Economy:
New housing starts declined by 5.5% in May and were 19.3% lower than in May 2023:
New Residential Construction Press Release
New Privately-Owned Housing Units Started: Total Units- St. Louis Fed I am not surprised that new housing starts is trending down pressured by inflation in building costs, higher insurance and property tax costs, and higher mortgage rates negatively impacting affordability.
Calculated Risk: By Request: Public and Private Sector Payroll Jobs During Presidential Terms This analysis separates private and public job creation numbers starting with the Reagan first term through Biden's term to date. Of all of the Presidents included in the chart and data, the job creation numbers for Biden are far higher than the others for the first 40 months in office. Trump ended his term with a negative job creation number. All of the republican Presidents had negative job creation numbers over the first 40 months in office.
++
Allocation Shifts Discussed in this Post:
Treasury Bills Purchased at Auction: $20,000 in principal amount
Corporate Bonds: $4,000 in principal amount.
FDIC Insured CDs: $4,000
U.S. Common Stocks: +$1,410.05 (no sales)
Canadian REIT: C$836, converted to US$610 for allocation purposes.
Stock ETF: $87.4
Inflow Common Stocks/Stock Fund: +$2,107.45
2024 Net Outflow Stocks/Stock Funds: -$28,136.45
+++
Putin and His Orwellian State:
Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war
Another S-400 Destroyed in Crimea (Radar, Launcher and Generator Truck) - YouTube
Putin 'is done' as losses in Ukraine degrade Kremlin's force projection | Peter Zeihan - YouTube
Ukrainian Drones Hit Lukoil Depot in Krasnodar -- Fuel Trucks Targetted - YouTube
Ukrainian Drones Hit Oil Depot in Azov Port, Rostov-on-Don - YouTube No effort was made to intercept the slow moving drones.
++++
Trump and His Party:
RealClearPolitics - Election 2024 - General Election: Trump vs. Biden
When will Trumpsters grow weary of him?
Americans in the 1950s turned on another powerful republican demagogue, Joseph McCarthy, when he was caught lying a few times during the Army-McCarthy hearings and attacked a young lawyer by the name of Fred Fisher. Trump does far worse everyday. "Have You No Decency?" | McCarthy | American Experience | PBS - YouTube
Father's Day Messages from Trump and Biden:
CEOs at Trump meeting: He was ‘meandering' and does not know what he is talking about
Fact check: Trump falsely claims Biden didn’t lower Americans’ insulin costs Lying works on those who are ignorant and unwilling to learn.
Fact check: Trump falsely claims almost all new jobs under Biden have gone to ‘illegal aliens’ Facts do not matter in TrumpWorld. Just make stuff up.
Former White House staffer says Trump called for leaker to be executed
Trump’s private demand to Johnson: Help overturn my conviction - POLITICO; Trump Demanded Mike Johnson Use the Federal Government to Overturn His Conviction, and Johnson’s Response Was Basically, “I’m on It, Boss!” | Vanity Fair
Fact check: Trump revives lie that he was long ago named Man of the Year in Michigan
Jimmy Kimmel Live: New Trump Tell-All Details Unhinged Behavior & Fox News Making Excuses in Case Biden Wins Debate - YouTube Trump Seeks Black Support, Posts Nasty Father’s Day Message - YouTube
Arizona is sending taxpayer money to religious schools — and billionaires see it as a model for the US The taxpayer dollars previously went to public schools.
The Trumpsters have shifted from attacking Taylor Swift and are now targeting Dolly Parton. There's Nothing Loving About Dolly Parton's False Gospel: The Federalist.com The Federalist Society, a far right group of "intellectuals", has been handpicking Supreme Court Justices and lower court judges for the republicans.
New York Times: 2 federal judges urged Aileen Cannon to step down from Trump case | CNN Politics; Judge in Trump Documents Case Rejected Suggestions to Step Aside - The New York Times One of the federal judges, Cecilia M. Altonaga who was appointed by President George W. Bush, is the chief judge of the Southern Florida district. Cannon is a judge in that district.
++++
1. Added to REI.UN:CA - Bought 50 at C$16.7 (C$1 Interactive Brokers Commission):
Quote: RioCan Real Estate Investment Trust (Canada: Toronto)
Total Cost: C$836
New Average Cost per share: C$17.69
Dividend: Monthly at C$.0925 per unit (C$1.11 annually)
Yield at New AC = 6.27%
I discussed this Canadian REIT in my last post and have nothing further to add here. Item # 1.A. Added to REI.UN:CA at C$17.01 (6/14/24 Post) I discussed the first quarter earnings report in that post. RioCan Reports First Quarter Results - Strong Leasing Results Driven by Accelerated Demand for High-Quality RioCan Space
2. Small Ball Buys:
As a reminder, when I grade regional banks on interest rate management, I am referring to how the banks reacted to hot inflation reports in 2021 and into early 2022 before the Federal Reserve first raised the federal funds range off ZIRP to .25% to .5% in March 2022, when the annual CPI inflation rate was already at 8.5%:
Consumer Price Index News Release - 2022 M03 Results
Federal Reserve issues FOMC statement (3/16/22):
Banks, regardless of size and purported sophistication in managing their portfolios of owned investment securities, acted as if problematic inflation did not exist in 2021 and the FED would not respond by rapidly increasing the federal funds rate, a bizarre and brain dead response to hyperinflation.
