed Press Release (E.P.S. = $.56 with the consensus at $.436 per Fidelity; net income of $85M; NIM = 2.38%, up from 2.31% in the 2020 third quarter; efficiency ratio = 64.13% adjusted higher to 65.54% due to items, both numbers are too high; NPA Ratio =.49%; Charge off ratio YTD = .1%; coverage ratio = 246.02%; ROA = 1.07%; "excluding PPP, average loans were up $211 million, to $23.6 billion"; tangible book value per share = $17.58; total capital ratio = 13.5%; dividend payout ratio = 32.94%; branches = 224) My AC per share is currently at $12.09. Item # 1.I.
Bar Harbor Bankshares (BHB) Reports Third Quarter Results (E.P.S. = $.73, up from $.56 in the 2020 third quarter; consensus at $.66; net income = $11M; Net Interest Margin = 3.02%, up from 2.9% in the 2020 3rd quarter; core NIM, excludings PPP loans, at 2.75%; efficiency ratio = 59.18%; charge off ratio = .02%; NPL Ratio = .48%; NPA Ratio = .33%; Coverage ratio = 184%; ROA = 1.16%; ROE = 10.38%; ROTE = 15.08%; tangible book value per share. = $19.19) My last pare brought my AC per share in my Fidelity account down to $19.53 (50+ shares) Item # 1.I. I will do 1 more pare to bring the AC below tangible book value per share when and if the price exceeds $30 per share.
Brandywine Realty (BDN) SEC Filed Earnings Press Release (FFO per share = $.35; FFO = $61.1M; core portfolio occupancy = 92.7% leased, 90.3% occupied; BDN experienced during the 3rd quarter a "positive mark-to-market rents which increased 16% and 12% on an accrual and cash basis, respectively."; "Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are adjusting our 2021 earnings per share guidance of $0.25 - $0.31 to $0.20 - $0.24 per diluted share and 2021 FFO guidance of $1.34 - $1.40 to $1.35 - $1.39 per diluted share.") A major flaw in this REIT's reports is a failure to provide a cash available for distribution (CAD) per share number. FFO does not reflect the cash available for distribution for an office REIT since the number is distorted higher by excluding routine maintenance expenses, a major item. Consequently, the FFO P/E will be much lower than a net lease REIT. The FFO number also includes non-cash revenue created by the straight line accounting convention which would be excluded when making a CAD calculation. As far as I can tell, the straight line rent revenue was included in another calculation and, along with something titled "other", was $8.126M during the third quarter. I refer to those "revenues" as "pretend cash". The dividend payout ratio using FFO was only 54.3%, low for a REIT, and a CAD per share payout ratio would likely be higher than the quarterly dividend of $.19. However, given the lack of data presented by the company, I do not know by how much. Compare BDN's report with another office REIT DEA which provides both a FFO and CAD number. See discussion at Item # 3.E. Pared DEA in Fidelity Taxable-Sold 10 at $22.92 (8/20/21 Post) (DEA second quarter FFO per share at $.33 but the CAD per share for that office REIT was much lower at $.245)
Brookline Bancorp (BRKL) SEC Filed Earnings Press Release (GAAP E.P.S. - $.37 with the consensus at $.325 per Fidelity; net income of $28.8M; NIM = 3.53%, up from 3.08% for the 2020 third quarter; efficiency ratio = 53.64%; NPA ratio = .44%; Charge off ratio = .07%; ROA 1.38%; ROE = 11.79%; ROTE =14.15%; the Board increased the dividend by 4.2% in the third quarter; tangible book value per share = $10.51, up from $9.07) My AC per share is currently at $9.14. Item # 2.N.
Cathay General Bancorp (CATY) SEC Filed Press Release (E.P.S. = $.93, with the consensus at $.906 per Fidelity; net income = $72.4M, up from $56.8M in the 2020 third quarter; NIM = 3.22%, up from 3.02% in the 2020 third quarter; efficiency ratio = 43.85%; NPA Ratio = .4%; coverage ratio = 180.71%; ROA = 1.45%; ROE = 11.61%; dividend payout ratio = 33.34%; total risk based capital ratio = 14.93%; "During the third quarter of 2021, the Company repurchased 942,613 shares of common stock at an average cost of $39.40 per share for a total of $37.1 million during the quarter."; "For the third quarter of 2021, total loans, excluding PPP loans, increased by 9.1% annualized."; tangible book value per share per Reuters = $26.55) After my last pare, my AC per share was reduced to $22.75. Item # 1.H.
