Economy:
Job Growth in March: 303,000 vs. 200,000 consensus
Average Hourly Earnings: Up 12 cents or .3% to $34.69, with annual at +4.1%
Work Week: Up .1 to 34.4 hours
Prior 2 Month Job Revisions: Up 22,000 Employment Situation Summary - 2024 Q01 Results
This strong report militates against a rate cut for as long as inflation remains sticky near current levels or rises.
The government released its PCE data for February on 3/29/24:
Annual PCE Inflation: 2.5%
Annual Core PCE Inflation: 2.8%
Both he PCE and core price indexes increased month-to-month at .3%. The annual core PCE price index was reported at 2.8%, down from 2.9% in January. The annual PCE price index rose .1% to 2.5%.
Over the past 3 months, the annual core PCE price index has been sticky in the 2.8% to 2.9% range having fallen from 3.4% in the 12 month period ending in October 2023.
Nominal personal consumption expenditures rose .8% (real at +.4%).
Discussed at PCE inflation report February 2024: Key Fed inflation gauge rose 2.8% annually as expected
The key points are that consumer spending remains robust and PCE price inflation is not moving down.
I noted in a comment that core PCE inflation rose at an annualized rate of 3.5% for the 3 month period ending in February 2024. Don’t Bet on Multiple Rate Cuts. The Case For ‘One and Done.’ - Barron's
Fed's Kashkari Sees Possibility of No Rate Cuts in 2024 - YouTube; When will the Fed cut rates? Maybe not in 2024, one Fed official cautions - CBS News
Fed Chair Jerome Powell signals rate cuts aren’t imminent | CNN Business
Biden: U.S. economy world's best; Trump claims 'cesspool.' Data is clear Trump is a demagogue who creates false narratives in pursuit of power. His descriptions of the current U.S. economy are false.
CME FedWatch Tool - July Meeting:
CME FedWatch Tool - CME Group
+++
Allocation Shifts Discussed in this Post:
Treasury Bill Purchases at Auction: $15,000 in principal amount
Corporate Bonds: $6,000 in principal amount
FDIC Insured CDs: $2,000
Common stocks: -$828.54
(consisting of $980.34 in proceeds minus $151.8 in purchases)
U.S. Equity Preferred Stocks: -$385.67
(consisting of $625 in proceeds from an issuer call minus $239.33 in a purchase)
2024 Outflow Common Stocks/Stock Funds: -$21,808.88
++++
Putin and His Orwellian State:
U.S. told Russia Crocus City Hall was possible target of attack - The Washington Post Putin publicly dismissed the U.S. warning before the attack. There were several reports in TASS that Russia had thwarted attacks by Islamic militants prior to the concert hall attack including one on a Moscow synagogue. TASS reported that the attack on the synagogue was stopped on 3/7/24, the same day as the U.S. Embassy in Moscow issued its warning. U.S. Warned About Possible Moscow Attack Before Concert Hall Shooting - The New York Times
So a Russian needs to ask how 4 terrorists were able to enter the Crocus City Hall so easily and then leave unmolested after killing so many. The question is whether Putin knew about the attack and did nothing for reasons that only Putin is in a position to explain, or alternatively whether Putin's government is just so incompetent that it took no measures to protect Russian citizens after the warnings and the knowledge that ISIS was operating inside Russia.
Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war
Russian tank graveyard: Ukrainians obliterate armour near Tonenke with Javelins and drones - YouTube; Huge Russian Armored Vehicle Attack Near Tonenke (36 Tanks, 12 BMPs) Defeated--20 Vehicles Destroyed - YouTube
Ukrainian Drone Hits Shahed Drone Production Facility in Yelabuga, Tatarstan (Nearly 1,200km! from Ukraine Border) - YouTube; 'Ukrainian' Cessna drone blows up factory 745 miles inside Russia - YouTube These drones were the size of Cessna aircraft and moved slowly. Russian air defense is non-existent.
Ukraine launches ‘massive’ drone attack on Russian military airfield - YouTube At least this video shows that the Russians at least had some air defense for this military airfield, but some grounds explosions can be seen and heard. In videos of drone attacks on military production factories and oil refineries, only occasional small arms fire can be heard.
Russia Su-27 Shot Down by Friend Fire Near Sevastopol! - YouTube
Russia Begins Closing Prisons As Prisoners And Staff Are Recruited For War In Ukraine - YouTube
++++
Trump and His Orwellian Party:
RealClearPolitics - Election 2024 - General Election: Trump vs. Biden
This is one political strategy that Trump has both learned and successfully implemented:
Adolf Hitler: "The receptivity of the masses is very limited, their intelligence is small, but their power of forgetting is enormous. In consequence of these facts, all effective propaganda must be limited to a very few points and must harp on these in slogans until the last member of the public understands what you want him to understand by your slogan."
Trump's Happy Easter Message:
Trump Shares Video Featuring Image of a Hog-Tied Biden - The New York Times Many Republicans see no problem with posting that image. I have read hundreds of comments from them supporting that opinion and have not seen any yet that expresses disgust.
