AEG, AMGN, AQN, AQN:CA, CRSP, FE, FLSW, IP, MRK, SBRA, SPYD

Economy: 

High inflation is eating up the budgets of American households - MarketWatch

Workers quit jobs in record numbers as consumer sentiment hits 10-year low

Inflation Has Run Hot for a Long Time. The Fed Knows It. | Barron's The article references the New York Fed's underlying inflation index. 

Underlying Inflation Gauge (UIG) - FEDERAL RESERVE BANK of NEW YORK

Fed is losing credibility over its inflation narrative, Mohamed El-Erian says

Retail sales rise faster than expected in October even as inflation pushes prices higher

Ignore 'hysterical people' — inflation is not here to stay, economist says

Fed's Daly warns against 'pre-emptive' interest-rate hikes to cool inflation- MarketWatch Inflation will have to fix itself. 

The Fed - Industrial Production and Capacity Utilization - G.17 ("At 101.6 percent of its 2017 average, total industrial production in October was 5.1 percent above its year-earlier level and at its highest reading since December 2019. In October, capacity utilization for the industrial sector increased 1.2 percentage points to 76.4 percent; even so, it was still 3.2 percentage points below its long-run (1972–2020) average.")

+++

Markets and Market Commentary: 

Resist buying U.S. stocks and Treasurys, Morgan Stanley advises. Here's what their strategists recommend buying instead. - MarketWatch It is not difficult to resist buying U.S. Treasury debt.  

Pfizer Shows Its R&D Is Strong. That Makes Its Stock a Good Long-Term Bet. | Barron's

Energy markets may see more supply crunches as demand grows: Dan Yergin

Cathie Wood says institutional buys make bull case for bitcoin reaching $500,000 by 2026 - MarketWatch

30-Year Fixed-Rate Mortgages Since 1971 - Freddie Mac  The average rate in October 2021 was at 3.07%. For the week ending 11/18, the rate was at 3.10%. Mortgage Rates - Freddie Mac

The long period of abnormally low mortgage rates has allowed American households to significantly reduce their mortgage service obligations as a percentage of disposable income. That savings allows them to reduce their existing debt obligations, to save more, and/or to spend more that is funded with disposable income rather than new debt. This is one of the powerful and positive long term forces. 

Mortgage Debt Service Payments as a Percent of Disposable Personal Income-St. Louis Fed

++ 

Earnings Reports-Owned Stocks: 

Alexander & Baldwin (ALEX) SEC Filed Press Release (FFO = $15.5M or $.21 per share; core FFO per share = $.25;"debt-to-total market capitalization was 27.0% as of September 30, 2021. The Company's debt has a weighted-average maturity of 4.3 years, with a weighted-average interest rate of 3.68%. Eighty-five percent of the Company's debt was at fixed rates."; "lease occupancy in the retail portfolio was 93.2% as of September 30, 2021, an increase of 90 basis points compared to June 30, 2021, primarily due to robust leasing activity at Kailua Retail and The Shops at Kukui‘ula. Leased occupancy in the Same-Store retail portfolio was 93.1% as of September 30, 2021, an increase of 90 basis points compared to the prior quarter; "leased and Same-Store leased occupancy in the industrial portfolio were 98.0% as of September 30, 2021, an increase of 20 basis points compared to June 30, 2021, primarily due to positive incremental leasing activity at Port Allen Industrial.";  revised 2021 Core FFO per share to $.88-$.92 from $.81-$.87) 

Atkore (ATKR) SEC Filed Press Release (GAAP E.P.S. = $4.26, up from $1.11; GAAP net income of $202.561M; Non-GAAP E.P.S. = $4.39 with the consensus at $3.844; for the fiscal year ending 9/30/21, diluted GAAP E.P.S. at $12.19, up from $3.10). ATKR is a new name for me. Revenues and earnings will be cyclical. The Stock Jocks responded favorably to this report: ATKR $111.60 +$8.60 +8.35% 

Bank of N.T. Butterfield (NTB) SEC Filed Press Release (GAAP E.P.S.  = $.8 with the consensus at $.804 per Fidelity; net income = $39.8M; NIM =  1.97% (the lowest among bank stocks that I own), down from 2.3% in the 2020 third quarter; Core efficiency ratio = 66.3% (too high IMO); NPL ratio =  1.2%; NPA Ratio = .5%; ROA = 1%; ROE = 16.2%; ROTE = 17.9%; declared regular quarterly dividend of $.44 per share; tangible book value per share = $17.92) I am keeping a few shares even though I view the NIM and efficiency ratio numbers unfavorably. My current AC per share in my Fidelity account is at $24.37 (18+shares, yield at 7.22% at AC). Item # 1.M. Ten shares are owned in my Schwab account with an AC at $23.55. 