Most just kept on their balance sheets mortgaged backed securities with coupons near 2%, whose durations increased as interest rates went up, leaving the banks with huge unrealized losses and interest income far below what had to be offered to depositors or paid in variable rate borrowings.
That systemic failure to shorten duration by selling low yielding mortgage backed securities in 2021, when they could have been sold profitably or at small losses, increased pressure on net interest margins as deposit and borrowing costs started to rise in significantly higher dollar amounts than interest income from loans and investment securities.
It was clear prior to March 2022 that the FED would have to rapidly increase the FF rate in response to inflation that had already gotten far too high due to its inaction.
I am being very generous with my "C" grades.
A. Restarted DCOM - Bought 10 at $18.11 - Fidelity Account:
Quote: Dime Community Bancshares Inc. (DCOM)
Cost: $181.06
"Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company with over $13.5 billion in assets and the number one deposit market share among community banks on Greater Long Island."
As of 12/31/23, Dime Community Bank "operated 60 branch locations throughout Greater Long Island and Manhattan, of which 45 were leased and 15 were owned." DCOM's "corporate headquarters is located at 898 Veterans Memorial Highway in Hauppauge, New York. The Bank’s main office is located at 2200 Montauk Highway in Bridgehampton, New York." Annual Report at page 23
DCOM is a symbol change and name change from Bridge Bancorp (BDGE). Almost all of my profits realized in this stock originated when the company was called Bridge. Dime Community (DCOM) was acquired by Bridge who then changed its name and symbol after completing the acquisition.
Last Elimination: Item # 2.A. Eliminated DCOM - Sold 41+ at $27.09 (1/6/24 Post)(profit snapshot = net of $369.83)
DCOM Analyst Estimates | MarketWatch
DCOM Key Metrics Page at Reuters
Last Buy Discussion: Item # 1.C. Added to DCOM in Fidelity Account - Bought 5 at $17.85 (7/1/23 Post) That lot has been sold.
Dividend: Quarterly at $.25 per share, last raised from $.24 effective for the 2023 second quarter. The dividend was raised to $.24 from $.23 effective for the 2020 first quarter. The $.23 per share quarterly dividend was in effect starting in 2005. I view this dividend history as highly unfavorable. The only positive is that the dividend was not cut from $.23 in 2008.
DCOM Stock Dividend History & Date
Dividend Yield at $18.11: 5.52%
Last Ex Dividend: 4/16/24
Last Earnings Report (Q/E 3/31/24): SEC Filed Earnings Press Release
Comparisons are to the 2023 first quarter.
E.P.S. = $.41, down from $.92 but up from $.37 in the 2023 4th quarter.
NIM: 2.21%, down from 2.74%
Efficiency Ratio: 64%, up from 51% (consistent with the decline in earnings)
Coverage Ratio: 218.42%
Charge off ratio: .03%, down from .06%
Tangible book value per share: $24.72, up from $23.52
Owned Securities:
I do not regard the interest rate risk management, reflected in the preceding snapshots, favorably, but I would not give any bank that I follow a higher than a B- grade. My grade for DCOM is a C-. The heavy reliance on mortgage backed securities when interest rates started to rise in 2022, given the inflation backdrop, can not be defended as competent IMO.
Realized Gains BDGE/DCOM: +$3,050.74
The largest annual gain was $2,157.52 realized from two transactions in 2017. Item # 2.A. Sold 109+ BDGE at $35.53 (10/31/17 Post)(profit snapshot = $1,782.46) and Item # 2.A. Sold 50 BDGE at $35.03 (4/23/17 Post (profit snapshot = $376.06).
Current Position: 10 shares. I will become more positive only when there is a meaningful upward trend in NIM coupled with no material deterioration in the loans.
Purchase Restrictions - Risk Control Measures: 5 share lots with each subsequent purchase required to be at the lowest price in the chain, up to a maximum of 50 shares.
B. Added to KHC - Bought 5 at $33.1; 1 at $32.3 - Schwab Account:
Cost: $197.78
KHC Analyst Estimates | MarketWatch
Last Sell Discussion: Item # 2.E. Pared KHC - Sold 6 at $38.34 (1/12/24 Post)(profit snapshot = $16.84) I have now bought back those shares.
Last Buy Discussion: Item # 1.C. Added to KHC - Bought 1 at $31.77; 2 at $31.5; 3 at $31.17; 2 at $30.9 (10/21/23 Post)
New Average cost per share: $32.95 (31 shares)
 |
| Price as of 6/18/24 close |
Dividend: Quarterly at $.40 per share.
Dividend History | The Kraft Heinz Company
I view a dividend hike as highly unlikely within the next two years.
Yield at New AC = 4.856%
Last Ex Dividend: 6/6/24 (owned 25 as of)
Last Earnings Report (F/Q ending 3/30/24):
GAAP E.P.S. = $.66
Non-GAAP E.P.S. = $.69
Net Sales: $6.411B
Organic Sales: Down .5%
Volumes have been hurt by increases in prices caused by input cost inflation. This is a common problem among packaged food companies that may now be mostly in the rear view mirror as inflationary pressures decline.
Free Cash Flow: $477M, up 116.8% compared to 2023 first quarter.
Reaffirmed Fiscal Year 2024 Guidance: Adjusted E.P.S. $3.01-$3.07
GAAP to Non-GAAP Reconciliation:
Analyst Reports (available to Schwab customers):
Morningstar (6/13/24): 5 stars with a fair value estimate of $57, increased from $54, and a narrow moat.
