AROW, CPF, ELC, EPRT, IBDU, IBDV, IBDW, IRM, LXP, PINE, SMDV, STAG, VZ, WASH

Economy: 

In its first estimate of second quarter Real GDP growth, the government reported that Real GDP increased at an annual rate of 2.8%, stronger than the consensus estimate of 2.1%.  Gross Domestic Product, Second Quarter 2024 (Advance Estimate) | U.S. Bureau of Economic Analysis (BEA); U.S. GDP Q2 2024: CNBC The personal consumption price index increased 2.6%, down from 3.1% in the 2024 first quarter. The personal savings rate was reported at 3.5%. Real disposable income increased by 1%. Personal consumption expenditures rose to 2.3% from 1.5% in the first quarter:

GDP: The US economy is pulling off something historic | CNN Business Based on GDP and recent inflation reports, I would agree that this information is consistent with sticking a soft landing after a spurt of problematic inflation that caused the Fed to increase the federal funds rate to its current range of 5.25% - 5.55%, up from 0-.25% just prior to the March 2022 Fed meeting when the rate was increased to just .25%-.5% even though the annual CPI was up 8.5% through March 2022. 

June Personal Consumption Expenditure Inflation (PCE): 

PCE Annual at 2.5%

Core PCE Annual at 2.6%

Month-to-Month PCE at .1%

Month-to-Month Core PCE at .2%

Personal Income and Outlays, June 2024 | U.S. Bureau of Economic Analysis (BEA)

Housing PCE annual, which includes owners equivalent rent, was at 5.3%, down from 5.5% in May and down from the peak 8.3% in April 2023. 

3 month annualized changes: If this trend continues, the annual PCE price index will return to 2% within a year, possibly in 6 months.  

PCE Price Index +1.3%

Core PCE Price Index: 2.3%

Core PCE Price Index minus housing: 1.8% 

100% Current Odds of a rate cut at the September meeting: 

CME FedWatch - CME Group

June existing home sales slump, pointing to a buyer's market Down 5.4% compared to May with a median sales price of $426,900, up 4.1% Y-O-Y. 

June New home sales were reported down .6% compared to May and down 7.4% from the June 2023 estimate: 

Census Bureau.pdf

’Inflationary’ U.S. tariffs may upset hopes for multiple Fed rate cuts - MarketWatch Trump claims that his tariffs proposals are not inflationary. The tariffs created inflationary pressures and act like a regressive tax on U.S. consumers. 

The Supreme Court Just Sabotaged the US Economy by Kenneth Jacobs - Project Syndicate "The abandonment of the Chevron doctrine ends the predictability that is essential for a healthy economy and stable capital markets." What will happen is a balkanization of regulations rather than having a uniform national standard. 

+++

Allocation Shifts Discussed in this Post:

Treasury Bills: $17,000 in principal amount 

Corporate Bonds: None

Upcoming Proceeds from maturing treasury bills, CDs and corporate bonds: 

August: $70,000

September $96,000

It currently looks like most of those proceeds will be redirected into treasury bills purchased at auction.  

Inflow Term Corporate Bond ETFs:  +$546.01

Outflow Common Stocks: -$3,269.21

(Consisting of $3,425.13 in proceeds minus $155.92 in purchase) 

Outflow Common Stock Funds: -$695.5

Outflow Common Stocks/Stock Funds: -$3,964.71

Realized Gains Stocks/Stock Funds: +$769.81

Inflow Exchange Traded First Mortgage Bond (ELC) = +$111

2024 Net Outflow Stocks/Stock Funds: -$22,043.19

+++

Trump and His Party: 

The anti-democracy party plans to challenge the legality of Kamala Harris being substituted for Joe Biden as the Democratic nominee for President. Republicans say they’ll sue to keep Biden on the ballot - Vox Hypocritical GOP threatens lawsuits to keep Harris off the ballot; Some Republicans are threatening legal challenges to keep Biden on the ballot. But will they work? - CBS News The effort is being led by the Heritage Foundation that published the republican policy agenda in a document called Project 2025. What is Project 2025? What to know about the conservative blueprint for a second Trump administration - CBS News 

Trump campaign files complaint with FEC seeking to keep Biden from transferring campaign funds to Harris - CBS News

Kamala Harris' campaign says it raised more than $100 million after launch - CBS News

JD Vance repeatedly indicated in 2016 that he believed Donald Trump had committed sexual assault 

Fact check: Trump made at least 10 false claims about Kamala Harris in a single rally speech 

Trump: UAW's Shawn Fain should be "fired immediately"

7 Characteristics of the Modern Psychopath | Psychology Today You can make up your own mind whether or not Trump checks all of the boxes.  

A searing reminder that Trump is unwell - The Atlantic Trump's mental condition is so obvious that those voting for him must be presumed to know about it. Donald Trump is insane and our republic is sick | Courthouse News Service; The Psychology of Donald Trump | Psychology Today It’s clearer than ever: Trump’s a psychopath – New York Daily News; Dr. Lance Dodes: Trump is a dangerous sociopath — but he's sane enough to stand trial | Salon.com  

And, the Trump voters must be presumed to know about the over 30,000 false and misleading statements made by him during his firm term, his non-stop demagoguery, his efforts to change or cancel state certified election totals, the Access Hollywood tape, the jury verdicts in the E. Jean Carroll cases, the sexual assault allegations made by other women against him, the Trump University and Trump charitable foundation scandals, his mean spirit frequently on display for anyone to see, his obvious mental condition, the false creation of a genius businessman image, his involvement in the January 6th insurrection, his unwillingness to engage in a peaceful transfer of power, the facts underlying the NY fraud verdict, the facts supporting his NY felony convictions, and the facts supporting the criminal indictments in the federal insurrection and documents cases as well as the facts supporting the Georgia indictments.  