‘We’ve never had anything like this’: The effect of Trump’s violent rhetoric on his base - YouTube; Trump is 'making being a dictator his brand': Ruth Ben-Ghiat - YouTube
Biden effigy kicked by Republicans at Kansas fundraising event - YouTube; Biden Effigy Attacked at Kansas GOP Event - The New York Times; Biden effigy beaten, kicked at Kansas Republican event, drawing outrage - The Washington Post
Trump calls Jan. 6 defendants "hostages," gets rebuke from Pence- YouTube; Trump has embraced Jan. 6. The extremist message may alienate — or resonate-NPR Trump is normalizing violence as legitimate political protest by calling the insurrectionists convicted of felonies "patriots" and "hostages". Meet some of the violent Jan. 6 rioters Donald Trump keeps calling 'hostages'; Why Trump says Jan. 6 rioters are "patriots" - The Washington Post
Trump says members of Jan. 6 Select Committee should go to jail - YouTube
Another Trump claim that resonates with members of his authoritarian party is that his his VP had the authority to reject the state certified results in 4 states won by Biden and to allow the republican dominated legislatures choose the winner. The same request was made to the Supreme Court with a majority of House republicans seeking that result. They were only trying to protect democracy by canceling the certified election results.
Trump VICIOUSLY ATTACKS judge's family - YouTube; Trump Asks Hush-Money Judge to Let Him Keep Attacking Judge's Daughter
Trump Media stock is 'a scam' Barry Diller says
DJT Stock: Trump Media Isn’t a Meme Stock, It’s a Cryptocurrency | Morningstar DJT is disintguishable from meme stocks in one respect as the author notes.
Meme stocks were once viable companies that earned profits but have fallen on hard times.
I doubt that DJT will ever generate a profit before its fate is sealed in a BK liquidation.
Possibly, if Trump causes his campaign to spend a large sum advertising on Truth Social this year, DJT may be able to turn a profit for a quarter or two.
Such spending would not be beneficial to the campaign since those viewing ads are already Trump voters and need no encouragement to vote for him. Spending other people's money on Truth Social ads would only be for Trump's personal benefit, allowing him to unload shares at a higher price when the lock up period expires.
What happens to DJT's revenues when and if Trump is convicted of a felony, loses the election in November or passes away as old people are prone to do.
DJT will have trouble attracting advertisers for a variety of reasons, including its limited reach and the unwillingness of most public companies to be associated with Trump who they justifiably view as too toxic.
I read an article that most of the advertising dollars so far come from Trump memorabilia sellers. Donald Trump’s Truth Social Is a Meme Stock. So What Happens Next? | Vanity Fair Most ads are for products like "Trump coins, Trump trading cards." Donald Trump Is Poised to Pocket Billions in a Meme Stock Media Merger | Vanity Fair
The risk factor section of the registration prospectus is 83 pages long. I doubt that the Trumpsters buying the stock have read a single sentence. S-4/A at pages 63 to 146.
Some highlights:
Bold letters are in the original document.
Page 99
Since inception, TMTG has continuously sought to improve its business model by developing its technology as an early stage company. TMTG expects to incur operating losses for the foreseeable future.
Page 100
TMTG does not currently, and may never, collect, monitor or report certain key operating metrics used by companies in similar industries.
(How can TMTG attract advertisers without gathering that kind of information?)
Page 107
TMTG’s independent registered public accounting firm has indicated that TMTG’s financial condition raises substantial doubt as to its ability to continue as a going concern.
(The financial condition improved with the merger which brought in the $300M in cash that Digital World had in an escrow account. DJT will need to raise additional equity capital within 12 to 18 months, which will dilute existing shareholders when and if the company ever becomes profitable)
Page 120
In connection with the preparation of its financial statements as of and for the nine months ended September 30, 2023, TMTG identified material weaknesses in its internal control over financial reporting, and TMTG may identify additional material weaknesses in its previously issued financial statements that, in the future, may cause the Combined Entity to fail to meet its reporting obligations or result in material misstatements of its financial statements.
Pages 130-132
The death, incarceration, or incapacity of President Trump, or discontinuation or limitation of his relationship with TMTG, may negatively impact TMTG’s business.
Donald J. Trump is the subject of numerous legal proceedings, the scope and scale of which are unprecedented for a former President of the United States and current candidate for that office. An adverse outcome in one or more of the ongoing legal proceedings in which President Trump is involved could negatively impact TMTG and its Truth Social platform.
A publicly-traded entity controlled by President Trump has previously been subject to a cease and desist order issued by the Securities and Exchange Commission.
A number of companies that were associated with President Trump have filed for bankruptcy. There can be no assurances that TMTG will not also become bankrupt.
A number of companies that had license agreements with President Trump have failed. There can be no assurances that TMTG will not also fail.
