EGBN, GIS, KLG, KRG, JQC, JRI, MEGI, O, TAC, WPC

Economy: 

The Federal Reserve made no change last Wednesday in the federal funds range of 5.25% to 5.5% as expected. 

In the projection materials, the FED did increase core PCE inflation to 2.6% from the 2.4% prediction made in December 2023. 

The 2024 PCE price inflation was kept at 2.4%. 

Real GDP growth was increased to 2.1% in 2024 compared to the 1.4% estimate made in the December projection. 

In the Dot Plot where FED members make predictions about the future Federal Funds range, 10 out 17 members are predicting at least a 75 basis point cut by year end. That is down from 11 in the December projection. 

I am discounting that probability based on the recent inflation reports and the FED's own revision higher in its core PCE inflation number based on what is known now. 

A 50 basis point cut would be likely even with continued strength in the economy with core PCE inflation trending down and moving closer to 2% as the year progresses. Cuts could also occur with the economy signalling a major slowdown even with PCE and core PCE inflation remaining near current levels or slightly higher.   

I discuss the projection materials in this video: Majority of FED Members Keep Prediction of a 75 Basis Point Cut by 2024 year end - YouTube I see no reason to change my plan for shifting some interest income into 2025 from 2024. Shifting Interest Income into 2025 - YouTube That plan is predicated on an opinion that short term rates will trend down though it is still a matter of speculation by how much IMO.  

Why We Think 5 Interest-Rate Cuts Are Coming in 2024 | Morningstar

10 Year TIP Breakeven Inflation Rate as of 3/21/24: 2.34%

+++

Allocation Shifts Discussed in this Post: 

Treasury Bills Purchased at Auction: $20,000 in principal amount

Corporate Bonds: $20,000 in principal amount

Treasury Note Purchased in the Secondary Market: $2,000 in principal amount 

Inflow Common Stocks: +$36.12

(consisting of $766.73 in purchases minus $730.61 in proceeds)  

Inflow Balanced CEFs: +$759.19

(classified as Stock Funds for the allocation purpose) 

Inflow Common Stocks/Stock Funds: +$795.31

2024 Outflow Stocks/Stock Funds:  -$23,581.18

++++

Putin and His Orwellian Empire of Misery: 

Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war

Swedish Foreign Minister: NATO must get ready for a Russian attack | DW News - YouTube This is something for young Russians to consider. What is Putin willing to do in order to remain in power. His life and wealth is dependent on him doing so. 

Ukraine blasts another Russian refinery as Putin claims he wanted to free Navalny in victory rant - YouTube   

Ukraine drones blast Slavyansk-na-Kubani oil refinery in Krasnodar during daring attack on Russia - YouTube

In Russian presidential election, voting is forced at gunpoint in occupied Ukraine - The Washington Post

Thousands In Russia Join Navalny-Backed Anti-Putin Election Protests - YouTube; Polling station protests show strong anti-Putin sentiment amongst Russians-FRANCE 24-YouTube The protest was to show up at voting locations at 12 o'clock. This will receive some attention in western media but it is a totally ineffectual protest. 

Putin will be Russia's dictator until he dies or is overthrown in a violent revolution similar to what the Bolsheviks started in 1917. Russian Revolution: Causes, Timeline & Bolsheviks | HISTORY 

In February 1917, there were only about 24,000 Bolshevik party members. Russia's losses in WWI and deteriorating economic conditions provided the necessary conditions that resulted in the Czar being overthrown by what was at the start an insignificant force. Russian Revolution-Wikipedia I do not foresee that happening in Putin's Russia, at least sufficiently to overthrow his dictatorship. How the Freedom of Russia Legion fights Putin from Ukraine - The Washington Post

It was noteworthy that there was no resistance by Russian civilians when Prigozhin's Wagner forces crossed into Russia's Rostov Oblast capturing Rostov-on-Don, the 11th largest city in Russian with over 1 million residents. Putin has fostered a politically apathetic population and that could eventually be his undoing. 

‘Welcome to Hell’: U.N. Panel Says Russian War Crimes Are Widespread - The New York Times Russia routinely commits war crimes and crimes against humanity. Like the Nazis before them, those acts are an integral part of Russia's military strategy in Ukraine. Independent International Commission of Inquiry on Ukraine | OHCHR

Moscow Airport Targeted in Drone Strike

Ukraine launches far-ranging drone attacks on the final day of Russia's presidential vote - ABC News

Russian Neighbor Deals Blow to Putin With Western Pivot

Putin’s Punishing Peace Deal for Ukraine Revealed - WSJ  Among the terms that would have led to Russia's absorption of Ukraine is the requirement that Ukraine could not accept military aid from western nations and would not join any alliance capable of resisting Russia's plans to absorb Ukraine. Russia will take whatever it is given in a treaty and then renege on its commitments while denying that it has. If the Ukrainians want to remain free, Ukraine has no choice but to continue resisting the Russian invasion.  

