GRX, IRM, LXP, MFIC, MPW, PPL, RTX, SJI

Economy: 

It Starts With Inflation (Ray Dalio commentary). I do not agree with his guess that a 4.5% ten year treasury yield will be the primary cause of a 20% stock market decline, due in part to a multiple reset. If there is a 20% decline from current levels in the S&P 500, the more likely primary cause would be a continuation of problematic inflation and its negative impact on consumer discretionary spending and corporate profit margins.  

FedEx CEO says he expects the economy to enter a ‘worldwide recession’

As of 7:37 CDT, the probability that the FED will increase the FF rate by at least .75% tomorrow is at 100%: 

Countdown to FOMC: CME FedWatch Tool

Probabilities for the 12/13/23 Meeting: 

+++

Markets:

In a recent Marketwatch article, the author claimed that the 60/40 portfolio would have its 5th worst year in history if the return remained flat for the remainder of 2022. The worst year in U.S. history for the 60/40 portfolio - MarketWatch

It has been a terrible year so far for bonds and stocks, but that was normal back in the 1970s. 

Total Return YTD through 9/19/22 based on price: 

SPDR® S&P 500 ETF Trust (SPY)-Morningstar: -17.25%

iShares 20+ Year Treasury Bond ETF (TLT)-Morningstar -26.49%

iShares Investment Grade Corporate Bond ETF (LQD)-Morningstar -17.53%

Invesco QQQ Trust (QQQ)-Morningstar -26.49%

First Trust Dow Jones Internet ETF (FDN)-Morningstar -39.76%

First Trust Cloud Computing ETF (SKYY)-Morningstar -36.65%

++++

Trump openly embraces, amplifies QAnon conspiracy theories | AP News

Trump embraces QAnon at rally by playing music similar to its anthem; Critics torch Donald Trump’s supporters for their 'uncanny resemblance' to 'Nazi Salute' - Alternet.org  

Trump’s New Recruits - The Atlantic

Trump warns of "big problems" if he's indicted - YouTube  

Trump Was Warned Late Last Year of Potential Legal Peril Over Documents - The New York Times, republished at MSN.Com, Trump Was Warned Late Last Year of Potential Legal Peril Over Documents

Team Trump refuses special master's order to list which Mar-a-Lago documents Trump 'declassified' - Alternet.org The filing would be under penalties for perjury. 

Demagogue Don claims that Biden's seating arrangement at Queen Elizabeth's funeral proves that the U.S. has lost prestige since the election was stolen from him. Apparently, Delusional Don believes he would have been seated in the first row. Trump Makes Queen's Funeral All About Him, Says He Would Have Had Better Seat Than Biden Trump is a tiresome, petty, obnoxious, bombastic, narcissistic and loathsome creature. I have yet to detect any positive characteristics in his personality.  

‘Look, these are our boys’: Ukrainian troops drive abandoned Russian tanks on new front line - The Washington Post 

Ukraine mass burial site with 440 bodies discovered in recaptured Izium, says police chief-The Guardian

Izium: Some bodies found at mass burial site in show 'signs of torture', Ukraine says | CNN; Izium mass graves - Wikipedia  

How Russian Trolls Helped Keep the Women’s March Out of Lock Step - The New York Times  

Russia Secretly Gave $300 Million to Political Parties and Officials Worldwide, U.S. Says - The New York Times

After losing territory to Ukraine's army, Russia decided to step up attacks against civilians and civilian infrastructure. Russia widens strikes on Ukrainian civilian targets after frontline setbacks; Russia expands attacks on Ukraine's civilian infrastructure | DW News - YouTube

2022 Ukrainian Kharkiv counteroffensive - Wikipedia 

Ukraine claimed that Russia launched a missile that landed within 300 yards of a nuclear plant. A Russian missile almost hit a nuclear power plant, Ukraine says-NPR

++++

1. Corporate Bonds and Treasuries: 

The bonds bought in late June and early July have gone down in price and up in yield, primarily in response to the last inflation report that sent stocks reeling last week. 

I have $140,000 in bonds that will mature later this year. Most of those proceeds will probably be redirected into treasury bill auctions. Some of those purchases will be in 2 month T Bills that mature this year which will be bought in October. 

