AJXA, AMCR, BMY, CC, CVE, ENBPRP:CA; FLSW, FRAF, NOMD, PARA, PYPL, RIGL, TUP, UL, VRTX

Economy: 

The personal consumption price index rose to 6.4% for the 12 months ending in February, up from 6% in the prior month.

Personal Income and Outlays, February 2022 | U.S. Bureau of Economic Analysis (BEA) The latest PCE price index numbers are at 40 year highs. 

Home sales fall in February ahead of key spring selling season

U.S. bonds: Treasury yields invert flashing recessionary warning sign

I noted in a comment published on 3/28/22 that the 2 year treasury note was within 2 basis points of inverting with the 10 year treasury note. I mentioned there buying a treasury note in a Roth IRA account, maturing on 5/31/24, with a YTM of 2.446% which was higher than the 2.4% then offered by the 10 year treasury note.    

+++++

Putin and His Soulmate Psychopath Demagogue Don: 

The latest independent poll, conducted by Levada this month, which Putin has declared to be a "foreign agent", shows that 83% of Russians approve of Putin's actions, up from 69% in January. Putin's Popularity Rises in Russia, Drops Among Americans, Polls Say Denis Volkov, Levada's director notes that the "confrontation with the West has consolidated people" in their support of Putin, with the general feeling being that "everyone is against us" and Putin defends them. 

7 Characteristics of the Modern Psychopath | Psychology Today

Putin and his FM Lavrov frequently refer to accurate statements about Russia's bad behavior as evidencing Russia phobia. It is a childish rebuttal meant to persuade the feeble minded.

The same tactic is used by Trumpsters in response to accurate statements about Don the Authoritarian. The phrase Trump Derangement Syndrome (TDS) is used, mostly by those incapable of acquiring and processing accurate information, to dismiss those factually accurate criticisms without rebuttal.   

Authoritarians like Putin and Trump will characterize any fact that they do not like as "Fake News". As Don once said, you can not even believe what you see, and no doubt Putin would agree (e..g video and eye witness accounts of Russians murdering civilians and destroying civilian buildings in Ukraine).  What Russia is willing to do has not gone unnoticed in Europe. What would cause Putin to view Sofia, Warsaw, Tallinn, Bucharest or Riga as different from the Russian speaking city of Mariupol that he has destroyed.  

Trump would be someone best ignored provided he no longer controlled the republican party which is not the case now. And, he may be the republican candidate for President in 2024. 

Top Russian general who bragged invasion would only take hours killed in Ukraine | Washington Examiner (3/6/22). This particular fool was Lt. General Yakov Rezantsev. 

Inside the Mariupol theater attack: ‘I heard screams constantly’ - The Washington Post; Just one of Russia's many war crimes. Russia murdered over 300 civilians in this attack alone. New video shows inside bombed Mariupol theater - YouTube Over 90% of the civilian structures in this Russian speaking city have been destroyed by Russia. Siege of Mariupol - Wikipedia

Continuing its uninterrupted war crimes in Mariupol, Russia destroyed a clearly marked Red Cross warehouse. The red emblem of the Red Cross was clearly visible from the sky and Russia bombed it anyway. Russia bombs Red Cross building in Mariupol | Daily Mail Online

On a vast scale, Russia has murdered Russian speaking Ukrainians and destroyed their businesses and homes. That is a fact. Russia's objective is not to stop the genocide of Russian speakers since it is the country committing that genocide. Putin could care less. 

The main reasons for Russia's invasion of Ukraine are to secure the natural gas resources in eastern Ukraine and to take the Ukraine's coastal areas along the Black Sea and Sea of Azov. 

Russia's annexation of Crimea in 2014 was also done to acquire natural gas assets for Russia and had nothing to do with protecting Russian speakers who lived there. The energy dimensions of Russia’s annexation of Crimea; 

The main reason Russia started the war in Eastern Ukraine in 2014 was to take away  natural gas and other natural resource assets located there from Ukraine. Natural gas in Ukraine - Wikipedia As I said earlier, Russia's violations of international law and devotion to war crimes, approved by a majority of its citizens, are out of a 18th century conquest playbook masked by obviously false cover stories. And, if Russia succeeds in that objectives, I doubt that the beneficiaries will be the average Russian citizen, and certainly not the Russian soldiers who have died in the invasion and whose bodies were left to rot.

Ukrainian family: 11-year-old girl shot in face by Russian soldier - YouTube Just another war crime committed by Russian soldiers. 

Graphic video shows extensive destruction in Kyiv suburb of Irpin - CNN Video  

Under Fire, Out of Fuel: What Intercepted Russian Radio Chatter Reveals - The New York Times (contains a video of a Russian tank firing a small sedan, killing the two elderly occupants, starting near 5:15) It is just an indisputable fact that Russia is intentionally targeting civilians as a routine military strategy to terrorize the population. This strategy makes no distinction between murdering civilians who speak Russian or Ukrainian. 

Russian troops’ tendency to talk on unsecured lines is proving costly - The Washington Post

A Russian advance in the south was stopped near Mykolaiv. Russia responded with a cruise missile attack successfully aimed at the office of the regional governor who has been vocal in his opposition to Russia's invasion. Russia murdered at least 15 civilians in this attack, probably a lot more since bodies are still being located in the rubble. A video captured the missile immediately before impact. Just another Russian war crime. Video shows aftermath of Russian attack on Mykolaiv (also contains an interview with a man whose elderly mother was murdered by Russian soldiers as they attempted to flee in a small sedan); Mykolaiv government building airstrike-Wikipedia; Battle of Mykolaiv - Wikipedia Since I mentioned those facts, Lavrov will say that I am suffering from Russian phobia, meaning that I am making an accurate comment about Russia's atrocities. 