+++

Trump's Orwellian Party: 

AI Trump: The Second Campaign Ad - YouTube

‘He looks like a puppet to Putin’: Panel discusses Trump’s affection for dictators - YouTube

Trump's Ohio Rally Recap in 107 Seconds - YouTube

After Trump stated that it would impose a 100% tariff on auto imports, he made this statement last Friday at an Ohio campaign rally: "Now, if I don't get elected, it's going to be a bloodbath for the whole - - that's going to be the least of it. It's going to be bloodbath for the country"

Trump campaign defends his 'bloodbath' warning. Hear what political strategists think - YouTube  He claims that he was referring to what would happen to the auto industry if he was not elected. Unfortunately, that kind of inflammatory rhetoric can be interpreted differently by anyone familiar with Trump's prior references to violence, referring to elections or other matters.  

Fact check: Trump, telling a completely fictional story, falsely claims he released ‘the tape’ of his Zelensky call Just another demonstrably false narrative created by Trump. He is a pathological liar or so delusional that he is no longer able to distinguish between his demonstrably false reality creations and the truth, more likely a combination of the two. He certainly knows that he can make more than 50,000 false and misleading statements over 8 years (my estimate) and still be viewed by tens of millions as an honest person, a Great American who tells it like it is. Trump’s false or misleading claims total 30,573 over 4 years - The Washington Post; False or misleading statements by Donald Trump - Wikipedia

My video: Why Do Trump Supporters View Him as Honest - YouTube

Prior to Trump, I would have that would have been possibly only in an authoritarian state whose dictator controlled all news outlets. We now know that it is possible in the U.S. where easily accessible accurate information rebuts every false statement made by Trump.  

My videos: Can Trump Distinguish True from False or is He Just Delusionary - YouTube; Why do Trump supporters disparage all of the women who have accused him of sexual misconduct - YouTube

Why does Biden keep mentioning January 6? Because Trump won’t stop talking about it

Pence says he ‘cannot in good conscience’ endorse Trump 

NYT: Trump's valet testified Trump had 'no reaction' to learning MAGA supporter was shot on Jan. 6 - YouTube

Trump's 'twisted and demented' salute to Jan. 6 rioters wrecked by Morning Joe - Raw Story

See Pence's reaction after Trump salutes Jan. 6 prisoners at rally - YouTube

'Worst of every corrupt Trump family tendency': Jared Kushner's new realty deal slammed - Raw Story; Kushner Developing Deals Overseas Even as His Father-in-Law Runs for President - The New York Times

GOP nominee to run North Carolina schools once called for Obama’s execution - YouTube

Analysis: Elon Musk puts his conspiratorial thinking on display for the world to see in Don Lemon interview When the WSJ published a fact based article on the Musk-Lemon controversy, I read a sampling of 100 or so comments to the article. All of them just attacked Lemon and defended Musk. None of the them engaged in anything resembling a thoughtful analysis of whether Musk claims about free speech and avoiding censorship were consistent with terminating a verbal agreement with Lemon after he interviewed Musk. Personal attacks by Trump loyalists, which they view as intelligent commentary on the issues, is part of Trump's dumbing down of political debate into pure vitriol. 

Trump says Jews who vote for Democrats 'hate' Israel and 'their religion'; 'This is antisemitic garbage': Joe reacts to Trump's comments about Jewish Democrats - YouTube 

Trump: "any Jewish person that votes for Democrats hates their religion. They hate everything about Israel, and they should be ashamed of themselves because Israel will be destroyed."

Judge Cannon files TOTALLY BIZARRE order that came OUT OF NOWHERE - YouTube This order demands that both sides prepare jury instructions using a clearly erroneous legal interpretation of the Presidential Records Act. 

Trump is claiming that shipping the classified documents from the White House to Mar-A-Largo was a declaration that the documents were his personal records rather than government records that were required to be turned over to the National Archives. Judge Cannon needs to so rule so that the government can appeal that ridiculous decision to the 11th Circuit which will reverse and hopefully remove her from the case as well. She is both biased and incompetent in my opinion. Aileen Cannon's handling of Trump's records case is off the rails - Los Angeles Times 

Cannon is actually giving credence to Trump's argument that he has the power to declare any and all government records prepared during his term as his personal records, a completely frivolous argument. Aileen Cannon's 'Insane' Donald Trump Filing Trashed by Legal Experts It may not be the most bizarre and legally frivolous court order that I have seen from a federal judge, but it definitely be in the top ten along with Cannon's earlier order that was reversed by the 11th Circuit. 11th Circuit Vacates Cannon’s Order to Appoint a Special Master in Mar-a-lago Investigation | Lawfare All 3 judges on that 11th Circuit panel were appointed by republicans and 2 were appointed by Trump (Britt Grant and Andrew Brasher) As reflected in the unanimous per curiam opinion, those republican judges were embarrassed by the legal absurdity of Cannon's order. Per Curiam Order .pdf