According to the most recent NYT/Siena poll, 48% of voters have a favorable opinion of Trump: 

The very unfavorable opinion of 44% is very sticky and is not going to change IMO. Those voters are 100% core anti-Trump. 

Harris Narrows Gap Against Trump, Times/Siena Poll Finds - The New York Times

PolitiFact | Donald Trump fact-check: 2024 RNC speech in Milwaukee full of falsehoods about immigrants, economy

JD Vance called 'phony' by hometown residents - YouTube

‘Politically Idiotic’: JD Vance roasted for comments about women who are not biological parents - YouTube

Daniel Dale fact checks Trump's claims made at first rally since assassination attempt - YouTube

Ohio Republican, State Senator George Lang, calls for ‘civil war’ at Vance rally if Trump loses - POLITICO Lang: "I’m afraid if we lose this one, it’s going to take a civil war to save the country, and it will be saved,” Lang said. “It’s the greatest experiment in the history of mankind, and if we come down to a civil war, I’m glad we got people like … Bikers for Trump on our side."

'Is it 1951?': Joe slams Rep. Tim Burchett's claim VP Harris was a 'DEI hire' - YouTube. Tim Burchett is a republican congressman who represents Tennessee's 2nd congressional district. After the Tennessee republicans decided that Nashville would no longer be allowed to elect a Democrat to the House, all congressional representatives with 1 exception, Steve Cohen (D) from Memphis, are republicans. The 2 Tennessee senators (Blackburn and Hagerty) and all Republican House members are more than just Trump clones, most are throwbacks to the late 19th Century south and represent a profoundly disconcerting departure from the pre-Trump republicans like the former senators Howard Baker and Bob Corker or the more distant senators Albert Gore and his father. (My video: The Tennessee GOP has decided that Nashville will not be allowed to elect a Democrat to Congress - YouTube)

The republican congressman from my district has filed an article of impeachment against VP Harris. Republican Andy Ogles files impeachment article against Kamala Harris Ogles is a far right republican who is being challenged in the primary by a candidate who is farther to the right. Ogles is best known for makes false claims about his accomplishments, though arguably not as bad as the disgraced former congressman from NY George Santos. For the GOP’s Andy Ogles, latest false claims add to his troubles; Andy Ogles Embellished Resumé, Much Like Republican George Santos - Business Insider; Read Andrew Ogles College Transcripts that Confirm Lies on Resume - Newsweek

Then there is a typical republican hypocrite that represents the 4th congressional district.  'Pro-Life' Congressman Who Urged Abortions for Ex-Wife and Mistress Is Running Again

Trump will carry Tennessee with about 57% to 60% of the vote. If he had been convicted of more felonies in either the insurrection or documents cases or even both, his win percentage in Tennessee may have fallen to as low as 55%.  

The Racist, Sexist Attacks on Kamala Harris - The Atlantic

I thought this was an excellent article that describes how the 6 Republican Supreme Court Justices created constitutional law in their immunity decision that benefits the leader of their party and makes it more likely that future Presidents will commit crimes. The Supreme Court Fools Itself - The Atlantic

 

+++

Putin and His Orcs: 

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

Telling the truth is a crime in Putin's Orwellian state. 'The Russian legal system is a sham': Alsu Kurmasheva's family blasts her conviction - YouTube

Huge Russian Attack Consisting of 45 APCs, 12 Tanks, 12 Motorcycles and a BMPT Terminator Defeated! - YouTube

When reading articles that quote Russians who support Putin's invasion of Ukraine, it is clear that they are permanent residents of an Alternate Reality bubble created by Putin's Orwellian state and will never question the false narrative created for them by an authoritarian state. This is the most recent one that I have read. Kirov residents say Russia must defeat Ukraine and the West at any cost - The Washington Post  

Tens of millions in the U.S. live in an Alternate Reality bubble that cannot be pierced with accurate information. This occurs even when there is easy access to reliable information that contradicts the demonstrably false reality creations created by a psychopathic demagogue who is incapable of telling the truth.  

Ukraine war: European nations turn to conscription as threat of wider war with Russia grows | CNN

Russia's economic potential has been stymied by its political system and kleptocracy. The Russian Central Bank raised its benchmark rate by 200 basis points to 18%. Annual inflation increased from 8.6% to 9%. The ruble is a junk currency. Russia's Central Bank Raises Its Key Rate as War Overheats Economy — Update | Morningstar GDP growth based on building military equipment that is then destroyed in Ukraine adds nothing but debt used to finance Putin's invasion of Ukraine. Russian nominal GDP growth is illusory. 

+++

1.  Term Corporate Bond ETFs: 

The term corporate bond ETFs discussed below will own investment corporate bonds that mature in a specific year. The expense ratio for each fund is .1%. When all of the bonds have matured, the fund will liquidate and distribute the proceeds to their respective shareholders. 

One of the funds discussed below owns corporate bonds maturing in 2031. 

If I bought a corporate bond maturing in 2031, and assuming the issuer survived to make all interest payments as well as the principal amount at maturity, I will receive a sum certain consisting of both principal and interest payments. I could calculate on the day of purchase to the penny what my total return would be.  

There is no sum certain when the 2031 ETF, but a term bond ETF is as close as I can get to owning bonds maturing that year without buying the bonds. 

Owning the term corporate bond ETF also achieves a wide diversity and consequently limits the credit risk of defaults compared to owning a few bonds maturing in a particular year.  