Putin says Russia is canceled like J.K. Rowling, compares to Nazis - The Jerusalem Post Putin has learned a lot from Donald and other republicans.  I have not heard him use the word "woke" to describe someone who is not a fan.  

You know that a government is pure evil when it lies about the number of soldiers killed in action. The bodies of Russian soldiers are piling up in Ukraine, as Kremlin conceals true toll of war | CNN In the first month of Russia's invasion, its Defense Ministry claims that 1,351 Russian soldiers have been killed. Russia Releases Its Forces’ Death Toll in Ukraine (3/25/22) 

Ukraine Takes Back Village Outside Kharkiv From Russian Soldiers - YouTube This is just one of the recent videos that I have viewed where Russia left the bodies of its dead soldiers for Ukraine to bury. 

Russians drove through radioactive Red Forest by Chernobyl with no radioactive gear on

Roman Abramovich 'suffered suspected POISONING along with Ukraine peace negotiators' | Daily Mail Online

The Making of Vladimir Putin - The New York Times

What untruths is Russia spreading about Nazis in Ukraine? - BBC News - YouTube

Russian journalist Oksana Baulina killed in Kyiv shelling - CBS News She worked for Navalny's Anti-Corruption Foundation and left Russia after that Foundation was declared an extremist organization by Putin. That Foundation reported on Putin's corrupt government. She then went to work for the Insider.  

Putin’s hunt for ‘traitors’ sends a message: We are watching everyone - The Washington Post 

Recognizing that Russia is now a fascist totalitarian state controlled from top to bottom by a violent and murderous psychopath, who is supported by a super majority of Russians, tens of thousands of Russians have left the country since Putin decided to invade Russia. Russia faces brain drain as thousands flee abroad - BBC News  

As of yesterday, Russia has driven more 4 million people out of Ukraine according to the U.N.  I doubt that those people will have homes left when Russia is done. About 6 million have been displaced Russia inside Ukraine. 

UNICEF, a UN organization, says that Russia has caused over 2 million children to become refugees in other countries and 2.5M have been internally displaced inside the country. Two million refugee children flee war in Ukraine in search of safety across borders Just more Russian war crimes. 

Poland to ban all Russian oil and gas imports and urges Germany to do more-NPR Russia will lose a lot of customers for its main revenue source. 

Ukraine war before and after photos Contains photographic evidence of Russian crimes against humanity. 

Mercenaries' Shift to Ukraine Reveals Russia's 'Desperation': Official

I do not see how the western democracies can lift sanctions against Russia for more than a generation. Putin has just gone way too far this time.

Donald Trump just can't stop praising Vladimir Putin (3/28/22) 

Trump Is Guilty of ‘Numerous’ Felonies, Prosecutor Who Resigned Says - The New York Times; Mark Pomerantz’s Resignation Letter: The Full Text - The New York Times

Trump ‘more likely than not’ committed a crime in trying to block congressional confirmation of Biden’s win, federal judge says - The Washington Post

Congressman Mo Brooks (R-AL), who gave a pep talk to the republican insurrectionists prior to their violent assault on the nation's capital, is running for the soon to be vacant senate seat in that state. Mo Brooks Tries to Pin Insurrection Speech Blame on White House Given Brooks servile fealty to Don the Authoritarian, he received Donald's endorsement. 

The endorsement was withdrawn, however, after Brooks said it was time for the GOP to "put that behind you" referring to the 2020 Presidential election. He was booed by members of the anti-democracy party after making that comment. 

Donald responded to Brooks "put that behind you" comment in a predictable way: 

Trump: "When I heard his statement, I said, 'Mo, you just blew the Election, and there’s nothing you can do about it. Very sad but, since he decided to go in another direction, so have I, and I am hereby withdrawing my Endorsement of Mo Brooks for the Senate."Trump pulls endorsement of Rep. Mo Brooks for Alabama Senate seat; Trump withdraws endorsement of 'woke' Mo Brooks | TheHill

Brooks then claimed that Donald had urged him to help him illegally rescind the election results. Rep. Mo Brooks says Trump repeatedly asks him to 'rescind' the 2020 election; Mo Brooks: Trump Asked Him To ‘Rescind' 2020 Results, Hold New Election - YouTube

Trump calls on Putin to release dirt on Hunter Biden - POLITICO  

Woodward: Telephone-addict Trump likely used phone during Jan. 6 gap in phone record - YouTube Don the Con said that he never heard of a burner phone. Bolton says he recalls Trump using the term "burner phones"-CBS News; Trump’s Missing Phone Logs on 1/6 | Vanity Fair; What Is Trump Hiding About His Phone Records? - The Atlantic (David Frum author)

+++

1. Corporate Bonds and Treasuries: Short Term Maturities

The brokers that I use to buy U.S. Treasuries do not charge a commission, either for purchases at auction or in the secondary market. 

So far this year, and starting this month, I have been buying only in the secondary market.  

I will buy in 1 or 2 bond lots and may average down on those with short maturities when interest rates are rising. The market is so liquid that there is generally no material difference in the yield available for 1 bond purchases compared to 100 or more. 

This is the order book for the 1.65% treasury note maturing on 5/31/23 that I discuss below. 

