AKBA, CTRA, DEA, FCX, IBB, IS, MOR, OGN, PBA, QYLD, REGN, RNW:CA; SMDV,

Economy: 

On a non-seasonally adjusted basis, CPI rose 7% Y-O-Y through December 2021. Core CPI was up 5%. Consumer Price Index Summary 

Fed Chair Powell says rate hikes, tighter policy will be needed to control inflation The FED in my opinion will do nothing that will meaningfully restrain inflationary pressures. Shrinking a bloated balance sheet, stopping QE and raising the FF slightly off the current 0% to .25% will have no material impact. The Stock Jocks seemed willing to accept Powell's assurance that the FED will tame inflation without hurting the economy. If inflation does moderate and return to a 2% or less annual rate, it will not be a result of any action taken by this Federal Reserve. 

Goldman predicts the Fed will hike rates four times this year Even if that happens, it will have no impact on inflation. Might as well throw pebbles at a charging and hungry lion, hoping that the lion will be intimidated by your resistance and resolve.  

Inflation fuels holiday online sales to record $204 billion: Adobe

Cyprus reportedly discovers a Covid variant that combines omicron and delta

Pfizer CEO says two Covid vaccine doses aren't 'enough for omicron'

WHO: Omicron may infect half of Europe within two months - The Washington Post

Omicron variant will 'find just about everybody,' Fauci says, but vaccinated people will still fare better - CNN

Empty grocery shelves return as sick employees, supply chain delays collide I have that to be true at my local Kroger store. 

China locks down another city as Omicron spreads ahead of Beijing Olympics - CBS News

+++

Market and Market Commentary: 

Is the Market Still Overvalued? - dshort - Advisor Perspectives

The Q Ratio and Market Valuation: December Update - dshort - Advisor Perspectives Never been higher. 

Shiller PE Ratio Starting in 1870, the Shiller P/E has been higher than now only briefly in early 2000. 

S&P 500 Price to Earnings Ratio - Shiller PE Ratio-Longtermtrends The second chart contains the Shiller P/E data over the past 150 years. 

Market Cap to GDP: The Buffett Indicator - Updated Historical Chart-Longtermtrends Starting with data in 1972, this ratio has never been higher. The prior peak for this ratio was hit in March 2000 at 140.71% and is currently at 205+%. 

S&P 500 Index - 90 Year Historical Chart | MacroTrends (check box to adjust for inflation) 

Pfizer and Beam Enter Exclusive Multi-Target Research Collaboration to Advance Novel In Vivo Base Editing Programs for a Range of Rare Diseases  

These 14 bank stocks are in the best position to benefit from rising interest rates - MarketWatch Of the stocks mentioned, which include only the larger regional banks, I currently own HBAN, NYCB, TFC, VLY and WBS. I invest primarily in small cap regional banks. 

Libor, Long the Most Important Number in Finance, Dies at 52 - The New York Times There are a large number of financial instruments that use a Libor rate as a benchmark. I no longer own any but will be monitoring what alternative rate is adopted by the quotation agent.  

++++

The past seven years have been the hottest in recorded history, new data shows - The Washington Post In Trump's America, that factual finding is of course Fake News. 

The Voting Rights Act Hangs by a Thread - The Atlantic The author makes a good point that America's Democracy is only about 55 years old. It took a constitutional amendment to insure women had the right to vote; and blacks were systematically denied that right throughout the south and in many other areas until the Voting Rights law was passed in mid-1960s that was recently significantly undermined by the Republican Justices on the Supreme Court. The Supreme Court Clearly Won’t Protect Voting Rights. But Congress Can. | Brennan Center for Justice

Even after the passage of the Voting Rights law, and before the Republican Justices meaningfully dismantled it, there were still major flaws including political gerrymandering, the constitutional grant of two senators for each state (favors republicans, just compare the population of Orange County, California with the total population of Idaho, South and North Dakota, Montana, and Wyoming), and the more recent efforts by America's Anti-Democracy party to suppress voting by those who do not vote for them and to undermine the electoral process. Prior to those efforts, and the reactionary Republican takeover of the Supreme Court, at least the U.S. was moving toward a better and more inclusive democracy but that has come to an abrupt end and gone in reverse with the pedal to the metal. 

The clear transition IMO of republicans to a pro-authoritarian party was confirmed by their willingness to give a demagogic enemy of democracy another 4 years as President; their widespread support for VP Pence to throw out the certified election results in 4 states won by Biden based on Trump's unproven claims of fraud; and the relief requested by most GOP House members including their leader Kevin McCarthy, made in a Supreme Court petition signed by them, for that Court to throw out the certified results in 4 states, cancel the votes, and allow the republican dominated state legislatures to nominate new electors. If either of the last two items had actually happened, which would have been cheered by tens of millions of Americans, that would have most likely marked the end of America's democracy.   

People who believe Trump's election lies are running for offices that control voting-NPR It is not difficult to identify hundreds of actions that establish the GOP's bona fides as an anti-democracy party, and this is just one of them. The related acts are pressuring republican officials who obeyed election laws to resign their posts and changing election laws to enable republican dominated legislatures to directly interfere in the vote counting process. Meet the Trump fanatics who have taken over elections in Michigan.  