Having the liquidation provision  may end up providing me more or less than the total amount invested with each purchase of shares. 

I will not be reinvesting the dividends. 

To reduce interest rate risk caused by interest rates moving back up, each purchase will have to be at the lowest price in the chain, either in 5 or 10 share lots, until I reach 100 shares for each term corporate bond ETF.  

If I start to become concerned that interest rates are going to spike higher, then I will consider liquidating these positions. 

I will most likely sell these term corporate bond ETFs prior to their liquidation dates. The goal is a total return in excess of the dividend payments. 

Understanding bond duration | Morningstar 

Brush Up on Bonds: Interest Rate Hikes and Duration | FINRA.org 

Investment Fundamentals: Bond Duration | SEI

To determine a bond funds sensitivity to changes in interest rates, a general rule of thumb is to multiply the change in interest rates by the duration number to determine how the net asset value of a bond fund will decline or rise. 

The net asset value of a bond fund with a 5 year effective duration would rise rise or fall 5% with a 1% directional change in interest rates. 

If the fund is paying a 5% annual dividend, the total return over a 1 year period with a 1% rise in interest rates at the start of the annual period would be close to zero. 

Conversely, a 1% decline in rates would indicate that the fund could be sold at the end of the annual period with a 6% total return.  

A.  Bought 5 IBDW at $20.49: 

Quote: iShares iBonds Dec 2031 Term Corporate ETF 

Cost: $102.45 

Sponsor's website: iShares® iBonds® Dec 2031 Term Corporate ETF (IBDW)

Expense Ratio: .1%

Portfolio Characteristics: 

Duration: 5.92 years

Number of Holdings: 401  

Credit Ratings: Investment Grade Corporate Bonds 

Dividends: Paid monthly at a variable rate. 

At $20.5, and using the TTM payments of $.995, the yield is about 4.85%.

Last Ex Dividend: 7/1/24

B. Bought 10 IBDU at $22.88:

Quote: iShares iBonds Dec 2029 Term Corporate ETF 

Cost: $228.8

Sponsor's website: iShares® iBonds® Dec 2029 Term Corporate ETF (IBDU) 

Expense Ratio: .1% 

All of the corporate bonds owned by this fund mature in 2029 and are rated at investment grades. 

Portfolio Characteristics:  

Number of Holdings: 537

Duration: 4.22 years

Credit Ratings: 

Dividend: Paid Monthly at a variable rate. 

Last Ex Dividend: 7/1/24

C. Bought 10 IBDV at $21.48: 

Quote:  iShares iBonds Dec 2030 Term Corporate ETF Overview 

Cost: $214.76

Sponsor's website: iShares® iBonds® Dec 2030 Term Corporate ETF | IBDV

Expense ratio: .1%

Dividends: Monthly at a variable rate

I would attribute the slight rise in the monthly dividend to the fund receiving new money that was used to purchase higher yielding bonds over the past year than those previously owned when interest rates were lower.  

Last Ex Dividend: 7/1/24

Effective Duration: 5.1 years

Number of Holdings: 498 as of 7/19/24

Credit Quality: 

2. Small Ball Sells: 

Investment Categories: 

Equity REIT Common and Preferred Stock Basket Strategy (STAG, IRM, EPRT, LXP, PINE)

Equity REIT stocks have rallied in anticipation of FED rate cuts which will make their dividends more attractive compared to alternative investments like treasury bills and short term treasury notes and will lower their borrowing costs.   

Regional Bank Basket Strategy (AROW, CPF, WASH)

Regional bank stocks have been in rally mode recently based on the hope that Fed rate cuts will allow net interest margins to increase through lowering deposit and borrowing costs.   

A. Pared STAG - Sold 10 at $39.55: 

Quote: STAG Industrial Inc.  (STAG) - Internally managed industrial REIT. 

Proceeds: $395.48

"As of March 31, 2024, the Company owned 570 industrial buildings in 41 states with approximately 113.0 million rentable square feet." 10-Q for the Q/E 3/31/24 at page 7 

SEC Filings

2023 SEC Filed Annual Report 

Website: Home Page | STAG Industrial

Last Discussed: Item # 2.A. Pared STAG - Sold 10 at $38.99 (1/23/24 Post)(profit snapshot = $249.22) 

Last Buy Discussion: Item # 2. Added to STAG in IB Account-Bought 50 at $17.55-Update For Equity REIT Basket Strategy As Of 1/21/16 - South Gent | Seeking Alpha

Profit Snapshot: $189.98

Average cost per share after pare: $17.19 (80+ shares), reduced from $17.56. 

Remaining Shares: 

Price as of Close on 7/22/24

I used the specific identification method, selecting part of the lot bought on 3/26/2020 and keeping all of the remaining shares bought earlier at $14.04 and the last remaining lot bought with a dividend at $14.03. The March 2020 purchase was made during the stock market meltdown that occurred in response to the pandemic. 

Dividend: Monthly at $.1233 per share ($1.48 annually), last raised from $.1225 effective for the 2024 first quarter payment.  

STAG Dividend History | Seeking Alpha

Dividend History: Very slow growth. In July 2014, the dividend was $.11 per share. I view the dividend growth as unsatisfactory and practically meaningless over the past decade. 

Yield at New AC = 8.61%

Next Ex Dividend: 7/31/24

Last Earnings Report (Q/E 3/31/24):  

SEC Filed Press Release

Revenues: $187.543M, up from $173.553M

Core FFO per share: $.59, up from $.55

Core FFO: $109.039M

Funds Available for Distribution: $98.133M

FAD per share: $.528, up from $.492.