As of 3/28/22 at 9:36 A.M. EDT

I am currently focusing my attention on short term maturities which I define as 1 month to 3 years.

I compartmentalize interest rate risk into several categories. 

The broadest category is that the price will go down as interest rates rise for comparable maturities. The only way for a lower vintage coupon to adjust to higher yields is to go down in price until yields equalize. 

Interest Rate Risk: Lost Opportunity

Another category is what I call the risk of loss opportunity. 

When rates are rising as they are now,  I lose the opportunity to use the same funds devoted to a purchase to buy at a higher rate, unless I am willing to sell at a loss and then invest the proceeds into the higher yielding bond. 

This particular interest rate risk would only be material to me when I am fully invested in bonds and am unable to buy more using funds held in a money market account that pays significantly less. 

The better comparison for me is whether I will likely earn more from the bond compared to keeping the money in a MM fund. I am trying to make that calculation now. And, I mitigate the risk of lost opportunity through a bond ladder strategy. If interest rates rise persistently, I will have a constant flow of redemption proceeds that can be reinvested into higher yielding bonds.   

My two Vanguard MM funds, which have the lowest expense ratios, are the first ones that started to pay more than .01%. The Vanguard Cash Reserves Federal Money Market Admiral shares have a 7 day SEC yield of .17% as of 3/30/22. The expense ratio is .1%. The yield will move up in tandem with the FED increasing the federal funds rate. 

Interest Rate Risk: Forced Sell at a Loss 

Another category of interest rate risk is a forced sell prior to maturity at a loss. I do not face that risk since I can hold every bond bought to maturity. 

Treasury Yield Curve-March 2022: 

There was a slight downtick on Wednesday as investors realized that Russia was not, as it claimed, pulling back on its invasion.  

A. Bought 2 Owl Rock 4% SU Bonds Maturing on 3/30/25 at a Total Cost of 99.084:

FINRA Page 

Credit Ratings: Baa3/BBB- (one notch above highest junk rating)

As previously discussed, I view BDC bonds as inherently risky given the high risk loans made by them and the fact that money is flying out the door in common share dividends. Risk is mitigated by the first or second lien status and the value assigned to the loans that is generally meaningfully higher than the total debt before trouble negatively impacts their values. 

As of 12/31/21, Owl Rock claimed its assets were valued at $13.298+B with total debt at $7.079+B. SEC Filed Earnings Report ("As of December 31, 2021, based on fair value, our portfolio consisted of 74.9% first lien senior secured debt investments, 15.1% second lien senior secured debt investments, 1.5% unsecured debt investments, 1.9% investment funds and vehicles, 2.1% preferred equity investments and 4.5% common equity investments.")

Prospectus 

Issuer: Owl Rock Capital Corp. - An externally managed BDC 

ORCC SEC Filings 

10-K for 2021

SEC Filed Earnings Press Release for the Q/E 12/31/21 

Claimed Total Asset value of $13.298+B as of 12/31/21

Debt at $7.079+B as of 12/31/21

Optional Redemption: Subject to make whole prior to 2/28/25  

Total Cost = 99.084 (includes $1 per bond commission)

Current Yield at TC = 4.04%, rounded up

YTM at TC = 4.32%, rounded down 

Accrued Interest Paid to Seller: $37.33

I own the common shares. Item # 2.F. Added to ORCC-Bought 5 at $11.65 (10/13/20 Post); Item # 4.E. Started ORCC-Bought 10 at $12.67; 1 at $12.59; 5 at $12.27 and 5 at $11.95 (6/27/2020 Post)

Maximum Bond Exposure: 2

B. Bought 1 Laboratory Corporation 2.3% SU Bond Maturing on 12/1/24 at a Total Cost of 98.239: 

FINRA Page (prospectus linked)

Issuer: Laboratory Corp. of America Holdings  (LH) 

LH Analyst Estimates | MarketWatch

LH SEC Filings 

SEC Filed Earnings Press Release for the 2021 4th Quarter 

2021 Annual Report 

Credit Ratings: Baa2/BBB

Bought at 98.139

Total cost at $98.239 (includes $1 per bond commission)

YTM at TC = 2.99%, rounded up 

Current Yield at TC = 2.34%

Last Bond Offering in May 2021: 

Prospectus ("We expect to use the net proceeds to redeem prior to maturity our outstanding 3.20% Senior Notes due February 1, 2022 and 3.75% Senior Notes due August 23, 2022." Page S-16) 

I owned 1 of the 3.2% LH bonds maturing on 1/1/22 that was redeemed early on 6/11/21, triggering a make whole payment of $18.56 in addition to the $1,000 in principal amount (plus accrued and unpaid interest). 

C. Bought 2 U.S. Treasury 2.125% Notes Maturing on 2/29/24 at a Total Cost of 99.8491:

No commission paid. 

Current Yield = 2.13%, rounded up 

This yield was close to the 10 year treasury yield on the purchase date.  

As discussed in a recent comment, I will slowly build a bond ladder when interest rates are rising and will use treasuries as fillers in the ladder. 

Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity-St. Louis Fed Prior to March 2022, the 2 year treasury note last traded above 2% in May 2019. 

D. Bought 1 U.S. Treasury 1.65% Note Maturing on 10/31/23 at a TC of 99.226: 

Current Yield: 1.66%

YTM: 2.122%

E. Bought 1 U.S. Treasury 1.625% Note Maturing on 5/31/23 at a TC of 99.746: 

Current Yield: 1.63%

YTM: 1.84%, rounded down

The YTM is slightly more than 1 year treasury bill that closed yesterday at a 1.64%. 

