CTT, ENB, NYCB, SCM

Economy: 

New home sales declined by 12.6% in July compared to June and down 29.6% from July 2021. The seasonally adjusted annualized rate was 511,000, the lowest number since January 2016. New home sales peaked at 1 seasonally adjusted annualized rate of 1.04M in August 2020. 

Census Bureau: New Home Sales.pdf 

The median sales price for new homes was $439,400. The average price was $546,800. Note that the seasonally-adjusted new homes available for sale was at 464,000 which represents a 10.9 month supply at the July sales rate. This numbers indicate that new home construction needs to meaningfully deccelerate, creating another meaningful headwind for the economy.  

Existing-Home Sales Retreated 5.9% in July

Nordstrom (JWN) reports Q2 2022 results (cuts full year forecast based on slowing demand)

Macy's Q2 earnings beat Wall Street's estimates, company cuts full-year forecast (based on slower demand for discretionary purchases)

Europe drought worst in at least 500 years: EU report

++++

So far, 18 senior Trump administration officials have acknowledged that they were unaware of Trump's "standing order" to declassify documents. The list includes Trump's former Chief of Staff Mick Mulvaney. 18 Former Senior Trump officials say his claim of 'standing order' to declassify is nonsense; Trump's Dubious 'Standing Order' to Declassify Documents - FactCheck.org

Trump calls for release of affidavit for Mar-a-Lago search warrant amid DOJ opposition | PBS NewsHour The only reason Trump wants the public release of an unredacted search warrant is to identify the informants, who gave the DOJ/FBI correct information about the government documents in Donald's possession, and then to intimate that persons with his usual threats and to punish them further by unleashing potentially violent Trumpsters. Allen Weisselberg, a Top Trump Executive, Pleads Guilty in Tax Scheme, republished by MSN.com from Allen Weisselberg, a Top Trump Executive, Pleads Guilty in Tax Scheme - The New York Times The noose is tightening. 

Trump envoy releases letter from National Archives deemed 'extraordinary damning' for Trump More than 700 pages of classified documents were turned over by Trump in January 2022. Full text of National Archives letter to Trump on classified documents | Just The News (Note that the National Archives was trying to convince Trump to return government documents throughout 2021.)  Trump made another production of classified documents in June along with his attorney's representation that no additional documents marked as classified were at Trump's resort. That proved to be false.  

For Donald and the Russian government, the reasonable assumption is that any statement is false, unless there is clear and convincing evidence using judicial evidentiary standards, that the statement is true beyond a reasonable doubt. 

The lawsuit filed this week by Trump's lawyers that requests the appointment of a special master is a frivolous publicity stunt that tries to cast Trump as the victim of his own malfeasance, illegal conduct and flagrant disregard for the law. It suggests to me that there may be damning evidence in the documents. 'They are just saying stuff': Ex-federal judge reacts to Trump's legal move; Haberman: There is an implicit threat in Trump's filing

DOJ issues new subpoena for more January 6 documents- YouTube (8/22/22)

Steve Bannon vows MAGA will destroy 'Gestapo' FBI: 'We are a threat to the American state' - Raw Story; GOP Will 'Incarcerate' Officials Who Approved FBI's Trump Raid, Bannon Says Bannon, a Chief Strategist for the Republican Party, referred to the FBI as the Gestapo and Jackboots.   

Jordan Klepper-Wisconsin Trump Supporters | The Daily Show - YouTube The Democrat pugilist James Carville recently made this comment “The problem the Republican Party has is, they got really stupid people that vote in their primaries. And … really stupid people demand to have really stupid leaders. That’s where the Republican Party is now ” James Carville: Trump scandal could be ‘biggest story since 9/11’ | The Hill 

I do not believe that any generalization about all Republicans or Democrats is appropriate since it is certainly not based on any individual assessment. 

It is reasonable to draw an informed opinion about those who truly believe Trump is honest and a good role model for their children. 

And, after viewing interviews with Trump voters, I can reasonably draw conclusions about their intelligence, knowledge and their susceptibility to being manipulated by demonstrably false narratives.

