Economy:
As expected, the FED raised the FF rate by .25%. The new range is 5.25% to 5.5%. Federal Reserve issues FOMC statement The new rate is a 22 year high.
The government currently estimates that real GDP increased at a 2.4% annual rate in the second quarter, higher than the consensus. GDP 2nd Quarter.pdf
The growth in personal consumption expenditures was estimated at 1.6%, down from 4.2% in the 2023 first quarter. Most of the PCE growth was in services rather than goods:
 |
| Table 1 |
The monthly PCE price index is released as part of the Income and Outlays reports. The report for June was released yesterday. Personal Income and Outlays, June 2023 | U.S. Bureau of Economic Analysis (BEA)
Annual Core PCE Prices: 4.1%, down from 4.6% through May
Annual Total PCE Prices: 3%, down from 3.8% through May
10 years of rally in U.S. house prices could end, says Robert Shiller
Pending Home Sales Rose 0.3% in June, First Increase in Three Months (The pending home sales index was down 15.6% Y-O-Y)
The average annual homeowner insurance premium in Florida has increased by over 100% in three years. The annual average is now at about $6,000 and is expected to rise to $9,000 next year. Hurricane Ian caused over $112B in damage last year. One major insurance company, Farmers, has left the state and others may follow.
With Hurricane Season Looming, Florida Faces an Insurance Meltdown | Barron's
My last annual insurance premium on my home was $1,466 this year. Annual property taxes, county and city, are about $2,700. The house is worth about $820,000.
According to the Kelly Blue Book, the average transaction price for a new vehicle purchased in the U.S. was $48,808 in June. Average New Car Price Hit $48,808 in June - Kelley Blue Book The average used car price was $27,147. Average Used Car Price Held Steady in June - Kelley Blue Book I am still driving a 2007 Saturn Aura which runs just fine. I bought the car new and paid about $21K as I recall.
I am becoming more concerned about the high prices for homes and cars when inflation has driven the cost up of necessary expenditures. The squeeze on discretionary spending has to be tightening for most households, mostly in the bottom 4 quintiles of annual income.
The number of middle income households that can no longer afford a median price house has to be rising significantly as well.
 |
| December 2024 |
+++++
Allocation Shifts Discussed in this Post:
Corporate Bonds: +$6,000 in principal amount excluding proceeds from a 2 bond sale.
Treasury Bills Purchased at Auction: $7,000 in principal amount
CDs: $1,000
Net Outflow U.S. Common Stocks: -$480.51
(consisting of $1,182.47 in proceeds and $701.96 in purchases)
Canadian Stock: +C$3,417 (valued at US$2,562.75)
Net Inflow Common Stocks: +$2,082.24
Equity Preferred Stocks: +$217.25 (yield at 8.2%)
2023 Net Outflow Common Stocks/Stock Funds= -$32,115.22
+++++
Putin and His Servile Orcs:
Ukraine war: Kyiv claims success as southern fighting intensifies - BBC News
Thomas Graham, senior fellow at the Council of Foreign Relations, made this comment about a peace agreement: "The Russians are more than happy to talk about Ukraine’s capitulation, I don’t think they are seriously interested in any talks about a resolution of the Ukraine crisis short of that at this point."
Putin told African leaders last week that Russia voluntarily withdrew its forces from Kiev last year to create the conditions for a peace agreement. This is an alternate reality creation worthy of Trump. Russia withdrew because it was defeated as everyone who has access to accurate information knows.
Putin has placed himself in a box with no escape hatch other than Ukraine's capitulation. If that requires the loss of 1 million Russian lives and a collapse of the Russian economy, then that is acceptable to Putin since both his life and power are at risk unless Russia's invasion succeeds in turning Ukraine into another Belarus at a minimum.
The Ukrainians will fight the Russian invaders until there is no capacity left to fight or victory.
While there will always be profound disagreements about policy matters in the U.S., with many citizens having low opinions about the U.S. President and Congress, there is no doubt that everyone would unite to fight a Russian invasion force crossing the border. For some reason, Putin was incapable of comprehending why Ukrainians would resist being ruled by a Putin installed puppet regime becoming another Belarus whose independence is only an illusion.
Why Putin disastrously Invaded Ukraine. Here's What happened. - YouTube
The Orcs expanded their attacks on the world's grain supply last week by destroying Ukrainian grain stored near the border with Romania. Ukraine war: Russia attacks grain stores at River Danube ports - BBC News That facility is located just across the Danube river from Romania. Russia used drones that lack accuracy. No sane Russian leader would risk one of the missiles or drones hitting a target in Romania, a NATO member, just to destroy food supplies intended for export to countries who need it. This attack is just another example of Putin's atrotriously bad judgment.
