Economy:
An important report will be released tomorrow morning (8/30/24) that will contain the PCE inflation data for August. I will discuss that report in a comment to this post.
The stock market rallied on 8/23 after Powell acknowledged that the "time has come" for rate cuts. Powell left open the possibility that the FED may cut by fifty basis points if the next jobs report was weak. Fed Chair Jerome Powell signals "time has come" for interest rate cuts - CBS News; Fed chair says ‘time has come’ to cut interest rates amid signs of weakening job market - YouTube
In its second estimate of 2nd quarter real GDP, the government raised the real GDP growth number from 2.8% to 3%. Gross Domestic Product (Second Estimate), Corporate Profits (Preliminary Estimate), Second Quarter 2024 | U.S. Bureau of Economic Analysis (BEA) The estimated increase for personal consumption expenditures was +2.9%, up from +2.3% in the prior estimate:
Home prices hit record high in June on S&P Case-Shiller Index
CME FedWatch - CME Group There is currently a 100% probability of at least a 25 basis point cut in September and a 100% probability that the FF range will be at least 75 basis points lower on or before the December FED meeting than the current range of 5.25% to 5.5%.
German inflation posts surprise drop to 2% in August
Dollar General (DG) shares crater as retailer cuts outlook, blaming 'financially constrained' customers DG closed at $84.03, down $39.81 or -32.15% Dollar General Corp. (DG) DG caters to lower and middle income households. I believe this report caused investors to question the reported increase in personal consumption expenditures to 2.9% in the second quarter or at least the durability of that spending level into the second half.
Treasury Yield Curve August:
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Allocation Shifts Discussed in this Post:
Treasury Bills Purchased at Auction: $17,000 in principal amount
Corporate Bonds: $5,000 in principal amount.
I have slightly lowered the lowest YTM that I will accept for an investment grade corporate bond to 5% based on total cost, preferring to buy mostly in the the 8 to 14 month range, though I will make an occasional exception.
In Item #5.C. below, I discuss buying 2 SU bonds that have, at my total cost, a 5.25% YTM, and mature on 3/15/29. On the day of purchase, the 5 year treasury note closed at a 3.66% yield.
This change is due to declining treasury bill yields and the volume of proceeds that will have to be reinvested as yield options become increasingly less desirable.
Tennessee Municipal Bonds: $5,000 in principal amount
Outflow Common Stocks: -$2,088.75
(Consisting of $2,222.74 in proceeds minus $133.99 in purchases)
Stock Funds (CEF): +$67.75
Net Outflow Stocks/Stock Funds: -$2,021.
Equity REIT Preferred Stock: +$149.7
2024 Net Outflow Common Stocks/Stock Funds: -$30,638.47
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Trump and His Party:
President: general election : 2024 Polls | FiveThirtyEight
2024 General Election: Trump vs. Harris Polls | RealClearPolling
Trump’s NFT Trading Card Grift Is Back—and as Scammy as Ever | The New Republic Each card costs $99. One has Trump dancing. Another has Trump dressed in superhero garb.
Trump is frequently adding new merchandise to sell to his True Believers at inflated prices. Trumpstore.com | The Official Retail Website of the Trump Organization This Make America Great Again flag can be yours for a mere $45. Official MAGA Gear
Fact check: Trump, reversing reality, keeps saying ‘everybody’ wanted Roe overturned
Donald Trump says he would win California if Jesus counted ballots Just another example of Trump casting doubt on the election results and a presage to him refusing to accept the results in the upcoming election.
Ex-Trump press secretary Stephanie Grisham says he mocked his supporters as 'basement dwellers' Grisham: "He was mad that the cameras were not watching him. He has no empathy, no morals and no fidelity to the truth. He used to tell me, 'It doesn't matter what you say, Stephanie — say it enough and people will believe you.' But it does matter — what you say matters, and what you don't say matters." Anyone with an open mind would have observed those qualities in Trump a very long time ago.
Donald Trump Calls General John Kelly 'One of the Dumbest People' He's Met - Newsweek (8/27/24) The sole reason for Trump calling his former chief of staff and retired Marine 4 star general, dumb is that Kelly repeated disparaging comments made by Trump about U.S. soldiers. Exclusive: John Kelly goes on the record to confirm several disturbing stories about Trump Trump said they were suckers and losers.
Trump Goes Off The Rails In Midnight Attack On 'Highly Overrated Jewish Governor'
Fact check: Trump falsely claims Harris met with Putin before Ukraine invasion
Trump attacks U.S. economics data, baselessly alleging electoral scheme, republished from Trump attacks U.S. economics data, baselessly alleging electoral scheme - The Washington Post
PolitiFact | Donald Trump misleads about a 2014 California crime law, Kamala Harris’ role Trump is incapable of telling the truth.
Trump’s businesses are raking in millions of dollars from Republican political campaigns – including his own As W.C. Fields once said, never give a sucker an even break.