I am not concerned about bonds going down in price after purchase for several reasons: (1) I have a constant stream of maturing bonds whose proceeds can be used to buy higher yielding bonds, provided rates continue to go up; (2) my bond ladder has an average weighted maturity of about 2.5 years which mitigates the particular interest rate risk that I call the risk of lost opportunity; and (3) I am generating more current income than I would by keeping the funds in a broker sweep account. 

Most of the corporate bonds and treasuries that I own, which are currently showing unrealized losses, will have realized gains at maturity. A few corporate bonds have been bought at par value and none at premiums to par.  

The apex of the bond ladder is in 2024 which currently has $289,000 in maturities and growing. Most of those bonds mature before September 2024. 

Until recently, the 2 year maturities had the best combination of yields and interest rate risk mitigation. 

The 1 year treasury bill now has the highest yield through the entire maturity spectrum. 

I will be disappointed if the proceeds received in 2024 can not be reinvested at higher yields and view that possibility as more of a potential negative than the current unrealized loss on those positions. 

The long end of my bond ladder consists of Tennessee municipal bonds. Some issuers are starting to redeem those bonds notwithstanding the rise in interest rates. I will lose 10 more on 10/3/22. 

A. Bought 2 Fifth Third Bancorp 3.65% SU Maturing on 1/25/24 at a Total Cost of 99.801: 

Issuer: Fifth Third Bancorp (FITB) 

FITB Analyst Estimates | MarketWatch

I own the common shares. 

FITB SEC Filings 

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

FINRA Page: Bond Detail (prospectus linked)

Credit Rating: Baa1/BBB+ 

YTM at Total Cost = 3.781%

Current Yield at TC = 3.6573%

B. Bought 1 Entergy Mississippi 3.25% First Mortgage Bond Maturing on 12/1/27 at a Total Cost of 93.614: 

Issuer: Wholly owned operating subsidiary of the utility holding company Entergy Corp. (ETR) 

Security: First Mortgage Bond

FINRA Page: Bond Detail

Credit Ratings: A2/A

YTM at TC = 4.593%

Current Yield at TC = 3.47%

C. Bought 1 Kinder Morgan 4.3% SU Maturing on 6/1/25 at a Total Cost of 99.448:

Issuer:  Kinder Morgan Inc. (KMI) 

KMI SEC Filings 

KMI Analyst Estimates | MarketWatch

I own the common stock. 

FINRA page: Bond Detail (prospectus linked)

Credit Ratings: Baa2/BBB

YTM at Total Cost = 4.503%  

Current Yield at TC = 4.3239%

D. Bought 2 Amcor Flexibles North America 4% SU Maturing on 5/17/25 at a Total Cost of  99.055: 

Issuer: Wholly owned subsidiary of Amcor PLC (AMCR). This company was formerly known as Bemis which was acquired by Amcor in 2019. 

AMCR Analyst Estimates | MarketWatch

This bond is guaranteed by Amcor and other Amcor related entities. 

I own Amcor common shares.  

Finra Page:  Bond Detail (prospectus not linked)

Prospectus 

Credit Ratings: Baa2/BBB

YTM at Total Cost = 4.343%

Current Yield at TC = 4.0392%

E. Bought 2 Arrow Electronics 3.25% SU Maturing on 9/8/24 at a Total Cost of 98.151: 

Issuer: Arrow Electronics Inc. (ARW) 

ARW Analyst Estimates | MarketWatch

ARW SEC Filings 

ARW SEC Filed Earnings Press Release for the Q/E 3/31/22  (net income of $365M)

ARW SEC Filed Earnings Press Release for the Q/E 6/30/22 (net income of $370M)

Finra Page: Bond Detail

Credit Ratings: Baa3/BBB- 

YTM at Total Cost = 4.146%

Current Yield at TC = 3.31%

F. Bought 1 Entergy Arkansas 3.5% First Mortgage Bond Maturing on 4/1/26 at a Total Cost of 99.33:

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

ETR SEC Filings

Finra Page: Bond Detail (prospectus)

Security: First Mortgage Bond 

Credit Ratings: A2/A

YTM at Total Cost = 3.692%

Current Yield at TC = 3.5236%

I now own 2 including 1 in a RI account. 

G. Bought 2 Fortis 3.055% SU Maturing on 10/4/26 at a Total Cost of 95.161: 

Issuer: Fortis Inc. (FTS)  - A Canadian based utility holding company. 