Beazer Homes (BZH) SEC Filed Press Release (net income of $48.4M or $1.57 per share with the consensus at $.82 per Fidelity)

Blackrock TCP Capital (TCPC) SEC Filed Earnings Press Release (NII = $18.7M; NII per share = $.32 with the consensus at $.32 per Fidelity; net asset value per share  = $14.09; the NAV suffered a $.11 per share hit due to a loss associated with prepaying early a 2022 note subject to a make whole payment; sold $150M of 2.85% notes due in 2026; declared a regular quarterly dividend of $.30 per share; as of 9/30/21, the weighted average yield on debt investments was at 9.4%; 77 % of total portfolio was first lien)  

Duke Energy (DUK) SEC Filed Press Release (E.P.S. = $1.79; Non-GAAP E.P.S. = $1.88 with the consensus at $1.795 per Fidelity; revenues = $6.951B, up from $6.721B in the 2020 third quarter; narrowed "2021 adjusted EPS guidance range to $5.15 to $5.30 and reaffirms long-term adjusted EPS growth rate of 5% to 7% through 2025")

Franklin Financial Services (FRAF) SEC Filed Press Release (E.P.S.  = $1.31 based on $5.9M in net income, up from $.79 in the 2020 third quarter; no analyst coverage; E.P.S. benefited from a $1.8M gain from selling main office building; weighted average diluted shares = 4.467M; $1.8M gain translates into about $.40 per share; NIM = 2.89%, down from 3.02% in the 2020 third quarter; NPL. Ratio = .85%; NPA Ratio = .5%; declared regular quarterly dividend of $.32 per share; tangible book value per share = $32.46, up from $29.87 as of 9/30/20) My AC is at $22 per share: Item # 2.K. 

FS KKR Capital (FSK) SEC Filed Press Release (NII per share $.71, adjusted down to $.64 with the consensus at $.627 per Fidelity; the difference of 7 cents per share was due to accretion accounting on acquired loans which should be ignored IMO; net asset value per share at $27.14, up from $26.84 as of 6/30/21; quarterly dividend at $.65 per share; weighted average yield on accruing debt investments = 9.1% and on total debt investments at 8.5%; percent of investments on nonaccrual = 3.7%; a $.62 per share quarterly dividend was declared)

Huntington Bancshares (HBAN) SEC Filed Press Release (adjusted E.P.S. = $.35, with the consensus at $.318 per Fidelity; adjusted E.P.S. excludes $.13 in expenses related to HBAN's acquisition of TCF Financial; NIM = 2.9%, down from 2.96% in the 2020 third quarter; Charge off ratio =  .20%; NPA Ratio = .81%; tangible book value per share  =  $8.10).  The AC in my Fidelity account is currently at $9.67 (72+ shares). Item # 2.A.. The AC in my Vanguard taxable account is at $8.57 (7+ shares). Item # 2.B. The AC per share in my Schwab account is at $7.56 (10 shares). 

New Mountain Finance (NMFC) SEC Filed Press Release (NII per share = $.31 with the consensus at $.30 per Fidelity; quarterly dividend at $.30; total NII = $68.2M; net asset value per share = $13.26, up from $12.62 as of 12/31/21). As with other BDCs, I did some light buying during the March 2020 meltdown period and have reduced my average cost per share by selling my highest cost lots. My AC per share is at $8.15 in my Fidelity account.  Item # 2.G. (8/6/21 Post) I did not discuss a 5 share purchase in my Vanguard taxable at $4.9 which I still own. 

New York Community Bank (NYCB) SEC Filed Press Release (Non-GAAP E.P.S.  = $.31 based on $145M in net income with the consensus E.P.S. at $.321; GAAP E.P.S. = $.30 which includes merger related expenses; NIM = 2.44%, up 15 basis points Y-O-Y; excluding prepayment income, NIM was at 2.32%, up 2 basis points; efficiency ratio = 38.84%; NPL Ratio - .06%; NPA Ratio = .06%; Coverage Ratio = 711.96%; ROA = 1.04%; ROE = 8.69%; ROTE = 13.89%; tangible book value per share = $8.68) 

Novo Nordisk (NVO) Earnings Report.pdf (E.P.S. DKK 5.27 with the consensus at DKK 5 and up from DKK 4.42 in the 2020 third quarter; net profit = DKK 12.199B; net profit margin = 34%; guides 2021 free cash flow to DKK 44-49B and operating profit growth to 12 to 15%; initial demand for NVO's weight loss drug Wegovy exceeds supply (page 8); in an aggravating presentation, NVO does not break out Wegovy revenues from its older weight loss drug Saxenda) 

OGE Energy (OGE) SEC Filed Press Release (E.P.S. = $1.26 with the consensus at $1.19 per Fidelity; net income = $252M; operating revenues = $864.4M)

Owl Rock Capital (ORCC) SEC Filed Press Release (NII  of $130.5M or $.33 per share with the consensus at $.309 per Fidelity; declared regular $.31 per share dividend; weighted average yield of accruing debt securities = 7.9%; net asset value per share = $14.95, up from $14.67 as of 9/30/21) The current AC in my Fidelity account is $12.25 (30 shares) Item # 2.K. I also own 20+ shares in my Schwab taxable account with a $12.31 AC and 25 shares in my Vanguard account with an AC of $12.26. 

Prospect Capital Corporation (PSEC) Press Release (NII per share  = $.21 with the consensus at $.175 per Fidelity; net asset value per share  = $10.12, up from $9.81 as of 6/30/21) After some paring, I have reduced my AC per share down to $4.98 in my Fidelity account. Item # 1.G. (9/24/21 Post) As noted in that post, recent results from this hated BDC have been encouraging. The AC per share is at $5.13 in my Schwab account. I also own 20 shares in  my Vanguard taxable account with a $5.02 cost basis. Those shares were purchased on 11/3/20.

