AMKBY, AQN:CA, COLB, EAI, EMA:CA, GNL, ILPT, INCY, OFS, PBA, SAIC, VZ, WHR

Economy: 

Existing-Home Sales Slip 2.7% in March The number decreased 4.5% from March 2021. The rise in mortgage rates applied to the substantial increase in home prices is going to restrain sales and possibly result in another major price decline. The median priced existing home price was reported at $375,300, up 15% from March 2021.  

Mortgage Applications Decrease in Latest MBA Weekly Survey (4/20/22)

Weekly initial unemployment claims fell to 184K for the week ended 4/16. News Release The number was over 600,000 in April 2021. 

+++

Earnings Reports Owned Stocks: 

Bank of America (BAC) SEC Filed Press Release and Supplemental Filing (Net income of $7.1B or $.80 per share with the consensus at $.749 per Fidelity; efficiency ratio = 65.95%, which I view as too high; average loan balances increased by $70B or +8% with deposit growth at 13%; ROE. = 11.0%; ROTE = 15.51%; total capital ratio = 14%; tangible book value per share = $20.99; noninterest expense = $15.319B, up from $14.731B in the 2021 4th quarter, which I view as an unfavorable trend)

Citizens Financial (CFG) SEC Filed Press Release (GAAP E.P.S. = $.93; Non-GAAP E.P.S. = $1.07 based on $476M in net income; GAAP includes acquisition and integration expenses relating to the Investors Bancorp acquisition which I discussed in my last post at  Item #3.I.; consensus at $.918; NIM = 2.75%, down 1 basis point from the 2021 first quarter; NPL Ratio = .60%; Charge off ratio = .19%; Coverage ratio = 238%; tangible book value per share = $30.97; "Noninterest expense of $1.1 billion was up 4%, or up 5% on an Underlying basis given higher salaries and employee benefits, reflecting seasonal increases in payroll taxes and 401k costs, partially offset by lower incentive compensation tied to lower capital markets revenue. Underlying noninterest expense for first quarter 2022 includes $13 million tied to the HSBC transaction. Excluding the impact of the HSBC transaction and other acquisitions closed in the second half of 2021, Underlying noninterest expense was up 3%."; other ratios impacted by extraordinary items). Fidelity modified the cost basis for my CFG shares acquired as part of its acquisition of Investors Bancorp due to accounting that a fractional CFG share, received in the exchange was sold rather than credited to my account. The old  average cost per share was $25.33 and is now at $23.04: 

As of 4/19/22 Close at $44.04, up 6.81% in response to earnings report

The CFG shares received in the exchange had a higher cost basis than my existing 2 share position which was bought at $14.44. 

Fifth Third Bancorp (FITB) SEC Filed Press Release (GAAP net income = $474M or $.68 per share, Non-GAAP at $.69 with consensus at $.693; NIM  =2.59%, down from 2.62% in the 2020 first quarter; efficiency ratio  = 64.9%; NPA ratio = .47%; Charge off ratio = .12%;  ROA = .96%; ROE = 10%; ROTE = 13.4%; tangible book value per share  = $19.54)

F.N.B. (FNB) SEC Filed Press Release (GAAP E.P.S. at $.15; Non-GAAP at $.26 with the consensus at $.23 per Fidelity; Non-GAAP excludes "$47.8 million (pre-tax) in Howard Bancorp, Inc. (Howard) merger-related significant items and $4.2 million (pre-tax) in branch consolidation costs"; NIM = 2.51%, down from 2.75% in the 2021 first quarter; efficiency ratio = 60.66%; NPL ratio = .66%; Charge off ratio =.03%; tangible book value per share = $8.09)

Fulton Financial (FULT) SEC Filed Press Release (Net income of $61.7M or $.38 per share with the consensus at $.317 per Fidelity; NIM = 2.78%, down from 2.79% in the 2021 first quarter; efficiency ratio = 65.8%, which I view as too high; NPL Ratio = .88%, which I view as too high at the current stage of the economic cycle; Charge off ratio- net recovery; Coverage ratio = 151%; ROA = 1.01%; ROE = 10.03%; ROTE = 12.88%)

JP Morgan & Chase (JPM) SEC Filed Press Release (GAAP Net income of $8.292B or $2.63 with the consensus at $2.688, down from $4.5 per share in the 2020 first quarter; quarter included a "$902 million net credit reserve build Firmwide ($0.23 decrease in earnings per share (EPS)" and "$524 million of losses within Credit Adjustments & Other in CIB driven by funding spread widening as well as credit valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties ($0.13 decrease in EPS)"; ROE = 13%; ROTE = 16%; "Noninterest expense was $19.2 billion, up 2%"; "Net revenue was $31.6 billion, down 5%"); tangible book value per share = $69.58). The Stock Jocks did not like this report which is IMO justifiable. 