Quarterly dividend at $.37, easily covered by FAD per share

Net Income to FAD Reconciliation:  

Some Other Sell Discussions: Item # 4.A. Eliminated Duplicate Position in STAG - Sold 50 at $37.22 (9/16/23 Post)(profit snapshot  = $1,075.13); Item # 1.G. - Sold 4 STAG at $33  (4/1/21 Post)(profit snapshot = $32.49); Item # 7-Pared STAG Sold 42 at $25.2: Update For Equity REIT Basket Strategy As Of 7/28/16 | Seeking Alpha (profit snapshot = $271.32); Item # 2. Pared STAG-Sold 54 Shares at $23.81: Update For Equity REIT Basket Strategy As Of 7/1/16- South Gent | Seeking Alpha (profit snapshot = $318.54); Item # 2. Pared STAG -Sold 50 of 240 at $22.74: Update For Equity REIT Basket Strategy As Of 6/24/16 - South Gent | Seeking Alpha(profit snapshot = $48.31); Update For Equity REIT Basket Strategy As Of 3/21/16 - Item # 2. Sold 133 STAG at $19.61 | Seeking Alpha (profit snapshot = $125.27). 

STAG Realized Gains to Date: +$2,354.99

B. Eliminated CPF - Sold 42+ at $24.82: 

Quote: Central Pacific Financial Corp.

Proceeds: $1,042.04

CPF SEC Filings

CPF Analyst Estimates | MarketWatch As of 7/22/24, the average 2024 E.P.S. estimate was at $1.98, at $2.05 in 2025, and at $2.25 in 2026. The actual 2023 GAAP E.P.S. was at $2.17 and at $2.68 in 2022. SEC Filed Earnings Press Release for the Q/E 12/31/23 The downtrend highlights the negative impact on net interest margins created by the FED abandoning ZIRP in March 2022 and then rapidly raising the federal funds rate.  

Profit Snapshot: +$133.61

Last Discussed: Item # 3.F. Eliminated Duplicate Position in CPF - Sold 22+ at $20.95 (2/2/24 Post)(profit snapshot = $53.27). 

Dividend: Quarterly at $.26 per share share, last raised from $.25 effective for the 2022 first quarter payment. 

CPF Dividend History | Nasdaq

Last Ex Dividend: 5/31/24 (owned as of)

CPF has not yet reported its second quarter earnings. 

SEC Filed Earnings Press Release for the Q/E 3/31/24 

E.P.S. $.48, down from $.60 in the 2023 first quarter. 

C. Eliminated AROW - Sold 25+ at $30.11: 

Quote Arrow Financial Corp.  (AROW)

Proceeds: $777.89

AROW SEC Filings

AROW Analyst Estimates | MarketWatch

SEC Filed 2023 Annual Report 

Investor Relations Website: Arrow Financial Corporation

Profit: +$127.87

Last Discussed: Item # 1.A. Added to AROW - Bought 5 at $24.5-Fidelity Account (4/8/23 Post) 

Dividends: Quarterly at $.27 per share ($1.08 annually)

AROW Dividend History | Nasdaq

The company has paid 3% stock dividends for several years, while keeping the quarterly dividend rate steady since raising it from $.26 effective for the 2022 first quarter payment. 

Arrow Financial Corporation Declares Stock Dividend (8/31/23)

Keeping the dividend steady is in effect a 3% annual dividend increase.  

Last Ex Dividend: 5/10/24 (owned as of)

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Earnings Press Release 

Comparisons are to the 2023 first quarter. 

E.P.S. $.52, up from $.35

The 2023 second quarter was negatively impacted by an increase in operating expenses related to improving interest controls.  

NIM: 2.69%, up from 2.63%

Efficiency Ratio: 66.29%, down fro 72.72%  

NPL Ratio: .64%, up from .21%

NPA Ratio: .5%, up from .17%

Coverage Ratio: 147.18%

Charge off ratio: .1%

ROTE: 9.74%, up from 7.1%

Tangible book value per share: $21.54, up from $19.84

Sell Discussions: Item # 2.K. Eliminated AROW in Schwab Taxable Account - Sold 10 at $32.7 and Item # 2.L. Eliminated AROW in Vanguard Taxable Account-Sold 5 at $33.15 (2/5/23 Post)(profit snapshots = $121.87); Item # 1.C. Sold 15 AROW at $36.1 (2/10/22 Post)(profit snapshot = $16.99); Item # 1. Sold 52+ AROW at $37.5 (7/2/18 Post)(profit snapshot = $661.34); Item # 5.A. Sold 100 AROW at $34.7 (4/23/18 Post)(profit snapshot = $62.04) 

AROW Realized Gains to Date: $1,012.17

D. Eliminated Duplicate Position in LXP - Sold 20 at $10.29 (Fidelity Account): 

Quote: LXP Industrial Trust  (LXP) - Internally Managed REIT

Proceeds: $205.8

LXP SEC Filings

I am keeping for now the 80 LXP shares owned in my Schwab account, where my average cost per share is $8.64.  

