ALEX, ARCC, CMCSA, COLB, DEA, EPRT, FSMEX, GTY, HBI, ILPT, INTC, NOMD, OHI, RCUS, SU

Economy: 

CPI Annual at +8.3% through April, down from +8.5% through March. 

Core CPI Annual at 6.2%

Food Prices Annual at +9.4%, the highest increase since the 12 month period ending in April 2021. 

Consumer Price Index Summary - 2022 M04 Results

Worker productivity fell 7.5% in the first quarter, the biggest decline since 1947 Unit labor costs increased by 11.6%, bringing the 12 month total increase to 7.2%. Productivity and Costs, First Quarter 2022, Preliminary - 2022 Q01 Results

+++

Earnings Reports - Owned Stocks:  

Barings BDC (BBDC) SEC Filed Press Release (Net investment income of $19M or $.23 per share, in line with consensus; net asset value per share = $11.86, up from $11.36 as of 12/31/21; weighted average yield on performing debt investments = 7.3%; increased the quarterly dividend to $.24 per share from $.23)

Blackrock TCP Capital (CPC) SEC Filed Press Release (NII per share = $.34, with the consensus at $.315; quarterly dividend is at $.30 per share; Net Asset Value Per Share = $14.27, down from $14.36 as of 12/31/21; "two portfolio companies on non-accrual status, representing 0.3% of the portfolio at fair value and 0.9% at cost as of March 31, 2022"; investment portfolio consisted of debt and equity positions in 119 portfolio companies with a total fair value of approximately $1.8 billion, 88% of which was senior secured debt. 74% of the total portfolio was first lien. Equity positions, which include equity interests in diversified portfolios of debt and lease assets, represented approximately 12% of the portfolio. 95% of our debt investments were floating rate, 92% of which had interest rate floors." ). I discussed in my last post buying a 3.9% TCPC SU bond that matures on 8/23/24. Fitch Affirms BlackRock TCP Capital's Ratings at 'BBB-'; Outlook Stable (4/8/22)

CVB Financial (CVBF) SEC Filed Press Release (Net income of $45.6M or $.31 per share, in line with consensus; NIM = 2.9%, down from 3.18% in the 2021 first quarter; Efficiency Ratio = 46.93%; NPA Ratio = .08%; Charge off ratio = zero; ROA = 1.06%; ROE = 8.24%; ROTE = 13.08%; Tangible book value per share. = $9.05)

Hope Bancorp (HOPE) SEC Filed Press Release (Net income of $60.7M or $.50 per share with the consensus at $.394 per Fidelity; NIM = 3.21%, up from 3.06% in the 2021 first quarter; Efficiency ratio = 51.5%;  Coverage Ratio = 279.7%; NPL Ratio = .71%; ROA = 1.37%; ROE = 9.93%; ROTE = 15.01%)

Gilead (GILD) SEC Filed Press Release (GAAP E.P.S. = $1.37; non-GAAP E.P.S. at $2.12, up from $2.04 in the 2021 first quarter; consensus non-GAAP E.P.S. at $1.807 per Fidelity; Non-GAAP earnings exclude "a $2.7 billion in-process research and development (“IPR&D”) impairment related to assets acquired by Gilead from Immunomedics in 2020"; "During the first quarter of 2022, Gilead made a $725 million collaboration opt-in payment to Arcus Biosciences, Inc., repaid $500 million of debt, paid dividends of $945 million and repurchased $352 million of common stock"; Free cash flow = $1.593B; guides 2022 Non-GAAP E.P.S. to $6.2-$6.7 and lowers GAAP E.P.S .forecast to $3 to $3.5 from $4.7 to $5.2 due to the Immunomedics charge; Gilead Sciences Completes Acquisition of Immunomedics, Inc. for about $21B) Gilead acquired the cancer drug Trodelvy in the Immunomedics acquisition. Trodelvy generated $146M in revenues during the 2022 first quarter, up 103%, but it looks doubtful that the price tag paid for Immunomedics will be justified by the profits generated by this drug and that opinion is reinforced by the $2.7B charge taken in the first quarter. 

Global Net Lease (GNL) SEC Filed Press Release (Core FFO per share = $.44; AFFO per share. = $.43, down from $.44 in the 2021 first quarter; AFFO reported at $44.331M, up from $40.429M in the 2021 first quarter; "Portfolio 98.7% leased with 8.4 years of weighted average remaining lease term"; Contractual annual rent increases in 94% of leases, including 59% that are fixed-rate and 28% that are based on Consumer Price Index, based on straight-line rent"; acquisition pipeline of $111.9M at a going in capitalization rate of 6.5% and a 14.6 year weighted average lease term) As with many REITs, GNL is growing revenue and AFFO but not AFFO per share.

OFS Capital (OFS) SEC Filed Press Release (NII per share = $.22, adjusted to $.30 with the consensus at $.29 per Fidelity; adjustment of 8 cents is for accrued but not yet paid capital gain incentive fee; "Net asset value (“NAV”) per common share of $15.52 as of March 31, 2022, an increase from $15.18 as of December 31, 2021";  Net gain on investments of $5.5 million, or $0.41 per common share"; As of March 31, 2022, based on fair value, 93% of our loan portfolio consisted of floating rate loans and 97% of our loan portfolio consisted of senior secured loans.")