S&P (5/1/24): 4 stars with a 12 month price target of $41, up from $40.
Argus (6/3/24): Hold
C. Added to AQN - Bought 5 at $5.75:
Quotes:
USDs: Algonquin Power & Utilities Corp (AQN)
CADs: Algonquin Power & Utilities Corp. (Canada: Toronto)
AQN Analyst Estimates | MarketWatch
Website: Algonquin Power & Utilities Corp
AQN SEC Filings - Foreign Company Forms
My only prior round-trip was to sell 300 of the CAD priced shares on the Toronto exchange: Item # 1. Sold 300 AQN:CA at C$19.51 (4/21/22 Post)(profit snapshot = +C$303).
AQN is pursuing the sale of its renewable generation. Algonquin Power & Utilities Corp. Will Pursue Sale of Renewable Energy Group Following Strategic Review (8/10/2023) As of 12/31/23, the renewable generation group has 46 facilities consisting of hydro, wind, solar and thermal generation. I have not seen any developments since this August 2023 announcement other than "selling its interest in three development solar assets in Spain to Atlantica Sustainable Infrastructure plc, and selling its 100% equity interest in the 74.9 MW thermal facility in Windsor Locks, Connecticut."
Renewable Generation Operating Profit by Segment: 2024 1st Q.
AQN Q1 2024 Earnings Call Presentation at page 21
If the sale is consummated, AQN will own only rate-regulated electric, natural gas, water, wastewater and transmission operation located primarily in the U.S. and Canada.
My thought on strategic positioning is to keep the renewable energy generation and sell some of small rate regulated operations that are scattered across multiple regulatory jurisdictions.
Regulated Rate Base: 2024 1st Q.
Recent News:
Algonquin Power & Utilities Corp. Announces Settlement Rate for Corporate Units Issued in June 2021 The corporate units were issued in June 2021. "Holders of Corporate Units will receive 3.3439 common shares of AQN ("Common Shares") for each share purchase contract they hold, which results in an effective issuance price of $14.9526 per Common Share . . . Upon settlement of all outstanding share purchase contracts, Algonquin will receive $1.15 billion in exchange for approximately 76.9 million Common Shares." (emphasis added) Those units were originally issued in June 2021. Algonquin Power & Utilities Corp. Prices Upsized $1.0 Billion Equity Units Offering (6/18/2021) The Corporate Units also included $1.15B of a 1.18% senior note due on 6/15/2026 that was remarketed to a 5.365% coupon SU note that will mature on 6/15/26. Algonquin Power & Utilities Corp. Announces Successful Remarketing of 1.18% Senior Notes due 2026 That bond is publicly traded. Bond Page | FINRA.org (rated at BBB- by S&P)
{AQN sold 44.08M shares at C$18.5, plus the greenshoe, that were issued to pay in part the cost of AQN's acquisition of Kentucky Power from American Electric Power. Algonquin Power & Utilities Corp. Announces Agreement to Acquire Kentucky Power and Concurrent Bought Deal Equity Financing (10/26/21). The deal ultimately collapsed based on the refusal of the West Virginia regulatory authority to approve the transaction based on terms required by the merger agreement. Algonquin Power & Utilities Corp. and American Electric Power Mutually Agree to Terminate Kentucky Power Transaction (4/17/23)}
Algonquin Power & Utilities Corp. Announces Its Support for Energy Capital Partners' Proposed Acquisition of Atlantica (AY) AQN "holds approximately 42.2% of the shares of Atlantica". The price is $22 in cash. I have eliminated my position in AY. Item # 2.A. Eliminated AY - Sold 40 at $21.9 (6/7/24 Post)(profit snapshot = $138.04)
AQN Average cost per share: $9.31 (120 shares)
Dividend: Quarterly at $.1085 ($.434 annually), slashed from $.1808 effective for the 2023 first quarter payment to improve "financial flexibility". Algonquin Power & Utilities Corp. Provides Business Update (1/12/23). The dividend payout was too high and a slash was IMO warranted.
Yield at AC = 4.66%
Next Ex Dividend: 6/28/24
Last Earnings Report (Q/E 3/31/24):
Revenues: US$737.1
Adjusted E.P.S. = US$.14
SEC Filed Financial Statement: Note 6
AY closed at $18.11 on 3/28, the last trading day in the quarter and is currently trading near $22, the cash acquisition price referenced above.
Adjusted Funds from Operations: US$189.2M
Equity Preferred Stock: I own 100 shares of the reset equity preferred stock AQNPRA:CA. Item # 2.A. Bought 100 AQNPRA:CA at C$20 (12/16/23 Post) The coupon reset at 6.469%, paid on a C$25 par value, and will remain in effect to but excluding 12/31/2028. Algonquin Power & Utilities Corp. Announces Dividend Rates on Cumulative Rate Reset Preferred Shares, Series A The coupon resets every 5 years at a 2.94% spread to the 5 year Canadian government bond as of the reset date. The stock went ex dividend for its quarterly distribution on 6/14/24.
D. Added to NOMD - Bought 5 at $17.24; 5 at $16.7:
Quote: Nomad Foods Ltd. (NOMD)
Cost: $169.7
NOMD states that it is "Europe's leading frozen food company", whose brands include "Birds Eye, Findus, iglo, Ledo and Frikom". Our Brands | Nomad Foods
NOMD Analyst Estimates | MarketWatch
NOMD SEC Filings (foreign company forms)
Website: Home | Nomad Foods
Last Discussed: Item # 1.A. Added to NOMD - Bought 5 at $18.08; 10 at $17.94 (5/10/24 Post)
New Average cost per share: $19.24 (85 shares). My next purchase will be 15 shares, and then I will quit buying.