QAnon Star Cirsten Weldon Who Said Only ‘Idiots’ Get Vaccinated Dies of COVID

Senator Marsha Blackburn (R-TN) Criticizes Black Judicial Nominee’s ‘Rap Sheet’ Of Speeding Tickets | HuffPost Latest News The black nominee had 3 parking tickets over 10 years ago. 

My Pillow CEO says he has ‘enough evidence' to put ‘300 million' Americans in jail

Moderna vaccine slightly more effective than Pfizer vaccine in preventing COVID-19 infection, hospitalization, and death | News | Harvard T.H. Chan School of Public Health

Tucker Carlson Claims White People Face COVID-19 Treatment Discrimination There are several appropriate labels for anyone who watches Tucker. 

Jan. 6 Capitol riot probe dismisses claims of FBI involvement This is one of the republican fact free conspiracy claims. Basically, the claim is that republicans were not involved in the attack against the nation's capital. Instead, the attack was orchestrated by the FBI and their paid inciters, democrats, and antifa members. And, the hundreds of criminal charges filed against acknowledged Trump supporters are simply part of that conspiracy with prosecutors and judges joining the cabal. Just listen to them being interviewed. 

House Jan. 6 riot probe asks GOP leader Kevin McCarthy for information McCarthy is an insurrectionist who wears a suit. He is certainly the right leader for the insurrection caucus in the House. 

Earlier this week, Senator Mike Rounds (R-SD) acknowledged that Biden won the election. 

This was Trump's response: Is he crazy or just stupid? I will never endorse this jerk again.” Trump Asks if Mike Rounds is 'Crazy or Just Stupid' After GOP Senator Calls 2020 Race Fair 

Rounds' wife recently died of cancer. Perhaps Don the Con was only trying to provide his version of solace and empathy. Trump's response is what everyone should expect from him since Donald is, without question IMO, an out-of-control psychopath and the unchallengeable leader of the Republican party who would easily win the republican nomination for President in 2024. 7 Characteristics of the Modern Psychopath | Psychology Today   

'What a moron': Fauci argues with GOP senator over financial disclosures - POLITICO  

The Wuhan Lab and the Gain-of-Function Disagreement - FactCheck.org

+++++

1. Eliminated RNW:CA-Sold 100 at C$16.98 (C$1 IB Commission):

Quotes:

USDs: TransAlta Renewables Inc. (TRSWF)

CADs: TransAlta Renewables (RNW:CA)

Website: 

Profit: +C$588.5

Buy Discussion:  Item # 1 Bought Back 100 RNW:CA at C$11.08 (4/11/20 Post)

I am going to quit playing with this one until I have a much lower re-entry price than C$16.98 and more clarity about the problem discussed below. 

When I sold my 100 share lot, priced in USDs, and traded on the U.S. Pink Sheet Exchange under the TRSWF symbol, the rationale given in my post explaining that decision was a foundation failure impacting some wind towers at TransAlta's Kent Hill wind generation facility. Item # 1 Eliminated TRSWF in Schwab Account-Sold 100 at US$14.94 (11/26/21 Post)(profit snapshot = +US$505.31). I discussed the last earnings report in that post. 

The problem was disclosed by the company in these October 2021 press releases. TransAlta Renewables Provides Operational Update for Kent Hills Wind Facility and Revises 2021 Guidance; TransAlta Renewables Temporarily Suspends Operations at Kent Hills Wind Facility Pending Investigation of Wind Tower Failure Transalta Renewables has an 83% indirect ownership  interest in this facility. There is outstanding C$222M non-recourse secured by, "among other things", the Kent Hills 1 and 2 facilities. 

The Ken Hills Wind facility "was completed in three phases and consists of 50 turbines at Kent Hills 1 and Kent Hills 2, which achieved commercial operation in December 2008 and November 2010, respectively; and five turbines at Kent Hills 3, which began commercial operations in October 2018." One wind tower collapsed at Kent Hills 1. Canadian developer TransAlta Renewables to rebuild onshore wind farm after turbine collapse | Windpower Monthly   

At that time, it had not been decided whether it would become necessary to replace the foundations for the 100 wind turbines located at Kent Hills 1 and 2. The company did not expect a problem with the wind turbines at Kent Hills 3. If replacement of any foundation was necessary, which was "suggested" by sub-surface cracks in "several" foundations, the company estimated in October 2021 that the cost would be C$1.5M to C$2M per foundation. 

On 1/11/22, the company released the results of an independent engineering analysis of this problem.  TransAlta Renewables Provides Update on Kent Hills Outage  The result is that all foundations at the Kent Hills 1 and 2 facility needed to be replaced due to a faulty design that caused the cracks. The estimated cost is currently at C$75M and C$100M. 

In addition, the company will forego "approximately $3.4 million per month on an annualized basis for so long as all 50 wind turbines are offline, based on average historical wind production. Revenue generation is expected to resume as wind turbines are individually returned to service following foundation replacement." 

The company "is actively evaluating any options that may be available to recover these costs from third parties and insurance." 

