ATLO, D, GNL, KMI, MATV, OPBK, PDM, STEW, VKTX

Economy: 

One theme that I have advanced here is that problematic inflation will not be easily tamed by increasing the Federal Funds rate off 0-.25%, which was the range until March 2022, when the annual CPI rate was reported at 8.5%. Consumer prices up 8.5 percent for year ended March 2022- U.S. Bureau of Labor Statistics That opinion is partly based on my experience from the 1970s when similar annual inflation rates were not brought under control with far higher FF rates than the current range of 4.5%-4.75%. 

The last CPI report and the PCE price index for January, released last Friday, provide some evidence that the current problematic inflation is more sticky and resistant to declines than generally believed last month. 

The annual PCE price index through January 2023 was reported at +5.4%, up from 5.3% in December. The increase in January was +.6%, up from .2% in December. 

Personal Income and Outlays, January 2023 | U.S. Bureau of Economic Analysis (BEA)

While I would not yet draw a conclusion that inflation started a dominant trend back up in January, since some up and down oscillation is normal even when the dominant trend is up or down, the report does confirm that investors were overly optimistic in January about inflation coming down sufficiently to justify FF rate cuts later this year and only 1 more .25% increase after the February 2023 meeting. (see my 2/4/23 comment about the CME FedWatch tool predictions, where the more probable than not predictions were for a 25 basis point cut in November and December) 

As stated previously, I currently anticipate that the FED will increase the FF rate by 25 points in March, May and June with no rate cuts this year.  

There may be a sigh of relief when the BLS reports the annual inflation rates in February to June 2023 when inflation during that period last year was hotter than now. 

Consumer Price Index - June 2022 If the annual CPI increase is at 4% in June 2023, that will look better than it is. That would be on top of the 9.1% annual increase through June 2022. Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years: U.S. Bureau of Labor Statistics 

At some point during the inflation reports for February-June 2023, investors may return to the inflation is in the rear view mirror narrative that propelled the stock and bond markets higher in January,  as the annual rate slows, provided the month-to-month increases do not average .5% or higher. 

On a more positive note, the personal income and outlays report for January 2023 does show a rebound in personal consumption expenditures to 1.8% compared to -.1% in December. 

However, that rate of expenditures was much higher than the .6% rise in personal income suggesting that consumers in the aggregate may reduce spending, though increasing debt financed spending to cover the gap is an option for many households. U.S. credit card debt jumps 18.5% and hits a record $930.6 billion (2/3/23) 

401(k) retirement savings account balances sank 23% in 2022, Fidelity says

Berkshire Hathaway Q4 earnings 2022 (operating earnings declined by 8%)

February 2023 Treasury Yield Curve: Steady uptrend 

+++

Allocation Shifts Discussed in this Post: 

Treasury Bills-Auction Purchases: +$5,000 in principal amount

Corporate Bonds: +$10,000 in principal amount

Outflow Common Stocks: -$1,888.56

(Consisting of $2,097.19 in proceeds minus $208.63 in purchases)

Realized Gains Common Stocks: +$549.03

2023 Net Outflow Stocks and Stock Funds: -$27,353.67

+++

Early Redemption- Wilson County, TN 3% GO Maturing on 4/1/2032: 

I am fine with these early redemptions since I can use the proceeds to buy a higher yielding bond with a much shorter maturity. This municipal bond is rated AA+

++++

Putin and His Servile Orcs: 

Professor Timothy Snyder understands Putin and how he has successfully and easily manipulated the Russian population with false narratives Putin and the Presidents: Timothy Snyder (interview) | FRONTLINE - YouTube 

One of the primary false narratives is Putin's claim that the West is an existential threat to "Motherland". The U.S. and its Nato allies wanted to continue mutually beneficial economic relationships and peaceful co-existence, but Putin chose to sever those ties in pursuit of his war of aggression, imperialistic revanchism, and flagrant and multiple violations of international law and norms. 

What Putin fears is not NATO invading the "Motherland" from Ukraine, but that too many Russians will compare Ukraine's success with Putin's many failures as a leader that have resulted in a GDP less than Italy and South Korea, a Kleptocracy, a psychopathic and brutal dictator for life who has poor judgment, and no free press or independent judiciary. 

Another important point made by Snyder is that the Western nations deluded themselves into believing capitalism was sufficient to turn Russia into a peace loving country or a democracy. 

Russia will remain an authoritarian regime that will severely punish criticism of Putin's dictatorship, with no effective checks and balances on its dictator, notwithstanding an economic turn away from communism. 

I would also agree with Snyder's observation that Trump was America's gift to authoritarians worldwide. 