Website: LXP Industrial Trust - Preeminent single-tenant U.S. industrial REIT

Properties | LXP Industrial Trust

"Since December 31, 2015 through December 31, 2023, we transitioned our portfolio from approximately 16% warehouse/distribution assets to approximately 99.7% warehouse/distribution assets." 2023 Annual Report at page 7 

Portfolio Statistics as of 3/31/24: 

Source: SEC Filed Supplemental for the Q/E 3/31/24 at page 3 

SEC Filed 2023 Annual Report

Profit Snapshot: $32.25

Last Buy Discussions: Item # 2.A. Added to LXP - Bought 10 at $8.48 - Schwab Account (4/26/24 Post); Item # 3.E. Added 20 LXP at $8.79 (3/28/24 Post);Item # 1.B. Added to LXP - Bought 5 at $7.98; 5 at $7.8 (11/4/23 Post); Item # 1.L. Added to LXP - Bought 5 at $8.43; 5 at $8.2 (10/21/23 Post); Item # 1.D. Added to LXP - Bought 5 at $9.1; 5 at $8.6 (10/7/23 Post)

Dividend:  Quarterly at $.13 per share ($.52 annually)

LXP Industrial Trust (LXP) Dividend History | Seeking Alpha

Dividend History: I rate the dividend history as poor. The quarterly dividend was slashed from $.1775 to $.1025 per share effective for the 2019 second quarter payment. 

A reason for the dividend slash was the disposition of 21 office properties in 2018, as LXP started to realign its portfolio to more industrial properties. Lexington Realty Trust Announces Disposition of 21 Office Assets for $726 Million to Joint Venture (9/4/18)   

2023 Dividend Taxation Information: 

 

LXP Industrial Trust Announces Final Dividend Allocation for 2023

Last Ex Dividend: 6/28/24 (owned as of)

Last Earnings Report (Q/E 3/31/24): SEC Filed Press Release

Revenues: $86.251M, up from $85.075M

Adjusted FFO: $48.803M, down from $50.258M

Adjusted FFO per share: $.16, down from $.17 

Funds available for Distribution: $45.238M, down from $46.732

FAD per diluted share: $.153, down from $.161

Net Income to Funds Available for Distribution: 

Reaffirmed guidance that 2024 FFO per share will be in the range of $.61 to $.65. 

Ongoing Development Projects: 

Other Sell Discussions: Item # 1.D. Eliminated LXP - Sold 20+ at $11.57 (2/13/23 Post)(profit snapshot = $33.37); Item # 1.C. Sold 137+ LXP at $9.08 and 53 at $9.06 In 2 Separate Roth IRA Accounts (9/12/18 Post)(profit snapshot = $914.11); Sold 100 LXP in Fidelity Roth IRA at $11.15 (1/6/17 comment- profit of $271.9 referenced with no snapshot)(snapshot in Gateway Post for Equity REITs); Item # 2 Sold 250 LXP on Ex-Dividend Date in Two Taxable Accounts-Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot = $224.65); Item # 1.B. Eliminated LXP - Sold 155+ at $9.46 (6/26/19 Post)(profit snapshot = $6.37); Item # 1.B. Sold 108+ LXP at $9.45-Used Commission Free Trade (2/6/19 Post)(profit snapshot = $79.9);; Item # 1 Sold 150 LXP in Vanguard Roth IRA-Update For Equity REIT Basket Strategy As Of 6/24/16 - South Gent | Seeking Alpha (profit snapshot = $80.19); Item # 1. Sold 54 LXP at $11.44 Vanguard Roth IRA (1/27/15 Post)(profit snapshot = $64.4); Item # 1 Sold 101+ LXP at $10.65 (10/28/14)(profit snapshot = $51.76)   

LXP Realized Gains to Date: $1,989.94

Bond Ownership: I previously owned 5 SU bonds that matured on 6/15/24. 

I currently have no LXP bond position. 

Last Bond Offering (11/23): Prospectus for $300M 6.75% SU maturing in 2028. Proceeds used to pay down credit facility. Bond Page | FINRA.org

I have eliminated my position in a LXP equity preferred stock. 

E. Eliminated Duplicate Position in PINE - Sold 11 at $17.11 (Schwab Account): 

Quote: Alpine Income Property Trust Inc. (PINE)

Proceeds: $188.2

For owned properties, PINE is a net lease equity REIT that owns "137 net leased properties located in 34 states. The properties in our portfolio are primarily subject to long-term, net leases, which generally require the tenant to pay directly or reimburse us for property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures." 10-Q for the Q/E 6/30/24 at page 10 

This REIT has some commercial loans secured by first mortgages:

10-Q at page 17.

Long term debt is through credit facilities priced at spreads to SOFR that have been turned into fixed rates through interest rate swaps as described at page 23. 

As mentioned in a comment published on 7/22/24, I am somewhat concerned about PINE's exposure to Walgreens as a tenant. It is hard to assess the risk since it is not known whether Walgreens will close any of the stores leased to it by PINE. 

SEC Filings

Property Portfolio — Alpine Income Property Trust, Inc.

Website: Alpine Income Property Trust, Inc.

Management: External by a subsidiary of CTO Realty Growth Inc. (CTO) which I also own. 

Last Discussed: Item # 1.B. Added to PINE in Fidelity Account - Bought 10 at $15.25 (6/14/24 Post)(discussed 2024 1st Q. report, SEC Filed Press Release); Item # 2.A. Added to PINE - Bought 10 at $15.18 (4/5/2024 Post)(discussed 2023 4th Q. report, SEC Filed Earnings Release)  

Profit Snapshot: $21.07

Dividend: Quarterly at $.275 per share ($1.1 annually), last raised from $.27 effective for the the 2022 third quarter payment. 

PINE Dividend History | Nasdaq

Last Ex Dividend: 6/13/24 (owned as of)

Remaining Position - Fidelity Account: 57+ shares with an average cost per share of $15.96. The dividend yield at that average cost per share is about 6.89%.

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Press Release and SEC Filed Supplemental 

As a net lease REIT, FFO and AFFO will be close to one another. 

AFFO per share: $.43, up from $.37. 

Occupancy:  99.1%

Weighted average remaining lease term: 6.6 years. 