Regeneron (REGN) SEC Filed Press Release (Non-GAAP E.P.S. = $15.37 with the consensus at $10.04 per Fidelity; non-GAAP net income = $1.773B; GAAP E.P.S. $14.33; total revenues = $3.453B; REGN-COV revenues at $677M, but facing potential competition from pills to treat Covid; Eylea revenues up 12% to $1.473B; collaboration revenues, which includes the blockbuster Dupixent, reported at $1.074B, up from $653M in the 2020 third quarter; Dupixent global  sales, "which are recorded by Sanofi, increased 55% to $1.66 billion versus third quarter 2020":). The Stock Jocks are having a hard time valuing this company since there is a big question mark about REGN-COV antibody cocktail revenues going forward. Several approved drugs have not produced revenues that would provide comfort. The combined net product sales of Libtayo, Praluent, and Evkeeza were $130M in the 2021 third quarter, up from $124M in the 2020 third quarter. 

SLR Investment (SLRC) SEC Filed Press Release (NII per share = $.36 with the consensus at $.366; declared regular quarterly dividend of $.41 per share; net asset value per share = $20.2, up from $20.16 as of 12/31/20; number of portfolio companies >600). I have not pared my position yet in this BDC but will likely to do so within a few months. My AC is at $17.25 (100 shares). Item # 1 

Unum (UNM) SEC Filed Press Release (Non-GAAP operating E.P.S. = $1.03 with the consensus at $1.152 per Fidelity; GAAP net income at $328.6M or $1.6 per share)  

++++

Hear Trump defend January 6 rioters who chanted 'Hang Mike Pence' - YouTube

Iowa Poll: Trump leads Biden in possible 2024 matchup

GOP roars back to life in Trump-resistant Pennsylvania suburbs - POLITICO

Messonnier, Birx detail political interference in last year’s coronavirus response-The Washington Post

House investigators release interview excerpts with Messonnier, Birx and others-The Washington Post

How Republicans Have an Edge in the Emerging 2022 Congressional Maps-The New York Times 

Wyoming Republicans disavow Liz Cheney over Trump impeachment, criticism-The Washington Post

Sidney Powell Reportedly Pleaded With Trump Official to Rescue CIA Chief Based on QAnon Conspiracy She Was ‘Hurt’ and Arrested in Germany Nutty does not begin to describe this particular conspiracy theory. 

Trump gave an agency $100 million to fight Covid. Here’s what happened.

It is noteworthy that 207 House republicans voted against censoring Paul Gosar who published an animated video depicting him murdering a fellow member of Congress and threatening violence against the President. November 17, 2021 Paul Gosar House censure vote on AOC and Biden videos House republicans, seeing nothing wrong with that video, were outraged that anyone would even suggest that the video was inappropriate. Those republicans are likely to regain control over the House after the 2022 election. The last censure vote was passed with strong Democrat support against the Democrat congressman Charles Rangel. The Rise, And Dramatic Fall, Of Charlie Rangel-NPR  

Earlier this year, Gosar attempted to raise campaign money by suggesting that the FBI organized the attack on 1/6. GOP Rep. Gosar Promotes More Jan. 6 Conspiracy Theories In Campaign Email

Demagogue Don endorsed Gosar for reelection. Trump throws support behind Gosar after censure vote | TheHill

++++

1. Bought 300 AQN:CA at C$18.48 (Interactive Brokers Account-Commission C$3): 

Quotes: 

I mentioned this purchase in a 10/14/21 comment. 

Toronto: Algonquin Power & Utilities (Canada: Toronto) 

NYSE:  Algonquin Power & Utilities (U.S.: NYSE) 

AQN is a diversified utility (water, gas and electricity) with over $16B in assets. Most of AQN's operations are in Canada and the U.S., but the company is expanding internationally. "AQN is a global leader in renewable energy through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities. AQN owns, operates, and/or has net interests in over 4 GW of installed renewable energy capacity."

Website: Algonquin Power & Utilities Corp.  

I also purchased shares on the NYSE using USDs, see Item # 2.G. below.  

Subsequent to my purchase, AQN announced that it would acquire Kentucky Power and AEP Kentucky Transco from American Electric Power (AEP).  

The purchase price is US$2.846B which includes the assumption of $1.221B in debt. 

"Kentucky Power is a state rate-regulated electricity generation, distribution and transmission utility operating within the Commonwealth of Kentucky, serving approximately 228,000 active customer connections and operating under a cost of service framework. Kentucky TransCo is an electricity transmission business operating in the Kentucky portion of the transmission infrastructure that is part of the Pennsylvania – New Jersey – Maryland regional transmission organization (“PJM”)." 

The deal will add over $2B in regulated rate base and is expected to be accretive to earnings in 2023, the first full year of operation. 

Financing includes the bought deal offering of 44.08M AQN shares at C$18.15 plus the greenshoe of up to 6.612M shares at the same offering price. (about US$743M with the exercise of the entire greenshoe option". Emphasis Added) Algonquin Power & Utilities Corp. Announces Agreement to Acquire Kentucky Power Company (10/26/21) This caused the stock price to decline. 

Additional equity financing is not expected until mid-2022 when the deal is currently expected to close. 

As with AQN's previous acquisition of the U.S. utility Empire District completed on 1/1/17, AQN will transition the generation fleet to green energy production from fossil fuels. 