Trump is expected to focus anew on border wall if he regains presidency - The Washington Post Trump appeared before a section of a border wall, claiming it was built during his administration. The section was built during Obama's administration. Trump was responsible for building an extension up a hillside that cost $35M per mile. "There was no evidence here of Trump’s depiction of vicious criminals and terrorists, cannibals and infectious hordes, or people sent directly from prisons and mental institutions pouring over the border. There was no sign of foot traffic over such hostile shadeless wilderness, other than a small patrol of Mexican authorities on the other side."
2024 election: Donald Trump’s war against vaccines is back on | Vox; Trump vows to defund schools requiring vaccines for students if he’s reelected | PBS News Vaccine mandates for school children is left up to the states. There is a significant part of the voting population who opposes those mandates even if their children transmits or receives a disease from another child. Brownstein makes prediction on impact of RFK Jr.'s Trump endorsement - YouTube (see starting at 4 minutes) Brownstein noted that 40% of republicans want to send their kids to school without being vaccinated against highly communicable diseases even if that endangers their own child or other children. Trump and RFK Jr would both draw support from that crowd, but I suspect most of them would have voted for Trump with or without RFK in the race.
US Army rebukes Trump campaign for incident at Arlington National Cemetery; Trump campaign staff had altercation with official at Arlington Cemetery : NPR; Haberman shares new reporting on Trump's Arlington National Cemetery controversy - YouTube; Trump's campaign spokesperson, the persistently and reliably disgusting Steven Cheung, claimed that the Cemetery official who attempted to enforce the rule about filming or taking photos at gravesites in section 60 had suffered a "mental health episode". Trump campaign was warned not to take photos at Arlington before altercation, defense official says - ABC News Notwithstanding knowing about this rule, Trump's staff shoved the official aside and proceeded to violate this rule at a gravesite which was then turned into a campaign ad.
Army defends Arlington Cemetery staffer ‘pushed aside’ by Trump aides - The Washington Post
Vance tells Harris to ‘go to hell’ for cemetery criticism she didn’t give - The Washington Post
My Video: Trump is Mentally Unfit and Has the Maturity Level of a Disturbed Juvenile - YouTube
The conservatives who sold their souls for Trump - The Atlantic In this article, the author Tom Nichols identifies the editor of the National Review, Rich Lowry, as one of those persons. Lowry recently published an article claiming that Trump could win the election by emphasizing his good character. Opinion | Trump Can Win on Character - The New York Times We are living in an Orwellian world where almost one-half of the population believes that Trump has good character and is an honest person. It does not matter whether Lowry knows better or actually believes what he is saying in that NYT opinion article. Either way, he just needs to be ignored completely by those who still have some sense which excludes members of Trump's cult.
Trump says he could win California if Jesus were the vote counters - YouTube
Donald Trump Reposts Crude Sexual Remark About Kamala Harris on Truth Social - The New York Times Trump promoted a post that read: "Funny how blowjobs impacted both their careers differently…" Trump proves beyond any doubt how disgusting he is on a daily basis.
PolitiFact | Donald Trump’s Pants on Fire claim that Biden, Harris manipulated job data
Ann Coulter Criticized for Now-Deleted Post Mocking Tim Walz's Son After DNC Moment-YouTube
RFK Jr./Nicole Shanahan and Trump: 3 peas from the same pod.
RFK Jr. is suspending his 2024 presidential bid. Here are 6 fact-checks from his campaign False and Pants on Fire ratings.
Trump taps RFK Jr., Tulsi Gabbard for transition team
RFK Jr.’s long history of attacking Trump melted away after he endorsed him for president
It is sad that anyone pays any attention to anything that RFK Jr. has to say.
RFK Jr. Was My Drug Dealer - The Atlantic
Fact check: RFK Jr. claimed Biden was mentioned just twice at the RNC. It was nearly 400 times RFK Jr. is delusional IMO. He made this statement: "In an honest system, I believe I would have won the election." He actually believes that IMO.
Maybe the cause is the worm that ate part of his brain or the deleterious impacts of heroin usage over many years. RFK Jr. and his parasitic worm are part of a global health issue-NPR; Robert F. Kennedy Jr., ex-heroin addict, plans to attack addiction. - Los Angeles Times; RFK Jr.’s Family Doesn’t Want Him to Run. Even They May Not Know His Darkest Secrets. | Vanity Fair ("14 years as a heroin user, which began when Kennedy was 15 and didn’t end until he was 29.") He was at one time arrested for heroin possession and was founded overdosing in an airplane's bathroom.
RFK Jr. confesses he left a dead bear in Central Park 10 years ago-NPR
Prior to his presidential campaign, RFK Jr. was primarily known for spreading conspiracy theories, particularly about vaccines. RFK Jr.'s presidential campaign is driven by conspiracy theories-NPR
RFK Jr.: There is "no vaccine that is safe and effective". He further suggested that the Covid vaccines were "ethnically targeted" to spare Ashkenazi Jews. He further claimed that the vaccines have "proven to have negative efficacy, causing people to be more prone to infection than doing nothing at all." RFK Jr. Adds “Leading Anti-Vaxxer” to Presidential Campaign | Vanity Fair
Without his Kennedy name, few would pay any attention to RFK Jr. other than those who are in the business of spreading fact free conspiracy theories.