++++

1. Corporate Bonds and Treasuries: 

In this section, I discuss purchases of  First Mortgage Bonds issued by electric utility companies: Southwestern Public Service and Entergy Louisiana. First Mortgage Bonds are issued by several operating subsidiaries of utility holding companies and will have higher credit ratings than the parent company. 

A. Bought 2 Oracle 2.95% SU Maturing on 11/15/24 at a Total Cost of 97.868 (IB Account):

Issuer: Oracle Corp. (ORCL) 

ORCL Analyst Estimates | MarketWatch

ORCL SEC Filings

ORCL Earnings Report for the F/Q ending 2/28/22 

Finra Page: Bond Detail

Credit Ratings: Baa2/BBB+

YTM at Total Cost = 3.88%

Current Yield at TC = 3.0143%

B. Bought 1 Federal Realty 2.75% SU Maturing on 6/1/23 at a Total Cost of 99.901: 

Issuer: Operating Entity for Federal Realty Investment Trust (FRT) 

FRT 2022 First Quarter Earnings Report 

FRT SEC Filings 

Finra Page: Bond Detail

Credit Ratings: Baa1/BBB+

YTM at Total Cost: 2.854%

Current yield at TC =  2.7527%

On the day of this purchase, the 1 year treasury bill closed at a 2.35% yield, up from .40% as of 1/3/22.  U.S. Department of the Treasury

C. Bought 1 Bank of America 4% Junior Bond Maturing on 1/22/25 at a Total Cost of 99.895: 

Issuer: Bank of America Corp.  (BAC) 

BAC Analyst Estimates | MarketWatch

BAC SEC Filings 

SEC Filed Earnings Press Release for the Q/E 6/30/22 

This is one of the most actively traded bond that I have bought this year. 

Finra Page: Bond Detail (prospectus linked)

Prospectus Excerpt-Junior to all senior unsecured debt/Superior in the capital structure only to common and preferred stock 

A junior bond issued by a bank holding company is likely to become worthless in the event the FDIC seizes the operating bank and the holding company declares bankruptcy. If BAC becomes bankrupt before paying off this bond, this $1K will be way down the least of my worries. 

Credit Ratings: Baa1/BBB+

YTM at Total Cost: 4.042%

Current Yield at TC = 4.0042% 

D. Bought 2 Enbridge 2.15% SU Maturing on 2/18/24 at a Total Cost of 97.649: 

Issuer: Enbridge Inc.  (ENB) 

ENB Analyst Estimates | MarketWatch

ENB SEC Filings 

ENB SEC Filed Earnings Press Release for the Q/E 6/30/22 

Finra Page: Bond Detail

Credit Ratings: Baa1/BBB+

YTM at Total Cost = 3.61%

Current Yield at TC = 2.2% 

I now own 6. 

E. Bought 1 of the BB Rated Qwest Capital 7.75% SU Maturing on 2/15/31 at a Total Cost of 91.882: 

Issuer: This bond is now the obligation of Lumen Technologies Inc. (LUMN).  

Qwest Capital was a wholly owned subsidiary of Qwest, one of the baby bells who guaranteed the note. Qwest was also known as U.S. West Communications, Inc.  

Finra Page: Bond  Detail (prospectus not linked)

Credit Rating: BB (JUNK Rating)

YTM at Total Cost = 9.122%

Current Yield at TC = 8.4347%

I have had some indirect ownership of this bond through the Trust Certificate PJA that had this bond as its underlying security. PJA is no longer trading. Call Warrant Exercise on PJA This TC had an 8% coupon paid on a $25 par value. 

PJA Trades: 

2014

2012

Realized PJA Gain = $293.12

I previously traded this $1k par value back in 2017 and in 2018, both held for a brief time:  

2017 1 Bond +$33.45

2018 1 Bond $39.69

I currently intend to hold this last 1 bond purchase longer than those purchases. 