Links to Recent Articles: Baystreet.ca - Here’s My Top Canadian Dividend Stock to Buy Today; 4 Top Canadian Dividend Stocks I’d Buy Now for Retirement | The Motley Fool Canada

Dividend: Quarterly at US$.1706 and at C$.2125 (annually = C$.85)

Algonquin Power & Utilities Corp. Declares Fourth Quarter 2021 Common Share Dividend of U.S.$0.1706 (C$0.2124), and Declares Fourth Quarter 2021 Preferred Share Dividends

The dividend rate has more than doubled since 2011 when the penny rate was less than US$.07. Dividend History 

Yield at C$18.48 = 4.6%

Last Ex Dividend: 9/29/21

Last Earnings Report (Q/E 9/30/21): This report was released after my purchase. 

Algonquin Power & Utilities Corp. Announces 2021 Third Quarter Financial Results

All amounts are in US dollars. 

Non-GAAP E.P.S. = $.15

Consensus at $.161 per Fidelity

Adjusted net earnings: $97.6M, up 11% compared to the 2020 third quarter

Adjusted funds from operations: $170.2M

Revenues = $538.6M

1 Broker Report: 

Credit Suisse (10/26/21): Neutral with a US$16 PT. 

Other Recent News: 

Algonquin Power & Utilities Corp. Prices Upsized $1.0 Billion Equity Units Offering (6/18/21)

Acquisitions Completed since 1/1/17: AQN is growing through acquisitions. I would call the company aggressive. 

Algonquin Power & Utilities Corp. Completes Acquisition of Bermuda Electric Light Company Limited (11/9/20)

Algonquin Completes ESSAL Acquisition (this is a water utility based in Chile)

Liberty Utilities Co. Expands Water Utility Presence with an Agreement to Acquire American Water's Regulated Operations in New York (11/20/19) Liberty is a subsidiary of AQN. 

Algonquin Power & Utilities Corp. Completes Acquisition of New Brunswick Gas (10/1/2019)(company notes in this release that this was the 24th regulated utility acquisition since 2009). 

Algonquin Power & Utilities Corp. Completes Purchase of Additional Stake in Atlantica Yield plc (11/27/18)

Algonquin Power & Utilities Corp. Continues Expansion of its Regulated Utility Distribution Business in the United States (8/31/17)

Algonquin Power & Utilities Corp. Completes Acquisition of The Empire District Electric Company (1/1/17) This was the largest acquisition in this list with an aggregate purchase price of C$3.2B. With this acquisition, AQN had, as of 1/1/17, "782,000 electric, gas, and water customers within its regulated utility business, and APUC's portfolio of power generating facilities now contains both regulated and non-regulated power facilities with a total capacity of over 2,500 MW."

Maximum Position: 500 shares all accounts

2. Small Ball:

A. Eliminated MRK in Schwab Taxable-Sold 4 at $81.57: 

Quote:  Merck & Co. Inc. (MRK)

Closing Price: 11/18: MRK $83.05 +$0.45 +0.54% 

I still own shares in 2 other taxable accounts accounts (12 shares with an AC of $68.84, with the tax cost basis adjusted down to account for the OGN spin off, see below) 

SEC Filings

Pipeline - Merck.com

2020 Annual Report

Investment Category: Bond Substitute with a flavor of dividend growth.

The quarterly dividend rate was $.43 in 2013 and is presently at $.65. 

I discussed the rationale in a comment published on 10/5, referring there to this article: Why Merck's Celebrated Covid Pill Could Be Riskier Than People Think | Barron's I do not see how Merck's pill Molnupiravir (branded as Lagevrio), which messes with Covid's genetic code, can be as successful as Pfizer's protease inhibitor pill Paxlovid, but it is too early to make a firm conclusion. Covid antiviral drugs: How the Merck and Pfizer pills work; COVID antiviral pills: what scientists still want to know

Merck's Covid pill has received its first authorization from the U.K. 

Biden administration to buy Pfizer antiviral pills for 10 million people, hoping to transform pandemic - The Washington Post; Pfizer asks FDA to authorize Covid antiviral pills

Profit Snapshot:  +$44.65

The cost basis was adjusted down to account for the Organon (OGN) spinoff. In this account, I did not own enough MRK shares to receive 1 OGN share, so I receive a cash payment of $10.34. The payment is treated as a sale of the OGN fractional share (.3) that I did not receive, resulting in a $.14 loss:

Last Substantive Discussion: Item # 1.I. Restarted MRK-Bought 1 at $78.12, 1 at $75.9, 1 at $75.13; 2 at $74.5; 1 at $73.49 (2/27/21 Post)

Dividend: Quarterly at $.65 per share

Last Ex Dividend: 9/14/21 

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release 

Non-GAAP E.P.S. = $1.75

Consensus at $1.546 per Fidelity

GAAP E.P.S. continuing operations = $1.8 

Revenues = $13.2B, up 20% vs. 2020 3rd Q. 

Key Product Revenues: 

"KEYTRUDA Sales Grew 22% to $4.5 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 21%"

"GARDASIL/GARDASIL 9 Sales Grew 68% to $2.0 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 63%"

"Animal Health Sales Grew 16% to $1.4 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 14%"

 

Narrowed "Full-Year 2021 GAAP EPS to be Between $4.71 and $4.76; Raises and Narrows Full-Year 2021 Non-GAAP EPS to be Between $5.65 and $5.70, Including a Positive Impact from Foreign Exchange of Approximately 2%."