Harris was correct in ignoring his feelers for a cabinet job in return for his endorsement. If Trump wins and gives him a position in his administration, RFK Jr. will not last long before being fired since he is a loose cannon firing endless vollies of gibberish.
It is not surprising to anyone that RFK Jr. has now endorsed Trump. Several of his siblings called that act a "betrayal of the values that our father and our family hold most dear". RFK Jr.'s siblings rip his endorsement of Donald Trump
RFK Jr. made this statement when endorsing Trump: “In Chicago, a string of Democratic speakers mentioned Donald Trump 147 times just on the first day … Who needs a policy when you have Trump to hate? In contrast, at the RNC convention, President Biden was mentioned only twice in four days.” Biden was actually mentioned 393 times. J.D. Vance mentioned Biden's name 12 times in his acceptance speech.
RFK Jr. also claimed that the Democrats were the party of big money, even though he chose a billionaire to be his running mate, received millions in campaign donations from very rich people and endorsed Trump who claims to be a billionaire. Trump’s biggest donor Timothy Mellon is a Gilded Age heir also backing RFK Jr. - The Washington Post
If anyone can remember anything that JFK Jr. has accomplished, it would probably be his role earlier in life as an environmental lawyer, and now he has endorsed for President a climate change denier who wants to eliminate federal support for clean energy alternatives. Kennedy’s Trump endorsement stuns his former environmental allies - The Washington Post; The Trump Administration Rolled Back More Than 100 Environmental Rules. Here’s the Full List. - The New York Times
JRK's VP candidate is Nicole Shanahan whose divorce settlement from the Google founder Sergey Brin reportedly took her net worth over a billion. Inside the Life of Nicole Shanahan, RFK Jr.’s Running Mate - The New York Times (According to that NYT article, she embarked on an affair with Brin shortly before her wedding day with Jeremy Kranz, which should have been a red flag for Brin. Kranz reportedly discovered the affair shortly after the wedding, and he filed to annul the marriage).
In a recent social media post, Shanahan made this bizarre claim: "What the Democrats consider common course to win elections is the kind of 'normalcy' that leads to famine, sickness, and civil war". Wow. Shanahan then asserted that a second Trump administration "represents unity". Is she toxic?
+++
Putin and His Orwellian Dictatorship:
Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war
Reuters staff member is missing from Kramatorsk hotel hit by Russian strike | CNN Russia routinely targets civilian structures in Ukraine, including healthcare facilities, retail establishments, schools and hotels, as part of its ongoing terror campaign and war crimes. In the same city last April, Russia targeted a railway station murdering more than 50 people including many children.
RFE/RL Meets Shocked Russian Civilians In Town Captured By Ukrainian Forces - YouTube
Ukraine sinks Russian fuel ferry in attack near Crimean bridge - YouTube
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1. Small Ball Buys:
A. Started BEN - Bought 5 at $19.75:
Quote: Franklin Resources Inc. (BEN) - An Asset Manager
Cost: $98.75
This is my first purchase of this struggling asset manager.
On the day of purchase, the stock slid in response to news about an SEC investigation, closing at $19.78, down $2.84 or -12.56%. That perked my interest only enough to buy 5 shares.
I do not know much about the investigation other than it involves an executive at BEN's Western Asset Management Unit and his allocation of derivative trades among managed accounts. It is impossible for an outsider to quantify the potential liability but this kind of problem suggests that one or more funds managed in that unit will have to be made whole.
The company also announced that it was closing its $2B macro opportunity fund because it is in the clients' best interests. SEC Filing The Western Asset Unit of Franklin Resources manages about $381.1B.
BEN Analyst Estimates | MarketWatch
SEC Filed Annual Report for the F/Y ending 9/30/23
Dividend: Quarterly at $.31 per share ($1.24 annually), last raised from $.30 effective for the 2024 first quarter payment.
Yield at $19.75 = 6.28%
Next Ex Dividend: 9/30/24
Last Earnings Report (Q/E 6/30/24):
This report was for the third fiscal quarter. The F/Y ends on 9/30/24.
GAAP E.P.S. = $.32
Adjusted E.P.S. = $.60, down from $.63 in the 2023 second quarter.
AUM: $1.6466 Trillion (As part of BEN's acquisition of Putnam Investments from the Great West Lifeco in January 2024, Great West would allocate $25B of assets for BEN to manage).
Reconciliation GAAP to Non-GAAP:
BEN acquired Legg Mason in 2020. Franklin Templeton Completes Acquisition of Legg Mason
B. Added to GLQ - Bought 10 at $6.78:
Quote: Clough Global Equity Fund Overview - Leveraged Long-Short CEF with some bond exposure.