Trump lawyer is asked if he'll get portion of bond from Russia or Saudi Arabia. Hear her response - YouTube

Pro-Trump attorney arrested after court hearing about leaked Dominion emails 

Peter Navarro begins serving prison sentence after historic contempt prosecution 

++++

1. Small Ball Buys: 

A. Added 50 JRI at $11.5 - Vanguard Account: 

Quote: Nuveen Real Asset Income & Growth Fund Overview - Leveraged Balanced CEF

Cost: $575

Investment Category: Monthly Income Generation

Sponsor's website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen

JRI SEC Filings

Summary of Holdings as of 12/31/23: 

Last Buy Discussion: Item # 2.F. Added to JRI - Bought 10 at  $9.98; 10 at $9.74 in Vanguard Taxable Account (10/28/23 Post) 

Number of Holdings as of 2/28/24: 401

Nuveen Real Asset Income and Growth Fund (SEC Filed Shareholder Report for the period ending 12/31/23 - JRI holdings list starts at page 69) 

Average cost per share before add: $10.57 (126+ shares)

Average cost per share after add: $10.83 (176+ shares)

Dividend: Monthly at $.10 per share, last raised from $.087 per share effective for the December 2023 payment. Prior to that increase, the monthly rate was cut from $.117 to $.0965 effective for the May 2020 payment and reduced again to $.087 effective for the April 2023 payment. This history indicates that the dividend rate is unlikely to remain steady at the current rate long term. 

JRI Dividend History | Nasdaq

Yield at AC (assumes monthly at $.10): 11.08%

Last Ex Dividend: 3/14/24 (owned as of 126+ shares as of)

Data Date of 3/20/24 Trade: 

Closing Net Asset Value per share: $13.38

Closing Market Price: $11.49

Discount: -14.13%

Average 3 year discount:  -11.74%

Sourced: JRI - CEF Connect 

Last Elimination: Item # 3.A. Eliminated JRI in my Fidelity Taxable Account - Sold 130 at $12.13 (3/11/23 Post)(profit snapshot = $184.6)

Other Sell Discussions: Item # 1.I. Pared JRI Again-Sold 12.661 shares at $16.31-Remaining Shares Bought With Dividends in Fidelity Taxable Account (10/1/21 Post)(profit snapshot = $53.03); Item # 2.C. Pared JRI-Sold 22.235 at $16.11(8/6/21 Post)(profit snapshot = $42.31); Item # 2.A. Pared JRI-Sold 30 at $15.9-highest cost shares (6/19/21 Post)(profit snapshot = $14.73); Item # 1.K Eliminated JRI in Schwab Taxable Account-Sold 100 at $11.48  (6/6/20 Post)(profit snapshot = $69.35); Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post)(profit snapshot = $140.67); Item # 1.A. Sold 100 JRI at $17.51(10/30/19 Post )(profit snapshot = $100.41); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)(profit snapshot = $40.45)   

JRI Realized Gains to Date: $665.52 (includes $19.97 realized gain from selling 9 shares in my Vanguard account in July 2021 that was not discussed in posts) 

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

B. Added 5 Realty Income (O) at $51.55: 

Quote: Realty Income Corp. (O)

Cost: $257.75

Investment category: Equity REIT Common and Preferred Stock Basket Strategy

I discussed this purchase in a comment published on 3/15/24.

Website: Homepage | Realty Income

SEC Filed 2023 Annual Report 

Top 20 clients as of 12/31/23: 

Recent News: Realty Income Closes Merger with Spirit Realty Capital | Realty Income (1/23/24)

Last Discussed: Item # 2.G. Pared Realty Income (O) - Sold 5 at $59 (1/12/24 Post) 

Last Buy Discussions: Item # 1.O. Added to O - Bought 1 at $48.9; 1 at $46.79; 2 at $45.54 (11/4/23 Post); Item # 2.I. Added to O - Bought 1 at $51.16; 1 at $50.78; 1 at $50.22; 2 at $50; 1 at $49.74 (9/30/23 Post) 

Average cost per share: $52.34 (30+ shares)

Dividend: Monthly at $.257 per share ($3.084 annually)

Dividend Payment Information | Realty Income

124th Common Stock Monthly Dividend Increase Declared by Realty Income | Realty Income

For the April 2014 payment, the dividend was $.185 per share. Realty Income has qualified as a Dividend Aristocrat by increasing the annual dividend rate for at least 25 consecutive years. Realty Income To Join S&P 500 Dividend Aristocrats® Index | Realty Income However, the dividend increases are small as set out in the previous link. If the past is prologue which is inherently a guess about the future, I would guess that it will take Realty Income between 15 to 20 years to double its current monthly dividend, and that would probably require a successful diversification into non-retail properties. 

I restarted dividend reinvestment effective for the next payment. I had turned off reinvestment after the December 2023 payment when the reinvestment price was $57.06. 