F. Bought 1 Entergy Louisiana 3.25% First Mortgage Bond Maturing on 4/1/28 at a Total Cost of 93.261: 

Issuer: Wholly owned subsidiary of Entergy Corp. (ETR) 

FINRA Page: Bond Detail

Credit Ratings: A2/A

YTM at TC = 4.513%

Current Yield at TC = 3.4848%

G. Bought 2 Canadian Resources 3.9% SU Maturing on 2/1/25 at a Total Cost of 98.652: 

Issuer: Canadian Natural Resources Ltd.  (CNQ) 

CNQ Analyst Estimates 

2021 Annual Report 

SEC Filed Press Earnings Press Release for the Q/E 3/31/22 (free cash flow at C$3.442B)

SEC Filed Earnings Press Release for the Q/E 6/30/22 (free cash flow of about C$3.3B)

Finra Page: Bond Detail

Credit Rating: Baa1/BBB-

Moody's upgraded the debt to Baa1 from Baa2 on 4/21/22.

DBRS rates the debt at A. Canadian Natural Resources - Credit Ratings

YTM at Total Cost: 4.451%

Current Yield at TC = 3.95%, rounded down. 

I own a few common shares. 

H. Bought 2 Arizona Public Service 3.3% SU Bonds Maturing on 6/15/24 at a Total Cost of 98.913:

Purchased 8/16/22. Discussed out of time order. 

Issuer: Arizona Public Service is the largest electric utility serving customers in Arizona and is the principal subsidiary of the S&P 500 component Pinnacle West Capital Corp. (PNW) 

PNW SEC Filings

PNW 10-Q for the Q/E 6/30/22 

PNW SEC Filed Earnings Press Release for the Q/E 6/30/22 

I discussed buying 10 in my last post. I now own 12.  

FINRA Page: Bond Detail (prospectus linked)

Credit Ratings: A3/BBB+ 

YTM at Total Cost of 98.913 = 3.971%

Current Yield at TC = 3.3363%

I. Bought 1 Southwestern Public Service 3.3% First Mortgage Bond Maturing on 6/15/24 at a Total Cost of 99.365: 

Purchased 8/18/22. Discussed out of time order. 

Issuer: Wholly owned subsidiary of Xcel Energy Inc. (XEL) 

2021 XEL Annual Report at page 9

XEL SEC Filed Earnings Press Release for the Q/E 6/30/22 

Finra Page: Bond Detail (prospectus linked)

Credit Ratings: A3/A

YTM at Total Cost = 3.661%

Current Yield at TC = 3.322%

J. Bought 1 Treasury 3% Coupon Maturing on 6/30/24 at 99.437: 

Purchased on 8/17/22. Discussed out of time order. 

YTM at Total Cost = 3.312148%

Current Yield at TC = 3.0169%

I recently bought this treasury note at auction. The price has declined some since that auction.  I now own 4 including 1 in a RI account. 

K. Bought 1 TIP .125% Coupon Maturing on 4/15/25 at 99.195-Roth IRA Account: 

Purchased 8/18/22. Discussed out of time order. 

Real Yield = .43%

Inflation Factor 1.14064 (the amount the principal has increased by CPI adjustments since issuance)

Principal Paid to Seller: $1,131.46 (99.195 x. 10 = $991.95 x. 1.14064 = $1,131.46)

This was my first purchase of this TIP. It has some appeal to me given its 4/15/25 maturity date. 

Better or Worse Off Compared to Nominal Treasury Maturing on 4/15/25: 

YTM of 2.625% T Note Maturing on 4/15/25 as of 8/18: 3.305%

Minus Real Yield of .43% = 

Breakeven Inflation Rate = 2.875%

There is no way to know the answer with certainty. My guess is that the TIP will produce a higher total return given the breakeven inflation rate.

When doing a better off calculation, that does not mean that either alternative is a good one compared to other investments but only that 1 of 2 alternatives may be better.  

L. Bought 1 Treasury 2.5% Coupon Maturing on 5/15/24 at 98.679: 

Purchased 8/17/22. Discussed out of time order. 

YTM at Total Cost  = 3.284989%

Current Yield at TC = 2.5334%

I now own 5 bonds including 1 in a RI account. 

M. Bought 1 Treasury 2.75% Coupon Maturing on 2/15/24 at 99.1885: 

Purchased 8/17/22. Discussed out of time order. 

YTM at Total cost = 3.309% 

Current Yield at TC = 2.77725%

I now own 3 bonds. 

N. Bought $10,000 91 Day Treasury Bills at Auction: 

Investment Rate: 2.798%

This T Bill was purchased using funds in my Schwab sweep account that currently pays .25%. 