Cost: $67.75
Investment Category: Monthly Income Generation
SEC Filed Shareholder Report for the semiannual period ending 4/30/24 (short sales are listed at page 18; leverage is based on a .8% spread to the Overnight Bank Funding Rate, amounting to 6.12% as of 4/30/24; OChart: Overnight Bank Funding Rate (OBFR-St. Louis Fed)
Last Buy Discussions: Item # G. Added to GLQ - Bought 10 at $6.49 (3/28/24 Post); Item # 2.A. Added to GLQ - Bought 5 at $5.88; 10 at $5.82 (12/9/23 Post); Item # 3.A. Added to GLQ - Bought 5 at $5.2 (11/4/23 Post); Item # 2.C. Added to GLQ - Bought 5 at $5.35 (10/14/23 Post); Item # 3.E. Bought 5 GLQ at $5.96 (5/6/23 Post)
Sponsor's website: Clough Global - Home
Clough Global Equity (GLQ) Portfolio | Morningstar (lists top 25 holdings, can be assessed without a subscription)
Top 10 Holdings as of 6/30/24:
New Average Cost per share: $6.43 (133+ shares)
 |
| Snapshot Intraday on 8/23/24 after add |
Dividend: Monthly at $.0603 per share ($.7236 annually), last raised from $.0599 effective for the January 2024 payment.
GLQ Dividend History | Seeking Alpha
ROC supported. The only way to support the dividend is through capital gains. Leverage costs and management fees will devour dividend and interest income.
Yield at $6.43 = 11.25%
Next Ex Dividend: 9/17/2024
Data Date of 8/23/24 Trade:
Closing Net Asset Value Per Share: $7.9
Closing Market Price: $6.78
Discount: -14.24%
Average 3 Year Discount: -9.39%
Sourced: GLQ - CEF Connect (Click "Pricing Information" Tab)
C. Added to WU - Bought 3 at $11.75 - Schwab Account:
Quote: Western Union Co. (WU)
Cost: $35.24
Western Union Profile Page at Reuters
WU Key Metrics Page at Reuters
The Western Union Company - Investor Relations
WU Analyst Estimates | MarketWatch
SEC Filed 2023 Annual Report (Summary of risk factors starts at page 21 and ends at page 42)
Last Discussed: Item # 2.C. Added to WU - Bought 10 at $11.71 (12/9/23 Post); Item #7.C. Bought 10 WU at $12.7; 5 at $12.37; 5 at $12.05; 5 at $11.82; 5 at $11.67; 5 at $11.25 (3/11/2023 Post)
New Average cost per share: $11.88 (55+ shares)
 |
| Snapshot Intraday on 8/23/24 after add |
Dividend: Quarterly at $.235 per share ($.94 annually), last raised from $.225 per share effective for the 2021 first quarter payment.
WU Stock Dividend History & Date
Yield at $11.88: 7.91%
Next Ex Dividend: 9/16/24
Last Earnings Report (Q/E 6/30/24):
SEC Filed Earnings Press Release
Comparisons are to the 2023 second quarter.
Revenues $1.0664B, down from $1.17B
"The revenue decline was driven by lower contribution from Iraq compared to the prior year period as well as the sale of Business Solutions. Iraq negatively impacted the adjusted revenue growth rate by 7 percentage points."
Net Income: $141M, down from $176.2M
Diluted E.P.S. $.41, down from $.47
Adjusted E.P.S. $.44, down from $.51
Consensus Non-GAAP E.P.S. Estimate at $.45 per Schwab
2024 Outlook: Adjusted E.P.S. $1.7 to $1.8; GAAP E.P.S. $1.62-$1.72
Cash and Settlement Assets:
"As of June 30, 2024 and December 31, 2023, we had Cash and cash equivalents of $1,033.0 million and $1,268.6 million, respectively. In many cases, we receive funds from money transfers and certain other payment services before we settle the payment of those transactions. These funds, referred to as Settlement assets on our Condensed Consolidated Balance Sheets, are not used to support our operations. However, we earn income from investing these funds. We maintain a portion of these settlement assets in highly liquid investments, classified as Cash and cash equivalents within Settlement assets, to fund settlement obligations." 10-Q at page 38.
Analyst Reports (available to Schwab customers):
Morningstar (7/30/24): 5 stars with a fair value estimate of $17 and a narrow moat. The analyst noted that there was a spike in revenues from Iraq during the 2023 second quarter. Excluding the impact from Iraq, and using constant currency, revenue was flat Y-O-Y. Revenues and earnings were hurt due to WU's exit from Russia.
S&P (8/5/24): 3 stars with a 12 month PT of $13.
Given the dividend yield at my average cost per share, I would be content to harvest that dividend and exit the position at $13 or higher.
I noted that JPM reduced its PT to $12 from $14 on 8/20, and RBC reduced its PT to $14 from $16 on 7/31/24. I do not have access to those analyst reports. WU's second quarter report was released on 7/30/24.