In a fact free, rambling speech last Tuesday, Putin blamed the West again for Russia's invasion of Ukraine and the atrocities committed daily by Russia. He also declared that the democratically elected Ukrainian government was illegitimate. 

Ukraine war: President Putin speech fact-checked-BBC News; 

Putin’s Desperate Hours - The Atlantic  

The speech was audaciously Orwellian which is normal for Putin. 

If Putin actually believes his assertions made in that speech, he is deeply and irretrievably delusional. And, as with other people suffering that kind of personality disorder, no amount of accurate contradictory information can change his opinions.   

By providing weapons to Ukraine, Putin claimed that the West is responsible for the death and destruction resulting from Russia's ongoing effort to absorb Ukraine into the Russian Federation and to terminate Ukraine's democracy and the freedoms exercised by its citizens.  

In Putin's worldview, Ukrainians just need to surrender and accept Putin as their Dear Leader for life; and their failure to do so makes them responsible for what Russia has done and will continue doing in Ukraine.

Another false claim made by Russia's dictator is that the West wants to dismember the Russian empire which is not the case when limited to the current internationally recognized Russian borders. Putin casts war as a battle for Russia's survival | Reuters 

What Putin is actually saying is that the West will resist efforts by Putin's Russia to conquer and reabsorb independent and democratic countries like Ukraine that were at one time part of the Russian or Soviet empires. Putin has never referred to Ukraine as an independent country and still regards that nation as part of the Russian Federation.Putin's new Ukraine essay reveals imperial ambitions - Atlantic Council  (7/15/21); Vladimir Putin’s Revisionist History of Russia and Ukraine | The New Yorker; Fact-checking Putin’s speech on Ukraine - The Washington Post

Leaked document reveals Putin's plans to take over Belarus - YouTube

'Shocking': Reporter says Russian losses are increasing support for Putin's war - YouTube

Putin Is 'Not Smart' Ex-Russian Diplomat Says  

Wagner: Russian warlord's feud with Putin's generals explodes into the open with gruesome PR campaign Yevgeny Prigozhin regards good military leadership as recruiting criminals and then sending them in wave attacks against entrenched Ukrainian positions defended with artillery, hoping that the Ukrainians will run out of ammunition before killing all of the Russians. 

Wagner fighters captured in Ukraine recount path from prison to war - The Washington Post ("One of the men said he watched a friend taken off to be shot — or “zeroed”— by a Wagner enforcement team for protesting deployments that sometimes led to hundreds of fighters a day being killed in and around Bakhmut.")

The Dueling Global Visions of Putin and Biden - The Atlantic (Anne Applebaum)

Ukraine's allies must 'double down' on military support, says UK prime minister - BBC News - YouTube

The most current estimate is that 200,000 Russians have been killed or wounded in Ukraine as of 2/17/23: Ministry of Defence 🇬🇧 on Twitter: "Latest Defence Intelligence update on the situation in Ukraine - 17 February 2023- Twitter As noted, there is a very high ratio of those killed to wounded which highlights the lack of medical care near the front lines. Maybe after another major mobilization and 500,000 Russians killed or wounded in Ukraine, some Russians may even start to ask themselves whether everything is going according to plan and is firmly under Putin's control. 

Russia’s New Offensive Sends Conscripts Into the Teeth of Ukraine’s Lines - The New York Times (1/27/23)

President Zelensky welcomes UN vote for withdrawal of Russian troops from Ukraine - BBC News - YouTube; UN condemns Russian invasion ahead of anniversary - BBC News The resolution called for Russia to withdraw its military from Ukraine. 141 nations voted for the resolution and 7 voted against it including Russia and Belarus controlled by Russia. North Korea and Syria also support Russia's invasion. 32 nations, including China, India, and Iran abstained. 

Russian invasion of Ukraine: A timeline of key events on the 1st anniversary of the war Contains graphic images of Russia's atrocities and genocidal operations in Ukraine. 

Putin cancels decree underpinning Moldova's sovereignty in separatist conflict | Reuters (2/21/23)  

US Treasury takes 'one of its most significant sanctions actions to date' on anniversary of Russia's war against Ukraine 

Former Russian President Dmitry Medvedev threatens Polish borders as Moscow mounts aggression against other European nations; Putin ally fires back at Biden’s Poland speech with nuclear warning | The Hill

Russian Court Sentences Lawmaker To Seven Years In Prison For Anti-War Statements

War in Ukraine Has Changed Europe for Good - The New York Times Any illusion that Russia will change has been shattered.   