O. Bought $2,000 of 2 Year Treasury Note at Auction at 99.890561: 

Coupon: 3.25%

YTM: 3.307%

Auction Results: 

Since the FED launched its Jihad against the Savings Class in 2008, the two year treasury note has not been on my radar until recently. 

Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity, Quoted on an Investment Basis-St. Louis Fed

P. Early Redemption Notice- $10K Health and Educational Facilities Board, Metropolitan Government of Nashville and Davidson County, Tennessee, for the benefit of Vanderbilt University 3.25% Coupon Maturing on 10/1/37: 

Emma Page: Rated Aa1/AA+

I own 5 in my Schwab account and 5 in my Vanguard account. The redemption notice was received from Schwab: 

Item # 1.F. Bought 10 (6/12/17 Post) 

This is a tax free bond even though the obligor is Vanderbilt University. The issuer is technically Nashville's Health and Education Facilities Board who lends the proceeds received from selling these bonds to Vanderbilt. Neither the Nashville government nor the Board have any obligation to make payments. 

Periodically, there is a legislative effort to deny this kind of "municipal" bond its tax free status under existing law.  

2. Sold 100 out of 130 NYCB in Vanguard Taxable Account at $10.87: 

This was my highest cost shares. My average cost per share in this account was reduced to $9.26. 

I still own over 400 shares spread out over several taxable accounts.  

Quote: New York Community Bancorp Inc. (NYCB)

"Based in Hicksville, N.Y., New York Community Bancorp, Inc. is a leading producer of multi-family loans on non-luxury, rent-regulated apartment buildings in New York City, and the parent of New York Community Bank. At June 30, 2022, the Company reported assets of $63.1 billion, loans of $48.5 billion, deposits of $41.2 billion, and stockholders' equity of $6.8 billion.  Reflecting our growth through a series of acquisitions, the Company operates 237 branches through eight local divisions, each with a history of service and strength: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt Savings Bank, and Atlantic Bank in New York; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona."

NYCB SEC Filings

10-Q for the Q/E 6/30/22

NYCB Analyst Estimates | MarketWatch

Investment Category: Regional Bank Basket Strategy/Bond Substitute

Last Buy Discussions: Item # 2.F. Added to NYCB in Vanguard Taxable Account - Bought 10 at $8.89; 10 at $9.3 (5/26/22 Post) (discussed my overall negative opinion); Item # 4.L. Added to NYCB in Vanguard Taxable Account - Bought 10 at $9.61 (5/5/22 Post)

Profit Snapshot: +$35.15

Item # 3 Bought 100 NYCB in Vanguard Taxable Account at $10.52 (4/24/22 Post)

Dividend: Quarterly at $.17 per share ($.68 annually)

Yield at $9.26 = 7.3434%

Last Ex Dividend: 8/5/22 (owned all as of)

Last Earnings Report (Q/E 6/30/22): SEC Filed Earnings Press Release 

Comparisons are to the 2021 second quarter: 

GAAP E.P.S. = $.34, up from $.30

Net Income (available to common shareholders) = $163M, up $152M

When I see 2 net income numbers, with one noting "available to common shareholders", that tells me that there is preferred stock outstanding and those shares have a preference claim to cash compared only to the common shareholders. 

Non-GAAP E.P.S. = $.35 (excludes merger related expenses relating to the pending acquisition of Flagstar Bancorp )

Consensus at $.33 per Schwab. 

NIM: 2.52%, up from 2.5% The increase was due to an increase in prepayment income. I  view the NIM unfavorably, both as to the total number and the .02% increase Y-O-Y including prepayments and no increase without. 

Efficiency Ratio = 35.57%, down from 37.11% (down is good)

NPL Ratio = .10%, up from .07%

Coverage Ratio = 434.11% (allowance for loan losses to nonperforming loans)

ROA   1.1%

ROE 10.18%

ROTE 16.73%

"Loan growth accelerated during the second quarter of 2022, with total loans increasing $1.8 billion to $48.5 billion, up 15% annualized, on a linked quarter basis.  This was driven by continued growth in the multi-family segment and a strong rebound in specialty finance lending."