MRK Realized Gains starting in 2016 (no round trips between 2007-2016): 

2016  50 Shares +$183.44

2017 113+ Shares +$741.19

2018 10 Shares +$69.17

2021 Etc. = $67.46

RI

Total: $1,061.26

Some Sell Discussions starting in 2017: 

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

Item 1.C. Sold 10 MRK at $61.2 (1/28/18 Post)(profit snapshot $69.17) 

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

B. Added 1 SBRA at $14.64; 1 at $14.1-Fidelity Taxable: 

Quote: Sabra Healthcare REIT Inc. (SBRA)

Closing Price 11/18: SBRA $14.31 -$0.02 -0.14% 

Sabra's assets consist of nursing homes, assisted senior living and mental health facilities. 

"As of September 30, 2021, Sabra’s investment portfolio included 421 real estate properties held for investment (consisting of (i) 282 Skilled Nursing/Transitional Care facilities, (ii) 61 Senior Housing communities (“Senior Housing - Leased”), (iii) 49 Senior Housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”) and (iv) 29 Specialty Hospitals and Other facilities), one asset held for sale, one investment in a sales-type lease, 17 investments in loans receivable (consisting of (i) one mortgage loan, (ii) one construction loan and (iii) 15 other loans), eight preferred equity investments and one investment in an unconsolidated joint venture. As of September 30, 2021, Sabra’s real estate properties held for investment included 41,692 beds/units, spread across the United States and Canada."

Website: Home | Sabra

Sabra SEC Filings

10-Q for the Q/E 9/30/21 (debt listed and discussed starting at page 17; senior unsecured notes = $2.05B, rated at BBB-/Ba1)

I am slightly increasing my exposure to nursing home REITs based on what I perceive as an improving risk/reward balance due to vaccinations and better actual and potential (the pills) treatments for Covid. I still regard them as the riskiest REIT sector. 

Average Cost per share this account after adds: $15.13 (48+ shares)

Snapshot Intraday on 10/6/21

Dividend: Quarterly at $.30, slashed from $.45 effective for the 2020 second quarter payment which I viewed as reasonable under the circumstances. 

SBRA Dividend History-Nasdaq

I am reinvesting the dividend in this account. 

Yield at $15.13 AC = 7.93%

Last Ex Dividend: 11/15/21 (owned all as of) 

Last Earnings Report (Q/E 9/30/21): 

AFFO = $.38

FFO = $.27

"Included in net income and FFO is the write-off of $25.2 million ($0.11 per diluted common share) of straight-line rent receivables related to our lease with the Avamere Family of Companies . . . Avamere has experienced cash flow constraints over the past several months and as a result, we subsequently determined that this lease should no longer be accounted for on an accrual basis and wrote off its straight-line rent receivable balance. This write-off is reflected as a reduction of our rental revenues for the third quarter of 2021."

"On October 15, 2021, we completed an underwritten public offering of 7.8 million newly issued shares of our common stock at a price of $14.40 per share and received net proceeds, before expenses, of $112.6 million."  Proceeds were used to fund part of Sabra's $290M first mortgage loan to Recovery Centers of America Holdings, LLC. that are secured by 6 addiction treatment centers. The coupon rate is at 7.5%. 

Sabra Health Care REIT, Inc. Closes on Previously Announced RCA Mortgage Loan; Sabra Health Care REIT, Inc. Announces Pricing of Public Offering of 6.8 Million Shares of Common Stock; Sabra Health Care REIT, Inc. Announces a Proposed Agreement to Expand Relationship with Recovery Centers of America; Provides Business Update; Reaffirms 2021 Outlook (9/13/21)

Occupancy By Segment: 

"Pro forma for the October 7, 2021 redemption of $300.0 million of 4.80% senior unsecured notes due 2024, as of September 30, 2021, we had approximately $1.2 billion of liquidity, consisting of unrestricted cash and cash equivalents of $246.6 million and available borrowings of $1.0 billion under our revolving credit facility. As of September 30, 2021, we also had $497.3 million available under the ATM Program."

C. Started SBRA in Vanguard Taxable-Bought 10 at $14.87: 

See Item # 1.B. Above. 

Yield at $14.87 = 8.07%

D. Bought 5 FLSW at $32.28: 

Quote: Franklin FTSE Switzerland ETF Overview

Closing Price 11/18: FLSW $35.15 Unc. 

Sponsor's website: Franklin FTSE Switzerland ETF - FLSW

Expense Ratio: .09%

The expense ratio for the competitive ETF is .51%. iShares MSCI Switzerland ETF | EWL EWL is more liquid. I would anticipate that FLSW will outperform EWL over time due to the .42% lower expense ratio. 

iShares MSCI Switzerland ETF (EWL) Performance-Morningstar

Franklin FTSE Switzerland ETF (FLSW) Performance-Morningstar

Both ETFs will be heavily weighted in Novartis, Roche and Nestle. 

TOP 12 Holdings for FLSW as of 11/11/21: 

Dividends: Semi-annually at a variable rate

The next ex dividend date will be December. 

I also own the CEF Swiss Helvetia Fund Inc. (SWZ); SWZ Fund - Schroders

I want to have some exposure to assets priced in Swiss Francs. 