Dividend: Quarterly at US$.15 per share
NOMD Dividend History | Nasdaq
NOMD started to pay a dividend this year.
Yield at New AC: 3.12%
Last Ex Dividend: 5/8/24
Last Earnings Report (Q/E 3/31/24):
E.P.S. = €.21
Adjusted E.P.S. = €.37
Exceptional Item Excluded from Reported E.P.S.:
Revenue increased by 1% to €784M
NOMD maintained its 2024 guidance "to deliver revenue growth of 3%-4%, Adjusted EBITDA growth of 4%-6%, and Adjusted EPS of €1.75-€1.80."
E. Added 5 SPTN at $18.46:
Quote: SpartanNash Co. (SPTN)
Cost: $92.3
SPTN Analyst Estimates | MarketWatch
New Average cost per share: $19.23 (20 shares)
Dividend: Quarterly at $.2175 per share ($.87 annually)
SPTN Dividend History | Nasdaq
Yield at $19.23: 4.52%
Last Ex Dividend: 6/14/24 (owned 15 as of)
Last Discussed: Item # 1.B. Added to SPTN - Bought 5 at $18.95 (6/7/24 Post) I discussed the last earnings report in that post and have nothing further to add here.SEC Filed Press Release (F/Q ending 4/20/24)
F. Restarted TRST - Bought 5 at $26.6-Schwab Account:
Snapshot shows the last elimination in this account (5 shares sold at $37.02)
Quote: Trustco Bank Corp. (TRST)
Cost: $133
Investment Category: Regional Bank Basket Strategy
Last Eliminated: Item # 3.C. Eliminated TRST in Fidelitiy Account - Sold 41+ at $30.33 (2/2/2024 Post)(profit snapshot = net of $31.36)
Last Buy Discussion: Item # 1.F. Added to TRST - Bought 4 at $27.13 (12/2/23 Post) Those shares have been sold.
Dividend: Quarterly at $.36 per share ($1.44 annually)
TRST Stock Dividend History & Date
Yield at $26.6: 5.41%
Last Ex Dividend: 6/7/24
Last Earnings Report (Q/E 3/31/24): SEC Filed Earnings Press Release
Comparisons are to the 2023 first quarter.
E.P.S. = $.64, down from $.93
Net Interest Income: $36.578M, down from $46.975M.
The decline in net interest income was caused by a rise in interest expense from $6.967M to $23.175M that more than offset the rise in interest income. That is a current typical problem for regional banks.
NIM: 2.44%, down from 3.41%.
The substantial decline in the net interest margin is a major negative. The primary sources of that decline are interest expenses (cost of deposits/borrowings) rising at a faster rate than interest income and the failure to shorten duration of the owned security portfolio in 2021 which includes a far too heavy reliance on low yielding mortgage backed securities bought prior to 2022 whose duration increases as interest rates rise. All of the foregoing impacted regional banks across the board.
Owned Securities Available for Sale:
Average Interest Rates- Owned Securities Available for Sale:
Note that the largest weighting is in mortgage backed securities with an average rate of just 2.3%. My grade is a C-.
Efficiency Ratio: 59.94%, up from 53.17% (up is a negative)
NPL Ratio: .37%, down from .4%
Coverage Ratio: 269.3% (allowance for loan losses to nonperforming loans)
Charge off ratio: Zero (excellent)
Tangible Book Value per share: $34.12, up from $32.31.
NIM contraction for regional banks may continue through most of this year before returning to an expansion mode in 2025. The variables include the timing and size of FED rate cuts, which will lower deposit costs, the reinvestment rates of proceeds from maturing owned securities, and the sensitivity of loans to declines in short term rates.
From my perspective, the primary positives are the dividend yield at my cost, the discount to tangible book value, zero charge offs in the last quarter, an acceptable NPL ratio and a high coverage ratio at 269.3% (allowance for loan losses to nonperforming loans already established prior to purchase)
Prior Sell Discussions: There was a 1 for 5 reverse stock split in 2021. Item # 2.C. Eliminated TRST in 2 Taxable Accounts - Sold 5 at $36.84; 5 at $37.02 (3/11/23 Post)(profit snapshots = $41.28); Item # 3.A. Eliminated TRST in Schwab Taxable Account - Sold 20 at $38 (12/13/22 Post)(profit snapshot = $129.4).