Our Companies The largest U.S. holdings are Tucson Electric Power, part of the FTS UNS Energy group, and Central Hudson.

I eliminated my common stock position earlier this year. 

FTS SEC Filings (foreign issuer forms)

2021 Annual Report 

FTS Analyst Estimates | MarketWatch

Investor Relations

SEC Filed Earnings Press Release for the Q/E 3/31/22 

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

FINRA Page: Bond Detail (prospectus not linked)

Prospectus 

Credit Ratings: Baa3/A-

DBRS has its rating at A.  

YTM at Total Cost = 4.315%

Current Yield at TC = 3.21%

H. Bought 1 Public Service of Colorado 2.9% First Mortgage Bond Maturing on 5/15/25 at a Total Cost of 96.738: 

Purchased 9/13/22. Discussed out of time order. 

I now own 2 bonds. The first 1 bond purchase was at a 97.64 total cost. Item # 2.G (8/30/22 Post) I will buy more as the price drops. 

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

XEL SEC Filings

Finra Page: Bond Detail (prospectus linked)

Security: First Mortgage Bond 

Credit Ratings: A1/A 

YTM at Total Cost = 4.205%

Current Yield at TC  = 3%

I. Purchased 2 Ameriprise Financial 3.7% SU Maturing on 10/15/24 at a Total Cost of 99.294: 

Purchased on 9/12/22. Discussed out of time order. 

Issuer: Ameriprise Financial Inc.  (AMP) 

AMP Analyst Estimates | MarketWatch

Finra Page: Bond Detail (prospectus linked) 

Credit Ratings: A3/A-

YTM at Total Cost = 4.055%

Current Yield at TC = 3.7263%

J. Tampa Electric 2.6% SU Matured on 9/15/22: 

I owned 3 bonds, including 1 in a RI account, that were bought in 2017 when the 5 year treasury was hoving near a 2% yield. 2017 Yield Curve 

I want bonds to mature that were bought prior to today since I can use the proceeds to buy bonds with higher yields. 

The use of a bond ladder mitigates interest rate risk, both when rates are falling and rising. If I knew where interest rates were going to be across the maturity spectrum over the next 5, 10 or 20 years, which I do not of course, I would be in a much better position to navigate the interest rate risks. 

Profit Snapshots: $45.1

K. Bought 1 GATX 4.35% SU Maturing on 2/15/24 at a Total Cost of 99.487: 

Purchased 9/16/22. Discussed out of time order. 

Issuer: GATX Corp. (GATX) 

GATX SEC Filings 

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

Finra Page: Bond Detail (prospectus not linked)

Credit Ratings: Baa2/BBB

YTM at TC = 4.729%

Current Yield at TC = 4.3423%

2. Treasuries: 

I am placing more emphasis now on buying treasury bills at auction. 

A. Bought $10 K Treasury Bills at 9/12/22 Auction - Vanguard and Schwab Taxable Accounts: 

91 Days

Maturity: 12/15/22

Investment Rate = 3.142%

B. Bought $2000 Treasury Bills at 9/12/22 Auction: 

182 days 

Matures on 3/16/23

Investment Rate: 3.576%

Set up for automatic rollover in my Fidelity account. 

D. Bought $10,000 Treasury Bills at 9/19/22 Auction - Fidelity Account:

91 Day T Bills

Matures 12/22/22

Investment Rate (coupon equivalent): 3.343%, up from 3.142% in the prior week's auction, see Item # 2.A. above.  

E. Bought 1 Treasury 2.25% Coupon Maturing on 10/31/24 at 98.289: 

I now own 3 bonds. 

YTM at Total Cost =  3.021%

Current Yield = 2.2892%

F. Bought 1 Treasury 2.75% Coupon Maturing on 7/31/23 at 99.3519: 

Purchased on 9/12/22. Discussed out of time order. 

YTM at Total Cost = 3.488%

Current Yield at TC = 2.7679%

I now own 3 bonds including 1 in a RI account. 

G. Bought 1 Treasury 2.5% Coupon Maturing on 8/15/23 at 98.6824: 

Purchased 9/16/22. Discussed out of time order. 