2. Treasury Bills Purchased at Auction:
A. Bought 7 Treasury Bills at the 8/26/24 Auction - 2 Accounts:
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182 Day Bill
By holding until the bill matures in February 2025, I shift the income tax recognition of the interest into 2025.
Matures on 2/27/25
Interest: $165.8
Investment Rate: 4.865%
B. Bought 5 Treasury Bills at the 8/26/24 Auction:
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Mature on 11/29/24
Interest = $63.63
Investment Rate: 5.114%
B. Bought 5 Treasury Bills at the 8/28/24 Auction:
Matures on 12/31/24
Interest: $80.49
Investment Rate: 5.018%
3. Tennessee Municipal Bonds:
A. Bought 5 Sullivan County, TN. 3% GO Maturing on 5/1/2030 at a Total Cost of 98.25:
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I now own 10 bonds.
Emma Page
Credit Rating: Aa2 by Moody's
YTM at Total Cost: 3.339%
Interest: Federally Tax Free
Optional Call: On or after 5/1/2026 at par value + accrued and unpaid interest.
4. Small Ball Sells:
As I reminder, I am retired with no earned income and will generally keep my marginal tax rate at 15% or slightly lower. Consequently, it makes no difference whether my realized gains are short or long term.
I keep the marginal rate near 15% by owning Tennessee municipal bonds that pay federally tax free interest, stocks that pay qualified dividends taxed at no higher than 15% based on my income tax bracket, realizing some long term capital gains taxed at 15% including capital gain distributions from mutual funds, and shifting tax recognition of interest income into the following calendar year. I am expecting lower interest income in 2025 compared to 2024 due to the anticipated decline in short term rates.
Some securities may be sold for a loss to partially offset realized capital gains, but that is generally very limited in dollar amounts.
I discuss two small ball utility stock eliminations below. I have almost no interest in this stock sector given the relatively high P/E ratios, the slow earnings growth, dividend yields below what I can acquire from short term bonds issued by those companies or an operating subsidiary, and periodic regulatory problems from a state utility commission on including expenditures in the rate base (see WEC below) or other issuers.
A. Pared STWD in Fidelity Account - Sold 4 at $20:
Quote: Starwood Property Trust Inc. (STWD) - A Hybrid REIT
Proceeds: $99.04
I sold the remaining fractional shares purchased with dividends back in 2020.
4 Business Segments:
 |
| Page 11, 10-Q |
I would describe this REIT as highly complicated with a lot of moving parts.
Starwood Property Trust- Investor Relations
Last Discussed: Item # 3.E. Eliminated 1 of 2 Duplicate Position in STWD - Sold 13 at $20.72 (8/5/23 Post)(profit snapshot = $87.37)
Profit Snapshot: +$27.88
New Average cost per share this account: $14.24 (25 shares)
 |
| Snapshot Intraday on 8/21/24 after pare |
All of the remaining shares in this account were acquired during the 2020 share price meltdown.
Dividend: Quarterly at $.48 per share ($1.92 annually)
STWD Dividend History | Nasdaq
Yield at $14.24: 13.48%
Next Ex Dividend: 8/30/24
Last Earnings Report (Q/E 6/30/24)
Distributable Earnings Per Share: $.48
GAAP Net Income to Distributable Earnings Reconciliation:
Other Sell Discussions: Item # 3.I. Pared STWD -Sold 5.105 at $25.43 (5/14/21 Post) (profit snapshot = $32.18); Item # 1.O. Sold 5 STWD at $25.22 (3/20/21 Post)(profit snapshot = $27.84); Item #1.N. Pared 7 STWD at $23.74 (3/13/21 Post)(profit snapshot = net at $14.56); Items 2.C. Pared STWD in Vanguard taxable-Sold 10 at $20.44 and 2.D. Pared STWD in Fidelity Taxable-Sold 10 at $20.95 (3/6/21 Post); Item # 1.A. Sold 10 STWD at $25.96 (2/16/2020 Post)(profit snapshot = $47.74)
Buy Discussions: Item # 1.H. Added STWD in Fidelity Taxable Account-Bought 2 STWD at $17.18; 2 at $16.91; 1 at $15.24, 1 at $10.36; 1 at $9.3; 1 at $8.74; 1 at $12.45 ( 4/18/20 Post); Item # 1.C. Added to STWD in Fidelity Taxable Account-Bought 1 at $15.66, 1 at $15.12, 1 at $14.82; 1 at $13.74 (7/25/20 Post); Item # 2.D. Added to STWD in Fidelity Taxable-Bought 1 at $14.29 (12/5/20 Post)
B. Eliminated WEC - Sold 5 at $92.57:
 |
| Snapshot Intraday on 8/22/24 after pare |
Management Discussion - 2023 SEC Filed Annual Report
FTS SEC Filings - Foreign Issuer Forms
Discussed at Item # 5.A. Added to FTSPRM:CA - Bought 50 at C$17.73 (3/6/23 Post); Item # 2.B. Bought 50 FTS.PRM at C$12.4 (5/23/20 Post); Item # 3.A. Bought 50 FTS.PRM at C$16.28 (3/14/20 Post); Item # 2.A. Bought 50 FTSPRM:CA at C$17.55 (11/23/2019 Post)
E. Eliminated Duplicate Position in MDT - Sold 4 at $89.79:
Quote: Medtronic PLC (MDT)
Proceeds: $359.16
Investor Relations | Medtronic - Overview
Remaining Taxable Account Position: 35 shares at an average cost per share of $80 - Schwab Account.