The following sales were made prior to the reverse stock split. Item # 3.G. Eliminated TRST-Sold 15+ in Schwab Taxable at $7.45 and 40+ in Fidelity Taxable at $7.44 (5/14/21 Post)(profit snapshots = $111); Item # 1.D. Pared TRST-Sold 10 at $6.72 (1/9/21 Post); Item # 3.A. Eliminated TRST Sold 56+ at $8.8 (11/27/19 Post)(profit snapshot = $68.51); Item # 2.B. Sold 125 TRST at $8.6 (11/2/19 Post); Item # 2 Sold 100 TRST at $6.69 Update For Regional Bank Basket Strategy As Of 7/26/16-South Gent | Seeking Alpha; Item # 1 Sold 315+ TRST at $6.92 (1/11/15 Post)(largest gain to date = $549.47); Sold 50 TRST at $7.29 (11/25/13 Post); Sold 308 TRST at $6.64 (10/28/13 Post)(profit snapshot = $238.38)(on a reverse split adjusted basis, the sales price was $33.2)
G. Added 5 APA at $27.85:
Quote: APA Corp. (APA)
Cost: $139.95
APA Analyst Estimates | MarketWatch
APA SEC Filings; 10-Q for the Q/E 3/31/24; 2023 SEC Filed Annual Report
Last Discussed: Item # 1.E. Added to APA - Bought 5 at $28.95 (6/7/24 Post)
Last Substantive Discussion: Item # 1.C. Started APA - Bought 5 at $30.7; 5 at $30.3; 5 at $29.8; 5 at $29.5 (5/24/24 Post) I discussed the last earnings report in that post. SEC Filed Earnings Press Release for the Q/E 3/31/24
The stock declined on 6/14 in response to a Bank of America reinstating coverage with an underperform rating and a $31 price target. I do not have access to that report.
Private E&P companies face a common problem, which is replacing oil and gas production with new discoveries that can be acquired by non-governmental entities.
APA's interest in the Suriname oil and gas discovery may end up resulting in a larger company acquiring APA. APA has a 50% interest. Suriname | APA Corporation; APA Corporation and TotalEnergies Announce Oil Project of 200,000 b/d in Block 58 and Launch Development Studies with the Objective of Sanctioning the Project by Year-end 2024 | APA Corporation
Dividend: Quarterly at $.25
Dividend History | APA Corporation
New Average cost per share: $29.52 (30 shares)
Yield at AC = 3.39%
Next Ex Dividend: 7/22/24
Analyst reports (available to Schwab customers):
Morningstar (5/2/24): 4 stars with a fair value estimate of $54.
Argus (6/14/24): Hold. The analyst is concerned about the high debt/capitalization ratio of close to 60%. The E.P.S. estimate for 2025 was raised to $4.77 from $4.68.
S&P (5/17/24): 3 stars with a 12 month PT of $32. The S&P downgraded the recommendation from buy in February 2024, based on APA's balance sheet health and its use of free cash flow to buy back stock rather than to reduce leverage.
H. Added to KBWY - Bought 5 at $17.48:
Quote: Invesco KBW Premium Yield Equity REIT ETF Overview
Cost: $87.4
Invesco | Product Detail | Invesco KBW Premium Yield Equity REIT ETF
Expense Ratio: .35%
Investment Category: Monthly Income Generation
New Average cost per share: $19.08 (48+ shares)
Monthly at a variable rate:
The annual rate through May 2024 is about $1.58 per share.
Number of Holdings: 30
Top 10 Holdings:
I have individual positions in all of those stocks. Of the remaining 20 that are now shown in the preceding snapshot, I own 7 with the largest dollar position being in WPC. I generally have a hyperactive trading approach to those stocks.
This fund has produced a satisfactory total return starting in 2022 due in part to the rise in interest rates negatively impacting REITs and in 2020 due to the pandemic. KBWY – Performance – Morningstar
Morningstar has a 1 star rating.
I. Added to TGNA - Bought 5 at $12.83:
Cost: $64.13
TGNA owns 65 television stations in 51 markets along with some other assets. Revenues will spike during election years and then decline in the following year. As of 6/20/24, the average E.P.S. estimate for 2024 was $3.24; falling to $2.24 in 205 and then rising again to $4.26 in 2026.
Sale of Interest in BMI: On 2/8/24, Tegna completed the sale of its interest in BMI (Broadcast Music) to a shareholder group led by New Mountain Capital for approximately $153M in pre-tax proceeds (see page 80 of the 2023 Annual Report and Earnings Press Release for the 4th Q.).
Accelerated Stock Repurchase: In February 2022, TENGA announced that it has agreed to be acquired by Standard General for $24 per share. TEGNA to be Acquired by Standard General for $24.00 Per Share TEGA's acquisition was not completed due to regulatory opposition.
Standard General had to pay TEGNA a $136M breakup fee. In lieu of cash, Standard General transferred 8,640,452 TEGNA shares to TEGNA "(equal to the termination fee plus interest accrued since termination of merger agreement)" TEGNA Inc. Enters Into $300 Million Accelerated Share Repurchase Agreement That accelerated repurchase program was in addition to the retirement of the 8.64+M shares received from Standard General. TEGNA completed that accelerated repurchase on 8/31/23 and then entered into a 325M accelerated share repurchase. TEGNA Inc. Enters Into $325 Million Accelerated Share Repurchase Agreement (11/9/23).
TEGNA Inc. (TGNA) Valuation Measures & Financial Statistics
Investor Relations | TEGNA Inc.
Last Discussed: Item # 2.C. Added to TGNA - Bought 5 at $13.3 (4/26/24 Post); Item # 1.G. Added to TGNA - Bought 5 at $14.15; 5 at $13.7 (3/1/24 Post)(where I discussed the 2023 4th quarter report, SEC Filed Press Release)
New average cost per share: $13.95 (40 Shares)
Dividend: Quarterly at $.125 ($.5 annually), last raised from $.1175 effective for the 2024 third quarter payment.
TGNA Dividend History | Nasdaq
Yield at AC: 3.58%
Last Ex Dividend: 6/7/24
Last Earnings Report (Q/E 3/31/24):
SEC Filed Earnings Press Release
E.P.S. = $1.06
Non-GAAP E.P.S. = $.45 (non-GAAP excludes a $116 million after tax gain from Tegna's interest in BMI)
"Total company revenue was $714 million in the first quarter, down four percent year-over-year and at the midpoint of our guidance range, primarily due to lower subscription revenue, which was adversely impacted by a temporary disruption of service with a distribution partner, partially offset by higher political advertising dollars."