I am not a buyer above $55. 

Yield at AC = 5.89%

Next Ex Dividend: 3/28/24

Last Earnings Report (Q/E 12/31/23):  

SEC Filed Press Release and Supplemental 

GAAP E.P.S. = $.30

AFFO per share: $1.01

GAAP to AFFO Reconciliation:

Properties as of 12/31/23: 13,458 (owned or "held interests in")

Square Feet: 272.1M

Occupancy: 98.6%

Weighted Average Remaining Lease Term: 9.8 years. 

Revenues by property type: 81.8% retail; 12.7% industrial; 3.9% from gaming properties; and 1.6% from other. 

Total 2023 Annual Contractual Rent: $4.o4B

98.1% of the properties are leased to a single tenant.  

2023 AFFO per share: $4, up from $3.92 in 2022. 

2023 AFFO = $2.7749B

The acquisition of Spirit Realty occurred after 12/31/23. This acquisition added 2,018 properties.

Largest Gain: Item # 1. Eliminated Realty Income (O)- Sold 100 at $52.37 -Seeking Alpha (profit snapshot = $1,579.6) 

C. Added 15 MEGI at $12.28: 

Quote: MainStay CBRE Global Infrastructure Megatrends Term Fund Overview - A leveraged balanced CEF that owns mostly common stocks with some convertible securities, CEFs, bonds and preferred stocks. 

Cost: $184.19

As previously discussed, I have been buying CEFs that pay monthly dividends in my Fidelity account with the goal being to generate at least $200 in monthly dividends by this month or no later than April 2024. I have recently started a position in MEGI. 

MEGI SEC Filings

MainStay CBRE Global Infrastructure Megatrends Term Fund - SEC filed semiannual report for the period ending 11/30/23

Sponsor's website: MEGI MainStay CBRE Global Infrastructure Megatrends Fund | New York Life Investments

MEGI Portfolio | Morningstar (lists top 25 holdings)

New Average cost per share: $12.55 (50+ shares)

Dividend: Monthly at $.125 per share ($1.5 annually)

Yield at AC: 11.95%

Last Ex Dividend: Today, 3/22/24

Data Date of 3/18/24 Trade: 

Net Asset Value per share: $14.16

Closing Market Price: $12.27

Discount: -13.35%

Sourced: MEGI - CEF Connect 

Last Discussed: Item #1.A. Added to MEGI - Bought 5 at $12.44; 5 at $12.2; 5 at $11.95 (2/23/24 Post)  

D. Added 5 WPC at $55.55: 

Quote: W. P. Carey Inc. (WPC) - Net Lease REIT

Cost: $277.75

SEC Filings 

Website: Leaseback Build-to-Suit Real Estate Finance | W. P. Carey

2023 SEC Filed Annual Report 

W. P. Carey Announces Completion of Spin-Off of Net Lease Office Properties This spin off included 59 net leased office properties.  Net Lease Office Properties (NLOP) The tax cost basis of my W.P.Carey shares was adjusted to reflect this spinoff.  The spinoff was completed on 11/1/24. 

W.P. Carey reduced its quarterly dividend to $.86 per share from $1.071 after the spinoff. The combined dividend of NLOP and WPC was expected to remain about the same as WPC was paying prior to the spinoff. 

WPC has been selling off the office properties that it owned after the NLOP spinoff, selling 79 properties for gross proceeds of $608.1M. Those transaction occurred in the 2023 third and 4th quarters and mostly in the 2024 first quarter. The remaining office properties are expected to be sold in in the 2024 first half. 

UHaul purchased the 78 storage facilities that it leased from WPC in the 2024 first quarter. 

Last Discussed: Item #2.A. Added to WPC - Bought 2 at $59.8; 1 at $58.55; 1 at $56.65;  1 at $53.97 (9/30/23 Post) 

New Average cost per share: $62.51 (32+ shares) 

Dividend: Quarterly at $.865 ($3.46), last raised from $.86 effective for the 2024 second quarter payment

WPC Dividend History | Nasdaq

W. P. Carey Announces Tax Treatment of 2023 Dividends 

Yield at AC = 5.53%

Next Ex Dividend: 3/27/24

Last Earnings Report (Q/E 12/31/23): 

SEC Filed Press Release; Supplemental and SEC Filed Investor Presentation 

AFFO = $261.35M

AFFO per share: $1.19

E. Added 5 KRG at $20.59: 

Quote: Kite Realty Group Trust (KRG) - Retail REIT

Cost: $102.93

KRG "is a real estate investment trust (REIT) headquartered in Indianapolis, IN that is one of the largest publicly traded owners and operators of open-air shopping centers and mixed-use assets. The Company’s primarily grocery-anchored portfolio is located in high-growth Sun Belt and select strategic gateway markets. . . . As of December 31, 2023, the Company owned interests in 180 U.S. open-air shopping centers and mixed-use assets, comprising approximately 28.1 million square feet of gross leasable space. "

KRG SEC Filings

2023 SEC Filed Annual Report

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

New Average Cost Per share: $21.46 (25 shares)

Dividend: Quarterly at $.25 per share 

Yield at New AC = 4.66%

Last Ex Dividend: 1/4/24 (owned 5 shares as of)

Next Ex Dividend: 4/4/24

Last Discussed: Item # 1.H. Added to KRG - Bought 5 at $20.9 (3/1/24 Post) I discussed the last earnings report in that post. SEC Filed Press Release and Supplemental.

