Economy:
The BLS reported that the economy added just 12,000 jobs last month. Hurricane Helene and the Boeing strike suppressed the number. Employment Situation Summary - 2024 M10 Results Average hourly earnings rose by 12 cents or .4% to $35.46. Over the past 12 months through October, the annual age wage growth was 4%.
"The change in total nonfarm payroll employment for August was revised down by 81,000, from +159,000 to +78,000, and the change for September was revised down by 31,000, from +254,000 to +223,000. With these revisions, employment in August and September combined is 112,000 lower than previously reported."
The U-6 number remained unchanged at 7.7%. Table A-15. Alternative measures of labor underutilization - 2024 M10 Results
The October ISM Services PMI increased to 56%, up from 54.9% in September. The new orders component was reported at 57.4o%. The employment component rose to 53% from 48.1%. The price component fell 1.3 to 58.1. This report was the probable cause of the stock market's rally last Tuesday.
The probability that the FED cuts the FF rate by 25 basis points later today is currently at 100%. CME FedWatch - CME Group
I do not believe it will be prudent to cut more until the FED has enough data to evaluate the potential resurgence of inflation.
++++++
Allocation Shifts Discussed in this Post:
Treasury Bills Purchased at Auctions: $5,000 in principal amount
Corporate Bonds: $20,000 in principal amount (Includes only purchases made through last Friday, November 1)
Outflow Individual Common Stocks: -$789.7 (net realized gain = $340.57)
(Consisting of $2,003.01 in proceeds minus $1,213.31 in purchases)
Outflow Stock Funds: -$409.05 (realized gains = $82.43)
Outflow Stocks/Stock Funds: -$1,198.75
Outflow Leveraged Bond CEF: -$710.43 (net realized gains = $55.18)
2024 Net Outflow Stocks/Stock Funds: -$51,341.78
+++
Portfolio Issues - Early Bond Redemptions:
Bank of America called early a 5.6% SU note that would have matured on 11/6/25. This note had limited call protection and was purchased as an original issue at par value.
Lazard called early its 3.75% SU bonds that would have matured on 2/13/25. The call date will be 12/12/24. I own 4.
American Express called its 3.65% SU note that would have matured on 12/5/24:
%20+$26%20.png){kind=small}
I have already replaced this SU note with a 3.95% American Express note that matures on 9/1/25. Item # 1.B. (10/31/24 Post)
Janus Henderson called early its 4.875% SU that would have matured on 8/1/25. I received the proceeds today.
+++
Election:
I, of course, accept the election results, as I did in 2020 and all earlier elections. I have never been an election denier.
Before the election, I decided that I would no longer pay any attention to what Trump says, irrespective of whether he wins or loses. I concluded many years ago that Trump rarely makes an accurate factual statement. The only rational response to any statement made by him is to assume it is false or at best misleading.
I will avoid any contact with whatever he says as much as possible.
My projection for his false and misleading statements during his second term is 35,000 to 40,000. He will still be viewed as honest by republicans at the end of his second term.
The only way that there was going to be a peaceful transfer of power was for Harris to lose.
There will be no additional economic or military aid for Ukraine. Trump will try to force Ukraine to accept Putin's peace plan. The western European nations are unlikely to replace the aid that will be cut off from the U.S.
Alito and Thomas will retire within 2 years and will be replaced by far younger and further to the right versions.
I am forecasting that the Republican Justices will overrule the gay marriage decision within 4 years. (My video: Republican Supreme Court Justices Will Overrule Gay Marriage Decision - YouTube)
The Dobbs v. Jackson Women's Health Organization (2022) decision overruling Roe v. Wade will remain in effect for at least the next three decades.
The odds that China will blockade or invade Taiwan within the next 4 years have gone up IMO. Trump is unlikely to assist Taiwan by using force. (My Video: Trump on U.S. Defending Taiwan - YouTube) The odds will go higher when and if Trump imposes the 60% increase in tariffs on China's exports to the U.S.
Trump's policies, if implemented, are likely to increase inflation.
I will comment on his actions to the extent that they impact the economy and my investment decisions.
His first actions that will have economic consequences will likely be to increase tariffs and to start the mass deportation of undocumented immigrants.
His tariff increases will have questionable legality unless Congress approves them.