Organon (OGN) SEC Filed Press Release (GAAP E.P.S. from continuing operations = $1.36; Non-GAAP net income of $420M or $1.65 per share with the consensus at $1.3; adjustments are for a non-cash amortization expense, stock based compensation and expenses related to the spinoff from Merck; Revenues = $1.567B, up 4% compared to the 2021 first quarter; Affirmed previous 2022 revenue guidance of $6.1B to $6.4B; Company does not provide E.P.S. estimates)

Owl Rock Capital (ORCC) SEC Filed Press Release (NII per share at $.31, with consensus at $.331 per Fidelity; Net asset value per share = $14.88, down from $15.08 as of 12/31/21; "As of March 31, 2022, based on fair value, our portfolio consisted of 74.0% first lien senior secured debt investments, 14.7% second lien senior secured debt investments, 2.1% unsecured debt investments, 2.3% investment funds and vehicles, 1.9% preferred equity investments, and 5.0% common equity investments"; "As of March 31, 2022, 98.8% of our debt investments based on fair value in our portfolio were at floating rates";  Declared regular quarterly dividend of $.31 per share) 

Starwood Property Trust (STWD) SEC Filed Press Release ("first quarter 2022 GAAP net income was $324.6 million, or $1.02 per diluted share, and Distributable Earnings (a non-GAAP financial measure) was $240.0 million, or $0.76 per diluted share. GAAP net income reflects $173.5 million, or $0.55 per diluted share, of unrealized increases in fair value of the Woodstar Fund's affordable housing investments, net of non-controlling interests, and an $86.6 million, or $0.27 per diluted share, gain on sale of a distribution facility ($84.7 million, or $0.27 per share, in Distributable Earnings"; the consensus estimate for distributable E.P.S. was $.52).

TriplePoint Venture Capital (TPVG) SEC Filed Press Release (NII per share = $.44 with the consensus at $.373 per Fidelity; Net Asset value per share = $13.84; "Achieved a 15.5% weighted average annualized portfolio yield on total debt investments for the quarter"; "Held debt investments in 48 portfolio companies, warrants in 86 portfolio companies and equity investments in 42 portfolio companies as of March 31, 2022"; Declared regular dividend of $.36 per share)  

Unum (UNUM) SEC Filed Press Release (GAAP E.P.S. = $1.25; non-GAAP net income of $277.3M or $1.36 per share with the consensus at $.931 per Fidelity; Full-year 2022 outlook increased; after-tax adjusted operating income per share now expected to grow 15 percent to 20 percent relative to full-year 2021, compared to the previous outlook of an increase of 4 percent to 7 percent)

Williams (WMB) SEC Filed Press Release (GAAP E.P.S. of $.31; Adjusted net income of $499M or $.41 per share with the consensus at $.355 per Fidelity; "Available funds from operations (AFFO) of $1.190 billion – up $161 million or 16% vs. 1Q 2021"; Cash flow from operations (CFFO) of $1.082 billion – up $167 million or 18% vs. 1Q 2021 Dividend coverage ratio of 2.30x using AFFO; " Dividend guidance increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64 in 2021")

++++

After an investigation, the Associated Press found that Russia murdered 600 civilians who had taken shelter in a Mariupol theater. AP evidence points to 600 dead in Mariupol theater airstrike -AP News; Russia clears Mariupol drama theater site for May 9 parade - The Washington Post Russia destroyed over 80% of the civilian structures in that predominantly Russian speaking city which is how Putin is saving them. Putin has destroyed Mariupol, once one of the most pro-Russian cities in Ukraine

Russia bombed school bombed in the Eastern Ukraine village of Bilohorivka, leaving up to 60 civilians dead-The Washington Post: Ukraine: Aftermath of Russian strike on school in Bilohorivka - YouTube Russia is intentionally targeting civilians and civilian structures as part of its ongoing terrorist campaign. 

A United Nations investigation found that Russia had murdered 300 civilians north of Kiev. Many were tortured by Russia prior to being murdered. The U.N. expects that number to grow as it continues its investigations. U.N. Investigators Record Unlawful Killing of 300 Civilians North of Kyiv - The New York Times; U.N. investigators say 300 civilians were unlawfully killed north of Ukraine’s capital | The Seattle Times

If the Russians want to find Nazis in Ukraine, they only need to look in the mirror. Putin defends war on Ukraine as fight against ‘Nazis’ during Russia’s Victory Day parade - The Washington Post Putin's justification for Russia's invasion, its routine commision of crimes against humanity and war crimes is a knowingly false narrative. Ukraine War: Putin's Victory Day speech fact-checked - BBC News  

Ukraine farm thefts: Russians steal vast amounts of grain and equipment, threatening this year's harvest | CNN

US announces sanctions against Kremlin-controlled media companies and bans Russia from using some American consulting services

Video shows how Ukraine defeated Russians in key battle - YouTube

Finland is on the verge of asking to join NATO. Here's why that's bad news for Putin | CNN Russia threatened Finland if it joins NATO. Russia invaded Finland in 1939. Russo-Finnish War | Summary, Combatants, & Facts | Britannica

Kyiv: Video shows Russian soldiers killing 2 civilians before they ransack a business | CNN

"Massive bombardments" in Ukraine as Russia blows up bridges to slow counter-offensive, officials say - CBS News

Defiance and anger: rural Ukraine unites against Russia’s aggression - BBC News - YouTube

Police homicide investigators help build war crimes cases - The Washington Post

Italy Seizes Superyacht Tied to Putin - The New York Times; $700M superyacht linked to Vladimir Putin seized by Italy

The War in Ukraine, as Seen on Russian TV - The New York Times

Trump wanted to 'quietly' bomb Mexico, seriously, ex-Defense Secretary Mark Esper recounts  

Esper: Trump Wanted to Court-Martial Retired Leader of Bin Laden Raid  Trump was upset that the Navy Seal criticized him. 

Texas AG says bar is suing him over 2020 election challenge | AP News

+++

1. Corporate Bonds and Treasuries: 

The goal for 2022 is to increase my interest income by 50% over 2021. I view that target as doable provided interest rates continue to rise. 