I do not have access to any research reports. I am aware that Jefferies recently cut is price target to $23 from $24. 

Maximum Position: 100

Purchase Restriction: 5 share lots when the price is over $20 and 10 share lots at below $20, with each subsequent purchase required to reduce my average cost per share. 

F. Added 5 TAC at $6.51; 5 at $6.32: 

Quote: Transalta Corp. (TAC)

Cost: $128.3

TAC Analyst Estimates | MarketWatch

Facilities - TransAlta

Projects in Development - TransAlta

New Average cost per share: $7.34 (40 shares)

Dividend: Quarterly at C$.055 per share.  

Last Ex Dividend: 2/29/24

Last Earnings Report (Q/E 12/31/23):  

SEC filed Press Release 

All amounts are in Canadian Dollars. 

E.P.S. : ($.27)

Funds from operations per share: $.74

Free cash flow per share: $.39

2023 Free Cash flow per share: $3.22

2023 Free Cash Flow: $890M 

2. Small Ball Sells: 

A. Pared GIS - Sold Highest Cost 5 Shares at $68.17:

Quote: General Mills Inc. (GIS) 

Proceeds: $340.86

Recent earnings reports from packaged food companies have been generally unfavorable, mostly caused by rapidly increasing input costs causing rapid prices increases that resulted in lower volumes. 

I have a favorable opinion of General Mills' expansion into pet foods/treats and organic products.

Pet Related Product Acquisitions:   General Mills Acquires Fera Pets, Inc. (11/9/23); General Mills Completes Acquisition of Tyson Foods’ Pet Treats Business for $1.2B in Cash (7/6/21); General Mills Completes Acquisition of Blue Buffalo Pet Products (4/28/21)

GIS Analyst Estimates | MarketWatch

GIS SEC Filings

General Mills: Brands overview

General Mills, Inc. (GIS) Interactive Stock Chart - Yahoo Finance (bear market trend started in May 2023 after the price topped $90)

Profit Snapshot: $28.61

I sold the last purchased lot the day before the earnings report (see Item # 1.A. Added to GIS - Bought 5 at $62.45 (10/14/23 Post) 

The Stock Jocks initially responded favorably to that report with the stock closing at $69.43 last Wednesday, up $.80 or 1.17%, but then declined $  yesterday. I thought the report was just okay, nothing to generate positive or negative vibes.  

Average cost per share before pare: $56.25 (50 shares)

Average cost per share after pare: $55.56 (45 shares)

Snapshot Intraday on 3/19/24 after pare

Dividend: Quarterly at $.59 per share ($2.36 annually), last raised from $.54 effective for the 2023 third quarter payment. 

GIS Dividend History 

I am not reinvesting the dividend. 

Yield at $55.56: 4.2477%

Next Ex Dividend: 4/9/24

Last Earnings Report (F/Q Ending 2/25/24): This is for the third fiscal quarter. 

10-Q and  SEC Filed Earnings Press Release

10-Q at page 4

Net sales: Down 1%
Diluted GAAP and Non-GAAP E.P.S. at $1.17

Consensus at $1.05 

Pet Segment Results: 

I am only highlighting the pet food segment. The other business segments are North American Retail, North American Food Service and International.  The largest segment in terms of revenues is the North American Retail that reported $3.2B in revenues.  

Sell Discussions: Item # 1.C. Eliminated GIS in Vanguard Taxable Account - Sold 2+ at $80.41 (3/6/23 Post)(profit snapshot = $66.83); Item 3.L. Added to GIS in Fidelity Account-Bought 1 at 58; 1 at $57.67 (8/20/21 Post); Item # 1.G. Added to GIS in Fidelity Taxable Account-Bought 5 at $55.9; 5 GIS at $55.5; 5 at $55.2; 5 at $54.9; 5 at $54.5; 5 at $54 (2/6/21 Post); Item # 1.A. and 1.B. Started GIS in Schwab Taxable account and Added to GIS in Fidelity Taxable Account (1/9/21 Post) The lowest price paid over the past 5 years was $36.75.  Item # 5 A. Bought 2 GIS at $40.25, 2 at $39.45, 10 at $38.3 and 5 at $36.75-Used Commission Free Trades (12/29/18 Post) 

GIS Realized Gains to Date: +$2,892.12

Last GIS SU Bond Purchase: Item # 1.H. Bought 2 General Mills 4% SU Maturing on 4/17/25 at a Total Cost of 97.35 (10/25/22 Post)