Mercantile Bancorp (MBWm) SEC Filed Press Release (Net income of $11.492M or $.73 per share with the consensus at $.723, but down from $.87 in the 2021 first quarter; NIM = 2.57%, down from 2.77% in the 2021 first quarter; efficiency ratio at 64.1%, which I view as too high; NPL Ratio = .05%; NPA Ratio = .03%; Charge off ratio: net recovery; ROA = .9%; ROE = 10.36%;  tangible book value per share = $24.36; net gain from selling mortgage loans at $3.204M compared to $9.182M in the 2021 first quarter).  

Truist (TFC) SEC Filed Press Release (GAAP net income of $1.3B or $.99 per share; non-GAAP E.P.S. at $1.23 with consensus at $1.102 per Fidelity; Adjusted net income available to common shareholders was $1.6 billion, or $1.23 per diluted share, excluding merger-related and restructuring charges of $216 million ($166 million after-tax), incremental operating expenses related to the merger of $202 million ($155 million after-tax), a gain on the redemption of noncontrolling equity interest of $74 million ($57 million after-tax) related to the acquisition of certain merchant services relationships, and losses on the sales of securities of $69 million ($53 million after-tax); NIM = 2.76%, down from 3.01% in the 2021 first quarter; adjusted efficiency ratio at 58.3% with GAAP at 69%; NPA ratio = .21%; Charge off ratio - .22%; Adjusted ROA and ROTE at 1.31% and 22.6% respectively; a; "Noninterest expense for the first quarter of 2022 was $3.7 billion, down 0.7% compared to fourth quarter 2021 and up 1.8% compared to first quarter 2021")

U.S. Bancorp (USB) SEC Filed Press Release (Net income of $1.557B or $.99 per share with the consensus at $.942 per Fidelity; NIM = 2.44%, down from 2.5% in the 2021 first quarter; efficiency ratio = 62.8%; NPA ratio  = .25%, down from .41% in the 2021 first quarter; NPL ratio = .44%; Charge off ratio = .21%; ROTE = 16.6%; total capital ratio = 13.4%; Y-O-Y deposit growth and loan growth at 6.5%);

+++++

Psychopath Putin and His Soulmate Don the Authoritarian: 

Mariupol ‘has been wiped off the face of the earth’ by Russia, Ukrainian governor says - The Washington Post  This is how Putin is "saving and helping" Russian speaking Ukrainians. The former residents of Mariupol were mostly Russian speakers.  

The last remaining Ukrainian forces  in Mariupol, the 36th Marine Brigade, are taking their last stand at the  Azovstal Iron and Steel Works.  Ukraine commander, surrounded by Russians, describes life inside besieged Mariupol plant - The Washington Post; How Mariupol's Azovstal steel plant became a holdout for the city’s resistance - The Washington Post Soon after Russia invaded Ukraine, it destroyed that major steel plant in an effort to help the Russian speaking Ukrainians who depended on the plant for their livelihoods. Before Rusia  destroyed the plant, it produced "more than 4 million tons of crude steel annually and provided livelihoods to tens of thousands of people." Over 40 thousand people used to be employed at that plant and one nearby owned by the same company. I have watched several interviews with Russian speaking Ukrainians who worked at that plant that now hate Russians with considerable fervor, as they should. 

Looks like the Azovstal Iron and Steel Works will become Ukraine's Alamo.   

A missile struck a humanitarian kitchen in Ukraine run by celebrity chef José Andrés, wounding four workers Russia has been intentionally targeting food storage buildings as part of its genocide campaign in Ukraine. Video shows Europe's largest food warehouse on fire after 'deliberate' Russian attack | Euronews; Russian forces attacking grain storage facilities in Ukraine, threatening world food supply: Report | Washington Examiner  

Atrocities in Ukraine War Have Deep Roots in Russian Military - The New York Times

Russia's unprovoked attack on Ukraine has now sent over 5 million Ukrainians to other countries as refugees. More than 5 million refugees have fled Ukraine-NPR

ICC chief prosecutor says 'Ukraine is a crime scene' -YouTube ICC is the International Criminal Court. 

Sanctioned Russian bank founder Oleg Tinkov condemns 'insane' Ukraine war, calls on West to give Putin face-saving exit

Near Kherson, Ukraine army retakes villages - The Washington Post The Russians left behind unopened jars of pickled vegetables after the Ukrainian army drove them out of previously conquered territory south of Kherson. 

The Russian flagship Moskva is now swimming with the fishes after being struck by two Ukrainian made Neptune cruise missiles, which at a minimum calls into question the effectiveness of Russia's missile defense systems. Ukraine war: First pictures show Russian warship Moskva sinking | Daily Mail Online Moskva was the most advanced ship in Russia's Navy and provided missile defense for the entire Russia Black Sea fleet. 