A.  Bought 2 Evergy 2.45% SU Bonds Maturing on 9/15/24 at a TC of 98.253: 

FINRA Page: Bond Detail (prospectus linked)

Issuer: Evergy Inc. (EVRG) 

I have eliminated my common stock positions. As with other utility stocks, I prefer owning the bonds that offer comparable yields to the common stocks at current prices given my main objective of capital preservation. 

YTM at TC = 3.203%

Current Yield at TC = 2.49%, rounded down. 

B. Bought 1 GATX 3.25% SU Bond Maturing on 3/20/25 at a TC of 99.425: 

FINRA Page:  Bond Detail

Credit Ratings: Baa2/BBB

Issuer: GATX Corp.

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release 

YTM at TC = 3.445%

Current Yield at TC = 3.27%

C. Bought 2 Dominion Gas 2.5% SU Bonds Maturing on 11/15/24 at a Total Cost of $98.715: 

FINRA Information:  Bond Detail (prospectus linked)

Credit Ratings: Baa1/A

Issuer: Wholly owned indirect subsidiary of Berkshire Hathaway through its ownership of Berkshire Hathaway Energy.  

Berkshire Hathaway Energy is not a publicly traded stock but does file reports with the SEC since it has publicly traded bonds outstanding. Berkshire Hathaway Energy SEC Filings (see page 160 of the 2021 Annual Report, where this bond is now listed as part of Eastern Energy Gas debt)

YTM at TC = 3.019%

Current Yield at TC = 2.53%

C. Bought 1 Treasury 2.25% Coupon Maturing on 12/31/23 at 99.93: 

YTM at TC = 2.409%

Current Yield at TC = 2.2516%

D. Bought 1 Treasury 2.125% Coupon Maturing on 11/30/23 at 99.66: 

YTM at TC = 2.338%

Current Yield at TC = 2.13%

E. Bought 1 Treasury 2.375% Coupon Maturing on 8/15/24 at 99.36: 

YTM at TC = 2.66%, rounded up

Current Yield at TC = 2.39%

F. Bought 1 Treasury 2.25% Coupon Maturing on 1/31/24 at a TC of 99.7: 

YTM at TC = 2.418%

Current Yield at TC = 2.26%, rounded up

2. Small Ball: 

Equity REITs have been tumbling in price probably due to concerns about debt refinancing costs and market dynamics related to high volatility and dominate downtrend in stock prices. My approach is to average down mostly in 5 or 10 share lots until I hit my maximum limit. I discuss small ball adds to the Equity REITs ALEX, DEA, EPRT, GTY, ILPT, MPW, and OHI below.

A. Added 10 MPW at $17.87: 

Quote: Medical Properties Trust Inc. (MPW)

MPW SEC Filings

2021 Annual Report

MPW  - Investor Relations

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Last Discussed: Item # 2.B. Bought 10 MPW at $20.31; 10 1993 (3/24/22 Post)  

Average Cost after add: $19.26 (25 shares)

Snapshot Intraday on 4/27/22 after add

Dividend: Quarterly at $.29 per share ($1.16 annually), last raised from $.28 effective for the 2022 first quarter payment. 

Medical Properties Trust, Inc. (NYSE: MPW) - Dividend History

Yield at New AC  = 6.02%

Last Ex Dividend: 3/16/22

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release 

FFO per share = $.47, up from $.43

AFFO per share  = $.37, up from $.34 

Revenues: $409.8M

Realized about a $600M gain on the sale of some assets. Medical Properties TrustCompletes Hospital Partnership With Macquarie Asset Management (sold a 50% interest in 8 Massachusetts-based general acute care hospitals)

The gain was excluded in the FFO and AFFO computations which is appropriate. 

Some Sell Discussions: Item # 3.B. Eliminated MPW- Sold 63+ at $15.55 (11/14/18 Post); Item # 3 Sold 50 MPW at $13.93 (5/15/17 Post); Item # 3 Sold 52 MPW at $15.14- Update For Equity REIT Basket Strategy As Of 6/24/16 - South Gent | Seeking Alpha; Item # 1 Sold 250 MPW at $14.32-Update For Equity REIT Basket Strategy As Of 5/19/16 - South Gent | Seeking Alpha

Realized Gains to Date = $1,582.11

B. Added to HBI in Schwab Taxable Account - Bought 5 at $14.4; 5 at $13.75; 5 at $13.55; 5 at $13.15; 5 at $12.32: 

Quote: Hanesbrands Inc.

HBI Analyst Estimates-MarketWatch

Annual Report for the F/Y Ending 1/1/22 

10-Q for the First F/Q Ending 4/2/22 

Website: Comfortable Clothing Since 1901 | Hanes

Hanesbrands, Inc.  Investor Relations Home

HBI SEC Filings

Last Substantive Discussion: Item # 2.B. Started HBI - Bought 10 at $15.87; 10 at $15.42; 5 at $14.98-Schwab Taxable Account (3/10/22 Post) 

Investment Categories: Bond Substitute/Contrarian Value 

Average cost per share this account: $14.47 (50 shares)

Dividend: Quarterly at $.15 per share

Yield at AC = 4.15%

Last Ex Dividend: 5/9/22 (owned  

Last Earnings Report (Q/E 4/2/22): SEC Filed Press Release 

GAAP E.P.S. = $.32

Non-GAAP E.P.S. = $.34 

Consensus at $.28

Revenues = $1.576+B, up +4.5% Y-O-Y even though HBI lost $40M in Champion revenues due to supply chain disruptions and with no price increases for the Champion product line. Expects to increase Champion product prices in the third quarter. 