The third party is probably the engineering firm that designed the foundation and may include the general contractor who built the facility.  

As to insurance, a general comprehensive property and casualty insurance policy would probably not cover a design failure at a manufacturing facility, but business interruption insurance added to that kind of policy may cover some or all of the lost revenue. Business Interruption Insurance Definition The question is whether the definition of insured perils would include a negligent design failure such as the one experienced at Kent Hills. 

I lack information on potential loss recoveries and consequently can not evaluate them. 

Other Trade Discussions: 

Item # 1 Sold 100 RNW:CA at C$17.92(3/14/20 Post)(profit snapshot = C$511)-Item # 2 Bought 100 RNW:CA at C$12.79 (9/14/19 Post);

Item # 3. B. Sold 150 RNW:CA at C$13.97 (profit snapshot = C$163.5)- Item # 2.A. Bought 100 RNW:CA at C$12.91 (6/18/18 Post), Item #2.A. Bought 50 RNW:CA at C$12.45 (7/12/18 Post)

RNW:CA/TRSWF Realized Gains to Date: 

USD = $581.05

CADs = $1,263

2. Small Ball: 

Baseball analogy-Small ball (baseball)-Wikipedia  

The underlying rationale for the small ball trading strategy is risk mitigation in what I view as a dicey stock market whose parabolic rise has been fueled by (1) unprecedented money creation; (2) central bank suppression of interest rates far below the inflation rate through extraordinarily abnormal monetary policies continued now for almost 14 years; (3) extreme levels of U.S. government deficit spending, and (4) spending rapidly increasing amounts of borrowed money by U.S. consumers. Possibly I need to add spending vast sums of borrowed money by publicly traded companies to buy back stock at elevated price levels. 

Small Ball Rules:

(1) Each purchase has to be at the lowest price in the chain; or has to lower my average cost per share; 

(2) Purchases are made in small lots, using commission-free trades;

(3) On price pops, I will consider selling my highest cost shares at a profit, no matter how small;

(4) Some positions will be eliminated altogether on price pops when the goal is achieved; 

(5) Shares purchased with dividends may be sold when it is profitable to do so and the share price is outside my consider to buy range.  

The most important objective is to reduce risk through a controlled and disciplined trading strategy that realizes gains, particularly by selling the highest cost lots that reduce my average cost per share, increasing my dividend yield.  

The corollary is to buy the dips, particularly during extreme volatility events that would be associated with major declines in stocks.   

Another aspect is selling fractional shares bought with dividends in order to harvest the original dividend amount plus a small profit on the shares. I am doing that regularly now, having turned off the dividend reinvestment option in virtually all stocks that I own. 

The primary known threats to the stock market are potentially problematic inflation that provokes central banks to increase interest rates to a level that would cause a recession, high valuations using most traditional valuation metrics, and a renewed surge in the pandemic that materially disrupts the economy. 

Those threats are placed in order of likelihood based on my opinion and what is known now. Even though omicron is highly contagious, the impacts so far have not caused me to elevate the pandemic to a higher threat. I do believe investors are underestimating omicron's negative impacts on the 2021 4th quarter and the 2022 first quarter revenues and profits.   

The primary erroneous assumption is that the extraordinary stimulus measures outlined above can continue indefinitely or that the economy will experience robust growth when they have to be withdrawn.  

The recently enacted infrastructure legislation is not sufficient to move the needle that much given the size of the economy, its dependence on far greater past economic stimulus and the amount of new spending over baseline spread out over a ten year period. 

Longer term, and previously discussed here in more detail, failed U.S. treasury auctions and a collapse in the USD's value, precipitating a depression with no way out through government deficit spending, are the primary threats. 

A. Bought 20 PBA at $30.16-Schwab Taxable: 

Quotes: 

USD Pembina Pipeline Corp. (PBA)

CAD Pembina Pipeline Corp. (Canada: Toronto)

CAD / USD Currency Chart. Canadian Dollar to US Dollar Rates

Pembina - Home

Pembina - Our Operations

In this account, I am planning to buy back the 100 shares sold at $32.21, as shown in the previous snapshot, using 20 share lot purchases. Each subsequent purchase has to be at the lowest price in the chain. 

Investment Category: Bond Substitute  

Last Substantive Buy Discussions: Item # 1. Bought 107 PBA-100 at $21.84; 5 at $20.89 and 2 at $20.66-Sold 7 at $23.18 (11/13/20 Post)(profit snapshot on 7 share pare = $9.42); Item # 2.E. Restarted PBA in Fidelity Taxable-Bought 10 at $15.72; 5 at $14.7; 1 at $13.3; 1 at $11.9 (5/9/20 Post)(still own)

Dividend: Monthly at C$.21 per share. The U.S.D. amount will vary depending on the CAD/USD conversion. If the C$.21 monthly distribution remains unchanged, I in effect receive a dividend increase when the CAD/USD exchange rate is higher than it was when I initially bought shares, but a decrease in that exchange rate in effect amounts to a temporary dividend cut for the monthly payment at issue. 