The war in Ukraine has reminded people throughout the world that Russia is a both a terrorist and an Orwellian state. It would be extremely foolish IMO to believe that will ever change.
In the past, Putin has threatened to invade Poland, Romania and the Baltic States, triggering a war with NATO. Putin 'privately threatened to invade Poland, Romania and the Baltic states'
Putin has recently threatened Poland. Putin threatening to 'use Wagner fighters to invade strip of land between Poland and Lithuania' | Daily Mail Online; Tensions Heat Up Between Russia and Poland This narrow strip of land is called the Suwalki Corridor or Gap. The most dangerous place on earth – POLITICO; Explainer: Suwalki Gap and Lithuania-Russia face-off over Kaliningrad – EURACTIV.com
Putin claims that Poland wants to annex western Ukraine. Putin Warns That Ukraine Could Be Invaded and Occupied by Poland
If Putin wants to start a war with NATO to further distract Russians from his many failures as an incompetent authoritarian leader for life, notwithstanding his army's inability to beat a much smaller Ukrainian army even after suffering massive losses in both men and material, then his mental illnesses have probably been severely aggravated by dementia that has led to him having even more delusional thoughts unmoored from reality. Putin's Bizarre Memory Lapse Sparks 'Dementia' Rumors
Russian missile strikes hit Ukrainian city of Odesa, killing at least 1 and damaging historic cathedral - CBS News; ODESA MASSIVE ATTACKS. Vlog 430: War in Ukraine-YouTube Those terrorist attacks occurred last Sunday. The Orcs targeted the historic Transfiguration Cathedral for destruction. Historic Ukrainian cathedral badly damaged in Russian strikes | CNN The Russian attacks included other structures in Odessa that had been designated by UNESCO as protected historic sites. Children were among those injured in this Russian terrorist attack.
Russia starved millions in Ukraine during what is known as Holodomor.
How Joseph Stalin Starved Millions in the Ukrainian Famine | HISTORY
Ukrainians are breaking their ties with the Russian language - The Washington Post A new generation of Ukrainians have grown to hate Russians, and deservedly so.
Putin appeared paralyzed and unable to act in first hours of rebellion - The Washington Post
In a recently published article, Anne Applebaum brought attention to Russia building gulags to imprison and torture Ukrainians. Russia Has a New Gulag - The Atlantic; Incompetence and Torture in Occupied Ukraine - The Atlantic This is to be expected from Russians and would happen in any country invaded by them.
What watching five straight days of Russian TV reveals about Putin’s Russia - YouTube
Video: See what Ukraine is using to attack Russia in the Black Sea | CNN (the sea drone carries 700 pounds of explosives and is capable of hitting a target 500 miles from the coast)
+++
Trump and His Deeply Reactionary, Anti-Democracy, Science Denying, Fact Free Conspiracy Generating Trumpsters:
RealClearPolitics - 2024 Republican Presidential Nomination
RealClearPolitics - Election 2024 - General Election: Trump vs. Biden
New criminal charges were filed against Trump and two other individuals in the documents case. READ: New charges in Trump Mar-a-Lago classified documents case (see pages 27-30 that summarizes the information that the government claims supports the the new obstruction charge); The incredibly damaging timeline of the alleged Mar-a-Lago coverup - The Washington Post
Some of the evidence is summarized in these excerpts:
 |
| P.27 |
The government alleges that Trump, Walt Nauta and a new defendant Carlos De Oliveira requested another employee, Yuscil Taveras ("Trump Employee 4"), to delete security footage to keep it from prosecutors. The government served a subpoena for the video footage that showed Walt Nauda, who was previously charged, moving documents out of storage. The video is now a central piece of evidence in the obstruction of justice charges.
‘2000 Mules’ but No Evidence - WSJ This "documentary" of alleged voter fraud was narrated by Dinesh D'Souza and funded by True the Vote who has raised millions. True the Vote Raised Millions to Combat Voter Fraud—But No One Really Knows Where the Money Went This organization filed claims in Georgia and Arizona alleging voter fraud in the 2020 election. Georgia sued the group demanding evidence of its claims, but True the Vote refused to comply with a subpoena and attempted to withdraw its complaint rather than to comply. Georgia sues True the Vote group over refusal to produce evidence of '2000 Mules' claims
Arizona is also seeking proof of this organizations claims of voter fraud but has yet to receive the data:
Sourced: Letter from Chief Special Agent Reginald Grigsby, Arizona Attorney General.pdf Arizona's AG at this time was the republican Mark Brnovich.