B. Eliminated EGBN - Sold 10 at $22.15: 

Quote: Eagle Bancorp Inc. (EGBN)

Proceeds: $221.55

EGBN Analyst Estimates | MarketWatch

SEC Filings 

SEC Filed 2023 Annual Report 

Profit Snapshot:  $39.05 

Last Discussed: Item # 1.F. Added to EGBN -Bought 3 at $17.86 (11/4/23 Post); Item # 3.G. Started EGBN - Bought 5 at $18.87; 1 at $17.61; 1 at $16.98 (5/13/23 Post)

Dividend: Quarterly at $.45 per share 

EGBN Dividend History | Nasdaq

Last Ex Dividend: 1/10/24

Last Earnings Report (Q/E 12/31/23): 

SEC Filed Press Release

Comparisons are to the 2022 4th quarter. SEC Filing 

Diluted E.P.S. = $.67, down from $1.32

NIM: 2.45%, down from 3.14%

Net Charge off ratio: .6%, up from .05%

Nonperforming loans ratio: .82%, up from .08% 

I had an unfavorable reaction to this report. The financial metrics will need to improve before I will repurchase any shares.    

C. Eliminated KLG  - Sold 10 at $16.82: 

Quote: WK Kellogg Co. (KLG) 

Proceeds: $168.2

As previously discussed, Kellogg split into two companies: W.K. Kellogg and Kellanova (K). KLG ended up with the cereal businesses. Kellogg Board Approves Separation into Two Companies, Kellanova and WK Kellogg 

KLG Analyst Estimates | MarketWatch

SEC Filings 

SEC Filed 2023 Annual Report 

Website: Our Brands 

Profit Snapshot: +$66

Last Discussed: Item # 2.K. Started KLG - Bought 10 at $10.22 SL (11/11/23 Post) After the split, large investors dumped KLG, driving the price down. Why WK Kellogg Stock Plunged 32% Last Month | The Motley Fool

Dividend: Initiated at $.16 effective for the 2023 4th quarter payment. 

Last Ex Dividend: 2/29/24

Last Earnings Report (Q/E 12/31/23): 

Diluted E.P.S. $.18, barely above the quarterly dividend. 

D. Pared JQC - Sold 5+ Shares Purchased with Dividends at $5.54:

I have turned off dividend reinvestment. Any additional purchases will have to lower my average cost per share.  

Proceeds: +$32.43

Quote: Nuveen Credit Strategies Income Fund Overview - Leveraged CEF 

"The Fund primarily invests in senior loans, high yield corporate debt, and collateralized loan obligation (CLO) debt."

SEC Filings 

SEC Filing: Holdings as of 10/31/23 The senior loans are mostly at spreads to short term rates. 

Nuveen Credit Strategies Income Fund- SEC field shareholder report for the period ending 7/31/23. 

Leverage as of 2/29/24: 

Credit Quality: 

Given the substantial leverage, the narrowing spread between the cost of borrowings and the yields of securities bought with borrowed money, and the overall low credit quality of the portfolio, I view this fund as high risk. 

Sponsor's website: JQC - Nuveen Credit Strategies Income Fund 

Investment Category: Monthly Income Generation

Profit Snapshot: +$1.7

Last Discussed: Item # 6.B. Added to JQC - Bought 10 at $5.08; 10 at  $5 (11/11/23 Post); Item # 1.F. Added to JQC - Bought 20 at $5.07 (8/12/23 Post); Item # 2.A. Added to JQC - Bought 10 at $4.94 (6/17/2023 Post)

New AC per share: $5.09 (140 shares)

Snapshot Intraday on 3/18/24 after pare

Dividend: Monthly at $.054 per share ($.648 annually)

Yield at New AC: 12.73%

Last Ex Dividend: 3/14/24

Data Date of 3/18/24 Trade: 

Net Asset Value per share: $5.92

Closing Market Price: $5.55

Discount: -6.25%

Average 3 Year Discount: -10.07%

I will consider trimming a leveraged CEF when the current discount is below the 3 year average. 

Sourced: JQC-CEF Connect (Click "Pricing Information" Tab)

Similar unleveraged ETFs: SPDR Blackstone Senior Loan ETF (SRLN) and Invesco Senior Loan ETF (BKLN). I have a small ball position in SRLN. 

3. Corporate Bond Purchases: $20,000 in principal amount. 

The pick up in short term investment grade corporate purchases results from ongoing deluge of proceeds from maturing securities. 

For Kite Realty, I discuss a common stock purchase in Item #1.B. above where I discuss the last earnings report. 

Equity REIT SU bonds are more risky than non-pass through entities that have the same operating characteristics. 

The reason is that REITs will pay out a much larger percentage of free cash flow in common share dividends. There is consequently less free cash flow available to expand the business and to pay off maturing debt.  