YTM at Total Cost = 3.995%

Current Yield at TC = 2.5334%

I now own 3 bonds. Note the meaningful rise in yield compared to the treasury maturing on 7/31/23 purchased on 9/12/22 and discussed in Item # 2.F. above.  

H. Bought 1 Treasury 3% Coupon Maturing on 6/30/24 at 98.2868: 

Purchased 9/19/22. Discussed out of time order. 

YTM at Total Cost = 4%

Current Yield at TC = 3.05%, rounded down. 

I now own 5 bonds. 

3. Bought 100 SJI at $33.68-Schwab taxable account: 

Quote South Jersey Industries Inc.  (SJI) 

SJI Analyst Estimates | MarketWatch

SJI SEC Filings  

Last Buy Discussion: Item # 3.A. Started SJI-Bought 5 at $23; 5 at $22.6; 5 at $22.2; 5 at $20.87; 5 at $20.5 (1/1/21 Post)

This is another arbitrage play similar to the one that I am playing with FHN's pending acquisition by TD.  

In this account and prior to this 100 share purchase, I owned 20+ shares with a $21.62 average cost per share: 

SJI is in the process of being acquired for $36 per share in cash. South Jersey Industries, Inc. Enters into Agreement to be Acquired The acquiring company is a privately owned investment fund advised by J.P. Morgan Management Inc. 

The acquisition requires regulatory approval. SJI expects that its acquisition will be consummated in the 2022 4th quarter.  SJI SEC Filed Earnings Press Release for the Q/E 6/30/22 ("acquisition by Infrastructure Investment Fund (IIF) on track; Closing expected in Q4 2022")

If approval is not granted, I would expect the SJI share price to initially fall back to $22-$27. The $36 price was at a 46.3% premium "to SJI’s 30-day VWAP as of February 23, 2022, the last trading day prior to the announcement of the agreement."   

The current discount to the cash acquisition price indicates a consensus opinion that the deal will be consummated but the opinion is not at a 100% certainty, more like 80%-90% with a recognition of the possible downside associated with non-approval. This estimate is based on the current price rather than an assessment of ideological predilections of the regulators which are unknown to me. 

Dividend: Quarterly at $.31 per share ($1.24 annually)

SJI Dividend History | Nasdaq

Average cost per share this account: $31.59 (120+ shares)

Yield at New AC = 3.925%

Last Ex Dividend: 9/8/22

Proceeds if acquired at $36 =  $4,353.37

Cost of 120+ shares = $3,820.55

Profit if acquired at $36 = $532.82. 

Some downward price pressure may be associated with SJI being a component in several stock indexes. Indices Containing South Jersey Industries Share - Investing.com 

I may eliminate the 20+ shares owned in my Fidelity and Vanguard taxable accounts which have a low cost basis when and if the price goes over $34.5:

Prices as of 9/19/22 Close: 

Vanguard 5 shares Bought at $22.26

Fidelity 15.07 Shares AC at $21.20

The disposition of those shares is just routine risk mitigation, and a rare example of reducing a stock position to just 1 taxable account.  I own SJI in two RI accounts which I intend to keep. 

4. Small Ball: 

A. Started MFIC in Vanguard Taxable Account - Bought 10 at $12.93: 

Quote: MidCap Financial Investment Corp (MDIC)- A BDC

2021 Annual Report (risk factor summary starts at page 19 and ends at page 50)

Website: MidCap Financial Investment Corporation

Working my way up to 100 shares. The next purchase will be a 5 share lot at <$12. MDIC is a deservedly hated BCD. I will engage in some gambling in the disfavored part of this disfavored sector.  

MidCap Financial used to be called Apollo Investment and traded under the symbol AINV.  8-K

After the name change, maybe no one would notice the past history where the external managers were richly rewarded for incinerating shareholder capital. 

MFIC/AINV Net Asset Value per share history:  

 6/30/2022 $15.52  10-Q at page 1 

12/31/2021 $16.08 10-Q at page 1 

12/31/2020 $15.59 10-Q at page 1 

12/31/2019  $18.27 10-Q at page 1 

12/31/2018  $19.03 10-Q at page 1 

1 for 3 stock split 12/3/2018 AINV Split History  

12/31/2017   $6.6  

3/31/16  $ 7.28
3/31/15  $ 8.18
3/31/14  $ 8.67
3/31/13  $ 8.27
3/31/12  $ 8.67
3/31/11  $10.03
3/31/10 $10.06
3/31/09 $ 9.82
3/31/08 $15.93 (Near Depression)
3/31/07 $17.87
3/31/06 $15.15
3/31/05 $14.27

IPO in 2005 at $15 per share: Final Prospectus

Adjusted for the 1 for 3 reverse split, the IPO price was at $45 with the last reported net asset value per share at $15.52 or a 65.5% decrease. 