"Provides second-quarter 2022 guidance. Constant currency net sales consistent with prior year as underlying business fundamentals position Company to anniversary last year’s substantial 88% growth, excluding PPE sales; GAAP EPS of $0.28 to $0.32; Adjusted EPS of $0.32 to $0.36"

The stock sold off after this report based on HBI guiding 2022 adjusted E.P.S. to the lower end of its previous $1.64-$1.81 due to higher input costs, freight delays and unfavorable currency movements. 

HBI benefited during the pandemic by manufacturing protective gear. 

Analyst Reports (available to Schwab customers): 

Morningstar (5/5/22): 5 stars with a FV of $26

Credit Suisse (5/5/22): Outperform with a 12 month PT of $19, reduced from $23 even though analyst views supply chain issues as transitory. 

S & P (5/5/22): 3 stars with a 12 month PT of $18  

Purchase Restriction: Each subsequent purchase limited to 10 shares or less with each required to be at the lowest price in the chain. 

Maximum Position: 200 shares. 

C. Added to OHI - Bought 1 at $26.83; 1 at $26.48, 1 at $25.47: 

Quote: Omega Healthcare Investors Inc. (OHI)

OHI SEC Filings

2021 Annual Report  Debt discussion starts at page F-44: 

Debt Ratings: Baa3/BBB-  

OHI debt levels and potential increases in the refinancing costs are major concerns. 

The last SU offering was made in March 2021 and consisted of $700M in 3.25% notes maturing in 2033. Prospectus 

With the ten year treasury now over 3%, OHI could not sell a 12 year bond anywhere near 3.25% today. Maybe OHI could sell a 10 year SU note somewhere in the 5.7% to 6.0% range today. (see current prices for the OHI 3.375% maturing in 2031 and the 3.25% SU maturing in 2033. 

Given the relatively high coupons for SU bonds maturing between 2023-2028, however, OHI may be able to refinance at least some of that debt at coupons equal to or slightly less than the current coupons, provided inflation starts to go down persistently and materially and the FED ends its FF rate increase cycle next year. 

Map of Our Locations (938 facilities/64 operators)

Last Discussed: Item # 2.D. Added to OHI - Bought 2 at $28.57; 2 at $28.1 (12/10/21 Post) 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Average Cost per share in this account = $29.67 (21+ shares)

Snapshot Intraday on 4/29/22

Dividend: Quarterly at $.67 per share ($2.68 annually)

Dividends – Omega Healthcare Investors, Inc.

Yield at $29.67 = 9.03%

Last Ex Dividend: 4/29/22 (owned all as of)

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release 

"The Company reported net income for the quarter of $195.2 million or $0.79 per common share.  The Company also reported Nareit Funds From Operations (“Nareit FFO”) for the quarter of $170.7 million or $0.69 per common share, Adjusted Funds From Operations (“Adjusted FFO” or “AFFO”) of $183.5 million or $0.74 per common share, and Funds Available for Distribution (“FAD”) of $161.9 million."

The consensus AFFO per share was at $.65. 

The higher GAAP net income number was primarily due to selling 27 facilities, netting about a $113.5M "gain".  I put gain in quotes since real estate can be sold for a tax profit created solely, or large part by depreciation. 

Of those cash flow numbers, I view FAD as the most important for dividend coverage. The company did not provide a FAD per share number. I calculated it at $.68 per share which is tight for covering the $.67 quarterly dividend.  That uncomfortable coverage may be made worse by a rise in refinancing and other costs outpacing rent increases, so I would still view a dividend cut as possible and more likely than a dividend increase. .  

D. Sold 3 RCUS at $39.62: 

Quote: Arcus Biosciences Inc.  (RCUS) 

RCUS Analyst Estimates | MarketWatch (Substantial losses predicted) 

Roche reported yesterday that its lung cancer treatment which blocks TIGIT, a receptor that masks cancer cells from the immune system, failed to increase progression free survival or the length of time before a patient's condition worsened. Roche reports

Roche's TIGIT blocker tiragolumab looked promising in earlier trial results. 

RCUS has a similar mechanism drug, Domvanalimab, and the stock tanked yesterday in response:

Arcus Biosciences Home | Pursuit of Curing Cancer

Clinical Pipeline 

RCUS SEC Filings

2021 Annual Report 

I sold into a non-fundamentally based price surge caused by an announcement that RCUS would be added to the S&P 600 small cap index. Arcus Biosciences Set to Join S&P SmallCap 600 RCUS replaced Investors Bancorp, a small cap bank holding company, which I owned, that was acquired by CFG.

Investment Category: Lottery Ticket Basket 

See discussion at FDA sets an example through Eli Lilly, Innovent's PD-1, rocking the boat for future contenders: analyst | Fierce Pharma (2/11/22)

Profit Snapshot: +$30.31

Discussed briefly at Item # 2.I. Sold 2 RCUS  (12/16/21 Post)(profit snapshot = $15.2) 

Realized Gains to Date = $45.51

Purchase Restriction: Playing with the house's money only. The stock closed yesterday at $17.23, down 28.24%. 

Some upside was temporarily generated by this announcement: Arcus Biosciences - Gilead Exercises Options to Three Arcus Biosciences Clinical-stage Programs and Adds Research Collaboration, discussed at Fierce Biotech (11/18/21) The transaction closed in December. Gilead and Arcus Biosciences Complete Closing of Option Exercise for Three Clinical-Stage Programs and New Research Collaboration (12/21/21).

Financial Report for the Q/E 12/31/21): SEC Filed Press Release Earnings were generated in this quarter solely to GILD's collaboration payment "Collaboration and license revenues were $354.5 million for the three months ended December 31, 2021, compared to $9.5 million for the same period in 2020. The increase was primarily driven by license revenue recognized upon closing of Gilead's exercise of its options. . .  Net income was $279.4 million for the three months ended December 31, 2021, compared to net loss of $51.9 million for the same period in the prior year. Net income was primarily due to license revenue recognized upon closing of Gilead's exercise in December 2021 of its options."