Dividend Yield per C$.21 monthly (C$2.52 annually) and US$30.16 under various assumptions

CAD/USD at 

.70 = 5.85% (C$2.52 x. .7 =US$1.764 ÷ US$30.16  =5.8488%)

.80 = 6.68%

.90 = 7.52%

1.0 = 8.36%

Last Earnings Report (Q/E 9/30/21) Pembina Pipeline Corporation (PBA) Reports Strong Results for the Third Quarter 2021 

E.P.S. at C$1.o1, beating the consensus by C$.28 according to Fidelity; 

However, the E.P.S. included C$350M pre-tax fee "related to the termination of the proposed acquisition of Inter Pipeline."; 

Total revenue = C$2.149B, up from C$1.496B in the 2020 third quarter; 

Cash flow per share from operating activities = C$1.66, adjusted to C$1.43; 

"Total volumes of 3,411 mboe/d for the third quarter represent an approximately one percent decrease over the same period in the prior year."

The stock has been under some pressure since the CEO resigned on 11/22 "to pursue other opportunities". SEC Filing

Sell Discussions: Item # 2.A. Eliminated PBA in Schwab Taxable-Sold 100 at $32.31 and Item # 2.B. Sold Shares Bought with  Dividends in Fidelity Taxable (5/14/21 Post))(profit snapshot = +$1,044.26 and $6.8); Item # 2 Sold 100 PBA at $38.69 (1/18/20)(profit snapshot = $435.78)= Item # 1 Bought 100 PBA at $34.34 (12/11/19 Post); Item # 5 Sold 100 PBA at 33.19 (10/3/13 Post)(profit snapshot = $383.72)-Item # 3 Bought 100 PBA at $29.22 (2/20/13 Post)

PBA Realized Gains to Date: US$1,879.98 (previous calculation did not include $9.62 profit noted above) 

Pembina Reset Equity Preferred Stock Position: I currently own 300 PPLPRC shares, a Canadian reset equity preferred stock issued by Pembina that pays cumulative dividends. PPL-PC.TO The current coupon is 4.478% paid on a C$25 par value to but excluding 3/1/2024. 

If not redeemed then, the coupon resets at a 2.6% spread to the 5-year Canadian government bond. Item # 2.B. Bought 100 PPLPRC at C$15.88 (3/7/20 Post); Item # 1. Bought 50 PPLPRC at C$15.8  (7/3/19 Post); Item # 1.B. Bought 50 PPLPRC at C$ 17.23 (5/25/19 Post); Item # 1.A. Bought 100 PPL.PR.C. at C$17.7 (3/23/19 Post) 

One Round-Trip: Item # 2.B. Sold 100 PPLPRC:CA (6/1/17 Post)(profit snapshot = C$496) 

Canada's inflation rate stays at 18-year high of 4.7% | CBC News (12/15/21)

B. Bought 5 SMDV at $65.79: 

Quote: ProShares Russell 2000 Dividend Growers ETF Overview 

Sponsor's Website: SMDV

Expense Ratio: .4%

ProShares Russell 2000 Dividend Growers (SMDV)- Morningstar (currently rated 2 stars)

Number of Holdings as of 11/30/21: 89

Some Top Holdings as of 1/7/22: 

Of those holdings, I currently own ASB and FULT in my regional bank basket. This fund's largest weighting is currently in small cap financial stocks. Among the remaining holdings, I own UBSI, WASH, KW, SBSI, BKH, NWBI, NJR, and STAG.

Dividends: Quarterly at a variable rate

Last 4 Dividend Payments: $1.354+ per share

Yield at $65.79 = 2.06%, rounded up 

I have had some decent returns from dividend growth ETFs, but have never owned one that focused on small caps. 

C. Bought 1 IBB at $153.23; $50 at $140.8: 

Quote: IBB | iShares Nasdaq Biotechnology ETF Overview | MarketWatch

I mentioned in my last post that biotech stocks have recently been in a dive mode. I will keep buying this ETF in $50 increments which each subsequent purchase at the lowest price in the chain. 

Sponsor's Website: iShares Nasdaq Biotechnology ETF | IBB

Last Buy Discussion: Item # 2.B. Bought 1 IBB at $148.75 (5/8/21 Post)

Expense Ratio = .45%

iShares Biotechnology ETF (IBB) -Morningstar (rated at 2 stars, down from 3 stars referenced in the post linked below)

Last Sell Discussion: Item #1.G. Sold 1 IBB at $169.44  (9/3/21 Post)(profit snapshot = $20.69) 

Some Top Holdings (376 as of 1/7/21): 

Of those stocks, I own AMGN, GILD, VRTX, INCY and BMRN. My largest dollar position is in Gilead, based in part on valuation and dividend yield, but mostly on a number of averaging down purchases. 

Average Cost GILD All Accounts: $64.23 (23+ shares)

Dividends: Quarterly and viewed as irrelevant on a dividend yield basis. 

D. Added to MOR-Bought 5 at $9.21: 

Quote: MorphoSys AG ADR- a German Biotech

Pipeline | MorphoSys AG

MOR Analyst Estimates | MarketWatch

20-F (2020 Annual Report, SEC form for foreign company) I do not recall ever seeing such details about  medical science in a drug's companies SEC filings. Most of it is far beyond my comprehension.  