First Commonwealth (FCF) Announces Third Quarter 2021 Earnings (E.P.S. = $.36 with the consensus at $.319 per Fidelity; net income = $34.092M; NIM = 3.23%, up from 3.11% in the 2020 third quarter; core efficiency ratio = 55.27%; charge off ratio = .14%; NPL Ratio = .58%; Coverage ratio = 247.3%; ROA = 1.42%; ROE = 12.14%; ROTE 17.28%; "portfolio loans (excluding Paycheck Protection Program (PPP) loans) increased $132.3 million, or 8.2% annualized from the previous quarter, driven by strong consumer loan growth and improved commercial loan production"; "997,517 shares at a weighted average price of $13.35 were purchased during the third quarter of 2021"; total risk based capital ratio = 15%; tangible book value per share = $8.38, up 7.8% from the prior quarter) My current AC per share is at $7.80. Item # 4.I.
First Community Bankshares (FCBC) SEC Filed Earnings Press Release (E.P.S. = $.73 with the consensus at $.67 per Fidelity; net income = $12.61M; NIM = 3.56%, down from 4.1% in the 2020 third quarter; NPL Ratio = 1.05%; NPA Ratio = .76%; Charge off ratio = .11%; Coverage Ratio = 131.87%; ROA = 1.59%; ROTE= 17.04%; tangible book value per share = $17.09, up from $15.97). My AC per share is currently at $19.05. Item # 2.C.
First Hawaiian (FHB) SEC Filed Earnings Press Release (E.P.S. = $.5; "Recorded a $4.0 million negative provision for credit losses"; consensus at $.478 per share per Fidelity; net income of $64.3M; GAAP efficiency ratio = 55.07%; NPL Ratio = .07%; ROE = 9.31%; ROA = 1.02%; ROTE = 14.63%; tangible book value per share = $13.38; total capital ratio = 13.38%; number of branches = 54) Many of these ratios are slightly higher using FHB's calculation of "core" earnings that produced an E.P.S. of $.51. The adjustment to GAAP numbers was for severance costs. I have done a number of pares for my FHB positions.
First Horizon (FHN) SEC Filed Earnings Press Release (GAAP E.P.S. = $.41; Non-GAAP E.P.S. = $.5o with the consensus at $.408 per Fidelity; Non-GAAP excludes "notable items tied to the IBERIABANK Corporation Merger ("IBKC Merger") and early retirement of certain trust preferred securities"; adjusted net income = $275M; NIM = 2.4%, down from 2.84% in the 2020 third quarter; adjusted efficiency ratio = 62.87%; charge off ratio - .02%; NPL ratio = .63%; adjusted ROTE = 18.4%; adjusted ROA = 1.28%; tangible book value per share = $10.88) My last pare brought my AC per share down to $9.32 (53+ shares). Item # 1.A.
Flushing Financial (FFIC) SEC Filed Press Release (GAAP E.P.S. = $.81 with the consensus at $.644 per Fidelity; Core E.P.S. = $.88; other core numbers: net income = $27.829M; NIM = 3.27%; efficiency ratio = 52.3%; ROA = 1.38%; ROE = 16.88%; NPA ratio = .31%; Coverage ratio = 179.86%; "Period end loans, excluding PPP, were flat QoQ but increased 11.6% YoY"; "loan pipeline increased 34.7% YoY to a record $530.7 million"; tangible book value per share = $21.13) In my Fidelity account, my AC per share is currently at $10.29. Item # 3.H. AC in my Schwab account is at $10.99. Item # 1.E.