Even with GILD's cash payment, RCUS ended the year with cash and cash equivalents of $681.3M, down from $735.1M as of 12/31/20. The clinical stage programs are devouring cash.

E. Pared SU in Fidelity Account  - Sold Highest Cost 10 shares at $36.77:

Quotes: 

USD: Suncor Energy Inc. (SU)

CAD: Suncor Energy Inc. (Canada: Toronto)

SU Analyst Estimates | MarketWatch

SU Analyst Estimates | MarketWatch

Last Buy Discussion: Item # 2.K. Added to SU in Vanguard Taxable Account-Bought 2 SU at $20.93 (5/8/21 Post)

I pared this position after a price pop resulting from a letter sent by Elliot Management who reportedly had accumulated a 3.4% stake. Suncor Is Targeted for a Shakeup by Activist Investor Elliott | Barron's; Letter (More information at  Restore Suncor)

 Profit Snapshot: +$72.19 (4/29/22 sale only)

Old AC per share this account: $22.06 (50+ shares) 

New Average Cost per share this account = $20.19 (40+ shares)

Snapshot Intraday on 4/29/22 after pare

Dividend: Quarterly at C$.47 (C$1.88 annually), last raised from $.42 effective for the 2022 second quarter payment, but was slashed to C$.21 from C$.465 effective for the 2020 second quarter payment. 

Dividends – Stock Information | Suncor

Yield at AC = Calculating dividend yield is impossible when the dividend is paid in a foreign currency that is converted into USDs at whatever exchange rate then prevails. I have calculated below the impact of how exchange rates impact yield, assuming a constant cost basis of $20.19 per share and no change in the dividend rate. 

CAD/USD .7: Yield at U.S.20.19 Cost  = 6.52%

CAD/USD .8 = 7.45% (currently use this one as a ballpark number)

CAD/USD .9 = 8.38%

1 to 1 = 9.31%

Canadian Dollar to US Dollar Exchange Rate Chart | Xe The CAD/USD was last over 1 back in 2012. Ten year lows were near .7. 

Yield calculations are not adjusted for taxes including Canada's 15% withholding tax when shares are owned in a taxable account. 

Last Ex Dividend: 3/3/22

Last Earnings Report (Q/E 3/31/22): SEC Filing This report was released after this last pare.   

All amounts are in CADs. 

Net Income = $2.949B

Adjusted to $2.755B (excludes unrealized currency and hedging gains) 

Adjusted E.P.S. = $2.06

Repurchased $827M in shares

Reduced debt by $728M

Even with the recent price surge, the share price has not yet returned to where I sold in 2014 which was the starting year of a long term secular bear market in energy stocks. Item # 2 Sold 50 SU at $40.95 (8/16/14 Post)(profit snapshot = $598.08) 

F. Added to NOMD- Bought 5 at 19; 5 at $18.49-Fidelity Taxable Account: 

Quote: Nomad Foods Ltd. 

NOMD Analyst Estimates | MarketWatch

Website: Home | Nomad Foods

NOMD SEC Filings

2021 Annual Report 

NOMD "is Europe’s leading frozen food company. The Company’s portfolio of iconic brands, which includes Birds Eye, Findus, iglo, Ledo and Frikom, have been a part of consumers’ meals for generations, standing for great tasting food that is convenient, high quality and nutritious. Nomad Foods is headquartered in the United Kingdom." 

Average cost per share after adds: $21.47 (45 shares)

Snapshot Intraday on 4/29/22

Dividend: None and none expected. 

Buy Discussions  in Fidelity Account: 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); Item # 1.A. Started NOMD-Bought 5 at $25.85 (2/20/21 Post)

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release

Adjusted E.P.S.  = €.43 with the estimate at €.382. 

E.P.S. = €.32, up from €.28 in the 2021 first quarter

Revenue: +3.6% to €733M

Organic Revenue Growth = -4.5% 

Reiterated guidance for 2022 adjusted E.P.S. of €1.71 to €1.75

Equivalent to US$1.8 to US$1.84 at a 1 to 1.05 EUR/USD exchange rate. 

Based on yesterday's closing price of $18.99, and using the E.P.S. midpoint of US$1.82, the P/E is 10.43.

1 EUR to USD - Euros to US Dollars Exchange Rate

Adjustments to Net Income: 

SEC Filed Supplement to Press Release at page 37

G. Added to COLB - Bought 5 at $28.9; 5 at $27.98-Fidelity Taxable Account: 

Quote: Columbia Banking System Inc.

COLB SEC Filings

2021 Annual Report

COLB Analyst Estimates | MarketWatch (As of 5/10/22, 2022 average E.P.S. estimate was $2.94; $3.44 for 2023; and $3.65 for 2024.) 

Investment Category: Regional Bank Basket Strategy

New AC per share =  $30.64 (35 shares) 

Snapshot Intraday 4/29/22 after adds

Dividend: Quarterly at $.30, last raised from $.28 effective for the 2021 4th quarter payment. 

COLB Dividend History | Nasdaq

Yield at New AC = 3.92%

Last Ex Dividend: 5/3/22

I discussed the 2022 first quarter earnings report in a recent post and having nothing further to add. Item # 4.A. Added 5 COLB at $29.88 (4/21/22 Post) 

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

Purchase Restriction: Averaging down in 5 or 10 share lots. Each subsequent purchase must lower my average cost per share but does not have to be at the lowest price in the chain given the current estimated E.P.S. growth through 2024 and the dividend yield.   

Highest Cost lots: Item # 2.D. Started COLB-Bought 2 at $34.93; 3 at $34.4; 2 at $33.95 (11/26/21 Post) Consider to sell those at over $35.  Typical small ball trading strategy. 