Buy Discussion: Item # 1.K. Bought 10 MOR at $12.38; 5 at $12.15; 5 at $11.75; 5 at $11.30 (10/29/21 Post) 

Investment Category: Lottery Ticket Basket 

MOR has the potential to be a multi-bagger based on its drug pipeline acquired through its recent risky acquisition of  Constellation Pharma for $1.7B. That possibility is contingent on the 2 acquired drugs, or at least one of them, actually being approved and becoming significantly profitable. As previously discussed, some rights to future royalties were sold to finance that acquisition in part.  

The Stock Jocks are expressing no confidence that the cancer drugs will make it and have slashed the stock price in response to this move. The stock closed at $20.8 the day before MOR announced that it was acquiring Constellation and selling royalty rights to finance the purchase of that clinical stage company. SEC Filed Press Release

Average Cost: $11.53 (30 shares)

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

Consolidated net loss of €112.8M 

Cash and Investments: €1.13+B as of 9/30. 

Other recent news since last discussion: 

MorphoSys Reports Preliminary 2021 Monjuvi U.S. Sales and Provides 2022 Financial Guidance | MorphoSys AG (1/7/22) Incyte is MOR's partner for this drug. Both companies market in the U.S. and INCY has foreign rights, paying MOR royalties on those sales. 

MorphoSys presents latest data from the Phase 2 MANIFEST Study evaluating the potential of pelabresib in the treatment of myelofibrosis | MorphoSys AG (12/11/21) Pelabresib is one of the 2 drugs that were acquired as a result of the Constellation merger. This disclosure did not help the stock price. MorphoSys AG (MOR) Stock Historical Prices & Data 

I have nothing further to add to my previous discussion. 

E. Added to QYLD in Fidelity Account-Bought 5 at $22.63; 5 at $21.79: 

Quote: QYLD | Global X NASDAQ-100 Covered Call ETF Overview 

This is a similar buy-write ETF as RYLD, which uses a covered call strategy for the Russell 2000 index,  that I discussed in my last post. 

Sponsor's Website: Nasdaq 100 Covered Call ETF ("The Global X Nasdaq 100 Covered Call ETF (QYLD) follows a “covered call” or “buy-write” strategy, in which the Fund buys the stocks in the Nasdaq 100 Index and “writes” or “sells” corresponding call options on the same index.") The components of the Nasdaq 100 index are identified in the ETF QQQ which I have sold. 

Last Substantive Discussions: Item # 1.C. Added to QYLD-Bought 5 at $21.46; 5 at $20.49 -Schwab Taxable (10/30/20 Post); Item # 1.B. Bought 5 QYLD at $20.73 - Fidelity Taxable (7/11/20 Post)

Global X NASDAQ 100 Covered Call ETF (QYLD)-Morningstar (currently rated 4 stars)

Sponsor's Website: Nasdaq 100 Covered Call ETF

AC per share this account: $21.36 (15 shares) 

Dividend: Paid monthly at a variable rate

The last dividend payment was .499 per share representing the net short term capital gain realized by the fund during 2021. I received that payment on a 10 share lot in this account.  

Excluding that short term capital gain distribution, the fund paid out $2.35 per share in dividends last year. 

Yield at $21.36 (excludes the short term capital gains distribution and is based on the 2021 payout of per share) =  11% .The actual future yield will vary.      

Goal: Any total return in excess of the dividend payments and before any ROC adjustments to the tax cost basis.   

F. Added to QYLD in Schwab Account- Bought 5 at $22.26:

See Item # 1.E. above. 

Average Cost per share this account:  $21.03 (20+ shares)

Yield =  11.17% (same assumptions as in Item # 1.E. above. 

I am reinvesting the dividend in this account. 

G. Eliminated REGN-Sold .274 at $618.05: 

Quote: Regeneron Pharmaceuticals, Inc.

REGN Analyst Estimates | MarketWatch

REGN SEC Filings

2020 Annual Report

10-Q for the Q/E 9/30/21

I never got started on this one and lost interest after learning that REGN's antibody cocktail was ineffective against omicron. That drug generated $677M in revenues during the 2021 third quarter. 

I am also concerned that another major product, Eylea, will lose its patent protection at some point mid-decade. The first U.S. composition patent will expire on 6/16/23 but there are 3 formulation patents that expire in the 2026-2027 time frame.  Eylea | FiercePharma

Eylea Patent Expirations: 

Eylea Page 27 Annual Report

Eylea Competitors: 

Beovu: A Longer Lasting Drug for Wet AMD | BrightFocus Foundation Beovu is a NVS drug which was approved by the FDA in October 2019.

Profit Snapshot: +$20.17 

Last Discussed: Item # 1.A.  Bought REGN- $100 at $544.72; $50 at $543.8 (7/15/21 Post) 

Dividend: None and none expected 

Last Earnings Report (Q/E 9/30/21): 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

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" 

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. 

The Stock Jocks are having a hard time valuing this company. 