2. Canadian Reset Equity Preferred Stocks: 

A. Bought 100 ENBPRP:CA at C$18.89 (C$1 IB Commission): 

Quote: ENB-PP.TO

Closing Price 3/30/22: C$19.10, up C$.09. 

This brings me back up to 400 shares. I recently sold 100 shares at C$20.20. Item # 1.A. Sold 100 out of 400 ENBPRP:CA at C$20.20 (12/31/21 Post)(profit snapshot = C$368). That pare reduced by average cost per share to C$15.04. 

I raised my AC per share to C$16.01 with this last 100 share purchase: 

As of the close on 3/28/21: Unrealized Gain at C$1,160.

Remaining Lots Buy Discussions: Item # 3.A. Added to ENBPRP:CA Bought 50 at C$11.98 and 50 at C$11.76 (6/13/20 Post);Item # 3.A. Added to ENBPRP:CA-Bought 50 at C$16.47 (2/16/20 Post): Item # 2.A. Bought 50 ENBPRP at C$15.68 (11/27/19 Post)

1 Year Chart as of 3/28/22: 

Security Description: 

Par Value: C$25

Current Coupon: 4.35% to but excluding 3/1/24 when the coupon resets unless redeemed at that time by the issuer. If the issuer does not redeem on the reset date, it loses its optional redemption right for another five years. 

Dividends: Quarterly and Cumulative

Last Ex Dividend: 2/14/22 (owned 300 as of) 

Canada will withhold a 15% tax when held in a U.S. citizens non-retirement account. 

Current Yield at C$16.01 = 6.79% (.0435% x C$25 par value = C$1.0875 per share ÷ C$16.01 TC per share = 6.79%)

Reset Coupon: 2.5% Spread to the 5 year Canadian government bond. 

Canada 5 Year Government Bond Overview | MarketWatch The yield has been moving up. When the next reset occurs in March 2024, it is possible that the reset coupon will be higher than the current one of 4.35%. That looked unlikely when I sold the 100 shares at C$20.20 a few months ago. And, it is at least conceivable that the reset coupon will be so high that ENB will elect to redeem at par value on the reset date. Resetting at a lower coupon in 2024 will of course be a negative development.  

The prospectus can be found here: Preferred Shares and Hybrid Securities - Enbridge Inc. 

Prior ENBPRP:CA Round Trips: Item # 4.A. Sold 200 ENBPRP at C$19.91 (3/25/17 Post)(realized gain snapshot= C$963). The IB reportable profit in 2017 was US$606.07. That post also contains a snapshot of a 300 share round-trip that netted U.S.$1,458.25 which is after Fidelity converted the CAD profit into USDs for tax reporting purposes. That 300 share lot was bought at C$12.39. Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 2/29/16 - South Gent | Seeking Alpha  

ENBPRP:CA Realized Gains to Date: 

USDs: $2,064.32 

CADs: $368 (USD reportable profit calculation will be made in my 2021 1099)    

3. Small Ball: 

A. Sold 100 RIGL at $3.05: 

Quote: Rigel Pharmaceuticals Inc.

Rigel SEC Filings

Website: Rigel Pharmaceuticals

2021 Annual Report ("In 2021, our net product sales of TAVALISSE were $63.0 million, a 2% increase compared to 2020. The increase in our net product sales was primarily driven by the increase in quantities sold as well as the increase in price per bottle of TAVALISSE. The increase in our net product sales resulting from the increase in quantities sold and price per bottle were partially offset by the increase in revenue reserves mainly due to higher government program rebates.") TAVALISSE is Rigel's only FDA approved drug. I would describe the sales as disappointing. The company blames the pandemic for the poor sales growth. 

Investment Category: Lottery Ticket Basket

Profit Snapshot: $134.99

This lot was purchased at $1.71. Item # 5.A. Bought 100 RIGL at $1.71 (10/2/2019 Post)

Last Discussed: Item # 2.A. Bought 10 RIGL at $3.27 and 5 at $3.12-Schwab Taxable Account (5/8/21 Post) I still own those shares held in my Schwab taxable account. The position is just 22 shares with an average cost of $3.17 per share.   

The most important positive news in the past year is referenced in the following documents: Rigel Announces Closing of Strategic Collaboration with Lilly Lilly paid an upfront cash fee of $125M. 

Summary of Terms

Product Portfolio: 

Last Report (Q/E 12/31/21): SEC Filed Press Release 

Net Loss of $22.6M or ($.13) per share

Cash at year end: $125M

Other Recent Development: 

Rigel Sharpens Focus on Its Advanced Portfolio Opportunities I view this announcement as a recognition that the company was running out of money and consequently needed to abandon some clinical stage drug development programs.   

Rigel Announces Publication of Data from Phase 2 Clinical Study of Fostamatinib for the Treatment of Warm Antibody Autoimmune Hemolytic Anemia in the American Journal of Hematology (3/8/22)

Sell Discussions: Item # 2.E. Sold 50 RIGL at $3.06 (12/25/20 Post)(profit snapshot = $9.05); South Gent's Comment Blog # 4 (sold 150 RIGL at $2.93 that was bought at $2.15; profit = $109.24)

Risk Management: Given the dicey nature of this stock, I will keep my total monetary exposure near my prior realized gains so that I am playing mostly with the house's money. 