DJT is a meme stock on steroids, not a cryptocurrency, and the market will find its true price based on fundamentals. The price will end up being zero, with the only question being how long it takes. The length of time will expand when and if DJT is able to do a secondary stock offering, selling millions of shares to Trump's True Believers at a grossly inflated price to refill its coffers drained by operating losses.
Trump will IMO be able to sell a sizeable number of his shares before the price collapse happens, which, when it happens, will seal his fate as the biggest grifter in world history. Trump will blame anyone other than himself for that price collapse. I would not predict when that will occur given the magnitude and resources of Trump's cult and speculator participation in driving short term moves Some have undoubtedly netted profits and many will likely continue doing so. Others will lose a lot by hanging on too long and buying at prices that will never be justified by earnings.
My video: Trump Media (DJT) 2023 Financial Information Reported Today (4/1/24) - YouTube
DJT Financial Information for 2023:
Exclusive: Trump Media saved in 2022 by Russian-American under criminal investigation | Donald Trump | The Guardian; Report finds sketchy money with Russia ties helped Trump Media stay afloat - YouTube
Donald Trump is Selling Off His Mugshot Suit in pieces; On Trump’s Truth Social: Ads for Miracle Cures, Scams and Fake Merchandise - The New York Times; Trump selling bibles, sneakers, perfume on campaign trail unprecedented
The Church of Trump: How He’s Infusing Christianity Into His Movement - The New York Times Trump's supporters who identify themselves as evangelical Christian view him as chosen by God, a strange choice for GOD to make given Trump's numerous ethical and moral flaws, an inability to be truthful about almost everything, and his obvious status as a pretend Christian who is obviously manipulating tens of millions into believing he is a messianic figure. I compared him recently to Elmer Gantry, a fictional character in the Sinclair Lewis novel. Trump's Latest Grift Hawking Bibles- Trump as a Modern Day Elmer Gantry - YouTube; Elmer Gantry - Wikipedia
Who put up Trump's $175 million bond? A subprime car loan billionaire who has run afoul of regulators I am not surprised that Don Hankey is a Trump supporter.
Maggie Haberman on Trump 2024: Rhetoric is 'much more apocalyptic' - YouTube
Republican says Gaza should be approached ‘like Nagasaki and Hiroshima’ - The Washington Post; Michigan Congressman Tim Walberg, pastor and "good" Christian, talks about his solution for #Gaza: Give it the Hiroshima treatment. "Get it over quick."-X In 2022, Walberg won the 5th Congressional District in Michigan with 62.4% of the vote, so it is a solid Trump republican district.
Putin can count on several Republican politicians, like Senator Vance from Ohio, to spread demonstrably false Russian propaganda about Ukraine. How pro-Russian 'yacht' propaganda influenced US debate over Ukraine aid; From Russia, Elaborate Tales of Fake Journalists - The New York Times; J.D. Vance and Volodymyr Zelensky: Two Men in Contrast | National Review; My Video: Putin's Useful Idiots Jim Jordan and James Comer - YouTube
++++
1. Small Ball Sells:
I have used the stock rally to pare or eliminate some stock positions that have proved to be less than optimal purchases.
A. Pared Duplicate Position in SBRA - Sold 14+ shares at $14.52:
Quote: Sabra Healthcare REIT Inc. (SBRA)
Proceeds: $213.85
All of these shares were purchased with dividends.
SBRA owns nursing homes which used to be the riskiest REIT property sector. Office REITs are now the riskiest or a close second IMO but some are better than others (e.g. compare stock chart for HIW to OPI).
This REIT also owns senior housing communities, behavioral health facilities and speciality hospitals.
 |
| As of 12/31/23, 10-K at page 7 |
Referring generally to REITs operating in the same property sectors, with the heaviest concentration being in nursing homes, to similar REITs, the property risks have come from operators who have been unable to pay rent due to their shaky financial conditions, made worse by the pandemic.
To save the operator, a variety of unfavorable measures have been used including rent concessions and even loans from the REIT.
Another response has been to sell the properties leased to a bankrupt tenant at a loss even after the tax cost basis had been substantially reduced by the noncash depreciation expense.
For the year ending 12/31/23, SBRA reported a loss of $76.258M from real estate sales, up from $12M+ in 2022.
Occupancy Trends:
Website: Sabra Health Care REIT
SEC Filed 2023 Annual Report (risk factor summary starts at page 14 and ends at page 29)
Last Discussed: Item # 3.C. Eliminated 1 of 2 Duplicate Positions in SBRA - Sold 25. at $14.29 (10/14/23 Post)(profit snapshot = $26.59)
Last Buy Discussions: Item # 1.L. Added to SBRA - Bought 1 at $11.28 (5/13/23 Post); Item # 4.I. Added to SBRA - Bought 1 at $12.1; 2 at $11.67 (5/5/22 Post)
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Profit Snapshot: +$25.41
New Average cost per share this account: $13.04 (71+ shares)
 |
| Snapshot Intraday on 3/27/24 after pare |
Dividend: Quarterly at $.30 per share
SBRA Dividend History | Seeking Alpha
Yield at $13.04: 9.2%
Last Ex Dividend: 2/12/24
Last Earnings Report (12/31/23):
GAAP E.P.S. $.07
Normalized FFO per share: $.32
Normalized AFFO per share: $.33
GAAP to AFFO reconciliation:
For the quarter, the largest add back to GAAP net income when calculating FFO is the noncash depreciation expense of $42.976. The second largest is the noncash impairment charge of $7.268M.