Mass deportation will contribute to supply chain issues similar to what happened during the pandemic but not as bad. That kind of disruption will generate more inflation as demand outstrips supply.
Trump's proposed tax cuts, including the elimination of the tax on SS benefits, will also move forward by 3 years or so the bankruptcy of the SS trust fund. Trump will be out of office when that occurs, around 1 year, so the voters will blame whoever is President after Trump's term expires. (My video: Trump Tax Proposals Would Move Forward in Time Automatic Cuts in Social Security Benefits - YouTube)
It is possible that other strong secular forces may cancel out, reduce or increase the inflationary pressures created by the implementation of Trump's policies. Those factors are largely outside the control of governments which was also the case for the problematic inflation numbers in the 2021-to September 2023 time period. Voters incorrectly blamed Biden.
I will be boycotting products and services by some companies. Overall, my discretionary spending will decline in 2025 compared to this year. I did make significant contributions to the economy this year, primarily through home improvement spending including a new roof.
+++
1. Corporate Bonds:
I am continuing to fill out my bond ladder by purchasing investment grade corporate bonds maturing in the 8/1/25 to 12/31/26 time frame. I am not taking much interest rate risk with these short maturities.
This is grunt work and requires about thirty minutes of my time each weekday.
Corporate bonds bought since last Friday will be discussed in my next post.
I am at my full point for Tennessee municipal bonds. I have already replaced the 10 Harpeth Valley Utility District water/sewer revenue bonds that have been called early.
The YTMs of these purchases will look better after the FED cuts the FF rate later today. The probability of another 25 basis point cut on or before the December meeting is at 71.1% as of 9:30 A.M. on 11/7/24. CME FedWatch - CME Group If that cut occurs, the FF range would then be at 4.25%-4.5% and MM yields will decline by about 50 basis points generally within 30-35 days after a second .25% cut in December.
A. Bought 1 Wells Fargo 3.55% SU Maturing on 9/29/25 at a Total Cost of 99.144:
%209:29:25.png)
Issuer: Wells Fargo & Co. (WFC)
WFC Analyst Estimates | MarketWatch
SEC Filed Earnings Press Release for the Q/E 9/30/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: A1/BBB+
YTM at Total Cost: 4.511%
Current Yield at TC: 3.581%
If I can buy 1 at less than a 99 TC, I will probably do it.
B. Bought 2 Invesco Finance 3.75% SU Maturing on 1/15/26 at a Total Cost of 98.9:
%203.75%25%201:15:26.png)
Issuer: Wholly owned subsidiary of INVESCO Ltd. (IVZ) who guarantees the notes.
I have a small ball position in the common stock.
IVZ Analyst Estimates | MarketWatch
I have a small ball position in IVZ.
Finra Page: Bond Page | FINRA.org
Credit Ratings: A3/BBB+
YTM at Total Cost: 4.692%
Current Yield at TC: 3.79%
I had 2 Invesco Finance SU bonds mature in January 2024.
%20+$32.1%20.png){kind=small}
C. Bought 2 Alexandria REIT 3.8% SU Maturing on 4/15/26 at a Total Cost of 98.63 (IB Account):
%204:15:26%203.8%25%20.png)
Issuer: Alexandria Real Estate Equities Inc. (ARE)
ARE SEC Filed 3rd Q 2024 Earnings Presentation (revenues of $791.6M, GAAP net income of $164.7M; FFO at $407.9M)
Credit Ratings: Baa1/BBB+
YTM at Total Cost: 4.783%
Current Yield at TC = 3.853%
In my last post, I discussed buying another Alexandria REIT bond that matures on 1/15/26. Bond Page | FINRA.org
D. Bought 2 Ryder Systems 3.35% SU Maturing on 9/1/25 at a Total Cost of 98.958 (IB Account):
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Issuer: Ryder System Inc. (R)
Ryder System (R) Analyst Estimates-MarketWatch
SEC Filed Earnings Press Release for the Q/E 9/30/24
FINRA Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB+
YTM at Total Cost: 4.634%
Current Yield at TC =3.385%
I now own 4 bonds.
I own 2 Ryder 4.625% SU bonds that mature on 6/1/25.