RIGL Realized Gains to Date: $253.27

B. Eliminated Remaining TUP - Sold 10 at $19.49: 

Quote: Tupperware Brands Corp.

Investment Category: Lottery Ticket Basket

2021 Annual Report 

TUP SEC Filings

TUP Analyst Estimates | MarketWatch

Profit Snapshot: +$52.76

Buy Discussions:

Item # 1.M. Added 5 TUP at $13.9  (2/3/22 Post); 

Item # 1.L. Bought 5 TUP at $14.53 (1/20/22 Post)

Sell Discussion: Item # 1.P. Eliminated TUP in Fidelity Account-Sold 25 at Various Prices (2/17/22 Post)(profit snapshot = $71.63) 

Dividend: None and none expected 

Last Earnings Report (Q/E 12/31/21):  SEC Filed Press Release 

GAAP E.P.S. = $.37

Non-GAAP at $.38 

Consensus Non-GAAP at $.52, missed by $.14. 

"Net sales were $394.9 million, a decrease of 12% year over year (or 10% on a constant currency basis)"

"For full year 2022, the Company expects diluted adjusted earnings per share to be between $2.60 to $3.20, and operating cash flow net of investing cash flow to be between $120 million and $160 million. This assumes a tax rate in the mid to high 20% range."

Current Position: None

Consider to Buy: <$15 

C. Eliminated VRTX - Sold 2.814 at $240.9:

Quote:  Vertex Pharmaceuticals Inc.   (VRTX) 

VRTX Analyst Estimates | MarketWatch

Pipeline | Vertex Pharmaceuticals

VRTX SEC Filings

Profit Snapshot:  +$119.56 (3/4/22 sale only)

Last Buy Discussion: Item # 3.L. Multiple VRTX Small Dollar Buys (6/12/21 Post)

Since that buy discussion, the Stock Jocks have become more positive on the stock, primarily IMO due to these press releases: Vertex Announces Positive Results From Phase 2 Study of VX-147 in APOL1-Mediated Focal Segmental Glomerulosclerosis (12/1/21); Vertex Advances VX-147 Into Pivotal Clinical Development for People With APOL1-Mediated Kidney Disease (3/22/22)

Last Sell Discussion: Item # 1.J. Pared VRTX- Sold 1 at $230.5 (2/3/22 Post) I discussed the last earnings report in that post and have nothing to add here. 

Dividends: None and none expected which cools my willingness to own this stock.

Current Position: None 

D. Added to NOMD- Bought 5 at $22.89; 5 at $20.88; 5 at $20.3-Fidelity Taxable Account: 

Quote: Nomad Foods Ltd. (NOMD)

NOMD Analyst Estimates | MarketWatch

NOMD SEC Filings

Website: Home | Nomad Foods

Last Discussed: Item # 3.H. Bought 5 NOMD at $25.14; 5 at $24.43; 5 at at $23.95 -Schwab Taxable Account (12/16/21 Post); Item # Added to NOMD-Bought 2 at $25.4, 3 at $24.5, 2 at $23.7; 3 at $23.4 (3/13/21 Post)

Dividend: None

Average cost per share this account:  $23.05 (30 Shares)

Last Earnings Report (Q/E 12/31/21): Nomad reports in Euros.  

Nomad Foods Reports Fourth Quarter and Full Year 2021 Financial Results - Nomad Foods

4th Q Results: Adjusted E.P.S. at €.33 with consensus at €.32 

Before adjustments, reported E.P.S. was at €.16.  

2021 Results: Adjusted E.P.S. at €1.55

Adjustments include integration costs of the Findus and Fortenova acquisitions, "Factory optimization" and "Business Transformation program" Presentation.pdf

Adjusted Free cash flow for 2021: €232, down from €345 in 2020 

2022 Guidance: Adjusted E.P.S. €1,71 to €1.75

Nomad Earnings Call Transcript.pdf

Analyst Reports: 

I do not have access to these report: 

UBS (3/20/22): Initiates at Buy with a $26 PT

Jeffries (3/30/22): Keeps buy rating, reduces PT to $30 from $33

Goldman Sachs (3/16/22): Maintains neutral rating, reduces PT to $26 from $29 

I am able to review the Credit Suisse which is available to Schwab customers: 

Credit Suisse (2/25/22): Outperform but reduces PT to $29 from $30 based on weaker Euro currency translation, believes 2022 guidance is conservative. 

I view the stock as undervalued at its current price, but am reluctant to take a significant position due to the lack of a dividend. 

E. Added 5 AJXA at $24.93: 

History: 

Quote: Great Ajax Corp. 7.25% Convertible Senior Notes Overview

Last Discussed: Item # 2.A. Bought 5 AJXA at $23.08(10/10/20 Post) 

Investment Category: Exchange Traded Baby Bonds

Issuer: Great Ajax Corp. (AJX) I would classify this company as an externally managed mortgage REIT. 

AJX SEC Filings 

AJX 2021 Annual Report (risk factor summary starts at page 15 and ends at page 42)

Security Prospectus 

Par Value: $25

Coupon: 7.25% paid in quarterly installments

Average cost per share: $24

Current Yield at $24  = 7.55%

Trades Flat

Last Ex Interest Date: Today, 3/31/22

Conversion Price: The initial conversion price was at $15.21, subject to adjustments as explained in the prospectus. In the 2021 Annual Report at page 66-67, the company states that the conversion price was $14.27 as of 12/31/21. The downward adjustment may be due to paying more than $.28 per share in common share dividends for several quarters.