Square feet: 3.8M

"During the three months ended June 30, 2024, the Company acquired one high-quality net lease retail property leased to two tenants for $14.6 million. The two tenants are investment grade rated Best Buy and Golf Galaxy (Dick’s Sporting Goods) and had a weighted average remaining lease term of 4.6 years at acquisition."

"During the three months ended June 30, 2024, the Company sold two net lease properties leased to non-investment grade rated tenants for total disposition volume of $6.6 million at a weighted average exit cash cap rate of 7.0%. The sale of the properties generated aggregate gains of $0.9 million."

Stores leased to Walgreens represented 12% of annual base rent, see Supplemental at page 9. 

F. Pared IRM - Sold 2 at $100: 

Quote: Iron Mountain Inc (IRM) - A REIT

Proceeds: $200

IRM is a document storage and management REIT. 

For a long time, the REIT focused on paper document storage and then moved into digital document storage, management and transformation. 

IRM has more than 240,000 customers worldwide and has a "range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management, secure destruction and art storage." 

Digital transformation; 

IT asset lifecycle management; 

Iron Mountain Data Centers; 

Document scanning-Digital storage; 

Records storage and management 

Project Services 

Business shredding services - document and paper shredding 

IRM made a late transition to digital document storage and management, allowing new entrants like Digital Realty Trust Inc.  (DLR) to gain market share. 

For a long time, I had doubts whether IRM would make a successful transition to digital related services given its late entry. 

Debt would have to substantially increase to finance that transition. Long term debt was at $12.588+B as of 3/31/24 and at $6.078+B as of 12/31/16.  Moody's has a Ba3 rating on the SU debt which is a junk rating. The highest junk ranking is Ba1. 

Based on the current share price, the market seems to have reached a conclusion that the entry was successful. 

Iron Mountain - Investor Relations

SEC Filings

SEC Filed 2023 Annual Report 

10-Q for the Q/E 3/31/24 

Management: Internal

Last Buy Discussions: Item # 2.E. Started IRM in Schwab Taxable Account-Bought 10 at $26.8; 5 at $25.8; 5 at $25.25; 5 at $24.9 (12/5/20 Post); Item # 1.B. Added 3 IRM at $22.99; 2 at $22.31 (6/20/20 Post); Item # 2.F. Added to IRM in Fidelity Taxable-Bought 1 at $26.88; 2 at $26.2; 1 at $25.7; 1 at $25.52; 1 at $24.96 (12/5/20 Post)(substantive discussion); Item # 2.A. Added 1 IRM at $26.46; 1 at $26.07; 1 at $25; 2 at $23.95; 1 at $23.3; 1 at $23.76; 1 at $24.33; 1 at  $22.61; 1 at $24.33; 1 at $22.6 and 1 at $21.79 (5/2/20 Post)

Profit Snapshot: +$150.29

Average cost after pare: $22.7 (13 shares)

Snapshot Intraday on 7/22/24 after pare

Dividend: Quarterly at $.65 per share ($2.6 annually), last raised from $.6185 effective for the 2023 4th quarter payment. 

IRM Dividend History | Nasdaq

Yield at New AC per share: 11.45%

Last Ex Dividend: 6/17/24 (owned all as of)

Last Earnings Report (Q/E 3/31/24): 

SEC Filed Press Release; SEC Filed Earnings Presentation; SEC Filed Supplemental 

Revenue: $1.477B, up from $1.314B

AFFO: $324M, up from $295M 

AFFO per share: $1.1, up from $1.01. 

2024 AFFO per share guidance: $4.39-$4.51

Reconciliation of Net Income to AFFO: 

I have always had trouble accepting IRM's adjustment to how NAREIT calculates FFO. Using NAREIT's definition, the FFO per share number was $.54, compared to $.74 as adjusted by IRM. My primary issue is the add back for "Restructuring and Other Transformation" which appears to be an ongoing expense item. The add back was $40.767M, up from $36.913M in the 2023 first quarter and down from $53.853M in the 2023 4th quarter. 

FFO to AFFO Reconciliation: 

Some Sell Discussions: Item # 1.J. Eliminated IRM in Vanguard Account - Sold 3 at $54.25 (2/13/23 Post)(profit snapshot = $98.68); Item # 4.G. Sold 1 IRM in Fidelity Taxable Account at $55.04 (9/20/22 Post)(profit = $29.61); Item # 3 Eliminated IRM in Schwab Taxable Account - Sold 19+ at $57.73  (5/5/22 Post)(profit snapshot = $631.54) Item # 2.H. Pared IRM in Fidelity Taxable Account - Sold 1 at $47.58 (10/10/21 Post)(profit snapshot = $21.6); Item #1.A. Sold 3 IRM in Fidelity Taxable-Sold 3 at $49.12 (10/1/21 Post)(profit snapshot = $86.06); Item # 2.K. Pared IRM in Fidelity Taxable Account-Sold 5 at $44.18 Item #2.L. Pared IRM in Vanguard Taxable-Sold 1 at $46.19; and Item # 2.M. Pared IRM in Schwab Taxable-Sold 1 at $46.93  (6/19/21 Post)(profit snapshots = $122.41); Item # 1.K. Sold 5 IRM at $37.69 (4/30/21 Post)(profit snapshot = $76.42); Item # 1.L. Sold 5 IRM in Schwab Account at $36.42 and Item #1.M. Sold 2.731 in Fidelity Account at $36.86 (4/1/21 Post)(profit snapshots = $73.38); Item #1.B. Sold 2 IRM at $35.63; 5 at $36.8 in Fidelity Taxable (2/27/21 Post)(profit snapshot = $54.15) ; Item # 1.B. Pared IRM-Sold 15 at $33.04 (2/22/20 Post)(profit snapshot = $36.73); Item # 1.C. Sold 10 IRM at $33.91-Used Commission Free Trade (12/26/18 Post)(profit snapshot = $12.24 ); Item # 4 Sold 50 IRM at $33.82 Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot = $398.06)