For 2023, depreciation expense is the largest add back at $183.087M with the loss of $76+M realized from property sales being the second largest add back.
The are several other adjustments in making the FFO, Normalized FFO, AFFO and Normalized AFFO, including the noncash stock based compensation expense, noncash rental income and expense, a foreign currency loss, etc.
B. Eliminated Duplicate Position in HOPE - Sold 36+ at $11.26:
Quote: Hope Bancorp Inc.
Proceeds: $409.21
HOPE Analyst Estimates | MarketWatch
Investment Category: Regional Bank Basket Strategy
Profit Snapshot = +$32.87
Dividend: Quarterly at $.14 per share, last raised from $.13 effective for the 2018 second quarter.
Hope Bancorp, Inc. Dividend History | Nasdaq
Last Ex Dividend: 2/8/24
Last Earnings Report (Q/E 12/31/23):
Comparisons are to the 2022 4th quarter.
E.P.S. $.22, down from $.43
NIM 2.7%, down from 3.36%
NPA Ratio: .24%, down from .36%
NPL Ratio: .33%, down from .32%
Charge off Ratio: .05%, down from .17%
Coverage Ratio: 349.05% (allowance for credit losses to nonperforming loans)
These numbers are somewhat typical for regional banks that still have good NPA, NPL and Charge off ratios. Loan credit quality is not yet a major issue. The primary source of income, net interest margin, was still being adversely impacted year-over-year by the FED's monetary policy.
Interest costs rose at a much faster percentage pace than interest income received from loans and owned investment securities.
Most regional banks failed to adjust the duration of owned securities in 2021 when inflation was running hot but the prices of those securities were kept at unsustainably high levels due to the FED continuing its extremely abnormal monetary policies of ZIRP and QE. The banks ended up with very low yielding and long duration securities that rapidly went down in price as interest rates started to go up in 2022. Many of the banks were heavily weighted in low yielding mortgage backed securities whose duration goes up as interest rates rise, adding to their loss in value.
This is an excerpt from HOPE's 10-K that contains information on its owned securities:
I have discussed this topic in several posts (E.G. Item # 3 under Bank Mismanagement of Interest Rate Risk)
C. Eliminated FCF - Sold 10 at $13.64:
Quote: First Commonwealth Financial Corp. (Pennsylvania)
Proceeds: $136.4
Profit Snapshot: $58.4
Last Discussed: Item # 4.I. Bought 10 FCF at $7.8 (8/29/20 Post)
Dividend: Quarterly at $.125 per share
The quarterly rate was $.07 in 2014.
Last Ex Dividend: 2/8/24
Last Earnings Report (Q/E 12/31/23): SEC Filed Press Release
Comparisons are to the 2022 4th quarter.
E.P.S. $.44, up from $.38
NIM: 3.65%, down from 3.99%
Charge off ratio: .72%, up from .11%
D. Pared Duplicate Position in OFS (Schwab Account) - Sold 22 at $10.04:
Quote: OFS Capital Corp - Externally Managed BDC
Proceeds: $220.88
OFS SEC Filings2023 SEC Filed Annual Report (Summary of risk factors starts at page 28 and ends at page 63; summary of investments starts at page 105; a loan with a (6) beside the name is on nonaccrual status)
I sold the highest cost shares using FIFO accounting.
This was my response to the last earnings report which I viewed negatively.
Last Discussed: Item # 3.G. Pared OFS in Schwab Account - Sold 10 at $12.02 (1/26/24 Post)(profit snapshot = $21.59) I discussed several problematic investments in that post which have caused me to reduce my dollar exposure to OFS.
I also recently pared my OFS position held in my Fidelity account that reduced my average cost per share to 3.82 and increased my dividend yield to 35.6% based on the current quarterly rate. Item # 3.D. Pared OFS in my Fidelity Account - Sold 8+ at $11.81 Fi(1/20/24 Post)(profit snapshot - $60.72)
Profit Snapshot: +$13.7
Average Cost per share this account before pare: $6.02 (81+ shares)
Details of Position this Account Before Pare -Schwab Account:
New Average cost per share: $4.765
 |
| Snapshot Intraday on 4/1/24 after pare |
Dividend: Quarterly at $.36 per share ($1.36 annually), last raised from $.33 effective for the 2023 third quarter payment.