Horizon Technology Finance (HRZN) SEC Filed Press Release (HRZN is a BDC; my focus for this sector is on net investment income per share in relation to the dividend and net asset value per share in relation to valuation; NII per share = $.40 up from $.34 in the 2020 third quarter; dividend is paid monthly at $.10 per share, so it is more than covered for the last quarter; net asset value per share = $11.63; undistributed spillover income of $.44 per share; declared a regular 10 cent per share monthly dividend and a special dividend of $.05 for December) I view the current price, hovering near $17, as likely to be in overvaluation territory, but that is not clear given the stock warrants and equity positions in 74 companies. I am holding onto my small ball lot purchased at $9.29. Item # 1.A.; see 10-Q for the Q/E 9/30/21 at pages 7 -12 for a brief summary of investments
KKR Real Estate Finance Trust (KREF) SEC Filed Earnings Press Release (Distributable E.P.S. = $.62 with the consensus at $.483; GAAP net income of $32M; distributable earnings = $34.524M)
MarineMax (HZO) SEC Filed Press Release (E.P.S. = $1.45 with the consensus at $1.17 per Fidelity; net income = $32.8M; revenues = $462.3M, up 16% Y-O-Y; E.P.S. for the F/Y ending 9/30/21 = $6.78; "Based on current business conditions, retail trends and other factors, the Company currently expects earnings per diluted share to be in the range of $7.20 to $7.50 for fiscal 2022.")
National Bankshares (NKSH) SEC Filed Press Release (E.P.S. = $.94 with the consensus at $.72; net income of $5.752M; NIM = 2.83%, up from 2.81% in the 2020 second quarter; efficiency ratio = 48.34%; NPA Ratio = .51%; Coverage ratio = 247.21%; Charge offs first 9 months of 2021 = $445K; ROA = 1.32%; ROE = 11.73%)
Novartis (NVS) SEC Filed Press Release (This Swiss based drug company reports in USDs; "core" E.P.S. = $1.71, with the consensus at $1.652 per Fidelity; core net income = $3.83B, up 10% from the 2020 third quarter; free cash flow of $4.423B, up 64%; "net sales were USD 13.0 billion (+6%, +5% cc) in the third quarter. Volume contributed 9 percentage points to sales growth, driven by Entresto, Cosentyx, Kesimpta and Jakavi. Volume growth was partly offset by price erosion of 2 percentage points and generic competition of 2 percentage points."; top selling drug in the quarter was Cosentyx at $1.247B, followed by Entresto at $924M and Gilenya at $703M; Cosentyx revenues at $3.475B in the first 9 months of 2021, up 18% in constant currency; Jakavi produced $426M, up 26% in CC "driven by strong demand in the myelofibrosis and polycythemia vera indications"; other drugs with over $500M in revenue during the quarter include Lucentis, Tasigna, Promacta/Revolade and Tafinlar + Mekinist)
Regions Financial (RF) SEC Filed Earnings Press Release (GAAP E.P.S. of $.65 with consensus at $.525 per Fidelity; GAAP net income = $624M; GAAP NIM = 2.76% with non-GAAP NIM at 3.3% which compares to 3.41% in the 2020 third quarter; one adjustment to NIM is a .59% add back for excess cash which I would ignore as an adjustment; GAAP efficiency ratio = 57.7%; Charge off ratio = .14%; NPA Ratio = .66%; total risk based capital ratio = 14.1%; tangible book value per share = $12.32) I do not accept the .59% add back to NIM since holding cash earning close to zero is a business decision made by RF as part of its operations. The impact on NIM does indicate the significant headwind resulting from the FED's extremely abnormal monetary policies. As with other regional bank stocks bought last year, I have pared my position down to an average cost per share ($8.97) less than tangible book value per share.
Southside Bancshares (SBSI) SEC Filed Earnings Press Release (E.P.S. = $.90; with the consensus at $.653 per Fidelity; the GAAP number included a $1.1M extraordinary expense related to redeeming early a 5.5% subordinated note maturing in 2026 which will increase NIM in the 4th quarter; without that expense the Non-GAAP E.P.S. was $.93; NIM = 3.16%, up from 3.02% in the 2020 third quarter; efficiency ratio = 47.92%; NPA Ratio = .17%; ROA = 1.61%; ROTE = 17.1%; total risk based capital ratio = 18.18%; annualized linked loan growth, excluding PPP loans, at 7.9%; tangible book value per share = $20.74). This is the strongest third quarter report so far released by small cap regional bank stocks that I own. My AC per share is currently at $26.16. Item # 1.D.