IRM Realized Gains to Date = $1,825.43

G. Pared EPRT - Sold 5 at $30.81: 

Quote: Essential Properties Realty Trust Inc.  (EPRT)  - Net Lease  REIT

Proceeds: $154.05

Management: Internal

Properties as of 6/20/24: 2,009 with weighted average lease term of 14.1 years and 99.8% occupancy

Last Buy Discussions: Item # 6.I. Added to EPRT - Bought 2 at $19.19 - Fidelity Account (11/1/22 Post); Item # 4.N. Added to EPRT - Bought 2 at $19.95 (10/11/22 Post)

Profit Snapshot: $16.57 (7/22/24 sale only)

I previously sold shares purchased with dividends. Item # 3.C. Sold 3+ EPRT at $26.33 (5/3/24 Post)(profit snapshot = $9.89) Profitably selling shares purchased with dividends is just one of my risk reduction trading practices. I am not concerned about losing the compounding effect given my age.  

New Average cost per share: $23.23 (34 shares)  

Snapshot Intraday on 7/22/24 after pare

 

Dividend: Quarterly at $.29 per share ($1.16 annually), last raised from $.285 effective for the 2024 third quarter payment. The quarterly rate was at $.22 in the 2019 third quarter. 

Yield at $23.23 AC =  4.99%

Last Ex Dividend: 6/28/24 

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Press Release and SEC Filed Supplemental 

Core FFO per diluted share: $.47, up from $.44

AFFO per diluted share: $.43, up from $.41

Net Income to AFFO Calculation: 

Reiterated 2024 AFFO guidance of $1.72-$1.75

Page 10, Supplemental 

Other Sell Discussion: Item # 3.D. Eliminated Duplicate Position in EPRT - Sold 13+ at $24.22 - Schwab Account (8/19/23 Post)(profit snapshot = $32.9). 

H. Eliminated SMDV - Sold 10 at $69.55: 

Quote: ProShares Russell 2000 Dividend Growers ETF Overview 

The fund targets companies that are components of the Russell 2000 that have raised their dividends for at least 10 years. 

Profit Snapshot: $56.88

I sold into the small cap rally. 

Sponsor's website: SMDV | Russell 2000 Dividend Growers ETF 

Expense Ratio: .40%

Number of Stocks: 101

Dividend: Quarterly at a variable rate

Last Dividend: $.528 per share

Last Ex Dividend: 6/26/24 (owned as of)

Some Top Holdings: 

All of the companies included in the previous snapshot are regional banks. I have been selling regional bank stocks into their recent rally. 

I. Eliminated WASH in Schwab Account - Sold 14+ at $32.2: 

Quote: Washington Trust Bancorp Inc. (WASH) - Holding company for Washington Trust. 

Proceeds: $461.67

Washington Trust | Locations The branches are located in Rhode Island except for one in Connecticut. Some residential mortgage lending offices are located in Connecticut and Massachusetts.   

Corporate Overview | Washington Trust Bancorp, Inc.

WASH Analyst Estimates As of 7/23/24, the average E.P.S. estimate for 2024 was at $2.17 and at $2.58 in 2025. The actual 2023 GAAP E.P.S. was at $2.82, down from $4.11 in 2022, which explains why the stock is struggling. SEC Filed Earnings Press Release for the Q/E 12/31/23. 

SEC Filings

10-Q for the Q/E 3/31/24 

SEC Filed 2023 Annual Report 

Properties as of 12/31/23

Profit Snapshot: +$41.29

Dividend: Quarterly at $.56 per share 

WASH Dividend History-Nasdaq

Last Ex Dividend: 7/1/24 (owned as of)

Last Earnings Report (Q/E 6/30/24): The stock rallied in response to this report. Since I was not impressed, I sold into the rally. 

SEC Filed Earnings Press Release 

Comparisons are to the 2023 second quarter. 

E.P.S. = $.63, down from .66%

NIM: 1.83%, down from 2.03%. I view both numbers as too low. 

Efficiency Ratio: 70.3%, up from 69%. I view both numbers as too high.

NPL Ratio: .54%

ROTE: 11.04%, down from 11.32%. Below average IMO. 

Loans to Deposit Ratio: 112.8%. Concerning IMO. 

Wholesale Brokered Deposits: $339M

FHLB Advances: $1.6B, up $310M compared to the Q/E 3/31/24. 

Tangible book value per share: $23.67, up from $22.98

Other Sell Discussion: Item # 2. Sold 50 of 100 WASH at  $22.44 (1/5/11 Post)(profit snapshot +$347.03); Item # 2. Eliminated WASH-Sold 50 at $61.53 (6/25/18 Post)(profit snapshot = $2,309.26)

WASH Realized Gains to Date: $2,697.58

3. Small Ball Buys - Common Stocks: 

A. Added to VZ in Schwab Account - Bought 4 at $38.98: 

Quote: Verizon Communications Inc.

Cost: $155.92

VZ Analyst Estimates | MarketWatch

VZ SEC Filings

Investment Category: Bond substitute with some dividend growth. 