'The Ukraine war is as neo-colonial as it gets' - YouTube

Soviet war crimes - Wikipedia  (focuses just on WWII Russian war crimes)

How One Besieged Hospital in Ukraine Treated Wounded Citizens, Soldiers, and Invading Russian Troops | Vanity Fair

The war in Ukraine will likely continue for years. Putin knows that he can not back down now and remain alive and in power. So it is irrelevant to Putin IMO how many Russians die in Ukraine or how much harm to the Russian economy is done by continuing his war of conquest.   

++++

Trump and His Party: 

Trump Used $10 Million of Donor Money to Pay Personal Legal Bills – Rolling Stone

Trump Uses Ohio Visit To Promote His Own Brand Of Water

Republican Former Arizona AG Mark Brnovich Sat On Records Refuting Trump Election Fraud Claims; Ex-Attorney General in Arizona Buried Report Refuting Voter Fraud Claims - The New York Times; Arizona's top prosecutor kept private records that debunked election fraud - The Washington Post 

Yes, a GOP Bill Would Make the AR-15 the 'National Gun' | Snopes.com; George Santos backs bill to make AR-15 America’s ‘National Gun’

Ron DeSantis (R-FL) made it clear that U.S. support for Ukraine will end or be substantially reduced once he is elected President. Biden Went to Kyiv; DeSantis Went to Fox & Friends - The Bulwark; DeSantis downplays Russia threat after Biden visit - POLITICO; Ron DeSantis Calls Russia's Military 'Third Rate,' No Threat to NATO DeSantis will be Putin's candidate for President. 

When the republicans were in control over the House in 2011, they passed a plan to end traditional Medicare for those then under 55 and replace it with a voucher program that republicans call "premium support" for purchases of private healthcare insurance. DeSantis supported that plan when he ran for Congress in 2012. Ron DeSantis once expressed support for privatizing Social Security and Medicare 

The Congressional Budget Office and other organizations found that the republican voucher plan would double the cost, compared to traditional Medicare, for those unfortunate retirees who were relegated to the republican alternative.  Proposed Changes to Medicare in the "Path to Prosperity" - pdf.; CBO Report: Ryan Plan Specifies Spending Path That Would Nearly End Most of Government Other Than Social Security, Health Care, and Defense by 2050 | Center on Budget and Policy Priorities

The purpose of the GOP plan was to shift increases in medical costs to seniors and away from the government. Almost every republican in the House voted for this result. GOP's Plan "Path to Prosperity" - Wikipedia According to polling in 2011, a majority of republicans favored turning Medicare into the government providing premium support for the purchase of private health insurance Kaiser Health Polling.pdf 

Some in GOP worry DeSantis has overstepped against ‘wokeness’- YouTube DeSantis is just another demagogue who is consumed by his own self-created wokeness. Republicans use ‘wokeism’ to attack left — but struggle to define it - The Washington Post 

The G.O.P.’s Long War Against Medicare and Social Security - The New York Times

Marjorie Taylor Greene (R-GA) wants the red states to succeed from the Union and wants to impeach Biden over his trip to Ukraine. 

Marjorie Taylor Greene calls for a 'national divorce' between liberal and conservative states;

Marjorie Taylor Greene Vows to Impeach Joe Biden for Supporting Ukraine; 

Marjorie Taylor Greene’s Civil War - The Atlantic The author notes that the Texas republicans approved a platform last year that called for a referendum on secession from the U.S.  The House Speaker, Kevin McCarthy (R-CA), has "forged an ironclad bond" with Greene.

MTG Calls For Biden’s Impeachment Over Surprise Kyiv Visit

+++++

1. Corporate Bonds: +$10,000 in principal amount

A. Bought 2 HCA 5% SU Maturing on 3/15/24 at a Total Cost of 99.717: 

Issuer: HCA Healthcare Inc. (HCA) 

HCA Analyst Estimates | MarketWatch

HCA SEC Filings 

2022 Annual Report 

SEC Filed Earnings Press Release for the Q/E 12/31/22 (net income of $2.081B)

Finra Page: Bond Detail (prospectus not linked)

Credit Ratings: Baa3/BBB- 

YTM at Total Cost: 5.274%

Current Yield at TC = 5.014%

B. Bought 1 Becton Dickinson 3.363% SU Maturing on 6/6/24 at a Total of 97.828: 

Issuer Becton Dickinson & Co. (BDX) 

BDX Analyst Estimates | MarketWatch

BDX SEC Filings 

SEC Filed Earnings Press Release for the Q/E 12/31/22 

FINRA Page: Bond Detail (prospectus not linked)

Credit Ratings: Baa2/BBB

YTM at Total Cost = 5.103%

Current Yield at TC = 3.4377%

I now own 2 bonds. 