Suncor Energy (SU) reports third quarter 2021 results (All amounts in Canadian Dollars; FFO of $2.641B or $1.79 per share; operatings E.P.S. of $.71; net earnings per share of $.59; "total upstream production increased to 698,600 barrels of oil equivalent per day (boe/d) in the third quarter of 2021"; Board increased dividend by 100% to $.42 per share; $704M in share repurchases during the quarter, bringing the level back up to the pre-pandemic level) Investors had a positive response to this report yesterday: SU $25.91 +$3.02 +13.19% As previously noted, SU is my largest dollar position in the Canadian E & P sector.
Union Bankshares (UNB) SEC Filed Press Release (E.P.S. = $.87; no analyst estimates; net income = $3.9M) UNB provides limited information in its earnings press releases. I have to wait until the 10-Q is filed in order to review material information. I own shares in two taxable accounts with my AC numbers within a few cents of the $18.37 tangible book value per share reported in UNB's 10-Q filed for the 2021 second quarter. Union Bankshares, Inc. Key Metrics | Reuters {Item # 4.N-AC at $18.4 in Schwab Account and Item # 1.J. AC at $18.35 Fidelity Account}
United Bankshares (UBSI) SEC Filed Earnings Press Release (GAAP E.P.S. = $.71 with the consensus at $.66; net income = $92.2M; NIM = 2.98%, down from 3.21% in the 2020 third quarter; efficiency ratio = 56.86%; NPL Ratio = .54%; NPA Ratio = .39%; dividend payout ratio = 49.13%; total capital ratio = 15.7%; tangible book value per share = $20.11) My AC per share is currently at $22.78. Item 2.I.
Washington Trust Bancorp (WASH) SEC Filed Press Release (E.P.S. = $1.07 with the consensus at $.926 per Fidelity; NIM = 2.58%, up from 2.31% for the 2020 third quarter; efficiency ratio = 57.5%; total capital ratio = 13.83%; loan to deposit ratio = 84.9%; ROA = 1.26%; ROTE = 15.29% tangible book value per share = $28.05) My AC per share number is at $29. Item # 2.G. WASH's tangible book value per share number was at $26.49 as of 9/30/20. I anticipate that my AC per share will fall below the tangible asset value per share late next year.
Webster Financial (WBS) SEC Filed Press Release (E.P.S. = $1.03; Non-GAAP E.P.S. = $1.08 with the consensus at $1.077 per Fidelity; adjustments are for merger related costs and "strategic optimization initiatives"; GAAP net income of $93.2M with adjustments at $4.3M after tax; "revenue of $313.5 million, an increase of 6.5 percent compared to a year ago."; NIM = 2.8%, down from 2.88% in the 2020 third quarter; efficiency ratio = 54.84%; charge off ratio = .02%; coverage ratio = 309.44%; NPL Ratio = 47%; NPA Ratio = .48%; ROA = 1.1%; ROTE = 14.16%; tangible book value per share = $29.63; total risk based capital ratio = 13.79%) My AC per share is at $25.54. Item # 1.H.
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1. Small Ball:
A. Added To VZ in Fidelity Account-Bought 5 at $54.12; 2 at $52.73; 3 at $52.32; 2 at $51.56; 5 at $50.95:
Quote: Verizon Communications Inc.
VZ Analyst Estimates | MarketWatch
Over the past decade or so, I have mostly limited my purchases to VZ bonds rather than the common stock.
Since the yields on the bonds are too low now, and all of my VZ bonds have either matured or been sold, I have started to nibble on the common stock.
For example, the YTM on VZ's 3.5% SU maturing in 2024 hovers around 1% at its 6% or so premium over par value. Bond Detail That is a serious negative real rate of return before taxes.