Cash and Cash Equivalents: $431M
Adjusted Free Cash Flow: $113M
"During the first quarter, TEGNA returned more than $100 million of capital to shareholders with $82 million of share repurchases, representing 5.7 million shares, and paid $20 million in dividends. In February, the Company also received a final settlement of approximately four million shares related to the completion of our previously announced accelerated share repurchase (“ASR”) program launched in November 2023." The stock purchases are part of the $325M stock purchase program that I referenced above.
I would generally most of the political advertising revenues to be received in the 3rd and 4th quarters with more in the second than in the first.
I do not have access to any analyst reports covering TGNA.
J. Restarted UNB - Bought 5 at $22; 5 at $21.38:
Quote: Union Bankshares Inc. (UNB)
Cost: $216.9
The market cap at $21.5 is about $97+M.
Investment Category: Regional Bank Basket Strategy
There are no analyst estimates.
Last Elimination: Item # 5.B. Eliminated UNB - Sold 20+ at $25 (10/28/23 Post)(profit snapshot = $97.66)
Last Buy Discussion: Item # 2.D. Added 5 UNB at $22; 5 at $21.82 in Fidelity Account (7/22/23 Post)
Average cost per share: $21.69 (10 shares)
Dividend: Quarterly at $.36 per share ($1.44 annually), last raised from $.35 effective for the 2023 first quarter payment.
UNB Dividend History | Seeking Alpha
Yield at $21.69: 6.64%
Last Ex Dividend: 4/25/24
Last Earnings Report (Q/E 3/31/24): 10-Q for the Q/E 3/31/24
Comparisons are to the 2023 first quarter.
Diluted Shares: 4.537M
Net Income: 2.417M, down from $2.977M
E.P.S. $.53, down from $.66
ROE: 15.08%, down from 20.9%
NIM = 2.68%, down from 3.14%
"The net interest spread decreased 61 bps to 2.23% for the first quarter of 2024, from 2.84% for the same period last year, reflecting the net effect of the 112 bps increase in the average rate paid on interest bearing liabilities, which was only partially offset by the 51 bps increase in the average yield earned on interest earning assets between periods. The net interest margin decreased 46 bps during the first quarter of 2024 compared to the same period last year as a result of the changes discussed above." (p. 27)
Efficiency Ratio: 79.68%, up from 70.44% (too high)
The NPA, NPL, Charge Off and Coverage ratios are excellent:
NPA Ratio: .13% (nonperforming assets to total assets)
NPL Ratio: .18%, down from .24% (nonperforming loans to total loans)
Coverage Ratio: 354.78% (allowance for credit losses to nonperforming loans)
Charge off ratio = zero, unchanged.
Investment Securities:
My grade for interest rate risk management is a C, higher than DCOM only because UNB is a tiny bank and at least that provides an excuse.
K. Added to CMCSA - Bought 5 at $37.3:
Quote: Comcast Corp. Cl A
Cost: $186.5
CMCSA Analyst Estimates | MarketWatch
Last Eliminations: Item # 3.C. Eliminated CMCSA - Sold 25+ at $46.89 (8/19/23 Post); Item # 3.D. Eliminated CMCSA in Vanguard Taxable Account - Sold 7 at $45.6 (8/5/23 Post)
New Average cost per share: $38.27 (20 shares)
Dividend: Quarterly at $.31 per share ($1.24 annually)
CMCSA Dividend History | Nasdaq
Yield at New AC: 3.24%
Next Ex Dividend: 7/3/24
I discussed the 2024 first quarter report in my last post and have nothing further to add here. Item # 1.C. Restarted CMCSA - Bought 10 at $38.91; 5 at $37.98 (6/14/24 Post); SEC Filed Earnings Press Release for the Q/E 3/31/24
3. Treasury Bills Purchased at Auction:
A. Bought 5 Treasury Bills at the 6/17/24 Auction:
%209:19:24%20.png)
91 Day Bill
Matures on 9/19/24
Interest: +$66.35
Investment Rate: 5.395%
B. Bought 5 Treasury Bills at the 6/17/25 Auction:
%20%2012:19:24%20%20.png)
182 Day Bill
Matures on 12/19/24
Interest: $130.18
Investment Rate: 5.361%
C. Bought 10 Treasury Bills at the 6/20/24 Auction:
119 Day Bill
Matures on 10/22/24
Interest: +$172.55
Investment Rate: 5.385%
4. Corporate Bonds:
A. Bought 2 Healthpeak 3.4% SU Maturing on 2/1/2025 at a Total Cost of 98.575:
%202:1:2025%203.4%25%20.png)
Issuer: Healthpeak Properties Inc (DOC)
DOC SEC Filed Earnings Press Release for the Q/E 3/31/24
FINRA Page: Bond Page | FINRA.org
Credit Ratings: Baa1/BBB+
YTM at Total Cost: 5.726%
Current Yield at TC = 3.45%
I now own 8 bonds.