H. Added to INTC - Bought 1 at $44.03:

Quote: Intel Corp. (INTC)

INTC SEC Filings 

10-Q for the Q/E 3/31/22

Last Discussed:  Item # 2.F. Bought 2 at $48.85 (2/17/22 Post) I discussed the 2021 4th quarter report in that post and my rationale for tip toeing back into the stock slowly. 

Last Eliminated: Item # 1 Sold 60 INTC at $52.29 (3/29/18 Post); Item 1 Sold 50 INTC at $50.51 (3/22/18 Post)(profit snapshots total = $3,990.42)

Average cost per share:  $47.24  (3 shares)  

Dividend: Quarterly at $.365 per share ($1.46 annually) 

Dividend History: 

Yield at AC = 3.09%

Last Ex Dividend: 5/5/22

Last Earnings Report (Q/E 3/31/22): 10-Q at page 2 

Consensus non-GAAP at $.87, in line.  

SEC Filed Press Release - Outlook

Full year non-GAAP E.P.S. forecast at $3.6

2021 non-GAAP actual E.P.S at $5.10

Analyst Reports (available to Schwab customers): 

Morningstar (4/29/22): 4 stars with a FV of $65 and a wide moat. The analyst notes three headwinds: resurgence of AMD, Apple's shift to its own CPUs, and the trend away from general purpose computing to "accelerated computing" that favors "the likes of Nvidia's GPUs". 

Credit Suisse (4/29/22): Outperform with a $60 PT, reduced from $70. 

Argus (5/3/22): Buy with a 12 month PT of $76.

S & P (4/29/22): 3 stars with a 12 month PT of $48 

Purchase Restriction: Each purchase must reduce my average cost per share. Most lot buys will be 5 shares or less. 

Maximum Position: 20 shares

I have a number of concerns about Intel that are not likely to be alleviated IMO over the short or intermediate term. Some of those concerns are noted by the Morningstar analyst as summarized above. While the foundry expansion move may end up being a long term plus, it will be both costly and risky. Debt and rising interest rates are also of some concern, but that is the case with many companies now.   

I. Pared ARCC in Schwab Account- Sold 4 at $20.72: 

I sold the remaining shares purchased with dividends. Since Schwab will not allow me to sell fractional shares unless a position is liquidated, I had to include a slither of a 1 share purchase made on 9/17/20 to hit 4 shares.  

Profit Snapshot: +$22.94

Average cost per share this account before pare: $12.88

Average Cost per share after pare = $12.58 (27+ Shares)

Remaining Lot Details: Snapshot Intraday on 4/29/21

Dividend:  $.42 per share (regular only) ARCC has periodically paid special dividends in addition to its regular one. I am not reinvesting the dividend. The Board declared a special dividend of 3 cents per share payable in the 2022 second, third and 4th quarters. ARCC paid a 3 cent special dividend in the 1st quarter. 

Yield at New AC of $12.58 this account: 13.35%

Last Ex Dividend: 3/14/22

Last Earnings Report (Q/E 3/30/31): SEC Filed Press Release 

NII per share = $.41

Consensus at $.464 per Fidelity

ARCC reported  NII per share of  $.52 in the 2022 4th quarter and $.33 in the 2021 first quarter. While I do not know the reasons for the NII miss, there does appear to be some seasonally in NII per share with the first quarter being low.  

Net asset value per share = $19.03, up from $18.96 as of 3/31/21

Loans on non-accrual = 1.2% of the total at amortized cost

"In January 2022, Ares Capital completed a public underwritten equity offering pursuant to which Ares Capital sold 11.2 million shares of common stock at a price of $21.06 per share to the participating underwriters, with net proceeds totaling approximately $235.5 million, after giving effect to offering expenses."

"During the three months ended March 31, 2022, Ares Capital issued and sold approximately 13.3 million shares of common stock under its existing equity distribution agreements, with net proceeds totaling approximately $274.8 million, after giving effect to sales agents’ commissions and certain offering expenses." The average net price per share after selling commissions was at $20.66. The "equity distribution agreements" are commonly called ATM programs. 

The foregoing stock sales were above net asset value per share, which I view as important. 

Ares Capital (ARCC) Q1 2022 Earnings Call Transcript | The Motley Fool ("net realized gains on investments now total over $175 million since year-end 2019 and approximately $1.1 billion since our inception. . . 74% of our total portfolio at fair value was in floating rate investments. . . currently estimate that our spillover income from 2021 into 2022 will be approximately $651 million or $1.32 per share.")

Goal: Any total return in excess of the dividends paid. I have profitably sold all shares purchased with dividends.  

J. Added to CMCSA - Bought 2 at $41.2; 2 at $40: 

Quote:  Comcast Corp. Cl A

Investment Categories: Large Cap Valuation/Dividend Growth

CMCSA SEC Filings

2021 Annual Report

Last Substantive Discussion: Stocks, BondItem # 2.G. Added to CMCSA - Bought 1 at $47.32; 1 at $45.2 (3/10/22 Post) I discussed the 2021 4th quarter report in that post. Comcast (CMCSA) SEC Filed Press Release

Average Cost per share: $47.7  (17+ shares) 

Maximum Position: 50 shares. 

Dividend: Quarterly at $.27 per share ($1.08 annually)

Dividend History:

There was a 2 for 1 stock split effective in February 2017.  The penny rate prior to that split was at $.275 or $.1375 per share adjusted for that 2 for 1 split. Comcast Stock Split History

Yield at New AC  = 2.26%

Next Ex Dividend: 7/5/22

1 Year Chart: Bear Market Trend with no bottom discernible. 

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release

GAAP E.P.S. = $.78

Non-GAAP E.P.S. at $.86 with the consensus at $.804 per Fidelity

Adjusted Net Income =  $3.9B, up 10.5%

Revenues: $31B, up 14%. 