I am trading small lots. My overall opinion is that I dislike VZ less than AT&T. The VZ average annual total return over the past 15 years through yesterday's close was only +5.44%. Verizon Communications Inc (VZ) Trailing Returns-Morningstar
Investment Category: Bond Substitute with some Dividend Growth. Victory is defined as an annualized total return in excess of 2% over the dividends received. The average annual returns numbers over the past year, 3 years, 5 years, 10 years and 15 years indicate that a buy and hold strategy does not work well.
Average Cost per share this account = 53.14 (20 shares)
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| Snapshot Intraday on 10/13 after last add |
Dividend: Quarterly at $.64 per share, last raised from $.6275 effective for the 2021 4th quarter payment.
I am reinvesting the dividend when the likely price is less than $55.
Yield at $53.14 = 4.82%
Ex Dividend: 10/7/21 (Owned 10 shares as of)
Last Earnings Report (Q/E 9/30/21): Verizon (VZ) SEC Filed Earnings Press Release
GAAP E.P.S. = $1.55;
non-GAAP E.P.S. = $1.41 with the consensus at $1.362 per Fidelity;
adjusted E.P.S. excludes a $704M gain from selling Verizon Media and adds back $247M in severance, pension and benefits charges;
"Total wireless service revenue of $17.1 billion, a 3.9 percent increase year over year, driven by higher access revenue, volume growth and products.";
"699,000 retail postpaid net additions, including 429,000 phone net additions, resulting in 122.0 million total retail connections. Phone net additions increased 51.6 percent year over year.";
"The company now expects adjusted EPS* of $5.35 to $5.40, an update from prior guidance of $5.25 to $5.35."
Broker Reports (available to Schwab customers):
Morningstar (10/20/21): 3 stars with a FV of $58.
Argus (10/21/21): Buy with a PT of $68, raised 2021 E.P.S. estimate to $5.4 from $5.12 and the 2022 estimate to $5.47 from $5.37.
S & P (10/20/21): 2 stars with a 12 month PT of $48. The concerns are high capital spending financed substantially by increased debt and competition.
Long Term Debt = $153.352B (that number gives me the willies)
Goal: Dividends + an annualized 2%+ on the shares. The highest cost lots will be sold into strength when and if that occurs. The consider to pare range for me is between $56 to $60, tilting more to the bottom of that range.
B. Bought 5 GTY at $30.2; 2 at $29.64; 3 at $29.28:
Quote: Getty Realty Corp. - a REIT
Closing Price 10/28: GTY +$32.92 +$0.87 +2.71%
Website: Getty Realty
This is a new name for me.
"Getty Realty Corp. is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of June 30, 2021, the Company owned 951 properties and leased 54 properties from third-party landlords in 35 states across the United States and Washington, D.C."
Average Cost Per Share = $29.81 (10 shares)
Dividend: Quarterly at $.39 per share, last raised from $.37 effective for the 2020 third quarter payment.
Yield at AC = 5.23%
Last Ex Dividend: 9/22/21 (owned 5 as of)
Last Earnings Report (Q/E 6/30/21): SEC Filed Press Release
"AFFO for the three months ended June 30, 2021 was $22.1 million, or $0.49 per share, as compared to $18.6 million, or $0.44 per share, for the same period in 2020. AFFO for the six months ended June 30, 2021 was $43.1 million, or $0.96 per share, as compared to $37.9 million, or $0.90 per share, for the same period in 2020."
"For the three months ended June 30, 2021, revenues from rental properties increased 5.5%, or $2.0 million, to $38.3 million, as compared to $36.3 million for the same period in 2020, including rental income contractually due from tenants of $34.4 million, as compared to $31.8 million for the same period in 2020."
Getty increased "its 2021 AFFO guidance to a range of $1.89 to $1.91 per diluted share. The Company’s outlook includes completed transaction activity as of the date of this release, but does not otherwise assume additional acquisition or capital markets activities for the remainder of 2021."