E. Bought 2 IP at $49.27:

Quote: International Paper Co. 

Closing Price 11/18: IP $48.57 -$0.36 -0.74% 

IP "is a leading global producer of renewable fiber-based packaging and pulp products with manufacturing operations in North America, Latin America, North Africa and Europe. We produce packaging products that protect and promote goods, and enable worldwide commerce, and pulp for diapers, tissue and other personal hygiene products that promote health and wellness. . . . Net sales for 2020 were $21 billion*. In Russia, the company has a 50/50 joint venture, Ilim Group, the country's largest integrated manufacturer of pulp and paper. ." The * reference notes that IP has sold or spun off certain assets whose revenues were included in that total. 

IP Analyst Estimates-MarketWatch

IP SEC Filings

2020 Annual Report 

10-Q for the Q/E 9/30/21 

Investment category: Bond Substitute

Prior to this purchase, IP had spun off Sylvamo Corp. (SLYM) which had IP's global printing assets. International Paper Company Announces Completion of Sylvamo Corporation Spin-Off (10/1/21) IP continues to own 19.9% of Sylvamo. I view the company more favorably after jettisoning this business. 

Dividend: Quarterly, reduced to $.463 per share from $.512 as a result of the Sylvamo spin off. 

IP Dividend History-Nasdaq

Yield at $49.27: 3.76%

Last Ex Dividend: 11/12 (owned as of) 

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release 

Non-GAAP net income = $532M

Non-GAAP E.P.S. = $1.35

Consensus at  per Fidelity

GAAP E.P.S. higher at $2.20

Reduced debt by $235 in the quarter and $1.1B YTD through 9/30.

Free cash flow = $519M

The printing business had $846M in revenues and an operating profit of $106M.  

Purchase Restriction: Maximum Position is 20 shares with each subsequent purchase having to be at the lowest price in the chain.  

F. Added $50 to AMGN at  $208.18 and  $100 at $205.26-Fidelity Taxable: 

Quote: Amgen Inc.

Closing Price 11/18: AMGN $204.02 -$1.80 -0.87% 

Investment category:  Dividend Growth

AMGN SEC Filings

Website: Investors | Amgen Inc.

Amgen Pipeline

2020 Annual Report

10-Q for the Q/E 9/30/21 (long term debt listed at page 16)

Major Product Revenues: 2021 Third Quarter: 

 

For the first 9 months, Enbrel generated $3.357B. or 18.62% of the total.  The percentage for U.S. sales was at 25.48%. Sandoz's Enbrel biosim case turned away at SCOTUS, giving Amgen's blockbuster 8 more years of free rein | FiercePharma (5/17/21); Appeals Court Affirms Validity Of Enbrel® (etanercept) Patents Injunction Against Sandoz's Infringement Stands (7/1/2020)

Otezla was acquired for $13.4B from Celgene which was required as a condition on Celgene's acquisition by BMY. JPM: How will Amgen make its $13.4B Otezla buy pay off? New launches, for one, CEO says | FiercePharma 

Other Product Revenues: 2021 Third Quarter

Average Cost per share this account: $213.12  (1+ shares)

Snapshot Intraday on 10/12 after last add

Dividend: Quarterly at $1.76 ($7.04 annually)

AMGN Dividend History-Nasdaq

The dividend was last raised from $1.6 effective for the 2021 first quarter. Dividends have been raised in the first quarter. 

Growth rates of dividend as of 9/30/21: 

Last Ex Dividend: 11/15/21 (owned all as of) 

Last Earnings Report (Q/E 9/30/21):  SEC Filed Press Release

Non-GAAP E.P.S. =  $4.67

Consensus at $4.269 per Fidelity

GAAP E.P.S. = $3.31

Free Cash Flow  = $2.176B

Debt outstanding as of 9/30/21 = $37.6B

Cash and Investments = $12.9B

Broker Reports (available to Schwab customers): 

Morningstar (11/3/21): 3 stars with a FV estimate of $200, wide moat. The analyst expresses concerns about generic competition for legacy drugs. See page 7 of AMGN's 2020 annual report for patent expiration dates. 

Argus (8/12/21): Buy with a $265 PT revised down from $275. 

S & P (11/9/21): 4 stars with a 12 month PT of $245. Views the pipeline favorably. Expects FDA to approve tezepelumab for severe uncontrolled asthma in the 2022 first quarter. Notes approval of Lumakras (sotorasib) in May 2021 for advanced non-small cell lung carcinoma. 

My last round-trip was a 20 share lot sold in 2016: 

+$310.68

G. Started AQN in Schwab Account -Bought 10 at $14.69; 5 at $14.45; 5 at $14.06: 

Quote: Algonquin Power & Utilities Corp.  (U.S.: NYSE) 

Closing Price 11/18: AQN $14.15 +$0.04 0.28% 

See Item # 1 above. 

Dividend History: 

Average cost USD Priced Shares =  $14.47

Yield at  $14.47 =  4.7% (assumes an annual USD dividend of $.6824 rounded to $.68  

Purchase Restriction: I will keep buying in 5 share lots provided the purchase lowers my average cost per share. 

H. Started FE in Vanguard Account-Bought 5 at $35.71: 

Quote: FirstEnergy Corp. 