C. Bought 1 Boston Properties LTD 3.8% SU Maturing on 2/1/24 at a Total Cost of 98.666: 

Issuer: Operating entity for Boston Properties Inc. (BXP)

BXP SEC Filed Earnings Press Release for the Q/E 12/31/22 

Finra Page: Bond Detail (prospectus not linked)

Prospectus 

Credit Ratings: Baa1/BBB+

YTM at Total Cost = 5.272%

Current Yield at TC = 3.85%

I now own 2 bonds. 

D. Bought 1 American Water Capital 3.85% SU Maturing on 3/1/24 at a Total Cost of 98.699:

Issuer: Wholly owned entity of American Water Works Co. (AWK) who guarantees the notes. 

AWK Analyst Estimates | MarketWatch

AWK SEC Filings 

AWK SEC Filed Earnings Press Release for the Q/E 12/31/22 

FINRA Page: Bond Detail

Prospectus 

Credit Ratings: Baa1/A

YTM at Total Cost: 5.203%

Current yield at TC = 3.9%

E. Bought 1 FNB 5.15% SU Maturing on 8/25/25 at a Total Cost of 99.236: 

Issuer: F.N.B. Corp. (FNB) 

FNB Analyst Estimates | MarketWatch

FNB SEC Filings 

SEC Filed Earnings Press Release for the Q/E 12/31/22 

FINRA Page: Bond Detail 

Credit Ratings: Baa2/BBB- 

YTM at Total Cost: 5.48%

Current yield at TC = 5.1896%

I now own 2 bonds. 

I eliminated my remaining common stock positions earlier this year. Item # 2.E. Eliminated Remaining FNB - Sold 15+ at $14.33 (2/5/23 Post)(profit snapshot = $117.17); Item # 4.A. Eliminated FNB in Schwab Account - Sold 50+$13.045 and Item # 4.B. Eliminated FNB in Vanguard Taxable Account - Sold 57+ at $13.28 (1/10/23 Post)(profit snapshot = $651.75). I prefer owning this 5.15% SU bond to the common shares.  As previously noted, FNB slashed its quarterly dividend to $.12 per share from $.24 in 2009 and has not raised it since that 50% cut. 

F. Bought 2 Devon Energy 5.25% SU Maturing on 9/15/24 at a Total Cost of 99.818: 

Issuer: Devon Energy Corp. (DVN) 

DVN  Analyst Estimates | MarketWatch

SEC Filed Earnings Press Release for the Q/E 12/31/22 

SEC Filings 

2022 Annual Report 

FINRA Page: Bond Detail (prospectus not linked)

Prospectus 

Credit Ratings: Baa2/BBB

YTM at Total Cost: 5.372%

Current Yield at TC = 5.26%

G. Bought 2 Weingarten Realty 4.45% SU Maturing on 1/15/24 at a Total Cost of 99.226: 

Weingarten was acquired by Kimco Realty Corp. (KIM) 

This SU is now a KIM obligation. 

KIM SEC Filed Earnings Report for the Q/E 12/31/22 

KIM SEC Filings 

KIM 2022 Annual Report 

FINRA Page (prospectus linked)

Credit Ratings: Baa1/BBB+

YTM at Total Cost: 5.355%

Current Yield at TC = 4.4847%

My apex in my bond ladder maturities is in 2024 with $411,000 in principal amount. 

2. Small Ball Buys: 

A. Added 5 PDM at $9.76; 5 at $9.2: 

Quote: Piedmont Office Realty Trust Inc. Cl A  (PDM)

5 shares bought 1 day after the ex dividend date. 

Working my way up to 100 shares. 

Investment Categories: Equity REIT Common and Preferred Stock Basket Strategy/Bond Substitute 

SEC Filings

New Average cost per share: $11.07 (90+ shares)

Dividend: Quarterly at $.21 per share

PDM Dividend History-Nasdaq

I am reinvesting the dividend. 

Yield at New AC =  7.59%

Last Ex Dividend: 2/23/23 (owned 85+ as of)

I discussed the 2022 4th quarter report in my last post and have nothing further to add here. Item # 3.C. Added 5 PDM at $10.3 (2/20/23 Post), SEC Filed Press Release 

B. Added 1 D at $57.19; 1 at $56.64: 

Quote: Dominion Energy Inc

"As of December 31, 2022, Dominion Energy’s portfolio of assets includes approximately 31.0 GW of electric generating capacity, 10,600 miles of electric transmission lines, 78,500 miles of electric distribution lines and 93,500 miles of gas distribution mains and related service facilities, which are supported by 4,000 miles of gas transmission, gathering and storage pipeline. As of December 31, 2022, Dominion Energy operates in 15 states and serves approximately 7 million customers." 2022 Annual Report at page 11

SEC Filings

Investor Relations | Dominion Energy

Dominion Energy Inc Profile | Reuters

Dominion Energy, Inc. (D) Interactive Stock Chart (Waterfall forms near $85 in mid-August 2022)

Last Discussed: Item # 7.A. Restarted D - Bought 2 at $60.42, 1 at $59.03, 2 at $58.42  (11/15/22 Post) I discussed the 2022 third quarter report and negative dividend history in that post. 