B. Bought 2 Ares Capital 3.25% SU Maturing on 7/15/25 at a Total Cost of 97.128:
%203.25%25%207:15:25%20.png)
Issuer: Ares Capital Corp. (ARCC) - Externally Managed BDC
SEC Filed Earnings Press Release for the Q/E 3/31/24
10-Q for the Q/E 3/31/24 (A summary of investments starts at page 4; the estimated impact of interest rate changes on net investment income at pages 209-210; list of SU notes at page 204. I owned the SU note that matured on 6/10/24 and own 6 of the 4.25% SU notes that mature on 3/1/25)
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa3/BBB-
YTM at Total Cost: 6.047%
The YTM includes the "profit" of $57.44 that will be realized at maturity provided ARCC pays the the principal amount.
Current Yield at TC = 3.346%
I currently own 4 bonds.
Last Bond Offering (5/24): $850M of 5.95% SU notes maturing in 2029. Prospectus The offering price to the public was at 98.983. Proceeds to Ares after the underwriters' discount was at 98.383. The estimated proceeds to Ares was $836.255+M. Ares internal costs were estimated at $2.4M, so the net was about $833.855M. Proceeds will be used to pay down one or more borrowings under revolving credit facilities that have variable rate coupons priced at spreads to short term SOFR rates (page S-14).
5. CDs - FDIC Insured:
These purchases shift the tax recognition of interest income into 2025.
A. Bought 2 Schwab Bank 5.35% CDs Maturing on 6/17/25:
%20CDs%206:17:25%205.35%25%20.png){kind=small}
Interest paid at maturity.
B. Bought 2 Bank of America 5.35% CDs Maturing on 6/20/25:
%205.35%25%206:20:25%20.png)
Interest paid at maturity.
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.
I thought the cognitive questions about Trump from interviews and a couple of directions now, interesting.
ReplyDeleteOn seeking alpha, as of this week the articles have shifted from regular, to most focused on downturn coming.
ReplyDeleteI'm not sure if that's a contrarian indicator that the market's going to do another run up.
But usually when everybody's sure it's time for it to come back, it does at least in the short term.
I'm thinking of selling a bunch of stuff in Roth to preserve the gains without triggering a tax event. But I'm not sure it's a good idea to try and time and miss getting back in?
Land: My focus is on creating a significant and ongoing stream of income and most of that cash flow will come from bonds (corporate/municipal), treasuries, preferred stocks (primarily Canadian resets), CDs and treasury money market funds (primarily the one offered by Vanguard which has close to a 50% weighting in that account). Those income sectors are currently weighted at about 88% of the total, maybe a bit higher. I want stocks to crash which will provide me with more satisfactory entry points than I have now.
ReplyDeleteIn my posts, I note in the allocation shift section the dollar movements in and out of stocks. I am still a net seller though there was a positive inflow summarized in this last post.
A weekly dollar increase in stock exposure will generally mean that I became concerned that interest rates may start a prolonged downtrend, causing a decline in interest income from my extreme overweighting in short maturities. That has happened this week. Maybe it will carry over into next week.
There will be an economic downturn that will result in a recession. That is a certainty. The onset of depressionary conditions will happen again as well. I thought a depression was possible in the later part of 2008.
I do not yet see a recession on the horizon. Sometimes there is enough data supporting that kind of prediction before it unfolds, but there is not enough now IMO. There is only some economic data that supports a slowing in the 2024 first quarter from the robust, for such a large economy, 3.4% real GDP growth in the 2023 4th quarter.
https://www.bea.gov/data/gdp/gross-domestic-product#:~:text=In%20the%20fourth%20quarter%20of%202023%2C%20real%20GDP%20increased%203.4%20percent.
I just entered my orders for next week's treasury auctions.
ReplyDeleteI will be buying 10 of both the 3 and 6 month treasury bills and just 2 of the 2 year treasury notes that will be auctioned next Tuesday.
The yield on the 2 year note closed last Friday at 4.7% with the 3 month bill at 5.49% as calculated by the Treasury:
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202406
The yield on the 2 year note is IMO pricing at least a 75 basis point cut in the FF rate range from the current 5.25% to 5.5%. That may turn out to be too aggressive but it is not an irrational forecast provided inflation resumes its decline and the economy weakens some.
I am going to build up my cash reserves in my Fidelity and Schwab account and maybe that will force me to increase my allocation to dividend paying stocks and to quite for awhile selling stocks so I that I am in a net add position each week.
I am becoming increasingly concerned about reinvestment options when my short term T Bills and corporate bonds mature. I am already facing a deluge of proceeds that is being aggravated by early calls on some corporate bonds, disrupting my bond ladder. I have just lost to an early redemption, as reflected in my accounts today, 6 Timken SU bonds that would have matured on 9/1/24.
Rigel Pharmaceuticals (RIGL)
ReplyDelete$0.8383 $-0.1179 -12.33%
Last Updated: Jun 25, 2024 at 10:13 a.m. EDT
https://www.marketwatch.com/investing/stock/rigl?mod=search_symbol
I just increased my position in RIGL to 200 shares (cost about $53) and will not be buying more. I view this kind of stock to be similar to playing a blackjack hand for the amount investment. The risk is described by my classification "Blackjack Hand, part of the Lottery Ticket Basket Strategy."
The only public news is that the company announced a 1 for 10 stock split.
https://www.prnewswire.com/news-releases/rigel-announces-reverse-stock-split-302181180.html
When that occurs, I will own 20 shares.
I will not be discussing this purchase in a post.