 |
| Snapshot Intraday on 8/26/24 |
Profit Snapshot: $38.9
Last Discussed: Item # 1.B. Added to MDT - Bought 5 at $77.3 (7/5/24 Post)
Last Substantive Discussion: Item # 2.C. Added to MDT-Bought 5 at $81.04; 5 at $79.95; 5 at $79 (6/28/24) I discussed the earnings report for the F/Q ending 4/26/24 in that post. SEC Filed Earnings Press Release
Dividend: Quarterly at $.70 per share ($2.8 annually), last raised from $.69 effective for the 2024 third quarter payment.
Next Ex Dividend: 9/27/24
Last Earnings Report (Q/E 7/26/24): This is for the first fiscal quarter.
SEC Filed Earnings Press Release
Comparisons are to the fiscal quarter ending 7/28/23
E.P.S. $.80, up from $.59
Adjusted E.P.S. $1.29, up from $1.2
I view large percentage differences between GAAP and Non-GAAP E.P.S. numbers unfavorably and with skepticism.
Reconciliation of GAAP to Non-GAAP Both Quarters:
Revenues by Product Category:
Free Cash Flow: $466M, down $521M. I would place more emphasis on this decline than the reported increase in non-GAAP E.P.S.
Largest Annual Realized Gains to Date (2011 & 2014): +$1,797.34 (269+ shares)
Total MDT Realized Gains: $1,937.71
F. Eliminated LKQ - Sold 5 at $42.64:
Quote: LKQ Corp. (LKQ)
Proceeds: $213.22
I had an unfavorable reaction to the last earnings report. I will consider restarting a position at less than $38.
LKQ Analyst Estimates | MarketWatch
Profit Snapshot: +$6.22
Last Discussed: Item # 1.E. Bought 5 LKQ at $41.4 (7/5/24 Post) I discussed the 2024 first quarter report in that post. SEC Filed Press Release and 10-Q. The stock declined 14.48% on 4/23/24, in response to this earnings report. I initiated a 5 share position at that time.
Dividend: Quarterly at $.30 per share, last raised from $.275 effective for the 2023 4th quarter payment.
Last Ex Dividend: 8/15/25
Last Earnings Report (Q/E 6/30/24):
Comparisons are to the 2023 second quarter.
E.P.S. = $.7, down from $1.05
Adjusted E.P.S. = $.98, down from $1.09
Reconciliation of GAAP to Non-GAAP:
Free Cash Flow: $133M, down from $414M
Revenues did increase 7.6% to $3.7B.
2024 Guidance:
Previous Adjusted E.P.S. $3.9 to $4.2
Current Adjusted E.P.S. $3.5 to $3.7G. Pared PINE - Sold Highest Cost 15 Shares at $18.47:
Quote: Alpine Income Property Trust Inc. (PINE) - Net Lease REIT
Proceeds: $227.13
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Property Portfolio — Alpine Income Property Trust, Inc.
Website: Alpine Income Property Trust, Inc.
Management: External by a subsidiary of CTO Realty Growth Inc. (CTO). I own CTO shares and a preferred stock issued by that REIT.
Profit Snapshot: $3.35
New Average cost per share this account: $15.15 (42+ shares)
 |
| Snapshot Intraday on 8/26/24 after parer |
The average cost per share was reduced from $15.96 in this account.
Dividend: Quarterly at $.28 ($1.12 annually), last raised from $.275 per share effective for the 2024 third quarter payment. In 2020, the quarterly dividend was at $.20.
PINE Dividend History | Nasdaq
Yield at AC of $15.15: 7.39%
Next Ex Dividend: 9/12/24
Last Buy Discussions: Item # 1.B. Added to PINE in Fidelity Account - Bought 10 at $15.25 (6/14/24 Post); Item # 2.A. Added to PINE - Bought 10 at $15.18 (4/5/2024 Post); Item # 1.A. Added to PINE - Bought 5 at $14.9; 5 at $14.4 (10/28/23 Post)
Last Discussed: Item # 2.E. Eliminated Duplicate Position in PINE - Sold 11 at $17.11 - Schwab Account (7/26/24 Post)(profit snapshot = $21.07) I discussed the last earnings report in that post. SEC Filed Press Release; SEC Filed Supplemental
News Since Last Discussion: Alpine Income Property Trust Announces Updated Year-To-Date 2024 Transaction Activity (8/2/24) "After adjusting for the announced transaction activity, PINE’s weighted average remaining lease term has increased from 6.6 years as of
H. Pared SBRA - Sold 15+ at $16.6-Fidelity Account:
Quote: Sabra Healthcare REIT Inc. (SBRA)
Proceeds: $257.15
Website: Sabra Health Care REIT
Investment category: Equity REIT Common and Preferred Stock Basket Strategy
Using the specific identification method, I sold my highest cost 11 shares bought in the open market and the remaining shares were my highest cost lots purchased with dividends that could be sold profitably. 3+ shares purchased with dividend will require a slightly higher price to liquidate profitably.