Maturity Date: 4/30/24

Risk Level Assessment: High but mitigated IMO by the maturity date and recent financial reports.   

I own a few shares of the common stock. Item # 3.D. Bought 10 at AJX at $8 (11/7/20 Post) 

F. Eliminated FRAF - Sold 5 at $34.01: 

Quote: Franklin Financial Services Corp. (FRAF)

FRAF SEC Filings

2021 Annual Report

5 Year Performance Metrics: 

Right to Left 2021 to 2017, page 19 Annual Report 

A major problem for small banks in particular has been the pressure on NIM. Note the decline in FRAF's NIM from 3.72% in 2017 to 2.88% last year. The efficiency ratio is too high (lower is better), but growth in tangible book value per share is good. The Charge Off Ratio has remained good over this 5 year period with the NPL and NPA ratios remaining range bound below 1%. 

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: +$60.04

Buy Discussion: Item # 1.H. Bought 5 FRAF at $22.8 and 5 at $22 (11/7/2020 Post)

Dividend: Quarter at $.32 per share, last raised from $.31 effective for the 2021 third quarter payment. 

Last Ex Dividend: 2/3/22

Last Earnings Report (Q/E 12/31/21): Earnings Release 4Q 2021 I was not impressed. Many of the important metrics are going the wrong way. 

E.P.S. at $.82, down from $1.04 in the 2020 4th quarter

Net income = $3.7M

NIM = 2.97%, down from 3.08% in the 2020 4th quarter 

NPL Ratio: .74%

NPA Ratio: .42%

Charge off ratio: .04%

ROA = .84%, down from 1.18% in the 2020 4th Q

ROE = 9.56%, down from 12.94% in the 2020 4th Q. 

Tangible Book Value per share = $33.10

G. Bought 5 CC at $23.2-Fidelity Account and 4 at $23.99 in Schwab Account: 

Fidelity: 

Schwab: Current position 10+ Shares

AC at $24.625

Quote: Chemours Co.

Closing Price 3/30/22 $32.23, up $.05 

The main knocks on this company are its cyclicality, debt levels, and litigation/environmental remediation risks mostly associated with the chemical PFAS. Those problematic liabilities are discussed in the 2021 Annual Report at pages 58-66 and at pages F-45 to F-62.  

I discussed the 5 share purchase in a comment published on 3/7/22. 

Brands and Products | The Chemours Company

Chemours Co Profile | Reuters

Investor Relations

SEC Filings

Sell Discussions: Item # 1.B. Eliminated CC in Fidelity Taxable Account- Sold 20 at $36.23 (1/27/22 Post)(profit snapshot = $221.41); Item # 1.D. Sold 22 CC Vanguard Taxable account at $28.5 (1/16/21 Post)(profit snapshot = $45.79); Item # 1.F. Pared CC in Fidelity Account-Sold 5 at $33.81 (5/16/21 Post)(profit snapshot = $37.11)  

Buy Discussions: Item # 1.D. Started CC in Fidelity Taxable Account-Bought 5 at $26.6; 5 at $26.14; 5 at $25.4; 5 at $24.8; 5 at $24.3  (1/16/21 Post); Item # 1.Q. Started  CC in Schwab Taxable Account-Bought 5 at $25.2 (2/20/21 Post); Item # 1.K. Added 1 CC at $24.08-Schwab Account (3/20/21 Post)

Dividend: Quarterly at $.25 per share, last raised from $.17 effective for the 2018 third quarter. 

I would not anticipate a dividend raise for several years given the debt levels, litigation and remediation costs, and cyclicality of earnings.  

CC Dividend History | Nasdaq

Yield at  $23.2 = 4.3%

Last Ex Dividend: 2/24/22

Last Earnings Report (Q/E 3/31/21): SEC Filed Press Release 

The Stock Jocks reacted negatively to this report which missed the consensus E.P.S. estimate. The stock closed at $35.15 2/10/22 and at $29.75 the next day in response to this report. The stock continued to drift down thereafter, closing at $23.12 on 3/7/22.

Non-GAAP E.P.S. = $.81, up $.20 compared to the 2020 4th Q. 

Consensus at $.88 

GAAP E.P.S. at $1.4, includes profit from sale of CC's Mining Solutions business for $521M.  

Revenues up 18% Y-O-Y to $1.6B, in line with consensus

2022 Free Cash Flow estimate: >$500M with adjusted E.P.S. between $4.07 to $4.7. 

Free Cash Flow in 2021: $543M compared to $540 in 2020

Other Recent News: Chemours Suspends Business with Russian Entities (3/10/22)

Analyst Reports (available to Schwab customers): 

S & P (2/11/22): 5 stars with a $43 12 month PT (keeps 2022 E.P.S. estimate at $4.5 and starts 2023 at $5.3

Argus (2/14/22): Buy with a $40 PT (raised 2022 E.P.S. estimate to $4.45 from $4.3 and initiated 2023 estimate of $5.58)

I do not have access to the following: 

RBC (2/15/22): Cuts PT to $41 from $44 citing TiO2 input cost inflation and Auto OEM production headwinds

JPM (2/14/22): Cuts PT to $30 from $35, maintains neutral rating.

UBS (2/11/22): Raises PT to $38 from $36, maintains neutral rating. 

CC Realized Gains to Date: $304.31 (47 shares) There were no trades prior to 2021. I am just starting to gain a feel for trading this stock. I am very reluctant to buy shares given the indeterminate liabilities associated with PFAS, which I view as serious. 