Generally, I would expect a SU bond issued by an equity REIT to have a slightly higher YTM than an identically rated one issue by a non-pass through entity.   

Equity REIT refers to real estate investment trusts that own real estate as distinguished from Mortgage REITs that owns debt and have considerably more leverage. 

A. Bought 2 Kite Realty LP 4% SU Maturing on 3/15/25 at a Total Cost of 98.293: 

Issuer: Operating entity for Kite Realty Group Trust (KRG) - An Equity REIT

I have a small ball position in the common stock (see Item 1.B. above). 

KRG 2023 SEC Filed Annual Report KRG's debt is discussed starting at page F-30. SU debt is listed at page F-32. The March 2025 will be the next one to mature after a 4.58% note that matures on 6/30/24 which has a $149.635M balance as of 12/31/23. 

KRG SEC Filed Financial Report for the Q/E 12/31/23 

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa2/BBB-

YTM at Total Cost: 5.8%

Current Yield at TC = 4.0695%

I now own 4 bonds. 

Last Bond Offering (1/2024): Prospectus for $350M SU maturing in 2034. Part of the proceeds will be used to redeem the 4.58% note that matures on 6/30/24 (p. S-11)

B. Bought 2 Kite Realty LP 4% SU Bonds Maturing on 10/1/26 at a Total Cost of 95.512:

Issuer: Operating Entity for Kite Realty  - An Equity REIT

See Items 1.B. and 3.A. above. 

Prospectus 

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa2/BBB-

YTM at Total Cost: 5.925%

Current Yield at TC = 4.188%

C. Bought 2 Fortune Brands 4% SU Maturing on 6/15/25 at a Total Cost of 98.164 - Interactive Brokers Account: 

Issuer: Fortune Brands Innovations Inc. (FBIN) 

The FBIN brands include Moen, House of Rohl, Aqualisa, Emtek, Therma-Tru, Larson, Fiberon, Master Lock, SentrySafe, Yale and August. Home - Fortune Brands Innovations

FBIN  Analyst Estimates | MarketWatch

FBIN SEC Filings

FBIN SEC Filed Earnings Press Release for the Q/E 12/31/23 

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa2/BBB

YTM at Total Cost: 5.545%

Current Yield at TC = 4.075%

D. Bought 2 Fortune Brands 4% SU Maturing on 6/15/25 at a Total Cost of 98.13 - Fidelity Account: 

This is the same bond discussed in Item #3.C. above.

YTM at Total Cost: 5.577%

E. Bought 2 General Motors Finance 3.5% SU Maturing on 11/7/2024 at a Total Cost of 98.762: 

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa2/BBB

YTM at Total Cost: 5.473%

Current Yield at TC = 3.544%

This bond was originally issued by Americredit that was acquired by GM Financial.  

F. Bought 1 Piedmont Natural Gas 3.6% SU Maturing on 9/1/2025 at a Total Cost of 97.209: 

Issuer: Wholly owned subsidiary of Duke Energy Corp. (DUK) 

Duke Energy completes acquisition of Piedmont Natural Gas (2016) 

DUK 2023 Annual Report 

Finra Page: Bond Page | FINRA.org

Credit Ratings: A3/BBB+

YTM at Total Cost: 5.63%

Current yield at TC = 3.7%

G. Bought 1 Public Service of New Mexico 3.85% SU Maturing on 8/1/2025 at a Total Cost of 97.688 - Interactive Broker's Account: 

Issuer: Operating entity of the electric utility holding company of PNM Resources Inc. (PNM) 

PNM SEC Filings 

PNM 2023 Annual Report 

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa2/BBB

YTM at Total Cost: 5.61%

Current Yield at TC =  3.94%

H.  Bought 1 Public Service of New Mexico 3.85% SU Maturing on 8/1/25 at a Total Cost of 97.633- Fidelity Account: 

This is the same bond discussed in Item #3.G. above. 

YTM at Total Cost: 5.667%

I. Bought 2 Capital One 3.2% SU Maturing on 2/5/2025 at a Total Cost of 98.005: 

Issuer: Capital One Financial Corp. (COF) 

COF Analyst Estimates | MarketWatch

COF SEC Filings 

2023 SEC Filed Annual Report 

Financial Data 2021-2023: 

In Millions Except as Noted, page 70

SEC Filed Earnings Press Release for the Q/E 12/31/23 (net income of $706M)

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa1/BBB

YTM at Total Cost: 5.563%

Current Yield at TC = 3.265%

J. Bought 1 Xcel Energy 3.3% SU Maturing on 6/1/2025 at a Total Cost of 97.328: 

Issuer: Xcel Energy Inc. (XEL) - Utility Holding Company

XEL Analyst Estimates | MarketWatch

XEL SEC Filings 

SEC Filed Earnings Press Release for the Q/E 12/31/23 (net income of $409M for the quarter and $1.771B for 2023)

SEC Filed 2023 Annual Report  Debt is discussed starting at page 58. This SU bond is the next one to mature. As noted on pages 59-60, operating subsidiaries issue first mortgage bonds. I own several of those.