Acquisitions and Redevelopments:
C. Added to TRST in Schwab Account-Bought 5 at $30:
Quote: Trustco Bank Corp. (TRST)
Closing Price 10/28: TRST $33.24 +$0.37 +1.13%
Trustco Bank - Corporate Profile
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 1.D. Restarted TRST-Bought 5 at $32.5; 5 at $32.27; 5 at $31.25 (9/17/21 Post)
Dividend: Quarterly at $.3406 ($1.36 annually rounded)
Average Cost per share this account: $31.5 (20 shares)
Yield at AC = 4.32% rounded
Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release
E.P.S. = $.871
Consensus at $.72 per Fidelity
Realized TRST Gains to Date: $1,222.29
D. Added to CDUAF-Bought 10 at $27.16-Schwab Taxable:
History this Account:
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| 15% Tax Withholding by Canada on Dividend Payments |
Quotes:
USD (pink sheet exchange): Canadian Utilities Limited (CDUAF)
CADs (Toronto): Canadian Utilities Limited (CU-TO)
CDUAF is not an ADR but the same ordinary shares traded in Canada. The shares are priced in USDs, trade on the U.S. pink sheet exchange, and pay dividends in USDs after conversion from the CAD payment.
Canadian Dollar to US Dollar Exchange Rate Chart | Xe
CDUAF Analyst Estimates | MarketWatch
Website: Canadian Utilities | Utilities | Energy
CU.TO - Canadian Utilities Limited Profile | Reuters
May 2021 Investor Presentation.pdf
Average Cost per share: US$27.26 (20 shares)
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| Snapshot Intraday on 9/22/21 |
Dividend: Quarterly at C$.4398 per share (C$1.76 annually)
Canadian Utilities | Dividends & Stock Splits
Last Discussed: Item # 1. Bought 100 CU:CA at C$34.25(5/8/21) In Item #2.E. of that post, I also discussed buying 10 shares of CDUAF at US$27.36.
Current Position: 120 shares
Last Earnings Report (QE 6/30/21): Canadian Utilities Reports Higher Second Quarter 2021 Adjusted Earnings
Adjusted earnings of C$115M
Adjusted E.P.S. = C$.43
Detailed report: Second Quarter Supplemental.pdf
E. Added to BMY in Fidelity Taxable-Bought 1 at $60.34; 1 at $59.98; 1 at $59.5:
Quote: Bristol Myers Squibb Co.
Closing Price 10/28: BMY $57.13 +$0.64 +1.13%
BMY Analyst Estimates | MarketWatch
2020 Annual Report (long term debt was reported at $48.711B, page 100)
Bristol Myers Squibb: Investor Relations
Pharmaceutical Research & Development Pipeline
New AC this Account: $60.7 (18 shares)
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| Snapshot Intraday 9/28/21 after last add |
Yield at $60.7 = 3.23%
Last Ex Dividend: 9/30/21 (own all as of)
Last Sell Discussions: Item # 2.F. Pared BMY in Fidelity Taxable-Sold 1.203 at $68.8 (9/10/21 Post)(discussed last earnings report, Bristol Myers (BMY) SEC Filed Earnings Press Release; Item # 3.G. Sold 1 BMY at $67.1-Schwab Taxable (6/12/21 Post); Item # 3.B. Pared BMY in Vanguard Taxable-Sold 2 at $65.63 (5/14/21 Post )
Revlimid and Celgene Acquisition:
The main problem with BMY is Revlimid's U.S. patent expiration next year. This drug generated revenues of $9.493B during the first nine months of 2021.
After the purchases discussed in this post, that potent concern was amplified when its drug deucravacitinib failed to meet either the primary or secondary endpoints in a phase 2 trial for severe ulcerative colitis. Bristol Myers Squibb Provides Update on Phase 2 Study of Deucravacitinib in Patients With Moderate to Severe Ulcerative Colitis
This drug is in several trials as described in that press release (and see 4/23/21 press release: Bristol Myers Squibb Presents Positive Data from Two Pivotal Phase 3 Psoriasis Studies Demonstrating Superiority of Deucravacitinib Compared to Placebo and Otezla® (apremilast).
BMY "continues to expect greater than $4 billion non-risk adjusted revenue target for deucravacitinib in 2029." Given the negative price response to this news, the Stock Jocks are skeptical of that prediction IMO.