OFS Stock Dividend History & Date
Yield at New AC of $4.765: 28.54%
Last Ex Dividend: 3/15/24 (owned all as of)
Net Asset Value Per Share History:
12/31/23: $12.09
9/30/23: $12.74
6/30/23: $12.94
12/31/22: $13.47
6/30/22: $14.57 10/Q for the Q/E 6/30/22 at page 3
03/31/21: $11.96 10-Q at page 3
12/21/20: $11.85 10-K at page 69
6/30/20: $10.10
3/31/20: $ 9.71
12/31/19: $12.46
9/30/19: $12.74
6/30/19: $12.95 Page 2 10-Q
3/31/19 $13.04 10-Q
12/31/18 $13.10
6/30/18 $13.70
03/31/18 $13.67
12/31/17 $14.12
12/31/16 $14.82
12/31/15 $14.76
12/31/14 $14.24
12/31/13 $14.54
IPO Offering Price at $15 (November 2012) with proceeds after the underwriters' discount at $13.05 Final Prospectus Supplement
Last Earnings Report (Q/E 12/31/23):
There are a lot of items in this report that I viewed unfavorably. Net investment income per share declined to $.35 from $.40 in the prior quarter. The net asset value per share decline to $12.09 from $12.74 as of 9/30/23. The BDC took a realized loss of $.08 per share. Unrealized depreciation was $.58 per share. The value of the equity investment in Pfanstiehl, discussed below, was reduced by $6.178M to $70.927M.
As previously discussed, the most significant investment is a 400 share equity investment in the private company Pfanstiehl, valued at $70.927M as of 12/31/23. That equity investment was valued at $77.105M as of 9/30/23, page 16, with an amortized cost of $217,000.
Looking at the 2019 OFS Annual Report, I noted that the 400 common shares was valued at $4.755M as of 12/31/2019. OFS then had outstanding a 10.5% subordinated loan of $3.768M outstanding. That loan matured in 2021 leaving OFS with just the equity position. (p. 96, 10-K) Frequently equity positions will be acquired by a BDC as part of a loan transaction.
I am also aware that the valuation bounces around a lot. In the 2022 first quarter, for example, the valuation increased by $9.6M to $75.308M (pages 17, 55 10-Q)
I am aware that Pfanstiehl was sold by Ferro in 2013 SEC Filing "Consideration was comprised of a $16.9 million cash payment and an earn-out incentive payment of up to $8 million, payable over two years based on attained earnings targets."); Med Opportunity Partners, LLC Makes Strategic Investment in Pfanstiehl, Inc. (4/1/2013)
Most Recent Buy Discussions: Item # 3.F. Bought 40 OFS with an Average Cost Per share of $4.18 (11/7/20 Post); Item # 2.L. Added 5 OFS at $3.97-Fidelity Taxable (11/28/20 Post); Item # 1.K. Added 3 OFS at $4.5 -Fidelity Taxable (8/8/20 Post); Item # 3.E. Added 5 OFS at $9.66; 5 at $9.2; 5 at $8.7; 5 at $6; 5 at $5.65; 2 at $3.7; 10 at $3.79 (4/11/20 Post)
Some Other Sell Discussions: Item # 1.B. Pared OFS in Schwab Account - Sold 20 at $11.51 (12/30/23 Post)(profit snapshot = $17.65); Item # 6.C. Pared OFS in Schwab Account - Sold 20 at $10.86 (9/30/23 Post)(profit snapshot = $28.94); Item # 3.A. Eliminated OFS in Vanguard Account - Sold 20 at $10.2 and Item # 3.B. Pared OFS in my Fidelity Account-Sold 10 at $10.15 (8/19/23 Post)(profit snapshots = $182.5)(Item #3.B. also contains snapshots of prior realized gains); Item # 3.D. Pared OFS in Fidelity Account - Sold 13.82 Shares at $11.32 (8/16/22 Post); Item # 4.B. Pared OFS in Fidelity Account - Sold 15.427 at $12.49 (6/15/22 Post)(profit snapshot = $60.07; contains snapshots of realized gains prior to 2022); Item # 4.D. Pared OFS in Fidelity Account - Sold 29+ at $13.06 (4/21/22 Post)(profit snapshot = $69.88); Item # 1.H. Pared OFS in Fidelity Account Sold 35 at $10.07- Highest Cost Lots That Could be Sold Profitably (7/22/21 Post)(profit snapshot = $12.44);; Item # 2.M. Pared OFS in Vanguard Taxable-Sold 20 at $7.2 (12/25/20 Post)(profit snapshot = $56.8); Item # 3.B. Sold 10 OFS at $12.04 (11/30/19 Post)(profit snapshot = $7.04); Item # 4.B. Sold 60 shares at $12 (11/13/19 Post)(profit snapshot = $13.11); Item # 3.A. Sold Highest Cost OFS Lots in Schwab Account - 50 shares at $12.27 and 50 at $12.47 (5/5/19 Post)(profit snapshots = $69.55)
OFS Realized Gains to Date: $780.21
Goal: Any total return before ROC adjustments to the tax cost basis in excess of the dividends.