The $12.93 price paid is at a 20% discount to the last reported $15.52 NAV per share. This is woefully insufficient if the external managers incinerate capital through significant loan losses. 

Last Buy Discussion: Item # 1.A. Bought 50 AINV at $5.58 (5/24/18). That lot was later sold.  

Dividend: Quarterly, regular currently at $.32 ($1.28) MFIC Dividend History- Nasdaq This dividend history is not adjusted for the 2018 1 for 3 reverse split. The quarterly rate was at $.60 per share in 2016 adjusted for that reverse split. 

Yield at $12.93: 9.9%

Last Ex Dividend: Monday 9/19/22 (owned as of)

Last Earnings Report (Q/E 6/30/22): 

Apollo Investment Corporation Reports Financial Results 

NII per share = $.37, down from $.39 for year ago quarter. 

Number of portfolio companies: 140 

Net asset value per share = $15.52

Total Return Since 1/1/19: The annual average total return (dividends reinvested) starting on 1/3/2019 (subsequent to the reverse split) through 9/16/22 was a respectable +12.18% with a starting price at $12.84. DRIP Returns Calculator | Dividend Channel (returns prior to the split are not adjusted and are consequently way off since most of the asset incineration occurred prior thereto). The return comes from the dividends and their reinvestment to buy more shares. This more recent history was sufficient to at least perk my speculative interest. 

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

B. Added to GRX - Bought 15 at $11.17; 10 at 10.62-Schwab Taxable Account: 

Quote: Gabelli Healthcare & Wellness Trust Overview- A CEF

SEC Filings

Sponsor's Website: GAMCO

Morningstar (currently rated at 2 stars, down from 3 stars when I last discussed this CEF). 

Last Discussed: Item # 2.C. Added 10 GRX at $11.2 (6/9/22 Post) 

Average cost per share this account: $11.77 (60+ shares)

Dividend: Quarterly at $.15 per share (regular only). 

Capital gain distributions, made in the 4th quarter, may add to that amount.  

I am reinvesting the dividend. 

Last Ex Dividend:  9/15/22 (owned all as of)

Data as of 9/16/22: 

Closing Net Asset Value per share = $11.98

Closing Market Price = $10.6

Discount: -11.52%

Sourced: GRX  CEF Connect 

C. Added to MPW in Fidelity Account - Bought 5 at $14.31; 5 at $13.46: 

Quote: Medical Properties Trust Inc. (MPW)

MPW SEC Filings

2021 Annual Report

MPW - Investor Relations

10-Q for the Q/E 6/30/22 (debt listed at page 20)

Portfolio Information: 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Working my way up to 100 shares. 

Last Discussed: Item # 2.F. Bought 5 MPW at $14.4 (6/22/2022 Post) 

1 Year Chart as of 9/19/22: Bear Market Trend

There are two primary reasons for the price downtrend IMO. First, the rise in interest rates increases financing costs and reduces the allure of dividend paying stocks. Second,  MPW's largest tenant, Steward Health Care System, is reportedly having financial difficulties. Is Now A Good Time To Buy Medical Properties Trust-Benzinga; How a Small Alabama Company Fueled Private Equity’s Push Into Hospitals - WSJ (I am not a subscriber but was allowed for some reason to read this article) The WSJ article was published on Monday 2/14/22. MPW Historical Prices & Data (closed at $21.67 on Friday 2/11 and at $20.78 on 2/14, with volume almost doubling).

Steward accounted for 27.8%% of MPW's second quarter revenue which is clearly excessive IMO. 10-Q at page 31 and Page 11 Supplemental That excessive concentration is made worse by MPW having a significant equity interest in Steward and a sizable loan outstanding. 10-Q at page 19 I view the foregoing as imprudent, even reckless from a risk viewpoint. I will consequently limit my investment.  