Free cash flow = $4.76B

Repurchased 62.5M shares during the quarter for $3B. 

"Cable Communications Total Customer Relationship Net Additions Were 194,000; Total Broadband Customer Net Additions Were 262,000 and Benefited From the Highest Level of Customer Retention on Record for Any Quarter"

"Cable Communications Wireless Customer Line Net Additions Were 318,000, the Best Quarterly Result Since Launch in 2017"

"Revenue for NBCUniversal increased 46.6% to $10.3 billion in the first quarter of 2022, including $1.5 billion of incremental revenue from the 2022 Beijing Olympics and the NFL's Super Bowl included in the Media segment. Adjusted EBITDA increased 7.4% to $1.6 billion."

"Revenue for Sky decreased 4.5% to $4.8 billion in the first quarter of 2022. Excluding the impact of currency, revenue was consistent with the prior year period, reflecting lower content revenue, higher advertising revenue, and consistent direct-to-consumer revenue . . . Advertising revenue increased 7.9% to $596 million, primarily reflecting higher advertising revenue in the U.K. due to an overall market improvement compared to the prior year period, partially offset by lower advertising revenue in Italy due to the negative impact of the reduction in Sky's broadcast rights to Serie A. Direct-to-consumer revenue of $3.9 billion was consistent with the prior year period, primarily reflecting increases in average revenue per customer relationship and customer relationships in the U.K., offset by a decrease in customer relationships and average revenue per relationship in Italy which included the impact of the reduction in Sky's broadcast rights to Serie A."

Analyst Reports (available to Schwab customers):  

Morningstar (4/29/22): 4 stars with a FV of $60 and a wide economic moat, noting significant slowdown in broadband customer growth 

Argus (5/6/22): Buy with a $67 PT. 

S & P (5/8/22): 4 stars with a 12 month PT of $55.   

Credit Suisse (4/28/22): Outperform with a 12 month PT of $70

K. Added to DEA - Bought 5 at $18.45: 

Quote: Easterly Government Properties Inc.

DEA SEC Filings

Easterly Government Properties Inc Profile-Reuters

Website: Easterly Government Properties, Inc.

Properties | Easterly Government Properties, Inc.

Last Buy Discussions: Item # 4.A. Added to DEA - Bought 10 at $20.4 (2/24/22 Post); Item # 3.B. Added 5 DEA at $20.76-Fidelity Taxable Account (10/8/21 Post)

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

New Average cost per share this account: $20.18 (65 shares)

Snapshot Intraday 5/2/22 after add

Dividend:  Quarterly at $.265 per share ($1.06 annually), last raised from $.26 effective for the 2021 third quarter payment. 

DEA Dividend History | Nasdaq

Yield at AC = 5.21%, rounded down

Last Ex Dividend: Today, 5/12/22

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release 

Supplemental Information Package 

FFO of $33.1 million, or $0.33 per share on a fully diluted basis

AFFO of $32.0 million, or $0.31 per share on a fully diluted basis

Cash Available for Distribution (CAD) = $28.8M 

DEA does not provide a CAD per share calculation. I calculated CAD per share at $.283. The CAD per share in the 2021 first quarter was reported at $.305. Two of the primary variables from quarter-to-quarter will be DEA's maintenance and contractual tenant improvement cash expenditures.  

I view the CAD per share to me the most relevant cash flow number. 

2022 FFO per share Guidance =  $1.34 to $1.36

Net Income to CAD Reconciliation: 

Debt Schedules: 

Sell Discussions: Item # 2.M. Pared DEA in Fidelity Taxable Account- Sold 12+ at $23.01 (1/13/22 Post); Item # 3.E. Pared DEA in Fidelity Taxable-Sold 10 at $22.92 (8/20/21 Post); 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)

DEA Realized Gains to Date: $561.84

Goal: Very modest at dividend + annual realized gains of 2%+ before ROC adjustments to the cost basis. Will consider selling highest cost lots when and if the price exceeds $22. 

L. Added to EPRT in Fidelity Account - Bought 2 at $23.28; 3 at $22.73; 2 at $21.55: 

Quote: Essential Properties Realty Trust Inc.

EPRT SEC Filings

2021 Annual Report 

10-Q for the Q/E 3/31/22 EPRT "is an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. The Company generally invests in and leases freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant’s sales and profits."

Management: Internal 

Properties: 1,361 as of 12/31/21

Properties as of 3/31/22: "As of March 31, 2022, the Company’s portfolio consisted of 1,545 freestanding net lease properties with a weighted average lease term of 13.9 years and a weighted average rent coverage ratio of 3.8x. In addition, as of March 31, 2022, the Company’s portfolio was 100.0% leased to 323 tenants operating 461 different concepts in 16 industries across 46 states."

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Last Discussed: Item # 2.D. Added to EPRT-Bought 5 at $26.6; 5 at $24.7 (2/10/22 Post) 

Last Substantive Discussion: Item # 1.C. Bought 10 at $27.95 (12/31/21 Post)

New Average cost per share this account: $25.67 (27+ shares)

Dividend: Quarterly at $.26 ($1.04 annually), last raised from $.25 effective for the 2021 4th quarter payment and from $.24 effective for the 2021 second quarter payment. 

EPRT Dividend History | Nasdaq

Yield at New AC  = 4.05%

Last Ex Dividend: 3/20/22

Last Earnings Report (Q/E 3/31/22):  SEC Filed Press Release 

FFO per share  = $.40

AFFO per share = $.38, up 27%

Net Income to AFFO Reconciliation: The main adjustments to FFO are to exclude non-cash revenue created by the straight line accounting convention and to add non-cash compensation. 