2. Small Ball Buys:
A. Added to PINE - Bought 10 at $15.18:
Quote: Alpine Income Property Trust Inc. (PINE)
Externally managed by wholly owned subsidiary of CTO Realty Growth Inc. (CTO) which I own.
Cost: $151.8
2023 SEC Filed Annual Report (properties are listed starting at page 7; debt is discussed starting at pages F-21)
As of 12/31/23, PINE owned 138 properties with 3.8M square feet of rentable space. The properties are subject to net leases with an average weighted lease term of 7 years.
In addition to owning real estate, PINE has commercial loans outstanding:
3 Years Operating Results:
 |
| Page 56 Annual Report |
Last Discussed: Item # 1.A. Added to PINE - Bought 5 at $14.9; 5 at $14.4 (10/28/23 Post) I discussed the 2023 third quarter report in that post. SEC Filed Earnings Press Release The market reacted negatively to this report and the revised 2023 guidance sending the stock down $2.12 or 12.81%, closing at $14.43 on 10/20/23. The bankruptcy of a tenant that operated 8 Valero branded convenience stores. The quarterly rent loss was then described as a little under $150,000. Alpine Income Property Trust Q3 2023 Earnings Call Transcript-Insider Monkey
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
New Average cost per share: $16.14 (46 shares)
 |
| Snapshot Intraday 3/28/24 after add |
Dividend: Quarterly at $.275 per share ($1.1 annually), last raised from $.27 effective for the 2022 third quarter payment.
PINE Dividend History | Nasdaq
Yield at $16.14 = 6.815%
Last Ex Dividend: 3/13/24 (owned 36 as of)
Last Earnings Report (Q/E 12/31/23):
SEC Filed Earnings Release and SEC Filed Investor Presentation
AFFO per share = $.38
Net Income to AFFO Reconciliation:
Major Tenants:
2023 AFFO per share = $1.49
2024 AFFO per share guidance: $1.53 to $1.58
During the earnings call, a question was asked about what was happening with the seven branded Valero convenience stores. The company stated that 2 stores had been released with discussions ongoing for releasing the other 5. The intention is to sell all of the properties.
3. Treasury Bills Purchased at Auction: $15,000 in principal amount
I have entered an order to buy 10 treasury six month treasury bills at next Monday's auction. I will not be participating in the 3 month bill auction.
A. Bought 5 Treasury Bills at the 4/1/24 Auction:
Matures on 10/3/2024
Interest: $129.55
Investment Rate: 5.334%
B. Bought 5 Treasury Bills at the 4/1/24 Auction:
92 Day Bill
Matures on 7/5/24
Interest: $66.83
Investment Rate: 5.374%
C. Bought 5 Treasury Bills at the 4/3/24 Auction:
119 Day Bill
Matures on 8/6/24
Interest: $85.94
Investment Rate: 5.364%
4. Corporate Bonds:
A. Bought 2 W.P. Carey 4% SU Maturing on 2/1/2025 at a Total Cost of 98.7:
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Issuer: W. P. Carey Inc. (WPC)
I own the common stock which I last discussed here: Item # 1.D. Added 5 WPC at $55.55 (3/22/24 Post)
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa1/BBB+
YTM at Total Cost: 5.6267%
Current Yield at TC = 4.05%
I now own 10 bonds.
As noted in Item #7 below, I had 4 W.P. Carey 4% SU bonds mature on 4/1/24.
B. Bought 2 Cenovus Energy 5.375% SU Maturing on 7/15/25 at a Total Cost of 99.667:
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Issuer: Cenovus Energy Inc. (CVE)
Website: Home
CVE SEC Filed Earnings Press Release for the Q/E 12/31/23
In my last post, I discussed eliminating my position in a Cenovus reset equity preferred stock. Item # 1 Eliminated CVEPRC:CA - Sold 100 at C$23.56 (3/28/24 Post)(profit snapshot = +C$717). I previously eliminated my position in the USD priced common stock. Item # 3.H. Sold 10 CVE at $16.2 (3/31/22 Post)(profit snapshot = $92.74)
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 5.64%
Current Yield at TC = 5.393%
C. Bought 2 Santander Holdings USA 4.5% SU Maturing on 7/17/25 at a Total Cost of 98.428:
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Issuer: Subsidiary of Banco Santander S.A. ADR (SAN)
SEC Filed Fixed Income Investor Presentation for the 2023 4th Quarter
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB+
YTM at TC = 5.79%
Current Yield at TC = 4.572%
5. CDs - FDIC Insured:
I am continuing to buy some CDs that mature in 2025 that pay interest at maturity. This is slow motion implementation of my current strategy to shift more income into 2025 from 2024. Most of that shifting will start to occur in July when I can buy 6 month Treasury bills at auction that mature in 2025
A. Bought 1 Bank of America 5.15% CD Maturing on 4/4/25:
Interest paid at maturity
B. Bought 1 Schwab Bank 5.1% CD Maturing on 3/27/25:
Interest paid at maturity.