Last Sell Discussions: Item # 2.K. Eliminated D in Fidelity and Vanguard Taxable Accounts - Sold 5 at $80.92; 5 at $81.95 (3/10/22 Post)(profit snapshots = $72.41); Item # 2.D. Eliminated D in Schwab Account- Sold 4 at $80.59 (3/3/22 Post)(profit snapshot: $36.05)

New Average cost per share = $58.65  (7 shares)

Snapshot Intraday on 2/24/23

Dividend: Quarterly at $.6675 per share ($2.67 annually)

Dividends & Splits | Dominion Energy

Yield at New AC = 4.55%

Last Ex Dividend: 12/1/22

Last Earnings Report (Q/E 12/31/22): SEC Filed Press Release 

GAAP E.P.S. = -.07 per share 

Non-GAAP E.P.S. = $1.06

"Differences between GAAP and operating earnings for the period include an impairment of certain nonregulated solar generation facilities, the mark-to-market impact of economic hedging activities, gains and losses on nuclear decommissioning trust funds, regulated asset retirements and other adjustments." Details are provided in the press release. 

2022 Non-GAAP E.P.S. = $4.11

4th Q Revenues: $4.913B

Other Recent Sell Discussions: Item # 3.E. Pared D-Sold 2 at $80.23, 2 at $80.24 (5/14/21 Post)(profit snapshot = $41.52); Item # 1.D. Eliminated D-Sold 3 at $74.04 (8/8/20 Post)(profit snapshot = $24.97); Item #1.D. Sold 13 D at $78.17 (6/20/20 Post)(profit snapshot = $51.81)

Purchase Restriction: 1 or 2 share lots, averaging down only. The yield allure of utility stocks as bond substitutes is diminished when treasury bill yield is more attractive. 

3. Small Ball Sells: 

In my taxable accounts, I am gradually reducing duplicate stock positions as a house cleaning effort.

A. Eliminated MATV - Sold 30 at $27.97: 

Quote: Mativ Holdings Inc.  (MATV)

SWM and Neenah Complete Merger to Become Mativ, a ~$3 Billion Global Leader in Specialty Materials (July 2022)

Proceeds: $839.09

Advanced Technical Materials and Fiber-Based Solutions | Mativ

MATV SEC Filings

MATV Analyst Estimates | MarketWatch

Profit Snapshot: $209.35 (2/23/23 sale only) 

Last Discussed:  Item # 5.C. Eliminated MATV in Schwab Account - Sold 18+ at $25.06 and Item #5.D - Pared MATV in Fidelity Account - Sold 15 at $26.05 (1/23/23 Post)(profit snapshots = $107.15)

Last Buy Discussion: Item # 5.A. Added to MATV in Fidelity Taxable Account- Bought 5 at $19.3; 5 at $18.55 (11/22/22 Post)

Dividend: Quarterly at $.40 per share

Next Ex Dividend: 3/8/23

Last Earnings Report (Q/E 12/31/22): I did not understand the enthusiastic investor reaction to this report so I eliminated my position. The stock rose $2.76 or 10.74% in response. 

SEC Filed Earnings Press Release 

GAAP E.P.S. = $.04

Non-GAAP E.P.S. at $.56

Consensus non-GAAP at $.66

GAAP to Non-GAAP Reconciliation: Related to the Merger

Revenues: $660.1M

Organic Revenue Growth: +2% including negative currency impacts and +6% in constant currency. 

I do not have access to any analyst reports. 

B. Eliminated GNL in Schwab Taxable Account - Sold 20+ at $14.32: 

Quote: Global Net Lease Inc.

GNL SEC Filings

Proceeds: $225.16

Profit Snapshot: $72.33

Last Discussed: Item # 2.F. Eliminated GNL in Vanguard Taxable Account - Sold 28 at $14.61 (2/20/23 Post) 

Last Earnings Report (Q/E 12/31/22): This report was released after my last discussion linked above. 