FINRA Page: Bond Page | FINRA.org

Credit Ratings: Baa1/BBB

YTM at Total Cost: 5.634%

Current Yield at TC: 3.39% 

K. Bought 2 Healthpeak 3.4% SU Maturing on 2/1/25 at a Total Cost of 98.125 - Vanguard Taxable Account: 

Issuer: Healthpeak Properties Inc.  (DOC) 

Healthpeak recently completed its acquisition of Physicians Realty Trust that traded under the DOC symbol. The company then changed its stock symbol from PEAK to DOC. Healthpeak Properties Closes Merger with Physicians Realty Trust (3/1/24)

I eliminated my position in Physicians Realty after the acquisition announcement and prior to its consummation. I currently own only 10 shares Healthpeak. Item # 1.J. Restarted PEAK in Fidelity Account - Bought 10 at $15.61 (11/4/23 Post) 

SEC Filings 

Website: Home - Healthpeak

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa1/BBB+

YTM at Total Cost: 5.649%

Current Yield at TC = 3.465% 

I now own 4 bonds. The prior 2 bond purchase was made last month at a 98.019 total cost. 

This bond was originally issued by Healthpeak when it was called HCP.  

L. Bought 2 Synchrony Financial 4.875% SU Maturing on 6/13/25 at a Total Cost of 98.587: 

Issuer: Synchrony Financial (SYF) 

I had a 2 Synchrony Financial bonds mature on 3/19/24, see Item # 5 below. 

SYF Analyst Estimates | MarketWatch

SEC Filings 

SYF SEC Filed 2023 Annual Report 

SYF SEC Filed Earnings Press Release for the Q/E 12/31/23

Finra Page: Bond Page | FINRA.org

Credit Rating: BBB-

YTM at Total Cost: 6.079%

Current Yield at TC: 4.945%

4. Treasury Bill Purchases: $20,000 in principal amount

A. Bought 5 Treasury Bills at the 3/18/24 Auction: 

180 Day Bill

Matures on 9/19/24

Interest: $129.67

Investment Rate: 5.34%

B. Bought 3 Treasury Bills at the 3/18/24 Auction: 

91 Day Bill

Matures on 6/20/24

Interest: $39.77

Investment Rate: 5.389%

C. Bought 2 Treasury Bills at the 3/19/24 Auction: 

364 Day bill

Matures on 3/20/25

Interest: $97.26

Investment Rate: 5.062%

D. Bought 10 Treasury Bills at the 3/20/24 Auction: 

119 Day Bill

Matures on 7/23/24

Interest: $172.38 

Investment Rate: 5.38% 

5. Treasury Note Purchases in the Secondary Market: $2,000 in principal amount. 

These purchases were made in my Schwab account. Schwab does not charge a commission for treasury purchases, either at the auctions or in the secondary market. 

I can fill vacant spaces in my bond ladder by buying treasury notes in the secondary market. I can also extend the maturities into the 2025 4th quarter which can not now be done with purchases at auctions. 

A. Bought 1 Treasury 4.5% Note in the Secondary Market: 

Priced at 99.6594

Matures on 11/25/25

YTM at 99.6594 Total Cost: 4.72%

Current Yield = 4.4154%

B. Bought 1 Treasury Note 4.75% Note Maturing on 7/31/24: 

Purchased at 99.8936

YTM at Total Cost 4.812%

Current Yield at TC = 4.755%

The next 52 week treasury bill auction is on Tuesday 4/16/24. 

The next two year treasury note auction is on Tuesday 4/23/24.  

5. Corporate Bond and Treasury Bill Maturities Monday 3/18 through Thursday 3/21):

I use a ladder approach in buying Treasury Bills, CDs and investment grade corporate bonds. I will generally have multiple securities maturing every week where I have to decide how to redirect the proceeds. 

Reinvestment of proceeds from maturing securities is by far my biggest investment challenge this year, made more acute by the anticipated decline in short term interest rates and my extreme weighting in short term maturities.  

Mondelez $2,000 Vanguard RI  

Ryder and Mendelez $6,000 Fidelity Account

Ryder $2,000 IB Account

 

Treasury Bill $7,000 Schwab Account

Synchrony Financial $2,000 Fidelity Account 

I used the proceeds to buy 2 Synchrony Financial 4.875% SU maturing on 6/13/25. 

Treasury Bill $5,000 Schwab Account

Nextera Capital $4,000 Fidelity Account

Nextera Capital $10,000 Schwab Account

Nextera Capital $2,000 Vanguard RI Account 

The Nextera Capital SU bonds are guaranteed by NextEra Energy Inc. (NEE), a utility holding company.  

Remaining March proceeds: $16,000

April 2024 Proceeds: $98,000

May 2024 Proceeds: $104,000

June 2024 Proceeds: $110,000

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.