SBRA owns nursing homes and assisted living centers. Those sectors have inherent risks that are discussed generally in the risk factor section of Sabra's 2023 SEC Filed Annual report at pages 14-27.
I try to mitigate risk using a variety of techniques that include profitably selling the highest cost lots and buying in small lots during periodic meltdowns in price.
A few of the currently owned shares were acquired in 2020 when the price collapsed to below $10 per share.
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| All 1 Share Lots |
I quit buying after a 1 share purchase at $10.14 (5/26/23) and turned off dividend reinvestment at that time as well. All of the shares purchased in 2023 were bought in the $10-$11 range.
Last Discussed: Item # 1.A. Pared Duplicate Position in SBRA - Sold $14+ at $15.52 (4/5/24 Post)(profit snapshot = $25.41) All of the shares had been purchased with dividends.
Profit Snapshot: $19.24
New average cost per share this account: $12.39 (56+ shares)
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| Snapshot Intraday on 8/27/24 after pare |
The average cost per share was at $13.04 before this pare.
Dividend: Quarterly at $.30 per share, last cut from $.45 per share effective for the 2020 second quarter payment. This was a Covid related cut that adversely impacted operators of nursing homes and assisted living facilities through, among other issues, causing significant increases in operating costs and reduced occupancy levels.
SBRA Dividend History | Nasdaq
Yield at $12.39: 9.685%
Last Ex Dividend: 8/19/24
Last Earnings Report (Q/E 6/30/24):
Portfolio: 308 properties are triple net leased.
SEC Filed Press Release and SEC Filed Supplemental
FFO per share: $.35
AFFO per share: $.36
Guides 2024 Normalized AFFO to $1.41 to $1.44
Reconciliation of Net Income to AFFO:
Revenues: $176.141M
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)
I have a duplicate position in my Schwab account, where I own 75+ shares with a $13.7 average cost per share.
I. Eliminated ARC - Sold 60 at $3.24:
Quote: ARC Document Solutions Inc. (ARC)
Proceeds: $200.35
ARC has agreed to be acquired for $3.4 per share in cash. SEC Filing
Profit Snapshots: +$29.77
Last Discussed: Item # 1.G. Bought 10 ARC at $2.68; 20 at $2.63 (2/23/24 Post)
Dividend: Quarterly at $.05 per share. ARC Dividend History | Nasdaq
J. Pared Duplicate HTBK Position - Sold 5+ at $10.11:
Quote: Heritage Commerce Corp.
Proceeds: $58.76
HTBK is the parent company of Heritage Bank of Commerce, headquartered in San Jose, CA, "with full-service branches in Danville, Fremont, Gilroy, Hollister, Livermore, Los Altos, Los Gatos, Morgan Hill, Oakland, Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Mateo, San Rafael, and Walnut Creek."
Investment Category: Regional Bank Basket Strategy
Locations-Heritage Bank of Commerce
Profit Snapshot: $7.58
Except for 2 shares, I sold my highest cost shares bought with dividends.
Last Buy Discussions: Item # 1.H. Added to HTBK in Vanguard Account - Bought 5 at $8.57 - Vanguard Account (12/2/23 Post); Item # 3.B. Added 5 HTBK at $6.9 - Vanguard Account (5/13/23 Post); Item # 2.A. Added 5 HTBK at $7.92 - Vanguard Account (4/22/23 Post)
New average cost per share this account: $9.18 (78+ shares)
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| Snapshot Intraday on 8/28/24 after pare |
Dividend: Quarterly at $.13 per share ($.52 annually), last raised from $.12 effective for the 2020 first quarter payment.
HTBK Stock Dividend History & Date
Yield at New AC of $9.18: 5.66%
Last Ex Dividend: 8/8/24 (owned all as of)
Last Earnings Report (Q/E 6/30/24):
10-Q and SEC Filed Earnings Press Release
E.P.S. = $.15, down from $.27
NIM: 3.26%, down from 3.76% (possibly at or near a bottom in the 2024 second quarter due to CDs starting to price lower and more interest income from reinvesting the proceeds of maturing securities)
Efficiency Ratio: 67.85% (too high), up from 51.67% in the 2023 2nd quarter
NPL Ratio: .18%
NPA Ratio: .11%
Coverage Ratio: 795.26% (allowance for credit loss to nonperforming loans)
Charge offs: $471,000
Tangible book value:
Deposit Costs: 1.78%
Owned Securities
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| Available for sale |
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| Securities Held to Maturity |
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| Anticipated Cash Flows by Quarter from Maturing Securities and Paydowns |
5. Corporate Bonds:
These corporate bonds were bought in my Fidelity account.