Donald frequently cites the 2000 Mules movie as his proof for election fraud. Protect Democracy sues makers of election conspiracy film '2,000 Mules'; AG Ken Paxton, other Republicans push debunked “2000 Mules” film | The Texas Tribune; ‘2000 Mules’ Repackages Trump’s Election Lies - The New York Times; Even the geolocation maps in ‘2000 Mules’ are misleading - The Washington Post; Evidence Gaps in '2000 Mules' - FactCheck.org; Barr Laughs Off Election Fraud Allegations In ‘2000 Mules’ Documentary - YouTube; Two leaders of True the Vote jailed by federal judge for contempt of court | The Texas Tribune; True the Vote lawsuit: Konnech sues for defamation
{In many states, I would add that 1 person can drop off ballots for family members which is the case in Georgia. Mark Andrews did that in Georgia and his vehicle and license plate is shown in the movie. While his face is blurred in the movie, two of the defendants showed the unblurred face on other occasions. D'Souza narrates the scene: "What you are seeing is a crime. These are fraudulent votes". Mr Andrews is rightfully suing for defamation after being cleared of any wrongdoing by the Georgia Bureau of Investigation. Georgia Voter Mark Andrews Sues Dinesh D’Souza Over Fraud Allegations in ‘2,000 Mules’; Mark Andrews Complaint Filed in Federal District Court.pdf}
Rudy Giuliani concedes he made defamatory statements about Georgia election workers
McCarthy, in escalation, floats Biden impeachment inquiry - ABC News; Rep. McCarthy floats Biden 'impeachment inquiry' - YouTube; FD 1023_Senator Grassley.pdf If republicans pursue an impeachment inquiry, the identify of the informant and his alleged sources need to be subjected to public cross examination. Making allegations about just about anything is easy to do, while supporting them with hard evidence is what is required. I believe the House Republicans will vote to impeach Biden prior to the 2024 election. That is what Trump and his Trumpsters want, and the GOP is controlled by those persons. The effort will probably backfire in competitive congressional districts that have republican incumbents. It is red meat for republican politicians who have no serious threat for reelection other than from a more far right candidate in the republican primary.
I do not support Biden running for reelection. In the 2024 Presidential primary, I will likely vote in the republican primary for an alternative to Trump. Currently, my three alternatives in that primary are Senator Tim Scott (R-SC), Governor Asa Hutchinson (Arkansas) and Governor Doug Burgum (North Dakota) who is liked by George Will. Opinion | North Dakota Gov. Doug Burgum is a qualified presidential candidate - The Washington Post I have quit voting for republicans in the general election since I do view the now dominant ideology to be the antithesis of conservatism, which is reflected in my new title for this section.
Ben Shapiro Burns Barbies During Meltdown Over 'Woke' Movie
DeSantis Says Black People Benefited From Skills Learned in Slavery;
July 2023 is planet's hottest month on record, Copernicus reports | CNN;
Climate change: July set to be world's warmest month on record - BBC News
U.S. heat waves prompt surge in use of natural gas, a fossil fuel - The Washington Post Daily records for consumption of natural gas are breaking records.
+++
1. Bought 100 CU:CA at C$34.16 (C$1 commission):
Quote: Canadian Utilities Limited (CU-TO)
Canadian Utilities says that it is a global utility and infrastructure company which is true, but most of the revenues are generated by utility and infrastructure operations in Canada.
In the 2023 first quarter, Canadian electricity operations contributed C$38M of adjusted earnings. Canadian electricity transmission, natural gas distribution and natural gas transmission contributed C$157M in adjusted earnings. The total adjusted amount was C$217M. I am not impressed with the international operations.
Previous Round-Trip: Item # 1 Eliminated CU:CA - Sold 100 at C$38.6 (4/28/22 Post)(profit snapshot = C$433)-Item # 1. Bought 100 CU:CA at C$34.25 (5/8/21). The USD reportable tax profit will depend on the CAD/USD conversion rates when the stock was purchase and sold.
1 Year Chart-Intraday 7/24/23:
My hunch is that a bottom may end up being near the current price. The hunch is based on the price decline taking the stock price back down to reasonable P/E, the dividend growth history, current dividend yield, a 1 year chart that indicates that a bottom near C$34 may occur and a possible decline in intermediate and long term interest rates that make utility dividend yields more attractive.