Current Position: 15+ shares

Consider to sell: >$36

Consider to buy: <$25

H. Eliminated CVE - Sold 10 at $16.2: 

Quote: Cenovus Energy Inc. (CVE)

Investment category: Lottery Ticket Basket

CVE SEC Filings (foreign issuer forms) 

2021 Annual Report 

Website: Cenovus Energy is an integrated Canadian oil company

Profit Snapshot: +$92.74 

Last Discussed:  Item # 2.K. Bought 10 CVE at $6.93 (3/6/21 Post) 

Dividend: Quarterly and negligible at C$.035 per share

Last Earnings Report (Q/E 12/31/21): SEC Filed Press Release I did not care for this report, particularly in comparison to the 4th quarter results released by CNQ and SU which I own.  

E.P.S. at (C$.21)

Free cash flow at C$1.103B

Long Term Debt at C$12.4B as of 12/31/21, down $1.7B from 1/1/21.   

I. Added 10 AMCR at $11: 

Quote: Amcor PLC

Closing Price 3/30/22: $11.53, down $.04 

Amcor PLC Profile | Reuters

AMCR SEC Filings

Website: Global Packaging Solutions | Amcor

Investment Category: Bond substitute with a small, barely detectable flavor of dividend growth. 

I recently sold 30 shares at $12.36. Item # 1.E. Pared AMCR in Schwab Account - Sold 30 out 130 at $12.36 (2/3/22 Post) I have now bought back 20 of those shares at lower prices. The other 10 share lot was bought at $11. 54. Item # 2.J. Added 10 AMCR at $11.54 (2/20/22 Post) 

Average cost per share this account =  $11.72 (120 shares)

I will buy 10 more shares in this account at less than $11. 

Dividend: Quarterly at $.12 per share 

Yield at new AC  = 4.10%, rounded up

Last Ex Dividend: 2/22/22

Last Earnings Report (Q/E 12/31/21): SEC Filed Press Release-4th quarter earnings; SEC Filed Investor Presentation This report is for the second fiscal quarter. 

Revenues at $3.103B

GAAP net income of  $219M or $.139 per diluted share. 

Non-GAAP E.P.S. of $.18 in line with estimates. 

"Amcor repurchased 24.6 million shares (1.6% of outstanding shares) during the six months ended December 31, 2021 for a total cost of $295 million. In addition to $400 million announced previously, the Company expects to allocate a further $200 million of cash towards share repurchases, bringing the total expected for the 2022 fiscal year to approximately $600 million. The additional $200 million of share repurchases is not expected to benefit EPS growth until fiscal 2023 as there will be no material impact on the weighted average number of shares outstanding in fiscal 2022."

Fiscal Year Ending 6/30/22 Guidance: 

AMCR has been hurt by the rapid and significant input cost increases. 

Other Recent News: Amcor issues update on the conflict in Ukraine | Amcor (scaling down operations in Russia which generated about 2 to 3% of AMCR's revenues)

Analyst Reports: 

On 3/25/22, Trust started AMCR with a $12 PT and a hold rating. 

On 3/25/22, BOfA Securities downgraded AMCR to underperform from buy and reduced its PT to $12.3 from $13.4. 

I do not have access to the BofA or Truist reports. I suspect the downgrades are related to margin pressures caused by input cost inflation and the Russian news reference above.  

S & P has a 3 star rating with a $12 PT as of 2/3/22

J. Added to PYPL-Bought $50 at $98.99:

Quote: PayPal Holdings Inc.

PYPL Analyst Estimates | MarketWatch

PYPL SEC Filings

I discussed the last earnings report in this post: Item # 2.K. Multiple $50 Fractional Shares purchases of PYPL (3/3/22 Post); SEC Filed Press Release

Small Ball "Buying Program": $50 per purchase with each subsequent purchase having to be at the lowest price in the chain. So the next purchase will have to be below $98.99. This is as brave as I can get for this stock and several others (e.g. FB, ETSY) where I am using the same small ball purchase approach. I will discuss a new one in my next post. 

Average Cost per share: $108.24  (3.6+ shares)

Closing Price 3/30/22: $118.73, down $2.69 

Dividend: None and none expected. 

K. Added 1 UL at $45.36; 1 at $43.9- Fidelity Account:

I am just lowering my average cost per share with small lot purchases. 

Quote: Unilever PLC ADR

Closing Price 3/30/22: $46.26, up $.01 

The ordinary shares trade in British Pence: Unilever PLC (U.K.: London)

The ordinary shares closed yesterday at 3,548 P, or £35.48

British Pound to US Dollar Exchange Rate Chart | Xe

ADR Ratio 1 for 1

All brands | Unilever global company website

Unilever simplifies organisation (1/24/22)

2021 Annual Report

Last Buy Discussion: Item # 1.A. Bought 5 One Share UL Lots at Various Prices Between $46.42 and $48.14 (2/3/22 Post) 

Last Substantive Buy Discussion: Item # 3.K. Added to UL in Schwab Taxable Account-Bought 3 at $51.5 (12/16/21 Post)

Dividend: Quarterly in USDs

Last Ex Dividend: 2/24/22

Last Earnings Report (Y/E 12/31/21): SEC Filing This report only provides 2021 annual data. 