Analyst Report (available to Schwab customers): 

Credit Suisse (7/27/22): Neutral with a $10 PT.

Sell Discussions: Item # 1.A. Eliminated NYCB in Fidelity Account-Sold 46+ shares at $12.31 (3/10/19 Post); South Gent's Comment Blog # 5: Sold 50 NYCB at $15.58  (11/16/16 Comment); Update For Regional Bank Basket Strategy As Of 10/19/15 - South Gent | Seeking Alpha: Item # 1 Sold 150 NYCB at $18.57 (profit snapshot = $999.66); Item # 2.D. Sold 50 NYB  at $14.25 (3/25/13 Post); Item # 7 Sold 50 NYB at $17.51 (7/28/2010 Post)(profit snapshot +$331.03)  

NYCB Trading Profits to Date: $1,505.34.

3. Small Ball: 

I have no stock purchases to discuss. My interest in taking on more equity risk is at a low ebb. I will probably have a few small ball purchases to discuss in my next post. I have not bought those shares yet. 

I am obviously more interested in buying treasuries and investment grade corporate bonds.

Baseball analogy-Small ball (baseball)-Wikipedia  

The underlying rationale for the small ball trading strategy is risk mitigation in what I view as a dicey stock market whose parabolic rise since bottoming in March 2009 has been fueled by (1) unprecedented money creation; (2) central bank suppression of interest rates far below the inflation rate through extraordinarily abnormal monetary policies continued now for over 14 years; (3) extreme levels of U.S. government deficit spending, and (4) spending rapidly increasing amounts of borrowed money by U.S. consumers.  

I would add spending vast sums of borrowed money by publicly traded companies to buy back stock at elevated price levels, which does not contribute to economic growth or job creation. Stock buybacks have become more costly with the recently adopted 1% tax on those purchases. What stock buybacks are, and how a new 1% tax affects your portfolio

Small Ball Rules:

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

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

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

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

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

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

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

Another aspect is selling fractional shares bought with dividends in order to harvest the original dividend amount plus a small profit on the shares. Prior to the recent downdraft earlier this year, I was doing that regularly having turned off the dividend reinvestment option in virtually all stocks that I own. I am now starting to turn back on the dividend reinvestment option. 

The primary known threat to the stock market are problematic inflation continuing for longer than currently anticipated that has several adverse impacts on the economy and corporate profits. 

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

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

Debt to the Penny | U.S. Treasury Fiscal Data

U.S. National Debt Clock : Real Time

A. Eliminated CTT - Sold 15+ at $11.30: 

Quote: CatchMark Timber Trust Inc. (CTT) 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

CTT SEC Filings 

SEC Filed Press Release- Q/E 6/30/22 Results 

Profit Snapshot: +$10.33

CTT is in the process of being acquired by PotlatchDeltic Corp. (PCH). 

Offer: .23 PCH shares for 1 CTT share 

PotlatchDeltic and CatchMark to Combine to Create a Leading Integrated Timber REIT 

The announcement caused my unrealized loss in CTT to become a slight realized gain. CTT shares plummeted in price shortly after my purchase in response to a dividend slash. The quarterly dividend went from $.135 per share to $.075 effective for the 2021 4th quarter payment.  CTT Dividend History-Nasdaq; SEC Filed Press Release Announcing Dividend Cut 

I currently own 5 PCH shares. 

B. Pared ENB in Fidelity Account - Sold 2 at $43.01: 

Quotes: 

USD: Enbridge Inc. (ENB)

CAD: Enbridge Inc. (Canada: Toronto)

ENB Profile | Reuters

ENB Key Metrics | Reuters

Website: Home - Enbridge Inc.

ENB SEC Filings 

Investment categories: Dividend Growth/Bond Substitute/Large Cap Valuation

Last Buy Discussions: Item # 1.F. Added to ENB in Vanguard Taxable Account-Bought 5 at $29.51; 5 at $28.95; 5 at $27.4 (10/31/20 Post); Item # 1.C. Added 5 ENB at $30.65-Fidelity Taxable (8/15/20 Post); Item # 1.C. Added 1 ENB at $27.23; 1 at $26.21; 1 at $25.49; 1 at $24.29; 1 at $23.68  (4/18/20 Post)

Profit Snapshot: $19.29  (8/22/22 sale only)

Average Cost per share before pare this account: $30.03 (35 shares)

Average cost per share after pare: $29.83 (33 shares)

Snapshot Intraday on 8/22/22 after pare

Dividend: Quarterly at C$.86 per share (C$3.44 annually), last raised from C$.835 effective for the 2022 1st quarter payment. 