The stock closed at C$32.9 yesterday, down C$.77, so the hunch is not playing out so far.
Dividend: Quarterly at C$.4486 per share (C$1.7944 annually), last raised from $.4442 effective for the 2023 first quarter payment.
Canadian Utilities | Dividends & Stock Splits
Dividend History: Good for a utility with annual dividend increases, though rate of growth may slow given the payout ratio. CU Dividend History 1972-2021.pdf
Yield at C$34.16 = 5.25%
Next Ex Dividend: 8/2/23
Earnings Report (Q/E 3/31/23): CU Q1 2023 Financial Information
This was the earnings report that I had when I bought the stock.
Adjusted earnings are lower than reported earnings.
E.P.S. C$1.01
Adjusted to C$.81
Adjustments discussed at page 22.
Earnings Report (Q/E 6/30/23): Released after my purchase on 7/27/23. Canadian Utilities Second Quarter Earnings
Adjusted earnings reported at C$100M or $.37 per share, down from $.51 in the 2022 second quarter.
CU-Q2-2023-Analyst-Call-Transcript.pdf The decline in earnings was attributed to "rebasing" in the Alberta distribution business. That resulted in a C$25M decline in earnings. The company expects pressure from the rebasing in the third quarter but sees potential seasonality benefits in the 4th quarter that may create year-over-year growth.
The overall reaction so far to this report is slightly negative.
Debt Ratings: Senior unsecured debt has ratings of A, BBB, and A- from DBRS, S&P and Fitch respectively. Fitch has a BBB+ rating on the preferred stock.
Canadian Utilities | Preferred Shares (low coupon, fixed rate) I have no interest in them.
2. Corporate Bonds: $6,000, Net of +$4,000 in principal amount
A. Sold 2 Piedmont L.P. 4.45% SU Maturing on 3/15/24 at 99.7:
Issuer: Operating entity for Piedmont Office Realty Trust Inc. Cl A (PDM) who guarantees the notes.
Prospectus (no make whole payment is required for an optional redemption on or after 12/15/23).
Proceeds at 99.6 ($1,992 + accrued interest of $32.14)
Profit Snapshot: +$19.12
%20+$19.12%203:15:24%20%20.png){kind=small}
I still own 2 bonds that I intend to hold until redeemed by the issuer or maturity.
PDM recently offered to buy up to all of the outstanding 2024 bonds at par value + accrued interest. Funding will be sourced from a recently completed $400M offering of 9.25% SU notes maturing on 7/20/28. Prospectus PDM announced that about 87% of the outstanding principal amount was tendered for purchase.
Rather than going to the trouble of tendering the bonds, I elected to sell 2 of the 4 that I own near par value. The notes are rated BBB/Baa2. It is possible that PDM will go ahead and redeem the remaining bonds that are not tendered after the offer expiration period and before the maturity date. It may not want to be paying interest on the newly issued 9.25% notes and the 4.45% note at the same time.
{In September 2021, PDM sold 300M of 2.75% SU notes maturing in 2032, Prospectus. In August 2020, PDM sold $300M in 3.15% SU notes maturing in 2030, Prospectus. Refinancing costs for Office REITs has risen substantially due in large part to the WFH trend and a potential glut of office space resulting in vacancies or substantial tenant concessions when existing leases expire}
At some point, I may elect to plow the proceeds received from the 4 bonds into purchasing 2 of the 9.25% SU notes. I will wait until the remaining 2 bonds are redeemed and then will consider buying only at less than par value. That bond is currently trading slightly over par value. Bond Page | FINRA.org After PDM redeems the remaining 2024 bonds, the 2028 SU will be the next one to mature.
I also own the common stock. Given the rise in interest costs, I was not surprised that PDM slashed its quarterly common stock dividend from $.21 to $.125, citing the higher interest costs. PDM Declared Third Quarter Dividend The annual savings from that cut will be $.35 per share. Applying that amount to the common stock outstanding as of 6/30/23 (123.692M), the annual savings would be about $43.05528M. The stock had already priced in a dividend slash IMO.
Last Earnings Report (Q/E 6/30/23) SEC Filed Press Release
"Core FFO was $0.45 per diluted share for the second quarter of 2023, as compared to $0.50 per diluted share for the second quarter of 2022. The $0.05 per diluted share decrease was almost exclusively attributable to a $9.6 million, or $0.08 per diluted share, increase in interest expense during the second quarter of 2023, partially offset by continued growth in Property Net Operating Income, as compared to the second quarter of 2022."