Last Discussed: Item # 2.I. Added to VZ in Schwab Account - Bought 1 at $38.78 (4/26/24 Post)(I discussed the 2024 first quarter report in that post,SEC Filed Press Release); Item # 6.K. Added to VZ in Schwab Account - Bought 1 at $35.09 (11/1/2022 Post);  Item # 5.M. Added to VZ in Schwab Taxable Account - Bought 1 at $38.65; 1 at $36.76; 1 at $35.73 (10/18/22 Post)(summarized my negative opinions about VZ in that post)

New Average cost per share this account: $39.86 (35+ shares)

Snapshot Intraday on 7/22/24 after add

Dividend: Quarterly at $.665 ($2.66 annually), last raised from $.6525 effective for the 2023 third quarter payment.  

Stock Dividend History for Investors-Verizon

Yield at AC of $39.86: 6.67%

Last Ex Dividend Date: 7/10/24 (owned 31+ shares as of)

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Press Release 

The initial reaction to this report, released on Monday 7/22/24, was negative. The stock closed at  $41.62 on Friday 7/19 and at $39.09 on 7/22. Volume accelerated to 54,985,800 shares on 7/22, up from $16.608M on 7/19. 

While I have a lot of negative things to say about this stock, I did not have the same negative reaction to the report and consequently added 4 shares on 7/22. 

Net Income: $4.7B or $1.09 per share, compared to $1.10 in the 2023 second quarter. 

Adjusted E.P.S. of $1.15, matching the consensus estimate but down from $1.21 in the 2023 second quarter. GAAP E.P.S. includes "a pre-tax loss from special items of approximately $355 million. This includes the amortization of intangible assets related to Tracfone and other acquisitions of $219 million, and a $136 million charge associated with a mark-to-market adjustment for our pension liabilities."

Wireless Service Revenue: $19.8B, up 3.5%

Total Operating Revenue: $32.8B, up .8%

Other Highlights: 

"Capital expenditures in first-half 2024 were $8.1 billion, compared to $10.1 billion in first-half 2023. The company has returned to historic levels of capital intensity."

"Verizon's total unsecured debt as of the end of second-quarter 2024 was $125.3 billion, a $3.1 billion decrease compared to first-quarter 2024, and $6.1 billion lower year over year."

Free cash flow January-June 2024: $8.498B, up from $7.95B:

VZ maintained its 2024 guidance for 2 to 3.5% total wireless service revenue growth and for its adjusted E.P.S. of $4.5 - $4.7. 

4. Treasury Bills Purchased  at Auctions: 

A. Bought 10 Treasury Bills at the 7/24/24 Auction: 

119 Day Bill

Matures on 11/26/24

Interest: $169.08

Investment Rate: 5.275%

B. Bought 5 Treasury Bills at the 7/22/24 Auction: 

91 Day Bill 

Matures on 10/24/24

Interest: $65.6 

Investment Rate: 5.332%

C. Bought 2 Treasury Bills at the 7/22/24 Auction: 

180 Day Bills

Mature on 1/23/25

Interest: $50.45

Investment Rate: 5.19%

5. Exchange Traded Bonds: 

A. Added to ELC, Exchange Traded First Mortgage Bond in my Fidelity Account - Bought 5 at $22.2: 

Quote: Entergy Louisiana LLC Mortgage Bonds 4.875% Series due 2066  (ELC)

Cost: $111

I own this FM bond in 3 of my taxable accounts. The limit in each account is 300 shares. 

Issuer: Wholly owned operating subsidiary of the utility holding company  Entergy Corp. (ETR)

ETR SEC Filings

Investment Category: Exchange Traded Baby Bonds

Last Discussed: Item # 7.B. Added to ELC in Schwab Account - Bought 5 at $21.6 and Item # 7.C. - Added to ELC in Vanguard Account - Bought 10 at $21.78 (5/17/24 Post); Item # 6.A. Added to ELC in Fidelity Account - Bought 10 at $21.3 (1/6/2024 Post); Item # 6.A. Added to ELC  Bought 10 at $21.93 in Vanguard Taxable; 5 at $21.78 and 5 at  $21.6 in Schwab Account  (12/23/23 Post); Item # 6.A. Added to ELC  Bought 10 at $21.93 in Vanguard Taxable; 5 at $21.78 and 5 at  $21.6 in Schwab Account  (12/23/23 Post)

Prospectus

Par Value: $25

Coupon: 4.875% paid on the $25 par value

Interest Payments: Quarterly

Security: First Mortgage on substantially all assets 

My Videos: First Mortgage Bonds Traded Like Stocks - YouTube; First Mortgage Bonds $1,000 Par Values - YouTube 

Call protection has expired. 

Maturity: 9/1/2066 unless called earlier at issuer's option.  

Interest Payments: Quarterly

Trades Flat (whoever owns the security on the ex interest date receives the entire quarterly interest payment, even if bought the day before that date)

Credit Ratings: A2/A

New Average cost per share in my Fidelity Account: $21.6 (60 shares)

Snapshot Intraday on 7/22/24 after add

Yield at New AC = 5.64%

Next Ex Interest Date: 8/30/24

I have no concerns about the credit risk. 

Interest rate risk is substantial given the potentially long maturity. 

Interest rate risk is asymmetric in favor of the issuer. 

(1) If interest rates rise, the issuer will allow the owners of this bond to keep it as the price declines. I am concerned about this risk. 

(2)  If interest rates fall sufficiently that it is in the interest of the issuer to call at the $25 par value, it may call the bond without having to pay a make whole payment that would have to be made for the $1,000 par value Entergy Louisiana first mortgage bonds that trade in the bond market. I am not concerned about this interest rate risk since the call would generate a profit on the bond and I am likely to find alternatives for the proceeds.  

If the make whole payment for one of the $1,000 par value bonds was to steep, the issuer probably would not call due to the penalty payment that would have to be paid to compensate the owners for an early redemption when interest rates had declined. 

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.