Yield at $29.83 = 9%    (assumes a .78 CAD/USD exchange rate-actual yields will vary with the exchange rate in effect when the CAD dividend is converted into USDs; C$3.44 x. .78 = US$2.68  ÷ US$29.83 AC = 9%, rounded up. At a 1 CAD/USD, the yield would be 11.53%.) 

Last Ex Dividend: 8/12/22 (owned all as of)

Last Earnings Report (Q/E 6/30/21): SEC Filed Press Release 

All amounts are in CADs. 

GAAP E.P.S. = $.22

Adjusted E.P.S. = $.67

Distributable Cash Flow (DCF) per share: $1.36, up from $1.24. I view this number as the most important one for dividend coverage. 

Distributable Cash Flow = $2.747B

Reaffirmed DCF per share 2022 guidance at $5.2 to $5.5

Growth Project Update: 

Sell Discussions: Item # 7.A. Pared ENB in Schwab Account - Sold 2 at $46.77 (4/28/22 Post)(profit snapshot = $33.27); Item # 3.F. Pared ENB in Fidelity Account - Sold 5 at $42.4 (3/17/22 Post)(profit snapshot = $42.71); Item 1.F. Pared ENB - Sold 3 at $42.18 (2/3/2022 Post)(profit snapshot = $22.89); Item # 1.E. Sold Remaining Shares Purchased with Dividends in Fidelity Account at 40.14 (10/15/21 Post)(profit snapshot = $20.93); Item # 1.B. Sold 8 ENB at $42.36 (2/19/20 Post)(profit snapshot = $68.36); Item # 3.B. Sold 17 ENB at $40.21 (1/18/20 Post)(profit snapshot = $68.18); Item # 1.B. Sold 15 ENB at $37.61-Used Commission Free Trade (2/20/19 Post)(profit snapshot = $9.29); Item # 3 Sold 50 ENB at $39.03 (12/21/17 Post)(profit snapshot = $72.48); Sold 10 ENB at $40.14 (1/4/18 Post)(profit snapshot =  $6.21)(no item #)

I own ENB in 3 taxable accounts and have been selling my highest cost shares in my both my Fidelity and Schwab accounts. 

ENB SU Bonds, Reset Equity Preferred Stocks, and Exchange Traded Junior Bond: My exposure to its senior unsecured debt (8 SU $1K par value) and equity preferred stock (400 shares of ENBPRP:CA) is substantially higher than my common stock exposure. 

I group the Canadian reset equity preferred stocks with my U.S. floating rate equity preferred stocks Advantages and Disadvantages of Equity Preferred Floating Rate Securities (contains trade snapshots)

ENB Reset Equity Preferred trading profits: 

2016 ENBPRF (100) = C$196

2017 ENBPRP (300) = C$1,814

2017 ENBPRP (200) = C$963

2021 EBGEF (150-2 trades) = US$351.52 (traded on the U.S. Grey Market)

2021 ENBPRP (100) = C$368

Totals: +C$3,341; +US$ 351.52 

The exchange traded ENB junior bond currently has a 6.375% coupon paid on a US$25 par value. Item # 7.A. Bought 10 ENBA at $15.17 (3/28/20 Post) This is a fixed-to-floating rate bond with an issuer optional redemption on or after 4/15/23. Prospectus  As with other fixed-to-floating rate exchange traded securities, the optional redemption date also marks the transition to a floating rate. The spread is to the 3 month Libor which is being phased out and will not longer be published as after 6/30/23. There is an alternative rate provision, which may end up being the 3 month SOFR rate. 3 Month LIBOR | Current 90 Day Libor Rate Today's Interest Rates Index; LIBOR to SOFR Transition

ENB Realized Gains to Date: $398.85

Goal: Any profit on the shares plus the dividend. 