Revised Core 2024 FFO guidance to $1.74-$1.8 from $1.8 to $1.9.
B. Bought 2 First American Financial 4.6% SU Maturing on 11/15/24 at a Total Cost of 98.119 (IB Account):
A $1 per bond commission was charged but is not reflected in this snapshot.
The issuer is not a bank. FAF provides title insurance, closing, escrow and related services. It also sells property and casualty insurance policies and home warranty products.
SEC Filed Earnings Press Release for the Q/E 3/31/23
2022 Annual Report (Debt is discussed starting at page 74. The 2024 SU is the next SU bond to mature.
New Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB-
YTM at Total Cost of 98.119: 6.102%
Current Yield at TC = 4.688%
Last Bond Offering (July 2021): Prospectus for $650M 2.4% SU Maturing in 2031) Proceeds were used in part to pay off a $250M 4.3% SU that matured on 2/1/23.
I now own 4 bonds.
C. Bought 2 Ally Financial 5.125% SU Maturing on 9/30/24 at a Total Cost of 98.395:
%205.125%25%209:30:24%20.png)
Issuer: Ally Financial Inc. (ALLY)
ALLY Analyst Estimates | MarketWatch
ALLY SEC Filed Earnings Press Release for the Q/E 6/30/23
New Finra Page: Bond Page | FINRA.org
This bond is actively traded.
Credit Ratings: Baa3/BBB-
YTM at Total Cost: 6.5547%
Current Yield at TC = 5.21%
Maximum Position: 2 Bonds, will consider buying 2 more when this bond is redeemed.
D. Bought 2 Webster Financial 4.375% SU Maturing on 2/15/24 at a Total Cost of 99.114:
Issuer: Webster Financial Corp. (WBS)
The last earnings report was solid in my opinion. SEC Filed Earnings Press Release for the Q/E 6/30/23 As with other banks, NIM is under pressure.
New Finra Page: Bond Page | FINRA.org
This bond is currently actively traded.
Prospectus "The notes will be unsecured obligations of ours and will rank equally with all our existing and future unsecured and unsubordinated indebtedness". This word "unsubordinated" indicates that this is a senior unsecured bond. When issued, this was a 10 year note.
Credit Ratings: Baa1/BBB
YTM at Total Cost: 6.031%
Current Yield at TC: 4.414%
I now own 4 bonds. The other two bonds were bought at a 97.717 total cost. Item # 3.C. (5/20/23 Post)
I also have small ball positions in the common stock and WBS.PRG, an equity preferred stock that pays non-cumulative dividends. I own 10 WBS with an average cost per share at $25.54. I am not reinvesting the dividend.
3. Small Ball Buys:
A. Added 5 CCNEP at $21.84; 5 at $21.61- Schwab Account:
Quote: CNB Financial Corp. 7.125% Preferred Series A Stock
Issuer: CNB Financial Corp. (CCNE)
CCNE Analyst Estimates | MarketWatch
I eliminated my position in the common stock, see Item # 3.A. below, and I redirected the proceeds into the CCNE preferred stock. I discussed the last earnings report there.
Security: Bank Holding Company Equity Preferred Stock, senior only to common stock in the capital structure.
Par Value: $25
Coupon: 7.125%
Maturity: None, Potentially Perpetual
Issuer Optional Call: On or after 9/1/25 at par value + accrued and unpaid dividends.
Stopper Clause: Standard
Dividends: Paid quarterly, qualified and non-cumulative.
Once the preferred share dividend is legally eliminated under the Stopper Clause, non-cumulative means that there is no legal obligation to ever pay the dividends that were lawfully eliminated. They are just gone. The legal obligation to pay future dividends is usually triggered by the resumption of a cash common stock dividend but that only applies to the preferred dividends that would be owed after that resumption.
Annual Dividend Per Share: $1.78, rounded down.
Last Discussed: Item # 2.B. Restarted CCNEP - Bought 5 at $22.2; 5 at $20.75; 5 at $18.75; 5 at $18.4 (5/13/23 Post)
New Average Cost per share: $20.59 (30 shares)
Yield at $20.39: 8.65%, rounded up (.07125% coupon x. $25 par value = $1.78125 annual dividend per share ÷ $20.39 total cost per share = 8.651%)
Last Ex Dividend: 5/17/23
Last Sell Discussion: Item # 5.A. Eliminated CCNEP - Sold 10 at $26 (1/16/23 Post)
In the event the operating bank owned by a bank holding company is seized by the FDIC, the bank holding company common and equity preferred stocks will become worthless, though it may be able to sell the preferred shares for around $1 for awhile before they are cancelled in a BK filing. So the downside is close to zero.