MPW did reduce its exposure to Steward in the first quarter by forming a partnership with an investment firm. MPW transferred 8 acute hospital leased to Steward to the partnership and the investment firm paid cash for its 50% interest. Medical Properties Trust Completes Hospital Partnership With Macquarie Asset Management MPW management claims that the return on these hospitals validates its exposure to Steward.  

MPW SU Debt Ratings: Ba1/BBB-

The 5.26% SU maturing in 2026 closed at 6.432% YTM yesterday. 

Average cost per share:  $16.69 (80 shares)

Snapshot Intraday on 9/16/22 after second add

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

MPW-Dividend History

Effective for the next dividend payment, I have changed my dividend option to reinvestment. 

Yield at AC per share = 6.95%

Last Ex Dividend: 9/14/22 (owned 75 shares as of)

Last Earnings Report (Q/E 6/30/22): 

SEC Filed Press Release and Supplemental 

FFO per share = $.46, up from $.35 in the 2021 second quarter

AFFO per share = $.35 per share, up from $.34 in the 2021 second quarter. 

Other Recent News: Medical Properties Trust Announces Successful Operator Transition at Watsonville Community Hospital and Sale of 11 Facilities to Prime Healthcare  

Some Prior Buy Discussions: Item 2.C. Added 10 MPW at $12-Used Commission Free Trade (2/12/18 Post); Item # 5.A. Reinitiated Position in MPW with a 50 Share Buy at $12.85 (8/3/2017 Post); Item # 4 Added 50 MPW at $9.84-Update For Equity REIT Basket Strategy As Of 2/12/16 - South Gent | Seeking Alpha

Some Sell Discussions: Item # 3.C. Eliminated MPW- Sold 63+ at $15.55 (11/14/18 Post)(profit snapshot = $187.01); Item # 3 Sold 50 MPW at $13.93 (5/15/17 Post)(profit snapshot = $69.99); Item # 3 Sold 52 MPW at $15.14- Update For Equity REIT Basket Strategy As Of 6/24/16 - South Gent | Seeking Alpha (profit snapshot = $112.02); Item # 1 Sold 250 MPW at $14.32-Update For Equity REIT Basket Strategy As Of 5/19/16 - South Gent | Seeking Alpha (profit snapshots = $396.64); Item # 6 Sold 100 MPW at $14-Regular IRA (9/13/2014 Post)(profit snapshot = $108.27); Item # 6 Sold 100 MPW at $12.25 - Roth IRA  (1/13/2013 Post)(profit snapshot = $221.08)

MPW Realized Gains to Date: $1,582.11. 

D. Added to RTX - Bought 1 at $83.5: 

Quote:  Raytheon Technologies Corp. (RTX) 

RTX Analyst Estimates | MarketWatch

RTX SEC Filings

2021 Annual Report

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

Working my way to 10 shares. 

Average cost per share: $87.25 (3 shares) 

Dividend: Quarterly at $.55, last raised from $.51 effective for the 2022 second quarter payment. RTX Dividend History | Nasdaq

Yield at AC = 2.52%

Last Ex Dividend: 8/18/22

I have nothing to add to my recent discussions. Item # 3.J. Bought 1 RTX at $87.66 (9/13/22 Post);  Item # 2.B. Bought 1 RTX at $90.59 (8/2/22 Post)

E. Added to LXP - Bought 5 at $9.74: 

Quote: Lexington Realty Trust (LXP) - a REIT

LXP SEC Filings

Properties | LXP Industrial Trust

Website: LXP Industrial Trust - Preeminent single-tenant U.S. industrial REIT

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy 

Working my way up to 100 shares.

Average cost per share = $10.23 (15 shares)

Dividend: Quarterly at $.12

Yield at AC per share: 4.69%

Next Ex Dividend: 9/29/22

I discussed this REIT in my last post and have nothing further to add here: Item # 3.I. Bought 10 LXP at $10.47  (9/13/22 Post) 

Maximum Position: 100 shares

F. Sold 10 PPL at $29.92: 

Quote: PPL Corp.

PPL is a utility holding company that owns electric utilities operating in Kentucky, Pennsylvania and Rhode Island that provides power to about 3.5M customers. 10-Q for the Q/E 6/30/22 

These shares were my highest cost lots that could be sold profitably. 