In that account, I will receive on 9/1/24 $13,000 in proceeds from maturing corporate bonds.
A. Bought 1 National Fuel 5.2% SU Maturing on 7/15/25 at a Total Cost of 99.996:
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| 10-Q at page 11 |
"The weighted average remaining noncancelable lease term of the Company’s operating leases with its tenants at March 31, 2024 was approximately
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| Price as of close on 8/23/24/Tax Cost Adjusted for ROC |
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.
The July "Personal Income and Outlays" report released earlier has the annual PCE inflation number at 2.5%, unchanged from June. Annual core PCE inflation was reported at 2.6, also unchanged from the prior month.
ReplyDeletehttps://www.bea.gov/news/2024/personal-income-and-outlays-july-2024
The month-to-month increases in both PCE inflation numbers was .2%.
Real personal consumption expenditures rose .4%, up from .3% in June. In other words, consumer spending remains supportive of real GDP growth.
PCE inflation was in line with expectations.
There is nothing in this report that will change the outlook for at least a 25 basis point cut in the FF range next month.
For the 12 months ending in July 2023, PCE core inflation increased by 4.2%:
https://www.bea.gov/news/2023/personal-income-and-outlays-july-2023
That's about as neutral report as possible, :).
ReplyDeleteLQK had looked innovative with using technology for user interface. Interesting to see that it hasn't been panning out yet. I hadn't taken a position yet.
ReplyDeleteMMM is bouncing back since the last earnings report. I'm 'only' a couple hundred underwater now. Wonder if they are out of the woods, or it's temporary improvement.
I should have added my comments about today, here. Not in the last blog.
ReplyDeleteThis is behind a paywall, but India has a fast delivery system? This looks like something they could really get attention.
ReplyDeletehttps://www.bloomberg.com/news/articles/2024-09-04/india-market-buzz-rural-relief-boost-consumer-stock-prospects
Dollar Tree Inc. (DLTR)
ReplyDelete$ 65.83 -$15.82 -19.38%
Last Updated: Sep 4, 2024 at 9:42 a.m. EDT
https://www.marketwatch.com/investing/stock/dltr?mod=search_symbol
I do not own DLTR but today's decline was sufficient for me to place the stock symbol in my monitor list.
The decline is due to the earnings report released this morning.
E.P.S. declined 26% to $.67 with the consensus estimate at $1.04. The GAAP E.P.S. was at $.62. Both the GAAP and Non-GAAP E.P.S. numbers included $.30 per share for costs related to general liability claims.
"Our general liability claims related to customer accidents and other incidents at our stores continue to develop unfavorably due to the rising cost to reimburse, settle, or litigate the claims. As a result, our actuarially determined liabilities were increased during the second quarter, contributing to incremental general liability claim expenses that adversely impacted our adjusted net income – relative to our earnings outlook provided on June 5, 2024 – by approximately $0.30 per share."
I do not know whether that cost was factored into the estimates.
Due to the "challenging macro environment," Dollar Tree cut its 2024 E.P.S. guidance to $5.2 from $5.6, down from $6.5 to$7. The stock is down more than 40% this year and has posted six consecutive monthly declines.
Interesting. A big decline based on earnings cut, but could be more decline. I'm not going in at this time, in part because the overall market environment is set for a pullback.
DeleteAlso because accidents seems like an excuse or is odd. Why would they suddenly be a factor now and not over the last 10 years? I don't know of any law that's made it easier to litigate.
But all this might explain why I'm seeing the shelves more empty, less stocked up lately.
Land: While I am not certain, the $.30 per share charge that DLTR took in the last quarter for "general liability claims" is most likely primarily caused by defense or settlement costs relating to selling certain products like talc as well as acetaminophen without a warning label that taking that a product containing acetaminophen when pregnant allegedly causes autism and ADHD (B.S. but expensive to defend in court). The lawsuits include claims against many acetaminophen products, including Tylenol, NyQuil, DayQuil, Excedrin, Alka-Seltzer Plus, Mucinex, Robitussin, and Goody's.
DeleteThose matters are described at page 11 of the last filed 10-Q.
https://www.sec.gov/Archives/edgar/data/935703/000093570324000041/dltr-20240803.htm
It appears that insurance carriers may have denied coverage for those kind of claims based on the wording in that SEC filing.
Walgreens, CVS and other retailers settled lawsuits for billions relating to filling prescriptions for oxycontin.
https://www.supermarketnews.com/finance/cvs-walgreens-to-pay-17-3b-in-opioid-settlement
That type of liability makes more sense that it's costing them now. I'd noticed those cases and wondered how they could get away with them. But for companies it adds up in dollars.
DeleteI have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2024/09/aap-aio-arcc-atlcp-atlcz-dcom-dg-emp.html