It looks like the current low P/E valuation is due to the current earnings being unsustainable and likely to fall significantly. A similar approach is applied to highly cyclical and economically sensitive companies that trade at low P/Es during their earnings surges.  

Current E.P.S. Consensus Estimates as of 1/10/22

2021 $70.25

2022 $48.51

2023 $46.57

At a $618 share price, the P/E is 8.8 using the 2021 consensus and 13.27 using the 2023 consensus. 

The issue is whether there will be another blockbuster in the pipeline that is capable of replacing Eylea. 

The current stock price also reflects that investors are skeptical that REGN will come close to hitting the 2022 and 2023 estimates. 

The actual 2020 and 2019 E.P.S. numbers were $31.47 and $24.67 on a non-GAAP basis respectively. The REGEN-COV antibody cocktail received an emergency use authorization in the 2020 4th quarter and generated $145.5M in revenues for during that quarter.

H. Added to CTRA - Bought 2 at $19.46; 3 at $19.13; 5 at $18.95:

History: 

Price as of 1/3/22 Close, day of last purchase 

Quote: Coterra Energy Inc.

CTRA SEC Filings

CTRA Analyst Estimates-MarketWatch

Website: Coterra Energy

Cabot Oil & Gas and Cimarex Energy Complete Combination, Forming Coterra Energy

AC per share after last add = $20.19 (25 shares)

Dividend: The base dividend is currently at $.125 per  share. The variable component added $.175 for the last payment. The variable component is based on free cash flow. CTRA has committed to paying a dividend that is at least equal to 50% of FCF. 

Yield: Will depend on the amount of the variable dividend. Using the base rate only and my AC of $20.19, the yield is 2.48%. 

Last Substantive Discussion: Item # 1.J. Started CTRA-Bought 5 at $21.52; 2 at $21.1; 2 at $20.75; 2 at $20.4: 2 at $20; 1 at $19.56 (12/10/21 Post) I discussed the last earnings report in that post and have nothing further to add here. 

I. Bought 10 OGN at $30.11-Vanguard Taxable:  

Quote: Organon & Co.

Home | Organon

Organon | Products list

OGN SEC Filings

OGN  Analyst Estimates | MarketWatch

When I last discussed OGN back in June 2021, the 2022 E.P.S. consensus estimate was at $6.11 and at $6.35 in 2023. As of 1/11/22, the 2022 consensus E.P.S. estimate was at $5.85 and at $6.02 for 2023.  While the new estimates produce a single digit P/E, the concern expressed in the price is the directional change in E.P.S. which has been moving down.  Using the $30.11 per share cost and the $5.85 average E.P.S. estimate for 2022, the P/E would be 5.14. 

Only Buy Discussion: Item # 2.F. Bought 2 OGN at $31.2; 1 at $29.9, 1 at $29.7;  1 at $29.2; 3 at $28.7; 2 at $28.45 -Fidelity Taxable Account(6/25/21 Post) As previously discussed OGN was spun out of Merck last year. Merck Announces Completion of Organon & Co. Spinoff

Dividend: Quarterly at $.28 per share ($1.12 annually)

Yield at $30.11 = 3.72%

Last Ex Dividend: 11/19/21

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

SEC Filed EArnings Call Transcript 

SEC Filed Presentation for the 3rd Q. 

Non-GAAP E.P.S. = $1.67

Consensus at $1.443 per Fidelity

Non-GAAP net income from continuing operations: $424M

GAAP E.P.S. = $1.27

Revenues: Down 1% Y-O-Y to $1.6B. 

Product Revenues: 

News Since last Discussion: 

FDA Accepts Samsung Bioepis’ and Organon’s sBLA for their Citrate-Free, High-Concentration HUMIRA® (Adalimumab) Biosimilar Candidate (1/5/22)

Organon Completes Acquisition of Forendo Pharma (12/13/21)("Forendo Pharma, a clinical-stage drug development company focused on novel treatments in women’s health. Forendo’s lead candidate, FOR-6219, is an investigational, potentially first-in-class oral 17β-hydroxysteroid dehydrogenase type 1 (HSD17B1) inhibitor entering Phase 2 clinical development for endometriosis.")

Organon Receives FDA Clearance for Technological Updates to the Jada® System, a Medical Device Intended to Control Postpartum Hemorrhage (10/11/21)

Maximum Position All Accounts = 100 shares

J. Eliminated FCX-Sold 8 at $41.98: 

Quote: Freeport-McMoRan Inc

FCX Analyst Estimates | MarketWatch

FCX SEC Filings

2020 Annual Report

Copper Prices - 45 Year Historical Chart | MacroTrends

Last Buy Discussions: Item # 2.M. Added to FCX-Bought 1 at $32.92 (8/26/21 Post); Item # 1.J. Added to FCX - Bought 1 at $39.37; 1 at $37; 2 at $34.68 (7/2/21 Post); Item # 3.A. Bought 2 FCX at $41.33; 1 at $40.29 (6/12/21 Post) 

Profit snapshot: +$34.23

Dividend: Quarterly at $.075 per share, regular only ($.30 per share annually).  The 2022 1st quarter will have 2 payments of $.075 per share with one payment being a variable dividend. 