Bristol-Myers Squibb Completes Acquisition of Celgene (11/20/19)(1.00 share of Bristol-Myers Squibb common stock, $50.00 in cash without interest and one tradeable Contingent Value Right (CVR), which will entitle the holder to receive a payment of $9.00 in cash if certain future regulatory milestones are achieved." Lawsuits have been filed against BMY relating to the CVR payments. Bristol Myers will likely settle the $6.4B Celgene CVR lawsuit at a discount, analyst says. Here's why | FiercePharma; Bristol Myers Squibb Provides Update on Status of Contingent Value Rights The closing stock price on 11/20/19 was $56.21.
To achieve antitrust clearance, Celgene had to sell the rights to OTEZLA to Amgen for $13.4B.
In addition to Revlimid, Celgene's acquisition brought BMY the following approved drugs as of the acquisition date: INREBIC for the treatment of certain forms of myelofibrosis and REBLOZYL for the treatment of adult patients with beta thalassemia, a condition that has so far been successfully treated in early trials by CRSP's gene editing therapy CTX001. REBLOZYL generated $240M in revenues during the first six months of 2021, whereas INREBIC only produced $32M. BMY pays Acceleron Pharma "tiered royalty payments in the low-to-mid 20% range on net sales of REBLOZYL", see page 11 Acceleron 2020 Annual Report
BMY also acquired Celgene's pipeline drugs: ozanimod (brand Name Zeposia) to treat multiple sclerosis and 2 CAR-T treatments for multiple myeloma, liso-cel (brand name Breyanzi) for lymphoma and bb2121. Zeposia was approved by the FDA in March 2020 for multiple sclerosis. Zeposia (ozanimod) FDA Approval History - Drugs.com Zeposia generated $46M in first half revenues. The FDA approved Breyanz in February 2021. FDA approves lisocabtagene maraleucel for relapsed or refractory large B-cell lymphoma-FDA Breyanzi produced $17M in revenue in the second quarter. Celgene also owned over 7M shares of Acceleron Pharma Inc., see Acceleron Pharma Inc. Common Stock (XLRN) Insider Activity, which has agreed to be acquired by Merck for $180 per share. Merck to Acquire Acceleron Pharma Inc)
Last Buy Discussions: Item # 1.M. Added to BMY-Bought 1 at $59.9; 3 at $59.7 (2/21/21 Post); Item # 3.A. Started BMY-Bought 5 at $63; 1 at $61.5; 1 at $61.24; 2 at $61 and 2 at $60.4 (12/19/20 Post)Item #3.M. Added to BMY- Bought 2 at $61.05 (1/1/21 Post)
Last Earnings Report (Q/E 9/30/21, released after purchases): SEC Filed Earnings Press Release
Non-GAAP E.P.S. at $2, up from $1.63 in the 2020 third quarter (+23%)
Non-GAAP consensus at $1.919 per Fidelity
Product Revenues over $500M
Revenues = $11.624B, up from $10.54B (+10%)
Revlimid Revenues = $3.347B, up from $3.027B (+11%)
Eliquis Revenues = $2.413B, up from $2.095B (+15%)
Opdivo Revenues = $1.905B, up from $1.78B (+7%)
Orencia Revenues = $870M, up 5%
Pomalyst = $851M, up 10%
Sprycel = $551M, up 1%
Yervoy = $515M, up 15%
Four other approved drugs acquired in the Celgene acquisition (Breyanzi, Inrebic Reblozyl, and Zeposia, generated a combined $252M in revenues.
Increased 2021 non-GAAP E.P.S. guidance to $7.4 from $7.55, up from $7.35 to $7.55
Other Recent News: BMY Receives European Commission Approval for Abecma (Idecabtagene Vicleucel), the First Anti-BCMA CAR T Cell Therapy for Relapsed and Refractory Multiple Myeloma (8/19/21)(BMY is partnering with bluebird bio on Abecma); The BMY-Pfizer Alliance is pleased with the decision by the U.S. Court of Appeals for the Federal Circuit upholding the Eliquis® Patents (9/3/21) Eliquis is an important drug for BMY, generating $2.792B in revenue during the first six months.
F. Added to BMY-Bought 2 at $60.14-Schwab Taxable:
See Item # 1.F above.