SEC Filed Press Release 

SEC Filed Supplemental 

SEC Filed Investor Presentation for the 4th Quarter 

AFFO per share = $.41, down from $.43 in the 2021 4th Quarter. 

Revenues: $93.948M (fees paid to external manager generally hover in the 10-11% of revenue range)

Properties: 309

Square Footage: 38.2M

Weighted Average Remaining Lease Term: 8 years

Weighted Average Interest Rate Cost: 4%

Leased: 98%

41% Office, 56% Industrial / Distribution and 3% Retail (based on an annualized straight-line rent)

Current Taxable Account Position: In taxable accounts, I still own 1,325+ shares in my Fidelity taxable account. My taxable cost basis was recently revised down to account for the ROC based dividends paid in 2022. The new revised cost per share is $13.94: 

Price as of 2/24/23 Close

The entire $1.6 per share paid in dividends last year was classified as return of capital ("ROC") :  

In other words, there was no GAAP net income. GNL reported a GAAP loss of 9 cents per share. 2022 AFFO per share was reported at $1.67 with the annual dividend at $1.6.  

When evaluating the success or failure of this position, I define success as any total return in excess of the dividends paid before ROC adjustments to the tax cost basis. 

The total return for these shares is not the $72.33 taxable gain plus the the $.40 quarterly dividend payment per share. That would double count the dividends classified as ROC as part of the taxable gain and the dividend calculation. 

Of the $72.33 taxable gain, $52.01 was attributable to a 7 share purchase on 3/18/20: 

Taxable Cost is shown at $48.04.

The original taxable cost was $72.88 before ROC adjustments to the tax cost basis: 

The actual profit realized from these 7 shares would be $27.36, not $72.33, which still meets my goal of any profit before ROC adjustments to the tax cost basis + the dividends.  After recalculating the profit based on original cost, I can now included the entire $.40 per share quarterly dividend as part of the total return.  

Since I did not sell any shares in 2022, the entire dividend paid by GNL will be tax free in that year, but those dividends will be classified as part of my 2023 reportable taxable gain for selling the shares. 

I would an additional observation which involves the current U.S. law that permits a stepped up tax cost basis to market value after death. Say, for example, I owned 1,000 GNL on my date of death that I bought at $16. The stock closed at $20 on my DOD. Assume further that the cost basis of those shares had been reduced to $5 due to ROC adjustments during my ownership period. My heirs could step up the cost basis to $20 for the inherited shares (or possibly use the 6 month after DOD alternate valuation date). Then assume the shares were sold by them at $18. That is not a $13 gain per share, which would have been the case if I sold the shares while living, but a $2 loss per share to them. What is the Cost Basis of Inherited Stock?- JP Morgan Wealth Management; Step-Up in Basis: Definition, How It Works for Inherited Property   (same stepped up cost basis is applied to valuing my home built in 1982). I am not referring to estate taxes here but to the profit or loss realized by my heirs when they sell inherited assets)  

C. Eliminated OPBK in Schwab Account  - Sold 10 at $11.47: 

Quote: OP Bancorp

Proceeds: $114.7

OPBK SEC Filings

OPBK Analyst Estimates | MarketWatch

Investment Category: Regional Bank Basket Strategy

I am keeping the 100 shares held in my Fidelity account. Item # 1. Bought 100 OPBK at $10.56 (12/3/21 Post)  

Profit Snapshot: +$7.69

Item # 2.D. Bought 10 OPBK at $10.71 in Schwab Account (8/2/22 Post) 

Dividend: Quarterly at $.12 per share, last raised from $.10 effective for the 2022 third quarter payment. 

OP Bancorp (OPBK) Dividend History | Seeking Alpha

Last Ex Dividend: 2/8/23 (owned as of)

Last Earnings Report (Q/E 12/31/22): SEC Filed Press Release 

Comparisons are to the 2021 4th quarter. 

E.P.S. = $.51, down from $.59

The lower E.P.S. compared to the 2021 4th quarter resulted from a 55.8% decrease in non-interest income primarily due to lower gains on loan sales. The rise in interest rates did cause a $3.1M or 18.1% rise in interest income. 

NIM: 4.08%, up from 4.07%

Efficiency Ratio: 48.36%, up from 39.24%

NPL Ratio: .18%, down from .24%

Charge off ratio = .03%, down from .05%  

ROA = 1.5% 

ROE = 18.58%

Non-interest Bearing Deposits at 37.2%. 

D. Eliminated ATLO in Fidelity Account - Sold 5 at $24.84: 

Quote: Ames National Corp.

Ames National Corporation Profile | Reuters

ALTO SEC Filings

ATLO Analyst Estimates | MarketWatch

Proceeds: $124.19 

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: +$10.97

I am keeping the 20 ATLO shares owned in my Schwab account, with a $22.88 AC per share. 