B. Added to TRP - Bought 2 at $37.29; 1 at $36.45; 1 at $36.15; 1 at $33.6:
Quotes:
CAD: TC Energy Corp. (Canada: Toronto)
Canadian Dollar to US Dollar Exchange Rates Chart | Xe
Cost: 180.87
Last Discussed: Item # 3.G. Added 3 TRP at US$39.12 (7/15/23 Post); Item # 1.B. Added to TRP - Bought 3 at US$39.77 (7/1/23 Post) I discussed the 2023 first quarter earnings report in that post. SEC Filing
Prior AC per share: $43.3 (25 shares)
New AC per share: $42.11 (30 shares)
Dividend: Quarterly at C$.93 per share (C$3.72 annually)
Dividend History:
Last Ex Dividend: 6/29/23
It is not possible to calculate a dividend yield without knowing the CAD/USD exchange rate when the CAD dividend is converted into USDs. If I assumed a constant exchange at .75, the yield at US$42.11 would be about 6.63% (C$3.72 annual dividend x .75 CAD/USD exchange = US$2.79 ÷ Total Cost per share of $42.11 = 6.6255%). At US$33.6, my last purchase price, the yield using the same CAD/USD exchange rate would be 8.3%.
After my last discussion, TRP formed a joint venture for its Columbia Gas and Columbia Gulf assets. TRP sold a 40% interest in those assets for $5.2B (USD at $3.9B), retaining a 60% interest and continuing to manage those assets. The JV partners will jointly fund on a 60%/40% basis future maintenance, modernization and growth capital expenditures. Those expenditures are estimated at about US$1B per year over the next 3 years. TC Energy partners with Global Infrastructure Partners through $5.2 billion sale of a 40 per cent equity interest in Columbia Gas and Columbia Gulf
Some analysts believed the price was low and consequently reduced their ratings and/or price targets. The shares hit a new 52 week low in response. I have no opinion on the price adequacy.
On 7/24/23, Moody's also downgraded the senior unsecured debt rating for TransCanada Pipelines, a subsidiary, from Baa1 to Baa2. Moody's also downgraded TRP SU debt to Baa3 from Baa2. The outlook is "stable". The downgrades were based on Moody's opinion that the leverage metrics were unlikely to improve for several years. Moody's cited the February 2023 revised cost estimate for the Coastal Gaslink Project of C$14.5B, up from the previous estimate of C$11.2B and substantially higher than the original estimate of C$6.2B. Moody's reacted negatively to TRP turning off its dividend reinvestment option, refusing to raise capital through common share offerings and remaining committed to increase its dividend. Moody's viewed the JV formation as a credit positive, it was not viewed as sufficient to offset the balance sheet pressure resulting from future capital expenditures.
Coastal GasLink project. Coastal GasLink - Construction activity map
I am continuing to nibble based on the improvement in both dividend yield and valuation due to the price decline. Historical Prices & Data I am limiting my purchases to 1 or 2 shares with a maximum limit of 50 shares. Those limits are based on a risk assessment that involves primarily dividend safety and the growing complexity and uncertainties related to the corporate structure.
Spinoff of Liquid Pipelines Business: In addition to releasing its second quarter earnings, TRP announced that it intended to split into two companies. The liquid pipelines business will be separated and spun off to TRP shareholders in what is expected to be a tax free transaction. The spin off is expected to happen in the 2024 second half. TC Energy to unlock value by creating two premium energy infrastructure companies with intention to spin off Liquids Pipelines business I do not see any good reason to do this. The decline yesterday may be due to the Stock Jocks agreeing with that assessment.
Last Earnings Report (Q/E 6/30/23): This report was released on 7/27 after my purchases. The Stock Jocks reacted negatively to it. The stock fell $1.62 yesterday to close at $34.17.
All amounts are in CADs.
E.P.S. $.24
Comparable E.P.S. $.96
Consensus at $.97 per Fidelity
Adjustments to E.P.S.
I can see why Moody's downgraded the debt. The quarterly dividend is barely covered by the "comparable" E.P.S. number.