My last substantive discussion can be found here:
Item # 1.C. Bought 100 RIGL at $.9597:
I have realized $253.27 in gains from this Lotto to date which still exceeds the amount invested in 200 shares that I currently own. Just playing with the house's money.
https://tennesseeindependent.blogspot.com/2024/05/aep-argd-ava-bkh-brt-cvi-d-elc-evrg-fts.html
Rigel Pharmaceuticals Inc. (RIGL):
Delete$8.76 + $0.86 +10.87%
Last Updated: Jun 27, 2024 at 10:19 a.m. EDT
https://www.marketwatch.com/investing/stock/rigl?mod=search_symbol
In an earlier comment, I mentioned that RIGL was going to do a 1 for 10 reverse split and that has now occurred.
The 2 year treasury auction was auctioned today with a "high yield" of 4.706% in line with expectations. The coupon is 4.625%, with interest paid semiannually. The note was sold at 99.847. The original issue discount is treated as interest that adds to coupon yield.
ReplyDeleteWhirlpool Corp. (WHR)
ReplyDeletePremarket
$102.46 +$ 15.43 +17.73%
Last Updated: Jun 26, 2024 at 8:29 a.m. EDT
Reuters reported earlier today that a German firm, Bosch, in the appliance business is considering a takeover offer.
https://www.reuters.com/markets/deals/bosch-eyes-offer-appliance-maker-whirlpool-sources-say-2024-06-26/
I own about 20 shares scattered in two taxable accounts. WHR is a typical contrarian value stock that I own. The dividend is good at $7 per share annually, and the P/E is low. The stock is also heavily shorted that can provide fuel for an up move when and if the short position proves to be unwise.
I did buy 1 share yesterday at $87.95 in my Schwab account, which I will not be discussing in a post. The reason was that the stock had declined by over 4% yesterday which allowed me to lower my AC per share and thereby increase my dividend yield. My average cost in that account is at $91.72.
The last ex dividend was on 5/16/24.
Ligand Pharmaceuticals Inc (LGND)
ReplyDelete$81.18 +$ 3.36 +4.31%
Last Updated: Jun 27, 2024 11:30 a.m. EDT
https://www.marketwatch.com/investing/stock/lgnd?mod=search_symbol
The market capitalization is about $1.4B. Volatility in the share price is routine, frequently with significant percentage bid/ask spreads.
I own about 10 shares.
The pop today is based on the FDA approving the Verona Pharma drug Ohtuvayre which "is the first inhaled product with a novel mechanism of action available for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adult patients in more than 20 years"
https://investor.ligand.com/news-and-events/press-releases/news-details/2024/Ligand-Partner-Verona-Pharma-Announces-FDA-Approval-of-Ohtuvayre-ensifentrine-First-Inhaled-Novel-Mechanism-for-Maintenance-Treatment-of-COPD-in-More-Than-20-Years/default.aspx
LGND has a license agreement whereby it will receive a low single digit royalty on worldwide net sales. LGND will receive $5.8M milestone payment and another one of $13.8M upon commercial launch.
On 6/18/24, the FDA approved Merck's
"CAPVAXIVE™, previously known as V116, a 21-valent pneumococcal conjugate vaccine for the prevention of invasive pneumococcal disease and pneumococcal pneumonia in the adult population. That triggered a $2M milestone payment to LGND and a royalty since Merck used the Pfenex Expression Technology® platform.
https://investor.ligand.com/news-and-events/press-releases/news-details/2024/Ligand-Collaborator-Merck-Receives-FDA-Approval-for-CAPVAXIVE-Pneumococcal-21-valent-Conjugate-Vaccine-for-Adults/default.aspx
LGND combined its Pelican Expression Technology® platform (formerly known as Pfenex Expression Technology®) with the Primordial Genetics’ Function Generator™ last year, forming Primrose Bio, but retained the right to royalties for the V116 vaccines and other compounds. Ligand owns a 49.9% equity interest in Primrose Bio.
https://investor.ligand.com/news-and-events/press-releases/news-details/2023/Ligand-Spins-Out-And-Merges-Pelican-Subsidiary-With-Primordial-Genetics-To-Form-Primrose-Bio/default.aspx
The main molecule that LGND has licensed that remains in trials is for the NASH drug being advanced by Vertex in trials, as I have previously discussed here.
Item # 1.B. Added to LGND - Bought $30 at $77.32; 1 at $76; 1 at $75; 1 at $73; 1 at $71.8:
https://tennesseeindependent.blogspot.com/2024/03/agr-bhb-cfg-eprprc-ffbc-lgnd-mbwm.html
LGND may have lost the entire $30M used for its purchase of royalties that Ovid Therapeutics (OVID) would have received from Takeda provided the epilepsy drug candidate soticlestat if approved by the FDA. However, the compound failed to meet the primary endpoints in a stage 3 trial. The OVID share price, currently near 70 cents, signals that the $30M investment is most likely gone.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2024/06/brkl-cpxpreca-cvbf-dpg-fts-mdt-nwn-peo.html
It's be great if Judge Cannon stepped down. I don't see anything to create enough pressure for that to happen.
ReplyDeleteNOMD has appeal. But with over 3% div, and VMRXX at over 5%, it's harder to buy into mere stocks. Of course stocks can rise, but it's hard mentally to include that in the calculus.
Cannon, who was appointed by Trump, will not allow a trial of the documents case before the election. If Trump wins, his attorney general will fire Jack Smith and that case will be dismissed along with what is left of the D.C. insurrection case after today's decision and the earlier decision that I have discussed called Fischer.
DeleteInfuriatingly, yes.
Delete