Prior to its destruction, Moskva had been regularly firing cruise missiles into Ukraine. The sinking of this ship has sent commentators on Putin TV into a demented outrage, with one commentator saying that it was an attack on the Motherland that justified using one bomb to end the "special military operation". Sinking of the Russian Warship Moskva-The New York Times Russian citizens will likely not be told how many crew members died in that attack. At first, Russia was suggesting that there were no fatalities even though it admitted that the ship had sunk and that a fire had exploded ammunition.  Sunken Russian warship Moskva: What do we know? - BBC News; Ukraine Sinks Russian Cruiser Moskva, the Largest Warship Sinking Since WWII

Soviet–Ukrainian War - Wikipedia This articles summarizes a prior conflict that occurred between 1917-1921. Ukrainians fighting for independence were defeated by a Bolshevik army. The Ukrainians made a movie of  the Battle of Kruty: Kruty 1918 (2019) - IMDb, 

Putin threatened the west with nuclear war again yesterday. Russia Said It Has Successfully Tested a New ICBM That Can Evade Defenses - The New York Times (Rabid Animal Putin: “This truly unique weapon will force all who are trying to threaten our country in the heat of frenzied, aggressive rhetoric to think twice.”)

Judge slams Trump as 'charlatan' after jury finds Jan. 6 rioter guilty on all counts - ABC News (Comments by Federal District Court Judge Reggie Walton, appointed by George W. Bush: "I have a concern that we have, unfortunately, American citizens who were so gullible that they were willing to accept what was being said without any proof that the allegations about the election had any merit whatsoever. People are just outraged at how they feel our system is not taking seriously what happened on that day because of their fear of the future of this country.")  

Trump Allies Are Still Feeding the False 2020 Election Narrative - The New York Times Republicans state legislators are trying to decertify the 2020 election results in an effort to install Trump as President.  

Donald Trump's Nebraska rally features candidate Charles Herbster, accused by 8 women of groping, republished by MSN.Com from Trump's Nebraska rally features Herbster; 8 women say he groped them-USA Today 

This is a collage of video clips where Doofus Don, the "extremely stable genius", praises Vlad the Impaler: Still Loyal to Putin - YouTube  

Tucker Carlson: Tan Your Balls If You Want To Be A Real Man | Vanity Fair

++++

As previously discussed, I have been eliminating positions in utility stocks based on a combination of factors, including the rise in interest rates reducing their allure as bond substitutes, the equivalence in yields between the stocks and short term bonds issued by these companies, and current valuations being high given the generally slow E.P.S. growth. 

In Items 1 and 2 below, I discuss eliminating two Canadian based utilities that have some operations in the U.S. 

1. Sold 300 AQN:CA at C$19.51: 

C$3 Commission 

Quotes: 

CADs: Algonquin Power & Utilities (Canada: Toronto)

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

Website: 

Profit Snapshot: +C$303

Purchase Discussion: Item # 1 Bought 300 AQN:CA at C$18.18 (11/18/21 Post)

1 Year Chart Intraday 4/4/22: 

Consider to Repurchase: <C$17.5

Dividend: Quarterly at C$.2124 or US$.1706

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

Last Ex Dividend: 3/30/22 (owned as of) 

Last Earnings Report (Q/E 12/31/21): Algonquin Power & Utilities (AQN) SEC Filed Press Release  

AQN is a Canadian based company that reports in USDs; 

Adjusted E.P.S. of $.21 with consensus at $.207 per Fidelity; 

Revenues at $594.8M in the 4th quarter and $2.2855B for 2021; 

2001 adjusted E.P.S. at $.71;  

Estimates 2022 adjusted E.P.S. of $.72-$.77; 

AQN is in the process of acquiring Kentucky Power from AEP; 

"AQN has been successfully executing on its financing plan for the Kentucky Power Acquisition, having raised approximately $1.7 billion in aggregate to date. In connection with the announcement of the Kentucky Power Acquisition, the Company completed a C$800 million bought deal common equity offering, and on January 18, 2022, the Company completed concurrent public offerings of junior subordinated notes in the United States and Canada in an aggregate principal amount of $750 million and C$400 million, respectively." 

I still own the USD priced shares. Item # 1.D. Added to AQN- Bought 5 at $13.95; 5 at $13.67 (12/31/21 Post); Item 2.G. Bought 10 AQN at US$14.69; 5 at US$14.45; 5 at US$14.06 (11/18/21 Post) 

2. Sold 100 EMA:CA at C$62.77: 

C$1 Commission 

Quote: Emera (EMA.TO)

Website: Home | Emera

Regulated Companies | Emera

Profit Snapshot: +C$457

Purchase Discussed at Item # 1 Bought 100 EMA:CA at C$58.18A (11/5/21 Post) 

Dividend: Quarterly at C$.6625 

Dividend Payment History | Emera

Last Ex Dividend: 1/31/22 (owned as of)

Last Earnings Report (Q/E 12/31/21): Emera Reports 2021 Fourth Quarter and Annual Financial Results | Emera

2021 Adjusted net income at C$510M or C$2.81 per share up from C$2.68 in 2020

4th quarter adjusted E.P.S. at C$.64

Using the adjusted 2021 E.P.S. number, the TTM P/E at $62.77 price is 22.34, which is just unappealing to me for a utility, particularly when interest rates are rising fairly rapidly.   