Closing Price 11/18: FE $38.61 -$0.47 -1.20% 

FE Analyst Estimates 

Investment Category: Bond Substitute 

Recent News: FirstEnergy Announces Transformative $3.4 Billion of Equity Financings, Introduces Long-Term Earnings Growth Rate of 6-8% ("FirstEnergy announced an agreement to issue $1 billion of common equity to Blackstone Infrastructure Partners at $39.08 per share, which is equal to FirstEnergy's common equity five-day volume-weighted average price (VWAP) as of the market close on Friday, November 5, 2021. FirstEnergy has also entered into a definitive agreement with Brookfield to sell a 19.9% stake in FET, the holding company for FirstEnergy's three regulated transmission subsidiaries, for $2.4 billion, representing an exceptionally attractive electric utility valuation of 40x LTM P/E.")

Dividend: Quarterly at $.39 per share, last raised from $.38 for the 2019 4th quarter.  

FE Dividend History | Nasdaq

Yield at $35.71 = 4.37%

Last Ex Dividend: 11/4 (owned as of) 

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release

GAAP Net Income = $463M

GAAP E.P.S. at $.85

Non-GAAP E.P.S. = $.82 with the consensus at $.789 per Fidelity.  

"updated its full-year 2021 GAAP earnings forecast range to $1.17 billion to $1.22 billion, or $2.14 to $2.24 per share based on 544 million shares outstanding, and raised and narrowed its full-year operating (non-GAAP) earnings guidance to $2.55 to $2.65 per share."

Broker Reports (available to Schwab customers): 

S & P (10/29/21): 4 stars with a 12 month PT of $46. Argues that the market is overreacting to the criminal bribery investigation given FE's proactive efforts to address this issue. To avoid criminal prosecution, the company agreed to pay $230M which can not be recovered from its customers. FE pleaded guilty to one wire fraud count which will be dismissed provided FE fulfills its obligations under the deferred prosecution agreement. There are still pending class action lawsuits filed on behalf of FE's shareholders. 

Morningstar (11/1/21): 4 stars with a FV of $42.   

Only Prior Trades-2011: +807.12 (182+ shares)

Item # 3 Sold Remaining FE shares at $45.1 (5/18/2011 Post); Item # 1 Pared  FE: Sold 50 FE at 41.32 (5/9/2011 Post); Item # 3. Sold FE at $40.9 (2/3/11 Post) 

Current Position: 5 shares

I. Sold 200 AEG at $5.22: 

Quote: Aegon N.V. ADR 

AEG Analyst Estimates | MarketWatch

Investor relations | Aegon

I am just escaping from a purchase that did not work out.  It is not inconceivable that I will try again, though I have seen enough over the past 15 years to say that AEG needs to cease its existence as an independent company and be absorbed by a company that delivers for shareholders. 

Profit Snapshot: +$8.78

Dividend History: Note the dividend slash. 

Last Discussed: Item # 1 Bought 200 AEG at $5.16 (2/13/19 Post) 

Last Earnings Report: 3Q 2021 Results | Aegon  

Most of my trades have been in the AEGON hybrids that were smashed in price during the Near Depression period. Aegon Hybrids I do not currently own any and believe that all of the ones that have owned in the past have been redeemed at their $25 par values.  

Prior Round-Trips: Item # 4 Sold 100 AEG at $6.74-Used Schwab Commission Free Trade (10/14/18 Post)(profit snapshot =$74.21)- Item # 1 Bought 100 AEG at $6 (9/2/18 Post); Snapshots of Earlier Round Trip Trades at Item # 2.A. Sold 200 AEG at $5.69 (3/22/17 Post)(total profits prior trades = +$370.28) 

J. Added to CRSP-Bought $50 at $95.45: $50 at $93.42; $50 at $89.94; $50 at $84.8: 

 

Quote: CRISPR Therapeutics AG

Closing Price 11/18: CRSP $82.97 -$3.11 -3.61% 

CRS Analyst Estimates | MarketWatch

Website: Home Page | CRISPR

Pipeline | CRISPR 

CRSP SEC Filings

CRSP 2020 Annual Report

CRISPR Therapeutics and ViaCyte, Inc. to Start Clinical Trial of Gene Editing Replacement for Type 1 Diabetes in Canada (11/16/21) This could be a big deal, if it works. 

This stock has been mauled some after reporting what many investors viewed as disappointing results in this phase 1 trial: CRISPR Therapeutics Reports Positive Results from its Phase 1 CARBON Trial of CTX110™ in Relapsed or Refractory CD19+ B-cell malignancies I discussed that trial result in a 10/13/21 comment. 

The main issue appears to be the duration of a favorable result, a concern that is present in gene editing therapies. The initial complete response (CR) rate was 38% and an overall 58% response rate. The CR dropped to 28% after six months. 

After six months, the response rate was similar to approved CART-T drugs. CRISPR believes that it may be able to improve durability by changing the dose amounts, but that remains to be seen. Financially for CRSP, multiple dosings rather than 1 and done would be better IMO. The question is whether the multiple dosing will improve results over existing therapies and have a better safety profile. Resolution of that issue is some time distance away which creates a lot of uncertainty and resulting trepidation among potential buyers of the stock and anxiety for those who own it now.  