Freeport-McMoRan Inc. - Freeport-McMoRan Announces Program for Increased Cash Returns to Shareholders The current intent is to pay the $.075 variable dividend every quarter this year. 

I view the dividend, including the variable component, as providing no support to the stock price. Even with the annual dividend with the variable component at $.60 per share, the yield at $41.98 is only 1.4% and half that if the variable dividend is not continued.  

Freeport-McMoRan Inc.-Dividend History

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

GAAP E.P.S. = $.94; 

non-GAAP at $.89 with the consensus at $.818 per Fidelity; 

adjusted net income = $1.3B; 

"Consolidated sales "totaled 1.033 billion pounds of copper, 402 thousand ounces of gold and 20 million pounds of molybdenum in third-quarter 2021. Consolidated sales for the year 2021 are expected to approximate 3.8 billion pounds of copper, 1.3 million ounces of gold and 85 million pounds of molybdenum, including 1.025 billion pounds of copper, 375 thousand ounces of gold and 22 million pounds of molybdenum in fourth-quarter 2021."; 

"average realized prices in third-quarter 2021 were $4.20 per pound for copper, $1,757 per ounce for gold and $18.61 per pound for molybdenum."; 

"average unit net cash costs in third-quarter 2021 were $1.24 per pound of copper and are expected to average $1.33 per pound of copper for the year 2021 and $1.26 per pound of copper in fourth-quarter 2021."

K. Bought Back 10 IS at $7.5; 5 at $7; 5 at $6.7 (Fidelity Account): 

Position: 20 shares with a $7.18 AC. 

Quote: ironSource Ltd.

SEC Filings

Website: ironSource | Turning Apps Into Scalable Businesses

I noticed a 8% price decline on the day of purchase and could not find any news to explain it. Volume was heavy at 5.802+M shares compared to the average of  2.023+M. The most likely reasons in the absence of news would be tax loss selling and/or large holder disgorgement regardless of price.  

Investment Category: Lottery Ticket Basket

Previous round-trip this account: 

Last Sell Discussion: Item # 1.N. Sold 10 IS at $12.2-Fidelity Account (10/22/21 Post) (profit snapshot = $35.99)

Last Buy Discussion: Item # 2.C. Bought 10 IS at $8.55 (8/27/21 Post)

Dividend: None and none expected. 

Last Earnings Report (Q/E 9/30/21): ironSource Announces Record Third Quarter 2021 Results 

SEC Filed Earnings Press Release 

Recent Acquisition History: 

ironSource to Acquire Bidalgo, Further Deepening Its Platform Offering for App Developers With a Full-Stack Marketing Solution (10/25/21 Post) Financial terms were not disclosed. 

ironSource to Acquire Mobile Advertising and App Monetization Company Tapjoy (10/14/21)(ironsource will pay about $400M in cash sourced from the balance sheet)  

Purchase Restriction: The general idea is to first reach a point where I am playing with the house's money. 

L. Added to Lotto AKBA-Bought 5 at $2.28: 

Quote: Akebia Therapeutics, Inc.

Website: Akebia | Pioneering Hypoxia Inducible Factor (HIF) Therapies

SEC Filings

2020 Annual Report

10-Q for Q/E 9/30/21 

Chart: Major bear trend, really awful 

Investment Category: Blackjack Hand, part of the Lottery Ticket Basket

Last Buy Discussion:  Item # 4.M. Added to Lotto AKBA - Bought 10 at $2.55 (7/31/21 Post) 

I am quoting here from that post: "If the FDA approves vadadustat which the market believes is unlikely based on the message being sent by the current price, there could be a major percentage pop. Akebia and Otsuka Announce FDA Acceptance for Filing of New Drug Application for Vadadustat for the Treatment of Anemia Due to Chronic Kidney Disease in Adult Patients on Dialysis and Not on Dialysis (6/1/21)" On a possible though unlikely bright side, an FDA approval would be a major surprise that would likely sent the shares skyward provided the approval encompasses treatment of CKD in both dialysis-dependent and non-dialysis dependent adult patients. both  And there is no shortage of capital loss carryforwards that would shield income from taxation. The PDUFA target date is currently on or before 3/22/22.  If the drug is rejected, I would anticipate a decline below $1. 

Vadadustat has been approved for marketing in Japan, but AKBA has sold its royalty interest for Japan and other Asian countries, subject to maximum caps, as more fully specified in the following snapshot: 

Pages 24-25 10-Q for the Q/E 9/30/21

See also, Akebia Announces Otsuka's Submission of Initial Marketing Authorization Application to the European Medicines Agency for Vadadustat for the Treatment of Patients with Anemia due to Chronic Kidney Disease (10/29/21)

AKBA has 1 approved drug, Aurysia, whose patent expires in March 2025 due to a series of patent settlements. That drug was acquired as a result of AKBA's acquisition of Keryx Biopharmaceuticals whose shareholders are not happy campers since they received AKBA's stock. Akebia Therapeutics, Inc. (AKBA) is Being Sued for Misleading Keryx Biopharmaceuticals, Inc. (KERX) Shareholders Ahead of Merger | Business Wire