While TRP may be able to muddle through its capital spending and debt issues without cutting the dividend, there is nonetheless a danger that the dividend will have to be cut some or even slashed. I now see the stock searching for a new trading range, possibly between $30 to $40 from the prior $40 to $55. TC Energy Corporation (TRP) Interactive Stock Chart - Yahoo Finance
C. Started NNN - Bought 5 at $43.95; 2 at $43.61; 3 at $43; 2 at $42.56:
Cost: $521.09
7 shares were bought the day before the ex dividend date. The stock has fallen by more than the value of the dividend. I then added 5 shares on the ex dividend date.
Retail Properties | Our Portfolio | NNN REIT (35.3M square feet; 3,449 properties; 99.4% leased)
Average cost per share: $43.42 (12 shares)
Dividend: Quarterly at $.565 per share ($2.26 annually), last raised from $.55 effective for the 2023 third quarter payment. In 2013, the quarterly dividend was at $.395 per share.
NNN REIT, Inc. Common Stock (NNN) Dividend History | Nasdaq
Yield at AC per share: 5.2% When and if intermediate term interest rates significantly decline from present levels, this yield will then look more attractive than it does now.
Last Ex Dividend: 7/28/23 (owned 7 shares as of):
Last Earnings Report (Q/E 3/31/23): The third quarter report is scheduled for release on 8/1.
As a net lease REIT, AFFO and FFO will be close to one another.
FFO per share: $.8
AFFO per share: $.82
Adjustments from Net Income to AFFO: The primary deduction from FFO is non-cash revenue created by the straight line accounting convention. The primary add back is stock based compensation.
4. Small Ball Sells:
The following sales were small ball eliminations or pares in my Regional Bank Basket Strategy. The total realized gains so far in that basket strategy is $65,321,79.
Top 10 Realized Gains in this Basket:
Of those stocks, my largest current position is in NYCB, somewhere near 600 shares in taxable accounts plus a few more in ROTH IRA accounts. I have been discussing purchases recently only in my Vanguard account. NYCB reported much better than expected earnings for the second quarter. SEC Filed Earnings Press Release for the Q/E 6/30/23
In part, I am using the recent rally in this stock sector to eliminate 2 duplicate positions (NTB and FFIC).
The report released by ONB was fine but the price spiked to near the top of a five year high price where the stock has faltered in the past. That kind of chart will cause me to at least consider reducing or eliminating a position. I am not investing in stocks for the long term given my age, financial goals and current financial condition.
A. Eliminated CCNE - Sold 10 at $19.12:
Quote: CNB Financial Corp. (Pennsylvania)(CCNE)
Proceeds: $191.21
I am going to quit buying the common shares until I see sustained improvement in Y-O-Y NIM and E.P.S.
Instead of owning the common stock, I will own only the preferred stock, CCNEP, discussed in Item # 2.A above, which has a much higher yield than the common and is more senior in the capital structure. The yield advantage of the preferred over the common stock is over 4%.
Another consideration for throwing in the towel is the almost non-existent common share dividend growth history.
CCNE Analyst Estimates | MarketWatch
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 2.D. Restarted CCNE - Bought 10 at $17.85 (4/22/23 Post)
Profit Snapshot: +$12.71
Dividend: Quarterly at $.175 per share ($.7 annually), last raised from $.17 effective for the 2021 4th quarter payment. CNB Financial Corporation (CCNE) Dividend History | Seeking Alpha
Yield at $19.12 = 3.66%
Dividend Growth: Almost non-existent. The quarterly rate was at $.165 in 2013.
Last Ex Dividend: 5/31/23 (owned as of)
Last Earnings Report (Q/E 6/30/23): SEC Filed Press Release
E.P.S. = $.61, down from $.85 in the 2022 second quarter
"The decrease in diluted earnings per share comparing the quarter ended June 30, 2023 to the quarter ended March 31, 2023 was primarily due to an increase in the Corporation's interest-bearing deposit costs as CNB raised targeted rates to sustain its core deposit base in legacy markets and to grow its funding base in expansion markets given the competitive deposit market as a result of continued Federal Open Market Committee ("Fed") rate increases. The decrease in diluted earnings per share comparing the quarter ended June 30, 2023 to the quarter ended June 30, 2022 was primarily due to the year-over-year increase in deposit costs, as well as the dilutive effect of the Corporation's common stock offering completed in September 2022, resulting in the issuance of 4,257,446 shares of common stock at $23.50 per share and net proceeds of $94.1 million after deducting the underwriting discount and customary offering expenses."