2022 Outlook: 

Analyst Reports (available to Schwab customers):

Morningstar (2/11/22): 5 stars with a FV of $59

S & P  (2/16/22): 3 stars (Hold) with a 12 month PT of $52

Argus (2/17/22): Buy, reaffirmed $62 PT

L. Pared BMY in Vanguard Taxable-Sold 1 at $69.3: 

Quote: Bristol Myers Squibb Co.

BMY SEC Filings

BMY Analyst Estimates | MarketWatch

Pharmaceutical Research & Development Pipeline

Products and Medicines

Last Substantive Buy Discussion: Item # 1.E. Added to BMY in Fidelity Account: Bought 1 at $60.34; 1 at $59.98; 1 at $59.5  (10/29/21 Post)

Last Buy Discussion: Item # 2.G. Bought 1 BMY at $54.76 (12/22/21 Post) 

Profit Snapshot: +$7.23

Average Cost per share this account: $59.47

                              

Dividend: Quarterly at $.54 per share ($2.16 annually), last raised from $.49 effective for the 2022 first quarter payment. Bristol Myers Squibb Announces Dividend Increase and Additional $15 Billion Share Repurchase Authorization

Yield at AC this account = 3.63%

Last Ex Dividend: Today, 3/31/22

Last Earnings Report (Q/E 12/31/21):Bristol Myers Squibb (BMY) SEC Filed Press Release 

Non-GAAP E.P.S. of $1.83 with the consensus at $1.796 per Fidelity; 

GAAP E.P.S. of $1.07; 

2021 Non-GAAP E.P.S. at $7.51, up from $6.44 in 2020; 

Revenues = $11.985B with Revlimid at $3.328B; Eliquis at $2.671B; Opdivo = $1.988B; Orencia = $864M; Pomalyst/Imnovid = $854M; 

GAAP E.P.S. includes a $2.417B charge for "Amortization of acquired intangible assets" from the Celgene acquisition, see page 7, supplemental SEC Filing; 

"2022 GAAP EPS guidance range of $3.37 - $3.67 and reaffirming its non-GAAP EPS guidance range of $7.65 - $7.95; 

2022 guidance assumes revenues will be "approximately $47 billion, representing an increase in the low-single digits" and a 2022 revenue decline resulting from a loss of exclusivity in Revlimid and Abraxane. Revlimid sales are expected to be in a range between $9.5B to $10B, down from $12.821B in 2021 or a decline between $2.821B to $3.321B. 

If I assumed that this drug would grow revenues 6% in 2022, as it did in 2021, the 2022 decrease in revenues due to generic competition would be somewhere in the $3.5B to $4.B range. There are patent settlement agreements in place that limit the amount that can be sold by generic manufacturers until 1/31/2026, though the limits have not been disclosed by the parties, see, e.g. After win at patent office, Bristol Myers inks Revlimid deal with Dr. Reddy's | FiercePharma).

Last Sell Discussions:  Item # 2.F. Pared BMY in Fidelity Taxable-Sold 1.203 at $68.8 (9/10/21 Post); 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 ) 

Analyst Reports (Available to Schwab customers): 

Morningstar (3/10/22): 3 stars with a FV of $68

Argus (2/14/22): Hold based on concerns about generic competition. Lower 2022 E.P.S. estimate to  $7.8 from $8 and starts 2023 estimate at $8.2  

S & P  (3/10/22) : 3 stars with a 12 month PT of $66

Consider to Buy: <$60

Consider to Sell: >$68

M. Sold 2 BMY at $68.9 and 1 at $72.16-Fidelity Taxable: 

See Item #2.L above.  

Profit Snapshot: +$32.15 (3/14 and 3/24 sales only)

Average cost per share this account after pares: $59.87 (14 shares)

Yield at $59.57: 3.61%, rounded up. 

N. Sold 1 BMY in Schwab Taxable at $73.15: 

See Item # 2.L. Above

Profit Snapshot: +$11.91

Average cost per share this account after pare: $60.34 (15+ Shares) 

Yield at AC of $60.34: 3.58%

BMY Realized Gains to Date: $359.73  ($308.44 in prior gains)

I have never been an active trader in BMY shares. The two largest gains occurred in 2009 and 2010 and the total was only $250.28: 

 

O. Added 1 FLSW at $31.5; 2 at $30.75: 

Quote: Franklin FTSE Switzerland ETF Overview

Investment Category: Exposure to assets priced in Swiss Francs  

Sponsor's website: Franklin FTSE Switzerland ETF - FLSW

Some Top Holdings as of 3/24/22: 

Of those stocks, I currently have small ball position in Roche, Novartis, ABB and Holcim. 

Expense Ratio: .09%

Last Discussed: Item # 2.D. Bought 5 FLSW at  $32.28 (11/18/21 Post) 

Average cost per share:  $31.86 (8 shares)

Dividend: Paid Semi-Annually with most of the dividends paid in June

Last Two Payments: $.67 per share rounded down. 

Yield at AC = 2.1%

P. Pared PARA in Schwab Account- Sold 5 at $38.55; 7 at $38.10: 

Quote: Paramount Global Cl B

PARA Analyst Estimates | MarketWatch

SEC Filings

Brands | Paramount

Profit Snapshot: $23.67

New Average Cost per share this account: $31.72  (20+ shares)

Price as of close on 3/25/22

I discussed PARA in my last post and have nothing further to add. Item # 2.H. Pared PARA in Fidelity Taxable Account - Sold 5 at $35.46 (3/24/22 Post)(now at 50 shares with an AC of $31.97)

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.