Based on events occurring since my initial purchase, owning this stock proved to be less than an optimal investment.

The events include a substantial cut in the quarterly dividend rate from $.415 per share to $.20 effective for the 2022 first quarter.  

The dividend cut was occasioned by PPL selling its UK based business. PPL Corporation to sell U.K. utility business to National Grid and acquire National Grid's Rhode Island utility, strategically repositioning PPL as a high-growth, U.S.-focused energy company

PPL did subsequently raise its dividend to $.225 per share after completing its acquisition of National Grid's Rhode Island utility called Narragansett Electric. PPL Dividend History | Nasdaq This acquisition was completed on 5/25/22. 

PPL Corp. Analyst Estimates

PPL Investor Relations

PPL SEC Filings

2021 Annual Report

Profit Snapshot: +$12.56

Last Discussed: Item # 7.F. Pared PPL - Sold 17+ at $29.3 (4/28/22 Post)(profit snapshot = $51.01); Item # 3.G. Eliminated PPL in Vanguard Taxable Account -Sold 13 at $26.45 (3/17/22 Post)(profit snapshot = $54.41)

New Average cost per share. = $31.66 (123+ shares)

Dividend: Quarterly at $.225 per share ($.90 annually)

Yield at $31.66 = 2.84%

Last Ex Dividend: 9/8/22

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

GAAP E.P.S. = $.16 

Non-GAAP E.P.S. = $.30

Reaffirmed 2022 Guidance at Non-GAAP E.P.S. of $1.30 to $1.45

Reaffirmed projected compound annual earnings and dividend growth of 6% to 8% through 2025. 

Revenues: $1.696B

GAAP to Non-GAAP Reconciliation: 

PPL 2022 Realized Gains to Date: $121.43

There were no round-trip trades before 2022. 

G. Sold 1 IRM at $55.04 - Fidelity Taxable Account: 

Quote: Iron Mountain Inc (IRM)

I would describe IRM as a document storage REIT. The documents are in paper or digital formats. 

SEC Filings

10-Q For the Q/E 6/30/21 

Iron Mountain - Investor Relations

2021 Annual Report

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Profit Snapshot: $29.61

New Average Cost per share this account = $23.01 (15 shares)

Snapshot Intraday on 9/16/22 after pare 

Dividend: Quarterly at $.6185 per share ($2.474 annually), last raised from $.611 effective for the 2020 first quarter payment.

IRM Dividend History | Nasdaq

Yield at $23.01 =  10.75%

Last Ex Dividend: 9/14/22 (owned all as of)  

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

AFFO = $270.934M

AFFO per share = $.93, up from $.85 in the 2021 second quarter

Revenues: $1.29B, up from $1.12B in the 2021 second quarter  

Net Income to Normalized FFO: 

FFO to AFFO:  

I view the AFFO number as the one that best captures cash flow. There is a $32.399M add back for routine capital expenditures. Non-cash "expenses" are deducted, either in the net income to FFO reconciliation or the FFO to AFFO calculation. 

Most Recent Buy Discussions: Item # 2.E. Started IRM in Schwab Taxable Account-Bought 10 at $26.8; 5 at $25.8; 5 at $25.25; 5 at $24.9 (12/5/20 Post); Item # 1.B. Added 3 IRM at $22.99; 2 at $22.31 (6/20/20 Post); Item # 2.F. Added to IRM in Fidelity Taxable-Bought 1 at $26.88; 2 at $26.2; 1 at $25.7; 1 at $25.52; 1 at $24.96 (12/5/20 Post)(substantive discussion); Item # 2.A. Added 1 IRM at $26.46; 1 at $26.07; 1 at $25; 2 at $23.95; 1 at $23.3; 1 at $23.76; 1 at $24.33; 1 at  $22.61; 1 at $24.33; 1 at $22.6 and 1 at $21.79 (5/2/20 Post)