NIM: 3.62%, down from 3.74%
NPA Ratio: .43%
Charge Off Ratio: .07%
Coverage Ratio: 215.06%
Other Sell Discussions: Item # 1.J. Eliminated CCNE - Sold 10 at $23.63 (3/6/21 Post)(profit snapshot = $92.8); Item # 2.B Pared CCNE-Sold 5 at $20.61 Fidelity taxable; Eliminated CCNE Schwab Taxable -Sold 6 at $21.24 (12/25/2020Post)(profit snapshots= $26.79 and $31.22 = $58.01); Item # 3.A. Eliminated Remaining CCNE-Sold 50 at $23.76 (2/17/2017 Post)(profit snapshot = $618.1); Item # 1 Sold 50 CCNE at $18.74 and Another 50 Share Lot-Update For Regional Bank Basket Strategy As Of 7/26/16 - South Gent | Seeking Alpha (profit snapshots $56.07 and $40.99)
CCNE Realized Gains to Date: $1,190.91 (at #15 in the basket)
B. Eliminated Duplicate Position in NTB - Sold 14 at $31.87:
I am keeping the 19 shares owned in my Fidelity account that have a $24.15 average cost per share.
NTB Analyst Estimates | MarketWatch
Investor Relations: Butterfield Group
Profit Snapshot: $96.14
Last Discussed: Item # 3.J. Bought 1 NTB at $23.4 - Fidelity Account (5/13/23 Post) I discussed the first quarter report in that post. SEC Filed Press Release The second quarter report is scheduled for release on 7/31.
Dividend: Quarterly at $.44 per share ($1.76 annually)
The Bank of N.T. Butterfield & Son Limited (NTB) Dividend History | Seeking Alpha
I am not expecting a dividend increase.
Last Ex Dividend: 5/5/23
Other Sell Discussions: Item # 3.E. Pared NTB-Sold Highest Cost 10 Shares in Fidelity Account at $32.5 (12/5/2020 Post); Item # 1.J. Pared NTB-Sold 2 at $35 (2/6/21 Post)
NTB Realized Gains to Date: $214.98
My interest in this stock is confined to the dividend yield at my total cost per share.
C. Eliminated Duplicate Position in FFIC - Sold 10+ shares at $14.05:
I am keeping a 13+ share position in my Fidelity account that has an average cost basis of $10.24:
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| Price as of 7/26 |
That is currently my entire position in FFIC.
As reflected in this snapshot, the stock rose 16.73% on 7/26 in response to the second quarter earnings report, which I discuss below. The dividend yield at $10.24 is 8.59%. I will add to that position only when the purchase reduces my average cost per share. I am not reinvesting the dividend.
Profit Snapshot: +$30.7
Item # 1.E. Pared FFIC in Schwab Account- Sold 5 at $24.21 (4/9/21 Post)(profit snapshot = $63.93).
Item # 1.H. Eliminated FFIC in Vanguard Taxable Account -Sold 10 at $18.85 (2/6/2021 Post)(profit snapshot = $82.8)
Item # 3.H. Pared FFIC in Fidelity Taxable Account-Sold 10 at $14.05; 5 at $16-highest cost lots (12/19/2020 Post)(profit snapshot = $39.96)
The largest gain was on 100 shares sold in 2011:
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| +$200.7 |
Item # 4 Sold 50 FFIC at $13.53 (10/31/2011 Post); Item # 2 Sold 50 FFIC at $14.51 (5/2/11 Post)
Snapshot of another gain that was not discussed:
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| 2022 5 Shares + $58.91 RI |
FFIC Realized Gains to Date: $573.6
A. Bought 5 Treasury Bills at 7/24/23 Auction:
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| Fidelity Account |
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| Schwab Account |
Matures on 10/26/23
91 Day Bill
Interest: $66.6
Investment Rate: 5.43%
B. Bought 2 Treasury Bills at the 7/26/23 Auction- Fidelity Account:
Matures on 11/28/23
119 Day Bill
Interest: $35.04
Investment Rate: 5.484%
6. CDs - FDIC Insured:
A. Bought 1 UBS Bank 5.05% CD Maturing on 8/4/2025:
Interest paid monthly.
When I purchased this CD, the 3 year treasury, which pays interest semi-annually, was trading at a 4.488% yield.
I am gingerly adding to my 2025 maturities. Currently, I have only $6K maturing in August 2025.
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.