The therapy that is furthest along is CTX-001 which I previously discussed in more detail: 

Excerpt 3rd Q. Press Release

Vertex has bought 60% of this therapy. Vertex Pharmaceuticals and CRISPR Therapeutics Amend Collaboration for Development, Manufacturing and Commercialization of CTX001™ in Sickle Cell Disease and Beta Thalassemia 

Vertex and CRISPR Therapeutics Present New Data in 22 Patients With Greater Than 3 Months Follow-Up Post-Treatment With Investigational CRISPR/Cas9 Gene-Editing Therapy, CTX001™   

Last Loss Report (Q/E 9/30/21): CRISPR Therapeutics Provides Business Update and Reports Third Quarter 2021 Financial Results and 10-Q

My willingness to take positions in gene editing stocks is subdued and restrained but still exists. Most likely, I will continue adding to CRSP in small dollar lots and will sell my highest cost lot (1 share bought at $126) when and if it becomes profitable to do so. 

K. Bought 2 FAN at $21.02-Schwab Taxable: 

Quote:  First Trust Global Wind Energy ETF Overview 

Sponsor's Website: First Trust Global Wind Energy ETF (FAN)

Expense Ratio: .67% after 1/31/22, .60% now

Holdings as of with greater than 1% weighting: 

The holdings include a few utilities that produce power from wind energy. 

Of those holdings, I have small ball position in Orsted (recently discussed). Item # 2.G. Bought 5 DNNGY at $45.16 (11/5/21 Post) I also recently nibbled on Vestas Wind Systems (VWDRY) after it hit a 52 week low and will not be discussing that stock here. Vestas cuts 2021 outlook for a second time, shares plunge | Reuters The ADRs of those two foreign companies can be bought on the U.S. pink sheet exchange. I previously owned 200 shares of Transalta Renewables and will discuss selling 100 in my next post which generated a profit of US$505.31. Among the utilities, I own only DUK and have recently pared that position which reduced my AC per share to $78.77. Item # 2.H. Sold 2 DUK at $107.4; 1 at $106/14 (9/10/21 Post) 

L. Pared LGND in Fidelity Account-Sold Highest Cost 3.077 Shares at Various Prices: 

Quote: Ligand Pharmaceuticals Inc.

Closing Price 11/18: LGND $160.73 -$1.27 -0.78% 

LGND SEC Filings

LGND Analyst Estimates | MarketWatch

Ligand Pharmaceuticals Inc. Profile | Reuters

2020 Annual Report

Profit Snapshot = $43.59: 

Remaining Shares AC this account: $106.17  (1+ share) 

Snapshot Intraday on 11/5 after last pare

I still own the 2 shares bought in my Schwab Account: Item # 2.G. Added 1 LGND at $108.8 (8/27/21 Post);  Item # 2.D. Bought 1 LGND at $119.5 (7/23/21 Post)

Dividends: None and none expected

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release 

Non-GAAP E.P.S. = $1.58 

Consensus at $1.037 per Fidelity

GAAP E.P.S. = $.80

Revenues = $64.8M, up from $41.8M

"Royalties for the third quarter of 2021 were $15.6 million, compared with $9.0 million for the same period in 2020. Captisol sales were $35.1 million for the third quarter of 2021, compared with $23.4 million for the same period in 2020, with the increase primarily due to higher sales of Captisol for use with remdesivir, a treatment for COVID-19. Contract revenue was $14.1 million for the third quarter of 2021, compared with $9.5 million for the same period in 2020, with the increase primarily due to the additional revenue from Pfenex, which was acquired in October 2020."

Note the contribution from Captisol which is dependent on remdesivir sales as a Covid treatment. 

Reaffirmed "full-year 2021 total revenues to be between $265 million and $275 million, and adjusted earnings per diluted share to be between $5.80 and $6.05."

GAAP to Non-GAAP: 

M. Eliminated SYPD in Vanguard Taxable - Sold 7 at $41.73: 

Quote: SPYD | SPDR Portfolio S&P 500 High Dividend ETF Overview

Profit Snapshot: +$96.26

Sponsor's Website: SPYD: SPDR® Portfolio S&P 500® High Dividend ETF

Expense Ratio: .07%

Number of Holdings as of 11/15/21: 78

Some Top Holdings as of 11/12/21: 

Of those stocks, starting from the top, I currently own the following: STX, KEY, RF, MTB, PBCT, PFE, OKE, HBAN, CVX, TFC, WMB, CFG, LUMN, PFG, XOM, MET, PRU, AMCR, IRM, USB, MRK GIS, ED, O (RI only), PEG, FE  and PPL.   Of the remaining stocks, I own DOW, K, D, EVRG, ABBV, ETR, LYB, KMB, GILD, SO, KMI, AEP, KHC, VZ, IP, and T. (or 43 out of the 79 stocks).  I would label that list as an equity income portfolio tilting to value.   

Last Buy Discussion: Item # 3.I. Started SYPD in Fidelity Taxable-Bought 5 at $29.44, 2 at $28.62, 3 at $27.76, 5 at $27.23  (7/18/20 Post) I currently own 16+ shares in that account with an average cost per share of $28.23. I am no longer reinvesting the dividend which is part of my capital preservation strategy with the market at elevated levels. 

Last 4 Quarterly Dividends: $2.03 per share

Yield at $41.73:  4.86%

My yield is higher based on security selection and cost basis. 

Last Ex Dividend: 9/17/21

SPDR® Portfolio S&P 500 High Div ETF (SPYD)-Morningstar- Rated 1 star

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.