6. U.S. Equity Preferred Stocks:
A. MBINP Redeemed by Issuer:
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| 25 shares at the $25 par value |
Proceeds: $625
Profit Snapshot: +$72.95
Buy Discussions: Item # 3.A. Added to MBINP - Bought 5 at $21.37; 5 at $17.7 (5/6/23 Post); Item # 5.D. Bought 5 at MBINP at $23.43 (11/8/22 Post); Item # 4.A. Started MBINP - Bought 10 at $24.01 (7/3/2020 Post)
This preferred stock was redeemed on 4/1/24 because the 7% fixed rate coupon expired that day and was about to be replaced by a floating rate coupon at a 460.5 basis point spread to a short term rate which is currently over 5%.
B. Added to ARGOPRA - Bought 10 at $23.93:
Quote: Argo Group International Holdings Ltd. Series A Non-Cumulative Preferred Stock
Cost = $239.33
The original issuer was acquired by Brookfield Reinsurance Ltd. (BNRE).
This is a fixed-to-floating rate preferred stock. The fixed rate is 7% to but excluding 9/15/25, then, if not called, resets for 5 years at a 6.712% spread to the 5 year treasury note. I doubt that Brookfield will want to pay a 6.712% spread to that rate. My current prediction, subject to change, is that this preferred stock will be called on the reset date just like MBINP discussed above barring a substantial issue involving credit worthiness.
Brookfield Reinsurance Completes $1.1 Billion Acquisition of Argo Group
Last Discussed: Item #5.A. Added to ARGOPRA - Bought 5 at $23.7 (2/15/24)
New Average cost per share: $24.25 (40 shares)
 |
| Snapshot Intraday on 4/2/24 after add |
Dividend: Quarterly at $.4375 per share ($1.75 annually)
Yield at New AC = 7.2165%
Last Ex Dividend: 2/28/24 (owned 30 shares as of)
Par Value: $25
Coupon: 7% to but excluding 9/15/25 then, if not called, resets for 5 years at a 6.712% spread to the 5 year treasury note.
Placement in the Capital Structure: Equity Preferred Stock
After Argo was acquired, a new prospectus was issued that had the same terms. A new prospectus was issued due to a name change and reincorporation from a Bermuda company to a U.S. registered one. SEC Form 8-K The new prospectus for ARGOPRA is attached as Exhibit A to the the SEC Certificate of Incorporation. SEC Filing
7. Cash Flow into Fidelity Account on 4/1/24:
Redemption Proceeds: $28,000
The largest redemption was the 15 Williamson County GO municipal bonds, rated AAA, that were redeemed early.
Taxable Interest = $1,114.91
Tax Free Interest: $538.76
Dividends: $128.18
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.
As of 8:20 CST today, the ten year treasury yield is trading at 4.39% up .073%
ReplyDeletehttps://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page
I would attribute the increase to the better than expected jobs report.
You've been saying less rate cuts than the market expects. Now the articles are catching up & reflecting the same idea.
DeleteI'm starting to wonder about the importance of a 2% inflation. Seems like the economy is doing okay at the current inflation and it's not running away.
The "Notify Box" is not working. It can be checked but will not stay that way.
ReplyDeleteI posted a video discussing a comparative analysis of three small cap value funds. I decided to eliminate FCPVX and to add a few shares to CALF.
https://www.youtube.com/watch?v=DufEL51v53c
That explains why I haven't been getting notifications even though I've checked it off.
DeleteI bought calf when you mentioned it quite a while ago. It's been doing well. Looking forward to listening to the video.
Land: Until the "Notify Box" shows the email address after checking it, then it is not working.
DeleteI view CALF as a small cap value fund which flows from selecting the 100 highest free cash flow yields in the S&P 500.
The CALF vs. IWM total returns highlight the importance that some selection criteria is needed to weed out the garbage in the Russell 2000 index and S&P 600 Small Cap Index.
Annual average total returns through 4/5/24:
IWM = 6.78% Russell 2000
https://www.morningstar.com/etfs/arcx/iwm/performance
VIOO: 7.9% S&P 600 ETF
https://www.morningstar.com/etfs/arcx/vioo/performance
CALF = 15.05% Uses Selection Criteria
https://www.morningstar.com/etfs/bats/calf/performance
There have been long periods when small cap stocks have outperformed large caps but the last such period started in 1999 and ended around 2014.
https://www.longtermtrends.net/large-cap-vs-small-cap/
One reason for small cap outperformance is that the S&P 500 becomes significantly overvalued.
For about 10 years or so, owning the Russell 2000 index or a total stock market ETF (VTI) that has the small caps would have resulted in lower total annual returns than investing in just SPY.
For those wanting exposure to the entire U.S. stock market, or close to it, using a combination of SPY and other ETFs like CALF for the smaller cap exposure, using the small cap weighting in a total stock market index, may end up producing better returns than just owning a total stock market ETF like VTI that includes a lot of junk in including Russell 2000 small caps and micro caps.