Some Sell Discussions: Item # 3 Eliminated IRM in Schwab Taxable Account - Sold 19+ at $57.73  (5/5/22 Post)(profit snapshot = $631.54) Item # 2.H. Pared IRM in Fidelity Taxable Account - Sold 1 at $47.58 (10/10/21 Post)(profit snapshot = $21.6); Item #1.A. Sold 3 IRM in Fidelity Taxable-Sold 3 at $49.12 (10/1/21 Post)(profit snapshot = $86.06); Item # 2.K. Pared IRM in Fidelity Taxable Account-Sold 5 at $44.18 Item #2.L. Pared IRM in Vanguard Taxable-Sold 1 at $46.19; and Item # 2.M. Pared IRM in Schwab Taxable-Sold 1 at $46.93  (6/19/21 Post)(profit snapshots = $122.41); Item # 1.K. Sold 5 IRM at $37.69 (4/30/21 Post)(profit snapshot = $76.42); Item # 1.L. Sold 5 IRM in Schwab Account at $36.42 and Item #1.M. Sold 2.731 in Fidelity Account at $36.86 (4/1/21 Post)(profit snapshots = $73.38); Item #1.B. Sold 2 IRM at $35.63; 5 at $36.8 in Fidelity Taxable (2/27/21 Post)(profit snapshot = $54.15) ; Item # 1.B. Pared IRM-Sold 15 at $33.04 (2/22/20 Post)(profit snapshot = $36.73); Item # 1.C. Sold 10 IRM at $33.91-Used Commission Free Trade (12/26/18 Post)(profit snapshot = $12.24 ); Item # 4 Sold 50 IRM at $33.82 Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot = $398.06)

IRM Realized Gains to Date: $1,576.46

5. Bought 1 TIP .375% Coupon Maturing on 7/15/27 at 96.906- Roth IRA Account: 

Real Yield at 1.035% + inflation adjustments to the principal amount

Prior to 2022 and for most of 2022 (first positive yield on 6/10/22), the five year TIP real yield was in negative territory. 

I am discussing a few TIP purchases. Due to tax considerations, all TIP purchases are made in a ROTH IRA account. 

My focus in on TIPs that mature in 2025-2027. 

The TIP discussed here matures in July 2027.  

Vintage TIPs continue to decline as the bonds adjust in price to reflect higher nominal treasury yields and somewhat lower inflation expectations. 

On 1/3/22, the 5 year TIP had a real yield of -1.58%. 2022 Real Yield Curve Rates The closing real yield on 9/16/22 was at +1.13%. Without doing the calculation, I know that a buyer of the 5 year TIP on 1/3/22 is being hit by the infamous Double Whammy, stuck with a negative yield bond that has gone down significantly in price to reflect the current positive yield. 

During that same period, the 5 year non-inflation protected note has gone from 1.37% to 3.62%. 2022 Non-Inflation Protected Treasury Yield Curve Rates 

YTD Total Return for TIP ETFs (through 9/16/22): I do not own any, preferring to select individual TIPs to purchase that have positive real yields, and will never buy a TIP with a negative real yield.   

iShares TIPS Bond ETF (TIP)-Morningstar -9.96%

iShares 0-5 Year TIPS Bond ETF (STIP)-Morningstar -2.16%

Vanguard Short-Term Inflation Protected Securities ETF (VTIP)-Morningstar -2.15%.

STIP and VTIP will respond quicker than TIP to a rise in real yields given its shorter weighted average maturities.  

5 year TIP Breakeven Inflation Rate:  2.49% as of 9/16/22

The breakeven inflation rate is the annual average CPI rate that the TIP buyer will need to breakeven on a total return basis with the buyer of the same maturity non-inflation treasury.  

The inflation factor for this 2027 TIP purchase was 1.21123. 

The inflation factor adjusts the original par value of $1,000 by CPI. The seller of this TIP is entitled to receive the adjusted principal amount + accrued interest. 

96.906 Price x. 10 = $969.06 in unadjusted principal per bond x. 1.21123 inflation factor =  $1,173.76 in adjusted principal + accrued interest of $.81. 

This TIP was originally issued on 7/31/2017. The CPI was then at 244.61839. For my 9/16/22 purchase, the inflation factor used is the one for Monday 9/19/22, which is the settlement date.  The CPI reference point was then at 296.29. 

After 9/19, I will receive the inflation accretion to the adjusted principal amount + the semi-annual coupon applied to the principal amount as adjusted. The only reason for owning this bond is for the inflation accretion to the principal amount.  

See Institutional - TIPS/CPI Query Results; Institutional - TIPS/CPI Data

I now own 2 bonds in a RI account. 

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.