Average cost per share: $2.59  (20 shares)

Last Loss Report (Q/E 9/30/21): Akebia Therapeutics Reports Third Quarter 2021 Financial Results and Highlights Recent Company Milestones

Loss = $59.544M

Loss per share = $.34

Revenues = $48.756M (of that amount, Aurysia generated $36.8M, up from $34.4M in the 2020 third quarter, with collaboration generating the remainder)

Cash = $207.204M, down from $268.69M as of 12/31/20

Sell Discussions: Item # 3.F. Eliminated AKBA Again-Sold 15 at $4.17 (7/9/21 Post)(profit snapshot = $29.05); Item # 1.O. Eliminated AKBA in Schwab Account-Sold 15 at $4.21 (2/13/21 Post); Item # 2.B. Sold 105 AKBA at $6.35 (1/2/20 Post)(net profit snapshot = $135.66); Item # 4.A. Sold 30 AKBA at $15.27 (8/22/17 Post)(profit snapshot = $181.03)

AKBA Realized Gains to Date: $345.74

Purchase restriction: no more than 1/2 of the house's money.  

M. Pared DEA in Fidelity Account- Sold 12+ shares at $23.01: 

Quote: Easterly Government Properties Inc.

DEA SEC Filings

2020 Annual Report

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

I profitably sold all shares bought with the dividend and 10 of my highest cost shares. 

Profit Snapshot: $14.53 (12/30/21 sale only): 

Last Buy Discussions: Item # 3.B Added 5 DEA in Fidelity Account at $20.76 (10/8/21 Post); Item # 1.J. Started DEA in Vanguard Taxable-Bought 10 at $21.24 and Item # 1.K. Added to DEA in Fidelity Taxable-Bought 5 at $21.26   (9/3/21 Post); Item # 2.A. Bought 15 DEA at $20.61; 5 at $20.03 (5/23/21 Post); Item # 2.F. Bought 5 DEA at $20.94 (3/27/21 Post)

Average Cost before pare this account = $20.9  

Average cost after pare = $20.65 (50 shares)

Snapshot Intraday on 12/30/21 after pare

Dividend: Quarterly at $.265 ($1.06 annually), last raised from $.26 effective for the 2021 third quarter payment. The $.26 per share rate was a raise from $.25 effective for 2017 4th quarter payment. Dividend growth has historically existed but at a relatively anemic level. Easterly Government Properties, Inc. Common Stock (DEA) Dividend History | Nasdaq  The DEA dividend was at $.22 for the 2015 4th quarter.  The slow rate of dividend growth for REITs that increase the penny rate over time is understandable for a pass through entity that is paying out all of its GAAP earnings and almost all of its cash flow in current dividends. 

Yield at $20.65: 5.13%

Last Ex Dividend: 11/10/21

Last Stock Offering: Easterly Government Properties Announces Pricing of Forward Common Stock Offering (8/12/21); Final Prospectus REITs will generally have a continuous flow of common stock sales, through share offerings and ATM programs, to fund new investments, which is understandable given that cash flow is regularly being sent to shareholders in dividends. 

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

FFO and FFO adjusted per share at $.33 and $31 respectively; 

CAD per share will be significantly lower since DEA is an Office REIT that will have substantial maintenance expenses; 

Adjusted FFO reported at $29.2M with CAD at $26.1M; 

"As of September 30, 2021, the Company wholly owned 83 operating properties in the United States encompassing approximately 7.5 million leased square feet, including 82 operating properties that were leased primarily to U.S. Government tenant agencies and one operating property that is entirely leased to a private tenant"; 

"On October 13, 2021, the Company announced the formation of a joint venture (the “JV”), which will serve as the investment vehicle for the acquisition of an anticipated 1,214,165 leased square foot portfolio of 10 properties (the “VA Portfolio”) for an aggregate contractual purchase price of approximately $635.6 million.  The VA Portfolio is 100% leased to the Department of Veterans Affairs (VA) with a weighted average lease term of 19.6 years. Easterly’s JV partner will retain a 47.0% stake in the JV, subject to adjustment as set forth in the applicable JV documentation. Easterly will retain a 53.0% stake in the JV."; 

Guides 2022 FFO per share to $1.34 to $1.36; 

Board declared regular quarterly dividend of $.265 per share

Sell Discussions: Item # 3.E. Pared DEA in Fidelity Taxable-Sold 10 at $22.92 (8/20/21 Post)(profit snapshot = $3.79); Item # 1.A. Sold 21+ DEA at $28.81 (6/6/20 Post)(profit snapshot = $272.6); Item # 3.A. Sold 10 DEA at $22.39 (11/20/19 Post)(profit snapshot = $47.24); Items 1.A. and 1.B. Sold 10 DEA at $19.81 and Eliminated DEA in Schwab Account at $19.81 (8/24/19 Post)(profit snapshots $74.38); Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post)(profit snapshot = $22.59); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot = $97.85)

Goal:  Dividend plus 2+% annualized return on the shares

DEA Realized Gains to Date: $561.84 (currently at #11 in my equity REIT basket)

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.