Last Discussed: Item # 3.D. Added to ATLO in Schwab Account - Bought 10 at $20.2 (7/27/22 Post) 

Dividend: Quarterly at $.27 per share, last raised from $.26 effective for the 2022 second quarter payment.  

Ames National Corporation Dividend History

Last Ex Dividend: 1/31/23

Last Earnings Report (Q/E 12/31/22): SEC Filed Press Release 

I viewed the report unfavorably. 

NIM declined to 2.45% from 2.65% in the 2021 4th Q.  E.P.S. declined to $.49 from $.58. Part of the E.P.S. decline was attributable to lower PPP fees recognized as income. 

Ames is an example of a small bank that has been hurt by the rapid rise in interest rates last year. That can occur when the bank is incorrectly positioned for a rapid rise in interest rates. The interest expense ledger rises faster than interest income.  

Comparison are to the 2021 4th Q: 

Deposit interest cost rose from $931,000 to $3.395M. 

Other borrowing costs increased to $610,000 from $37K. 

Interest and some dividend income rose to $16.798M from $14.477.

Net Interest Expense: +$3,037,000

Net Interest/Dividend Income: +$2.321M

Interest income can rise as low yielding fixed coupon securities mature and are replaced with higher yielding ones. 

E. Eliminated KMI in Two Taxable Account- Sold 10 at $17.34 and 17+ at $17.37: 

Quote: Kinder Morgan Inc

Proceeds: $484.71 

I am keeping the 100 share purchased in my Vanguard Taxable Account. Item # 1. Bought 100 KMI in Vanguard Taxable Account at $15.89 (1/7/22 Post) 

KMI is the largest gas transmission and storage company in the U.S.  

My most important issues with KMI are the debt level and the use of cash to buy back stock rather than to reduce debt. 

Long Term Debt as of 12/31/22: $28.288B

Short Term Debt as of 12/31/22: $3.058B

KMI SEC Filings 

2022 Annual Report 

Asset Map

Kinder Morgan Projects

Kinder Morgan History

Profit Snapshots: +$148.56

Item # 3.C. Bought 10 KMI at $12.5; 5 at $12.32; 2 at $11.95- Fidelity Taxable (11/7/20 Post)

Dividend: Quarterly at $.2775, last raised from $.27 effective for the 2022 second quarter payment. 

Kinder Morgan Dividend History

Last Ex Dividend: 1/30/23 (owned as of)

Last Earnings Report (Q/E 12/31/22): SEC Filed Earnings Press Release 

E.P.S. = $.30

Adjusted E.P.S. = $.31

Revenues: $4.579B

Distributable Cash Flow: $1.217B

2023 Guidance: "For 2023, KMI expects to generate net income attributable to KMI of $2.5 billion ($1.12 per share) and declare dividends of $1.13 per share, a 2% increase from the dividends declared for 2022. The company also budgeted to generate 2023 DCF of $4.8 billion ($2.13 per share) and Adjusted EBITDA of $7.7 billion and to end 2023 with a Net Debt-to-Adjusted EBITDA ratio of 4.0 times, well below our long-term target of 4.5 times."

Analyst Reports Available to Schwab Customers: 

Morningstar (1/30/23): 3 stars with a FV estimate of $17.5 with a narrow moat

S&P (1/19/23): 3 stars with a $20 PT  

Argus (1/19/23): Hold 

SU Bonds: I currently own 3 KMI SU bonds: Rated Baa2/BBB

1 KMI 4.3% SU Maturing on 6/1/25 

2 KMI 4.25% SU Maturing on 9/1/24 

F. Eliminated STEW in Fidelity Taxable Account - Sold 20 at $12.64:

SRH Total Return Fund Inc. (STEW)

Proceeds: $252.79

This CEF was formerly known as the Boulder Income & Growth Fund (BIF). Prior trades were under the former name and BIF symbol.  

Profit Snapshot: +$72.96

I am keeping the 100 share lot owned in my Vanguard account. Item # 2.A Bought 100 BIF in Vanguard Taxable Account at $10.08; 10 at $9.95 (11/7/2020) I previously sold 10 shares in that account. I may add at lower prices in my Roth IRA accounts. 

SEC Filed Shareholder Annual Report (period ending 11/30/22; total investments cost at $774.22+M, valued at $1.768+B) 

The unrealized gain as of 11/30/22 was dominated by a large position in Berkshire Hathaway which was then weighted at 36.6% of assets.