C. Pared SCM in Fidelity Taxable - Sold 5 at $13.59: 

Quote: Stellus Capital Investment Corp. (SCM)- an externally managed BDC. 

SEC Filings

Website: Stellus Capital

Last Substantive Buy Discussions: Item # 1.E. Bought 5 SCM at $7.41 in Fidelity Account (8/15/20 Post); Item # 3.J. Added 10 SCM at $7.85; 5 at $7.65; 10 at $7.5 (7/18/20 Post); Item # 2.B. Added 10 SCM at $7.8; 2 at $6.26, 3 at $5.30; 5 at $7.53 (5/9/20 Post)

Profit Snapshot: +$28.69 (8/22/22 sale only)

I did not discuss the 10 share sale included in the previous snapshot. 

Average Cost per share this account before pare: $7.24

Average cost per share this account after pare: $7.15 (35 shares)

Snapshot Intraday on 8/22/22 after pare

Dividend: Monthly  at $.0933 (regular only)

SCM has also been paying recently a $.02 per share special monthly dividend. 

See: Stellus Capital Investment Corporation (SCM) Dividend History | Seeking Alpha

Yield at $7.15 = 15.66% (regular only, $1.1196 annual)  

Next Ex Dividend: 8/30/22

Net Asset Value per share history: 

6/30/22:   $14.32 10-Q for the Q/E 6/30/22 

Discount to $14.32 at $7.15 = 50.07%

12/31/21:   $14.61 

9/30/21:    $14.15 

6/30/21:    $14.07

3/31/21:    $14.03  10-Q for the Q/E 3/31/21 at page 3 

12/31/20:  $14.03   10-K at page 74 
12/31/19:   $14.14
12/31/18:   $14.09
12/31/17:   $13.81
12/31/16    $13.69
12/31/15:   $13.19
12/31/14:   $13.94
12/31/13:   $14.54

November 2012: IPO at $15 ($14.46 after underwriters discount)

Last Earnings Report (Q/E 6/30/22): 

Stellus Capital Investment Corporation Reports Results for its second fiscal quarter ended June 30, 2022

Net Investment Income = $6.1M or $.32 per share

Net asset value per share = $14.32 

Asset coverage ratio = 1.92

Summary terms of investments discussed in  10-Q starting at page 5.

83 portfolio companies: 

SCM Risk Assessments: BDC loans are inherently risky. There will be defaults. 

Stock Offerings since inception: 

Sell Discussions: Item 2.L. Pared SCM in Fidelity Taxable Account - Sold 5 at $14 (12/3/21 Post)(profit snapshot = $30.75);  Item # 2.B. Sold 8.558 SCM shares at $13.19 (8/27/21 Post)(profit snapshot = $45.73); Item # 2.G. Pared SCM in Vanguard Taxable-Sold 10 at $13.2 (6/19/21 Post)(profit snapshot = $11.33); Item # 1.C. Pared SCM in Fidelity Taxable -Sold 13 at $12.46 and 13+ at $13.25 (4/17/21 Post)(profit snapshot = $69.04); Item # 1.F. Pared SCM in Fidelity Taxable-Sold 20 at $11.08 and Item #1.G. Pared SCM in Vanguard Taxable-Sold 20 at $11.17 (12/19/20 Post)(profit snapshots = $14.23); Item # 3 Sold 50 SCM at $13.72 (9/21/19 Post)(eliminating position as of that date; profit snapshot = $3.75); Item # 1.I. Sold 20 SCM at $7.61 (8/22/20 Post)(contains snapshots of prior trades; profit snapshot = $10.84); Item # 1.B. Sold 32+ SCM at $14.22-Used Commission Free Trade (2/2/19 Post)(profit snapshot = $78.09); Item # 1.A. Sold Highest Cost Lot-50 Shares at $12.63 (5/3/18 Post)(profit snapshot = $34.24); Item 2.B. Sold 100 SCM at $14.23 (2/27/17 Post)(profit snapshot=$285.96); Item # 2 Sold 100 SCM at $13.02 (1/12/17 Post)(profit snapshot= $141.96) 

SCM realized gains to date: $754.61

Goal: Any total return in excess of the dividend paid.  

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.