3. Corporate Bonds and Treasuries: 

A. Bought 2 Ventas LTD Partnership 2.65% SU Bonds Maturing on 1/15/25 at a Total Cost of 97.985: 

FINRA Page:  Bond Detail 

Credit Ratings: Baa1/BBB+

Bought at 97.885

Total cost at 97.985 (includes $1 per bond commission)

Current Yield at TC = 3.19%

YTM at TC = 3.41%

B. Bought 2 Northeast Utilities 3.15% SU Bonds Maturing on 1/15/25 at a TC of  99.836: 

FINRA Page: Bond  Detail

Credit Ratings: Baa1/BBB+

Issuer:  Eversource Energy (ES), formerly known as Northeast Utilities. Northeast Utilities Becomes Eversource Energy (2/2/15)

ES 2021 Annual Report 

Bought at 99.736

Total Cost at 99.836

Current Yield at TC = 3.13%

YTM at TC =  3.21%

C. Added 1 Entergy Mississippi 2.85% First Mortgage Bond Maturing on 6/1/28 at a Total Cost of at a Total Cost of 94.785: 

FINRA Page:  FINRA Page

I discussed this bond in my last post. Item # 1.A. (4/14/22 Post) I discussed my reasons for adding to my position in a comment published on 4/14/22. 

YTM at TC = 3.814%

Current Yield at TC = 3.01%, rounded up. 

D. Bought 1 Treasury 2.5% Coupon Maturing on 1/31/25: 

Bought at a Total Cost of 99.8281

Current Yield at TC = 2.5043%

YTM at TC =  2.56%, rounded down

E. Bought 1 Treasury 2% Coupon Maturing on 5/31/24 at a Total Cost of 99.063: 

Current Yield at TC = 2.0189%

YTM at TC = 2.446%

F. Bought 1 Treasury 1.75% Coupon Maturing on 6/30/24 at a Total Cost of 98.4579: 

Current Yield at TC = 1.78%, rounded up

YTM at TC = 2.457%

G. FS KKR Bond Redemption: 

This bond was redeemed one month prior to maturity at par value. No make whole payment was required for an optional redemption within that one month time frame. 

Profit Snapshot: +$31.82

Item # 4.D. Bought 2 FS KKR 4.75% SU Bonds Maturing on 5/15/22 at a TC of 98.409 (5/6/20 Post)

I have already replaced this FSK bond with two 3.4% SU bonds: Item # 1.A. Bought 2 FSK 3.4% SU Bonds Maturing on 1/15/26 at a TC of 96.04 (3/24/22 Post) As noted in that post, my risk limit for this issuer is 2 bonds + a hyper managed common stock position.  

4. Small Ball: 

A. Added 5 COLB at $29.88-Fidelity Taxable: 

Quote: Columbia Banking System Inc.

In early 2021, the stock peaked at $50+. 

COLB SEC Filings

2021 Annual Report 

Investment Category: Regional Bank Basket Strategy

Even though intermediate and longer term interest rates have been rising, the positive impact on bank net interest margins will be restrained by increases in deposit costs. 

Another problem is that the rise in mortgage rates will likely decrease this major income source for regional banks, both by reducing demand for new mortgages and the profits from selling bank originated ones. 

The SPDR® S&P Regional Banking ETF (KRE) rose 47.5% in 2013 when the ten year treasury yield rose from 1.66% to 3.04% as of 12/31/2013. KRE is down so far this year after rising 39.32% last year.  

Buy Discussions: Item # 2.D. Added to COLB-Bought 2 at $31.2; 3 at $30.68(1/7/22 Post); Item # 2.M. Added 3 COLB at $32 (12/3/21 Post) Item # 2.D. Started COLB-Bought 2 at $34.93; 3 at $34.4; 2 at $33.95 (11/26/21 Post)

Acquisition of Umpqua Holdings (UMPQ) Pending: Columbia Banking System And Umpqua Holdings Corporation Combining To Create The West Coast's Leading Regional Bank

1 Year Chart: The break on October 12, 2021 was in response to the Umpqua acquisition announcement. 

Average Cost per share = $32.05 (20 shares)

Dividend: Quarterly at $.30 per share

Yield at $32.05 = 3.74%

Last Ex Dividend: 2/1/22

Last Earnings Report (Q/E 3/31/22): This report was released earlier today.  

Columbia Banking System Announces First Quarter 2022 Results and Quarterly Cash Dividend

GAAP Net Income of $57.5M or $.74 per share 

Non-GAAP E.P.S. at $.81 (excludes 7 cents related to acquisition related expenses) 

Consensus at $.678

NIM at 3.12%, up 7 basis points from 2021 4th quarter, but down from 3.31% in the 2021 first quarter. 

Operating efficiency ratio = 55.42%

NPL Ratio = .16%

NPA Ratio = .09%

Charge off ratio: Net recovery

Both the NPA and NPL ratios are excellent. 

Tangible Book Value per share = $19.14

"Total deposits at March 31, 2022 were $18.30 billion, an increase of $289.1 million from December 31, 2021. The deposit mix remained fairly consistent from December 31, 2021 with 48% noninterest-bearing and 52% interest-bearing."