5/10 year Total Average Annual Returns
VTI 13.51%/12.21%
https://www.morningstar.com/etfs/arcx/vti/performance
SPY 14.27%/12.79%
https://www.morningstar.com/etfs/arcx/spy/performance
I own VTI but my larger position is in a total stock market index fund is the zero expense ratio FZROX.
https://www.marketwatch.com/investing/fund/fzrox
FZROX has slightly outperformed VTI with a 5 year annual average total return of 13.68%. The difference is probably attributable to its zero expense ratio compared to .03% for VTI.
https://www.morningstar.com/funds/xnas/fzrox/performance
I currently own 80+ FZROX shares with an average cost of $9.33 with the closing price yesterday at $18.1. The first purchase was in 2018 and I have not sold any shares. I am not reinvesting the dividend.
Another cash cow ETF that I own is COWZ which selects the 100 highest free cash flow yields in the Russell 1000:
ReplyDeletehttps://www.paceretfs.com/products/cowz/
5 Year Annual Average Total Return through 4/5/2024 = 16.66%
https://www.morningstar.com/etfs/bats/cowz/performance
Russell 1000 ETF VONE:
5 Year Annual Average TR = 13.97
I would generally expect this fund to do better when severage high flying stocks like NVDA, MSFT, AAPL, GOOG, META, and AMZN are having bad years. None of those stocks are currently owned in COWZ since none are among the 100 highest free cash flow stocks in the Russell 1000.
VONE had a total return of -19.14% in 2022 whereas COWZ managed to be up .2%.
https://www.morningstar.com/etfs/xnas/vone/performance
BRT Apartments Corp. (BRT)
ReplyDelete$17.49 +$0.79 +4.73%
Last Updated: Apr 8, 2024 1:19 p.m. EDT
BRT is a mini cap apartment REIT. I would attribute the rise today to Blackstone buying Apartment Income REIT Corp. (AIRC) for $39.12 per share in cash.
https://www.businesswire.com/news/home/20240408368769/en/
A rare solidly down day. Over inflation meaning Fed won't be cutting so quickly. Which the Fed said late week already.
ReplyDeleteI haven't bought in, but might be worth buying the dips.
https://finance.yahoo.com/news/stock-market-today-stocks-sink-yields-jump-after-inflation-data-torpedoes-rate-cut-hopes-200322716.html
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DJT's stock's down 31% since taking his initials as ticker symbol. Seems appropriate!
Though Meanwhile, it's probably helped bail him out of debit some from the IPO.
https://www.marketwatch.com/story/trumps-djt-stock-dives-toward-lowest-close-since-ron-desantis-dropped-out-e181008b?mod=mw_rss_topstories
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Costco raised it's div by 14%? Wonder if it's worth a long term buy? I haven't looked yet.
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Still not letting me sign in to keep notification set. It's often taken a few tries but now nothing's worked.
Land: The 1 year T Bill and the 2 year treasury note yields signal no rate cuts this year. The 1 year T Bill yield is near 5.2% which would be consistent with about a 50/50 probability of the first 25 basis point cut occuring in January 2025. The signals sent by short term treasury yields about market expectations for rate cuts can change, but they do reflect some problematic inflation trends that could put the FED on hold this year.
Deletehttps://www.cnbc.com/2024/04/10/the-supercore-inflation-measure-shows-fed-may-have-a-real-problem-on-its-hands.html
The .4% month-to-month core CPI increases over the past three months are the wrong kind of trend for any rate cuts.
Trump has a 6 month lock up period for selling his DJT shares which runs as I recall from the first trading day into September. He can receive a waiver from the Board which consists of his sycophants. So they will do whatever he says. I believe that a waiver would require a two day notice before shares could be sold. Once Trump starts unloading shares and he will, the shorts will have more shares available to them which are in limited supply now. It costs a lot to borrow shares to sell short. The shorts will increase their selling when Trump is selling. Trump will be able to increase his wealth with this latest grift, as he has done in past with other ones. I doubt that he has any or much of a cost basis in the stock. The losers will end up being his cult members who bought into the hype and held the shares too long.
LAND: Costco closed yesterday at $722.58.
Deletehttps://www.marketwatch.com/investing/stock/cost?mod=search_symbol
The quarterly dividend was raised to $1.16 per share or $4.64 annual.
The dividend yield is less than 1% ant .64%. Given my age, I would want a starting dividend yield over 3% when selecting a dividend growth stock. The total return for a purchase of COST now is dependent on the share price movement with the dividend being immaterial.
The quarterly rate was the $.35 in 2014.
Assume that this kind of growth rate continued, and the annual dividend in 2034 was say $13.92 per share. The yield at $722.58 would then be 1.92%. Throughout that 10 year period, I would anticipate that the dividend would be producing by itself a negative real return each prior to taxes.
I have published a new post.
ReplyDeletehttps://tennesseeindependent.blogspot.com/2024/04/calf-fcpvx-megi-peo-rexrprb-sccc.html