Sponsor's Website: SRH Total Return Fund - The Fund

Top 10 Holdings as of 1/31/23: 

Dividends: Quarterly at $.125 per share

Last Ex Dividend: 1/23/23

Tax Basis for Distributions - 2022 and 2021 Fiscal Years: 

Data as of 1/22/23: 

Closing Net Asset Value per share: $15.22

Closing Market Price: $12.58

Discount: -17.35%

Average Discounts: 

1 Year     = -18.39%

3 Years   = -16.56%

5 Years   = -16.38%

Sourced: STEW - CEF Connect 

Leveraged: Yes, with senior unsecured notes. 

Last Sell Discussions: Item # 1.E. Sold 10 BIF at $11.08 (1/9/21 Post) (profit snapshot = $10)(contains prior profit snapshots that total $560.27 including the $10 profit discussed in that post); Item # 3.E. Eliminated BIF-Sold 156+ at $11.42 (12/18/19 Post)(profit snapshot = $127.2); Item # 3.C. Sold 50 BIF at $11.28 (11/13/19 Post)(profit snapshot = $1.63); Item # 3.B. Eliminated BIF: Sold 116+ (2/16/17 Post)(profit snapshot = $137.25)

The largest dollar gain was in 2013: 

200 Shares +$180.07

STEW-BIF Realized Gains to Date: $633.23

G. Pared VKTX-Sold 5 at $11.31: 

Quote: Viking Therapeutics Inc. 

Viking Therapeutics – Pipeline Overview

VKTX SEC Filings

Website: Viking Therapeutics Home - Viking Therapeutics

Proceeds: $56.55  

Investment Category: Blackjack Hand, part of the Lottery Ticket Basket Strategy

Profit Snapshot: +$27.17 

Average cost per share before pare = $4.65

Average cost per share after pare: $4.45

Last Discussed: Item # 1.I. Added to Lotto VRTX Bought 5 at $4.67; 3 at $4.32; 10 at $3.95 (1/20/22 Post) 

In the event Viking reports a negative trial result for its NASH drug, this sale will make me feel a tad better. If this drug fails, I would anticipate a price plunge to less than $2. My clinical stage drug company stocks are feast or famine, death or nirvana, with little or no daylight in between. 

Viking has two important drugs in clinical trials. 

NASH: Viking Therapeutics Presents New Data from Phase 2 Study of VK2809 in Patients with Non-Alcoholic Fatty Liver Disease (NAFLD) and Elevated LDL-Cholesterol at The Digital International Liver Congress™ 2020 - Aug 28, 2020 Data from a phase 2A trial is expected in the 2023 second quarter. 

Weight loss (just started last year): Viking Therapeutics Announces Initiation of Phase 1 Clinical Trial of VK2735, Company's Lead Dual GLP-1/GIP Receptor Agonist for various metabolic disorder (1/10/22); Viking Therapeutics Presents Preclinical Data on Novel Dual GLP-1/GIP Agonists at ObesityWeek® 2021 The Phase 1 trial data is expected this quarter. 

The next few weeks will be critical for this stock. 

Last Loss Report (Q/E 12/31/22): SEC Filed Press Release 

($18.9M) or ($.26 per share)

Cash, cash equivalents and short term investments: $155.485M

I am not sure whether I should be dismayed or encouraged by this company's failure to raise capital in response to the recent price spike. It may be a lost opportunity, or a possible buyout discussion underway by a major drug company, or a willingness to roll the dice that the upcoming trial results will cause an appreciable gain in the stock price allowing more shares to be sold at a higher price. 

Every major drug company that has tried a new compound for NASH has failed. VKTX stock priced recently spiked when Madrigal Pharmaceuticals Inc. (MDGL) reported positive results for its NASH drug last December. Madrigal Announces Positive Topline Results from the Pivotal Phase 3 MAESTRO-NASH Clinical Trial of Resmetirom for the Treatment of NASH and Liver Fibrosis MDGL closed at $234.83 (12/19/23), up from the prior close of $63.8. VRTX closed at $6.99 on 12/19/23, up from the prior close of $4.02.  

4. Treasury Auction Purchases: $5,000 in principal amount 

A. Bought 1 Treasury Bills at 2/21/23 Auction: 

Matures on 2/22/24

1 Year T Bill 

Interest: $48.48

Investment Rate: 5.046%

B. Bought 2 Treasury Bills at 2/22/23 Auction:

Matures on 6/27/23

119 Day Bill

Interest = $31.93

Investment Rate:  4.977%

C. Bought 2 Treasury Bills at 2/23/23 Auction: 

58 Day Bill 

Matures on 4/25/23

Interest: $14.5

Investment Rate:  4.759%

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.