"Total noninterest expense for the first quarter of 2022 was $105.1 million, an increase of $2.4 million compared to the fourth quarter of 2021. Total acquisition-related expenses for the quarter were $7.1 million, which compares to the linked quarter of $11.8 million."

B. Added to AMKBY- Bought 5 at $15.25; 5 at $14.28; 5 at $12.9: 

These shares were bought after a US$1.85 annual dividend went ex dividend on 3/16/22. There will be wide variations in the dividend based on the prior year's earnings. The dividend paid in 2021 was US$.2611.  

Quotes: 

USD: A.P. Moeller-Maersk A/S ADR

DKK: MAERSK.B (Denmark)

ADR Ratio: 1 ADR = .005 Ordinary

Investor Relations - A.P. Møller - Mærsk A/S

Ocean shipping rates may have peaked last year. Freight Rate Index / Freightos Baltic Container Index The surge in rates last year, caused in part by supply chain disruptions and a worldwide economic recovery, led to a record year for AMKBY that is not likely to repeated anytime soon. Supply Chain Crisis Helped Shipping Companies Reap $150 Billion in 2021 - Bloomberg ("The spot rate for a 40-foot container to the U.S. from Asia topped $20,000 last year, including surcharges and premiums, up from less than $2,000 a few years ago, and was recently hovering near $14,000.")  

New Average Cost per share: $14.66 (30 shares)

Last Buy Discussion: Item # 3.D. Bought 10 AMKBY at $15.97 (3/17/22 Post) I discussed the last earnings report in that post.  

Last Round-Trip: Item # 2.I. Eliminated AMKBY - Sold 25 at $16.98 (1/7/22 Post)-Item # 1.B Bought 5 AMKBY at $13.54; 5 at $12.88  (11/11/21 Post)

Purchase Restriction and Maximum Position: I will continue buying only in 5 or 10 shares lots, with each purchase being at the lowest price in the chain until I hit 100 shares. 

C. Added to VZ - Bought 2 at $51.29: 

Quote: Verizon Communications Inc.

VZ Analyst Estimates | MarketWatch

VZ SEC Filings

2021 Annual Report 

Last Buy Discussions: Item # 1.C. Bought 1 VZ at $52.26 -Schwab Taxable (1/20/22 Post); Item # 1.A. Added to VZ in Fidelity Account-Bought 5 at $54.12; 2 at $52.73; 3 at $52.32; 2 at $51.56; 5 at $50.95 (10/29/21 Post); 

Investment Category: Bond substitute with a flavor of dividend growth

Last Bond Offering in early April 2022: SEC Filing ($2.771B in 3.5% SU maturing on 4/15/29; $948M 4% SU maturing on 4/15/52)

Average cost per share this account: $52.61 (7+ shares, with dividends reinvested)

Dividend: Quarterly at $.64 per share ($2.56 annually) 

Dividend History: 

10 year growth rate at 2.5% (CAGR). 

Last Ex Dividend: 4/7/22 (owned all as of)

Yield this account at $ AC = 4.87%, rounded up. 

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

GAAP E.P.S. = $1.11

Non-GAAP E.P.S. = $1.31 with consensus at $1.284

Revenues: $34.1B

+1.058M postpaid net retail wireless

Annualized 5 year growth rate in cash flow = 5.6% 

2021 GAP E.P.S. at $5.32 with non-GAAP at $5.39 compared to $4.9 in 2020

The next report is scheduled for release tomorrow. 

Analyst Reports (available to Schwab customers): 

Morningstar (3/4/22): 4 stars with a FV of $59

Argus (4/18/22): Buy with a $68 PT. (2022 E.P.S. range estimate between $5.4 to $5.55 or about a 3.2% growth rate. 

S & P (2/3/22): 2 stars with a 12 month PT at $48. I share the concerns of this analyst which include competition in wireless space and high debt levels.

Credit Suisse (3/3/22):  Neutral with a 12 month PT of $60

5 YR Average Annual Total Return Through 4/18/22: Poor at +5.92% (SPY at +15.38%)

D. Pared OFS in Fidelity Taxable - Sold 29+ at $13.06: 

Quote: OFS Capital Corp- A BDC

OFS SEC Filings

Website: Homepage - OFS Capital

2021 Annual Report 

Management: External

Last Buy Discussions: Item # 3.F. Bought 40 OFS with an Average Cost Per share of $4.18 (11/7/20 Post); Item # 2.L. Added 5 OFS at $3.97-Fidelity Taxable (11/28/20 Post); Item # 1.K. Added 3 OFS at $4.5 -Fidelity Taxable (8/8/20 Post); Item # 3.E. Added 5 OFS at $9.66; 5 at $9.2; 5 at $8.7; 5 at $6; 5 at $5.65; 2 at $3.7; 10 at $3.79 (4/11/20 Post)

Profit Snapshot: +$69.88

Average cost before pare this account:  $6.29 (134 + shares)

I sold my highest cost lots using the specification identification method.  