New AC This Account: $60.74 (15+ shares)
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| Closing Price as of 9/23 |
Yield at $60.74 = 3.23%
G. Eliminated MHGVY-Sold 5 at $26.91:
Profit Snapshot: +$26.77
Last Discussed: Item # 1.D. Bought 5 MHGVY at $21.56 (2/13/21 Post)
Last Earnings Report (Q/E 6/30/21):
Quarterly Report Q2 2021 (footnotes omitted from snapshot)
While results substantially improved from the pandemic suppressed demand in the 2020 second quarter, my overall reaction to this report was that the valuation was too high for me. The Stock Jocks apparently disagree since the price has risen since I sold this 5 share lot.
H. Eliminated XT in Vanguard Taxable-Sold 2 at $64.5:
Quote: XT | iShares Exponential Technologies ETF Overview
Sponsor's website: iShares Exponential Technologies ETF | XT
Some Top Holdings as of 10/22:
Expense Ratio: .47%
Profit Snapshot: +$35.84
Dividends: Semi-annually at a variable rate
Last 2 Dividend Payments: $.28 per share rounded
Yield at $64.5 = .43%
I. Added to INCY in Fidelity Taxable-Bought 2 at $72.8; 1 at $71.5; 1 at $70.5; 1 at $70; 1 at $69.3; 1 at $68.18; 1 at $66.8; 1 at $65.58:
Last Discussed: Item # 1.J. Bought 1 VBR at $115.5; 1 at $112.9 (9/19/20 Post)
Dividend: Quarterly and variable. The last dividend was $.66 per share.
Ex Dividend: 9/24/21. I sold on the ex dividend date.
M. Sold 1 ARCC in Fidelity Account at $21.61:
Quote: Ares Capital Corp.- An externally managed BDC
Website: Ares Capital Corporation
Profit Snapshot: $9.1 (10/27/21 sale only)
Dividend: Quarterly at $.41 (regular only)
New Average Cost per share this account: $11.04 (35 shares)
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| Snapshot Intraday on 10/27 after pare |
Yield at $11.04 = 14.86% rounded
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)
Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release
Core E.P.S. = $.47 with the consensus at $.444 per Fidelity.
NII per share = $.40
GAAP per share = $.73 (includes net unrealized gains based on valuation marks)
Net Asset Value per share: $18.52, up from $16.97 in the 2020 third quarter
Discount to NAV per share at my AC = -40.39%
Debt/Equity Ratio =1.17x
Other Data:
Sell Discussions: Item # 1.J. Sold 1 ARCC at $19.27 (4/30/21 Post); Item # 3.C. Pared ARCC in Schwab Taxable Account-Sold 20 at $17,44 and Item #3.D. Pared ARCC in Fidelity Taxable-Sold 5 at $17.32 (1/1/21 Post)(profit snapshots = $39.52: post contains in Item # 3.D. prior profit snapshots); Item # 1.C. Sold 50 ARCC at $16.98 (6/18/18 Post); Item 2.A. Eliminated ARCC-Sold Remaining 50 Shares at $17.25 (2/15/17 Post); Item # 1, Sold 102+ ARCC at $15.32 and 50 at $15.26: Update For Portfolio Positioning And Management As Of 8/21/16 - South Gent | Seeking Alpha; Sold 100 ARCC at $17.195 (4/28/15 Post); Item # 3 Sold 100 ARCC Roth IRA at $17.05 (2/25/15 Post); Sold 100 ARCC at $17.54-IRAs in Two 50 Share Lots (9/13/12 Post)
I have been trading ARCC for over 10 years. My first snapshot was a 50 share lot sold in 2011 that was bought in 2010.
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| +$24.61 |
The largest gain was a 50 share lot sold in 2017:
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| +$160.51 IB account |
Goal: As with all BDC stocks, the goal is simply to earn a return in excess of the dividends paid.
Of the externally managed BDCs, ARCC has the best track record IMO.
I currently own ARCC in 4 accounts which includes 2 of my ROTH IRA accounts. The Schwab taxable account has been whittled down to 31+ shares with an AC per share at $12.88.
ARCC Realized Gains to date = +$712.63
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.