2022 Guidance: "The Company is increasing its guidance for AFFO per share on a fully diluted basis for 2022 to a range of $1.50 to $1.53 from its previously announced range of $1.47 to $1.51."

The company amended its credit facility during the quarter: 

One reason for the decline in REIT stocks this year is their use of debt whose cost will increase with short term interest rates. For EPRT, the spread to the SOFR rate is currently 105 basis points to 150. SOFR is the new short term rate that replaced Libor. Secured Overnight Financing Rate Data - FEDERAL RESERVE BANK of NEW YORK This rate will capture all or almost all of the FED's increase in the federal funds rate. 

Compare to mortgage  and senior unsecured bond coupons, the reliance on short term debt provided a cheaper financing alternative. Some of that advantage will evaporate as the FED increases the FF rate, which will reduce cash flow compared to what it would have been under ZIRP. 

Currently, EPRT has $400M of a 2.95% SU bond that matures in 2031. Bond Detail (rated at Baa3/BBB-) That bond was trading near 102 in September 2021 and is now hovering near 80. Prospectus (offered in June 2021)

K. Added to FSMEX - Bought $50 at $62.16; $50 at $55.9: 

Quote:  Fidelity Select Medical Technology and Devices Portfolio Overview 

Rated at 5 stars by Morningstar

L. Added to GTY - Bought 5 at $25.95: 

Quote: Getty Realty Corp.

"Getty Realty Corp. is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of March 31, 2022, the Company’s portfolio included 1,014 freestanding properties located in 38 states across the United States and Washington, D.C."

GTY SEC Filings

2021 Annual Report 

Website: Getty Realty

Our Portfolio | Getty Realty

10-Q for the Q/E 3/31/22 (debt discussed at pages 13-16) 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Last Substantive Buy Discussion: Item # 3.C. Added to GTY-Bought 5 at $28.35; 5 at $27.76 (2/24/22 Post)

New Average cost per share = $28.14 (30 shares)

Snapshot Intraday on 5/3/22 after add

Dividend: Quarterly at $.41 per share

Yield at $28.14: 5.8%, rounded down. 

Next Ex Dividend: 6/22/62

Last Earnings Report (Q/E 3/31/22): SEC Filed Press Release

FFO per share = $.49, up from $.44

AFFO per share = $.52, up from $.49 

Net Income to FFO and Then to AFFO: 

Revenues: $38.894M, up from $36.951M

"As previously announced, in February 2022, the Company closed on the private placement of $225 million of senior unsecured notes, including (i) $100 million of 3.45% notes funded at closing and maturing in February 2032, and (ii) $125 million of 3.65% notes to be funded in January 2023 and mature in January 2033. Proceeds from the notes funded at closing were used to repay all amounts outstanding on the Company’s revolving credit facility and for general corporate purposes, including to fund investment activity. Proceeds from the delayed funding notes will be used to prepay $75 million of 5.35% senior unsecured notes maturing in June 2023 and for general corporate purposes, including to fund investment activity."

2022 Guidance: Increases AFFO per share to $2.10-$2.12 from $2.08-$2.10.   

Purchase Restriction: Each subsequent purchase must be a the lowest price in the chain. I will be buying in 5 share lots.  

Maximum Position: 100 shares

M. Added to ALEX - Bought 5 at $20.85: 

Quote: Alexander & Baldwin Inc. (ALEX)- A REIT

Website: Home - Alexander & Baldwin

ALEX "is the only publicly-traded real estate investment trust to focus exclusively on Hawai'i commercial real estate and is the state's largest owner of grocery-anchored, neighborhood shopping centers. A&B owns, operates and manages approximately 3.9 million square feet of commercial space in Hawai'i, including 22 retail centers, 11 industrial assets and four office properties, as well as 141 acres of ground leases. A&B is expanding and strengthening its Hawai'i CRE portfolio and achieving its strategic focus on commercial real estate by monetizing its remaining non-core assets." 

While the dividend yield is lower than other REITs that I own, and not very appealing to me given the rising interest rates, I have some interest in this REIT due to its Hawaii real estate.  

ALEX SEC Filings 

2021 Annual Report 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Last Discussed: Item # 1.A. Bought 5 ALEX at $22.77 (10/22/21 Post) 

New Average Cost per share: $21.81 (10 Shares)

Snapshot Intraday on 5/3/22 after Add 

Dividend: Quarterly at $.20 per share

Alexander & Baldwin Announces 5.3% Increase in Common Stock Dividend (4/26/22)

Yield at $21.81 = 3.67%, rounded up. 

Next Ex Dividend: 6/16/22

Last Earnings Report (Q/E 3/31/22): Alexander & Baldwin, Inc. Reports First Quarter 2022 Results

NAREIT Defined FFO = $19.7M or $.27 per share, up from $.26 in the 2021 first quarter. 

Core FFO per share = $.29, up from $.21. 

Total Leased Occupancy: 94.5%

New Comparable Lease Rents: +8.8%

2022 Guidance: Raised core FFO per share range to $1.01 to $1.07 from $.94 to $1

N. Added to ILPT - Bought 5 at $15.17; 5 at $14.95; 5 at $14.75; 5 at $14.30: 

Quote: Industrial Logistics Properties Trust

ILPT SEC Filings

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

I discussed the last earnings report in this recent post: Item # 6.I. Added to ILPT - Bought 5 at $19.69; 5 at $17.65 (4/28/22 Post); SEC Filed Press Release and Supplemental

New Average Cost per share this account: $17.77 (80 Shares)

Dividend: Quarterly at $.33 per share ($1.32 annually)

Yield at AC = 7.43%

Last Ex Dividend: 4/22/22 

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.