Average Cost per share this account after pare: $5.09 (105+ shares)

Snapshot Intraday on 3/30/22 after pare

Last Reported Net Asset Value per share: $15.18 as of 12/31/21

Discount to $15.18 NAV per share at $5.09 AC = -66.47%

Dividend: Quarterly at $.28  

Dividends -OFS Capital Corporation

I am taking the dividend in cash in all accounts. 

Yield at $5.09 AC per share = 22% (assumes continuation of the $.28 per share quarterly rate which is not a reasonable long term assumption given this BDC's dividend history. 

Last Ex Dividend Date: 3/23/22. I sold shortly after the ex dividend date. 

Net Asset Value per share history: 

12/31/21:   $15.18

03/31/21:  $11.96 10-Q at page 3 

12/21/20:  $11.85 10-K at page 69 

6/30/20:   $10.10
3/31/20:    $  9.71
12/31/19:   $12.46
9/30/19:    $12.74  
6/30/19:    $12.95   Page 2 10-Q
3/31/19      $13.04   10-Q
12/31/18    $13.10
6/30/18     $13.70
03/31/18   $13.67
12/31/17    $14.12
12/31/16    $14.82
12/31/15    $14.76
12/31/14    $14.24
12/31/13    $14.54

IPO Offering Price at $15 (November 2012) with proceeds after the underwriters' discount at $13.05 Final Prospectus Supplement

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

NII per share at $.33 

Consensus at $.245 per Fidelity

Adjusted NII per share = $.47

The adjusted NII per share excludes $.14 in accrued incentive fees that may be paid to the external manager. I ignore that number until I can determine whether or not the fee is paid. When paid, the fee just becomes another expense and to think of this expense as part of adjusted net income is obviously ridiculous. Several BDCs provide adjusted NII numbers that exclude accrued incentive fees.   

NAV per share: $15.18, up from $14.16 as of 9/30/21. 

As of 12/31/21, 92% of the portfolio based on "fair value" consisted of floating rate loans. 

Weighted average yield on debt investments = 9.71% 

2 loans were on non-accrual as of 12/31/21 "with an aggregate fair value of $7.7 million, or 2.2% of our total debt portfolio at fair value".

"For the three months ended December 31, 2021, net gain on investments of $14.7 million was primarily due to unrealized appreciation of $10.1 million on our common equity investment in Pfanstiehl Holdings, Inc."

One issue with BDCs is whether the values assigned to investments are accurate. 

There is no way for me to determine whether the unrealized gain in the Pfanstiehl Holding's common stock is justified. The company is not publicly traded and consequently there are no SEC filings to review. (Website: Pfanstiehl)

E. Eliminated SAIC - Sold 4+ at $93.55: 

Quote: Science Applications International Corp.

Website: SAIC

SAIC Analyst Estimates | MarketWatch

Science Applications International Corp Profile | Reuters

Science Applications International Corp Key Metrics | Reuters

SAIC SEC Filings

SAIC - Investor Relations

Russia's invasion of Ukraine has given this stock a lift along with other defense sector stocks. About 48% of revenues for F/Y 2022 were derived from contracts with the Army, Navy or other parts of the DOD.  Page 2 F/Y Annual Report This reaction is not as understandable as the rallies in GD and LMT which I own. 

Rationale for Selling: This elimination was motivated by the price downtrend after my initial purchases. I wanted to get rid of those higher cost shares and then restart a small ball "purchase program" at less than $80, a price selected by looking at this 2 year chart: 

As of 4/15/22

Profit Snapshot: +$35.67

Purchase Discussions: Item # 1.O. Added to SAIC-Bought $30 at $81.25 and $30 at $79.85 (2/17/22 Post); Item # 2.E. Added 1 SAIC at $84.3 (8/27/21 Post); Item # 1.C. Added to SAIC-Bought 1 at $87.5 (7/15/21 Post); Item # 3.C. Bought 1 SAIC at $88.17 (5/14/21 Post)

Dividend: Quarterly at $.37 per share ($1.48 annually), last raised from $.31 effective for the 2019 second quarter payment. 

SAIC - Stock Information - Dividend History

I do not regard this dividend and the dividend growth history as providing much support to the current price. The stock does not qualify for purchase under my Dividend Growth or Bond Substitute categories. 

Last Ex Dividend: 1/13/22

Last Earnings Report (Q/E 1/28/22): This report is for the 4th fiscal quarter. SEC Filed Press Release 

Non-GAAP E.P.S. = $1.5

Non-GAAP Consensus at 1.234 per Fidelity 

SAIC has been beating the average non-GAAP E.P.S. estimates during the current 2022 fiscal year: 

GAAP E.P.S. = $.76

GAAP to Non-GAAP:

Q4 Revenues = $1.8B, up 4% 

F/Y 2022 Revenues = $7.4B, up 5%

Repurchased $211M of shares in F/Y 2022 or about 4% of the diluted shares outstanding 

4th Q Free Cash Flow = $94M

F. Pared PBA in Fidelity Taxable Account = Sold 3 at $37.9: 

Quotes: 

USDs: Pembina Pipeline Corp. (PBA)

Closing Price 4/20/22: US$40.84 +$1.01 

CADs: Pembina Pipeline Corp. (Canada: Toronto)

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

Website: Pembina

Operations

2021 Annual Report 

PPL.TO - Pembina Pipeline Corp Profile | Reuters The symbol is different for the CAD priced common shares traded in Toronto which I have never bought. 

Last Purchase Discussion: Item # 2.A. Bought 20 PBA in Schwab Taxable Account at $30,16 (1/13/22 Post) 

Profit Snapshot: $66.54

Average cost per share this account after pare: US$14.68 (15 shares)

Snapshot Intraday on 3/30/22 after pare

Dividend: Monthly at C$.21 per share ($2.52 annually)

Stock & Dividend

Yield at US$14.68 AC in this Account: 13.73%

It is impossible to calculate a yield when a dividend is paid in a foreign currency that is then converted into USDs. The yield will fluctuate with the then existing exchange rate. In my yield calculation, I am using a constant CAD/USD exchange rate of .8.

CAD/USD at 1 = 17.17%

CAD/USD at .8 = 13.73%

CAD/USD at .6 = 10.3%

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

All amounts are in CADs. 

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)

Other 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); 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)

PBA Realized Gains to Date: US$1,946.52

PBA Reset Equity Preferred Stock: My more important position is a 300 share position in a Pembina reset floating rate preferred stock, PPL-PC.TO, which closed yesterday at C$20.50: 

As of Close 4/20/22-AC at C$16.73

Current Yield at C$16.73 =  6.69%

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)  PPLPRC will reset its coupon in March 2024 at a 2.6% spread to the 5 year Canadian government bond yield on the reset date, unless redeemed at that time. The current coupon is 4.478% paid on a C$25 par value which indicates that the 5 year bond was then at 1.878% back in March 2019. The 5 year Canadian bond yield closed yesterday at 2.75% and is currently near 2.8%. There is no telling what the yield will be in March 2024, but that will be the key number when pricing this preferred stock since the coupon stays in effect for 5 years. If the coupon reset at a 2.6% spread to 2.75%, the new five year coupon would be 5.35%, producing a yield of 8% at my constant average cost per share number. My dividend yield becomes 9.87% with the 5 year at 4% on the next reset date.  

My decision whether or not to harvest the profit will depend on whether the trend of the 5 year Canadian bond yield is up or down as the reset date moves closer. The trend now is up. Canada 5-Year Bond Yield - Investing.com

G. Eliminated INCY in Vanguard Taxable- Sold 4 at $80.12:

Quote: Incyte Corp.

Closing Price 4/20/22: $78.71 -$.76 

INCY Analyst Estimates

INCY SEC Filings

2021 Annual Report 

The company remains highly dependent on 1 drug (Jakafi): 

Page 72 Annual Report

A new drug for the treatment of atopic dermatitis was recently approved by the FDA, but was tagged with a black box warning label. Incyte Announces U.S. FDA Approval of Opzelura™ (ruxolitinib) Cream, a Topical JAK Inhibitor, for the Treatment of Atopic Dermatitis (AD)(9/21/21) 4th quarter revenues from this drug were only $4.668M. It remains to be seen how much the warning will impact revenues. 

Opzelura is in a trial  for another indication. Incyte - Incyte Announces 52-Week Data From the Phase 3 TRuE-V Program Evaluating Ruxolitinib Cream (Opzelura™) in Patients With Vitiligo

Pharmaceutical Portfolio Transforming the Treatment of Cancer & Immune-Mediated Conditions; see also Incyte - Nearly 40% of Adults with Alopecia Areata Taking OLUMIANT® 4-mg Saw at Least 80% Scalp Hair Coverage at 52 Weeks in Lilly's Pivotal Phase 3 Studies (3/26/22) 

Profit Snapshot = $33.71

Last Discussed: Item # 1.I. Added to INCY in Fidelity Taxable- Bought 2 at $72.8; 1 at $71.5; 1 at $70.5; 1 at $69.3; 1 at $68.18; 1 at $66.8; 1 at $65.28 (4/29/22 Post) 

Dividend: None and none expected. 

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

GAAP E.P.S. at $2.54

Non-GAAP at $.10

"GAAP and Non-GAAP operating income for the quarter ended December 31, 2021 decreased compared to the same period in 2020, due to expenses related to the establishment of our dermatology commercial organization and the launch of Opzelura and upfront consideration related to our collaborative agreement with Syndax, partially offset by growth in total revenues." 

Syndax Pharmaceuticals and Incyte Announce Global Collaboration to Develop and Commercialize Axatilimab for Chronic Graft-Versus-Host Disease and Other Fibrotic Diseases (INCY paid $117M in cash to Syndax plus a $35M equity investment at $24.62 per SNDX share, Syndax Pharmaceuticals Inc.  (SNDX), closing yesterday at $17.17)

2022 Guidance: 

Analyst Reports (available to Schwab customers): 

Morningstar (3/13/22): 4 stars with a FV of $105. 

Argus (3/24/22): Buy with a $90 PT

S & P (3/18/22): 4 stars with a 12 month PT of $80. The price was at $74.35 when this report was released. 

H. Pared INCY in Schwab Taxable- Sold 2 at $80.12: 

History Schwab Account: 

I sold the lots that were bought at over $70 using FIFO tax accounting. 

Profit Snapshot: +$9.57

New Average Cost per share this account = $67.95

Snapshot Intraday on 4/1/22 after pare

See Item # 2.G. Above

I. Pared INCY in Fidelity Taxable Sold 2 at $81.1: 

See Item # 2.G. Above.  

Profit Snapshot: +$2.99

Average cost per share after pare = $69.6 (10+ shares) 

Note this position is weighted at .10% in this account.  

The AC was reduced from $71.27.  

When I get around to it, I will consolidate my INCY position in this account. 

J. Bought 1 WHR at $173.72: 

Quote: Whirlpool Corp. 

WHR  Analyst Estimates | MarketWatch (As of 4/20/22, the consensus E.P.S. estimates were $25.87 in 2022; $27.52 in 2023; and $27.84 in 2024. Using  the 2022 E.P.S. estimate, the P/E at $173.72 is 6.72)

Website: Home, Kitchen & Laundry Appliances & Products | Whirlpool

WHR SEC Filings

2021 Annual Report 

3 Year Financial Data: 

Page 30 Annual Report

I has been awhile since I owned this stock and do not recall when I sold a position or what I paid for the shares.   

I initiated a Placeholder position based on the recent significant price decline, valuation, dividend yield, and recent dividend growth history. The stock topped out at $257+ early in 2021.  

The stock has declined in part due to concerns about profit margin pressure caused by rising input costs, lower demand as inflation eats into consumer discretionary spending and slower new home sales due to affordability. Those concerns led the S & P analyst to recently downgrade the stock to sell and to reduce the PT by $20 to $80. Those concerns are legitimate IMO but it is just unknowable about how long those negative forces will last.  

Dividend: Quarterly at $1.75 per share ($7 annually), last raised from $1.4 effective for the 2022 first quarter payment. 

Whirlpool Corporation Declares Quarterly Dividend

WHR  Dividend History 

Yield at $173.72: 4.03%

Next Ex Dividend: 5/19/22

Last Earnings Report (Q/E 12/31/21)

2022 GAAP E.P.S. Guidance: $27 to $29 with free cash flow at $1.5B. 

The 2022 first quarter report will be released on 4/25. 

K. Added 5 ILPT at $20.08: 

Quote: Industrial Logistics Properties Trust

ILPT SEC Filings

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

I discussed this REIT in my last post. Item # 3.D. Bought 10 ILPT at $21.67; 5 at $20.67; 5 at $20.35 (4/14/22 Post) Since that discussion, ILPT declared its regular quarterly dividend of $.33 per share. Industrial Logistics Properties Trust Announces Quarterly Dividend on Common Shares (4/14/22). 

Average cost per share: $21 (25 Shares)

Yield at AC =  6.29%, rounded up.  (at $1.32 annual per share rate)

Next Ex Dividend: Tomorrow 4/22/22 

L. Added 3 EAI at $24.30 in Fidelity Account: 

Quote: Entergy Arkansas 1st Mortgage Bonds 4.875% due 2066 (EAI)

I discussed this exchange traded first mortgage bond in my last post. Item # 3.H. Added 2 EAI in Fidelity Account at  $24.64 (4/14/22 Post) 

This is just small ball averaging down where the concern is continued price declines resulting from rising interest rates for a potentially long term bond.

Average cost per share this Account: $24.93   (20 Shares)

Yield at new AC this account: 4.89%

Next ex interest date: 5/27/22

The issuer can now redeem this baby bond at its $25 par value plus accrued and unpaid interest. 

This kind of security makes more sense for me in a Roth IRA account where I turn taxable interest into tax free interest. Since I have an abundance of cash in this Fidelity account, currently earning .01%, I am willing to buy in both my taxable and Roth IRA accounts. (I started converting my regular IRA to a Roth IRA in October 2008 and finished the conversions in early 2009. In posts from that time period, I converted then because the substantial price declines reduced my tax burden arising from that kind of transfer and the securities recovered quickly in price after the conversion). 

M. GNL Dividend Reinvestment-Fidelity Account: 

Quote: Global Net Lease Inc. 

The Stock Jocks hold this externally managed net lease REIT in disfavor. That opinion is reflected in the price chart and dividend yield. While I own over a 1,200 shares in all accounts, I am not a fan, but simply view the stock as the least expensive net lease REIT using P/AFFO while having the highest dividend yield. 

I am taking a few more serious positions in order to increase my dividend income going forward. 

2021 AFFO Per Share = $1.77

GLOBAL NET LEASE REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS

Annual Dividend per share: $1.6 

Yield at $15.095 Reinvestment Price = 10.6%

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.