E. Bought 2 Sherwin Williams 4.25% SU Maturing on 8/8/25 at a Total Cost of 99.737:
%204.25%25%208:8:25.png)
Issuer: Sherwin-Williams Co. (SHW)
On 11/8, SHW will replace DOW in the DJIA.
SHW Analyst Estimates | MarketWatch
SEC Filed Earnings Press Release for the Q/E 9/30/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.594%
Current Yield at TC: 4.261%
I own 4 Sherwin Williams SU bonds that mature on 8/1/25.
F. Bought 2 Old Republic 3.875% SU Maturing on 8/26/26 at a Total Cost of 98.511:
%203.875%25%208:26:26.png)
Issuer: Old Republic International Corp. (ORI)
I eliminated my common stock position in a taxable account but still own a few shares in a Roth IRA account.
ORI Analyst Estimates | MarketWatch
ORI SEC Filed Earnings Press Release for the Q/E 9/30/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB+
YTM at Total Cost: 4.736%
Current Yield at TC = 3.934%
I had 4 Old Republic 4.875% SU notes mature on 10/1/24:
%20+$11.82.png)
%20+$23.16.png){kind=small}
%204.15%25%203:4:26%20%20.png)
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%203.25%25%206:30:26.png)
%203.1%25%204:27:26.png)
2. Small Ball Purchases:
A. Added to UGI - Bought 5 at $23.7; 5 at $23.4:
Cost: $235.5
UGI Analyst Estimates | MarketWatch
SEC Filed Annual Report for the F/Y Ending 9/30/23
Investment Category: Bond substitute with Dividend Growth
The stock may come under my contrarian value category provided the operations of the Amerigas business, the largest distributor of propane, turns into a significant profit center. Why I Just Bought This Ultra-High-Yield Dividend Stock | The Motley Fool (10/19/24)
Last Discussed: Item # 3.A. Added to UGI - Bought 5 at $24.76; 5 at $24.26 (10/31/24 Post)
New Average Cost per share: $24.38 (30 shares)
Dividend: Quarterly at $.375 per share ($1.5 annually), last raised from $.36 effective for the 2023 third quarter payment. The dividend was at $.2175 in the 2014 4th quarter.
Dividends | UGI CorporationThere was a 3 for 2 stock split in 2014.
Yield at New AC = 6.15%
Last Ex Dividend: 9/16/24
Last Earnings Report (Q/E 6/30/24): I discussed this report here which is my only substantive discussion: Item # 3.A. Started UGI - Bought 5 at $25.2; 5 at $24.96 (10/24/24 Post); SEC Filed Press Release I discuss some negative issues in that post. The stock was trading near $46 in January 2022.
The next report is scheduled for release on 11/21/24.
B. Added to UDR - Bought 5 at $41.75:
Quote: UDR Inc. (UDR) - Apartment REIT, included in the S&P 500.
Cost: $208.75
UDR "is a self-administered real estate investment trust, or REIT, that owns, operates, acquires, renovates, develops, redevelops, and manages apartment communities in targeted markets located in the United States. At September 30, 2024, our consolidated apartment portfolio consisted of
Last Discussed: Item # 5. Added to UDR - Bought 3 at $43.36 (10/16/24 Post); Item # 3.A. Started UDR - Bought 5 at $45.95; 1 at $45.37; 1 at $45.14 (10/3/24 Post)(discussed 2nd Q. earnings report,SEC Filed Earnings Press Release and SEC Filed Supplemental Financial Data)
New Average cost per share: $44.05 (20 shares)
Dividend: Quarterly at $.425 per share ($1.7 annually), last raised from $.42 effective for the 2024 second quarter payment. In the 2014 4th quarter, the dividend was at $.26.
Yield at New AC = 3.86%
Last Ex Dividend: 10/10/24
Debt as of 9/30/24:
Last Earnings Report (Q/E 9/30/24):
SEC Filed Press Release and SEC Filed Supplemental
Weighted average physical occupancy: 96.3%
Revenues: $420.2M, up 2.4%
GAAP E.P.S. = $.07
FFO per share: $.60
AFFO per share: $.54
Reconciliation:
To arrive at AFFO, UDI deducts $29.898M in maintenance expenditures, up from $27.139M in the 2023 third quarter. For the nine months, the deduction is $73.496M, up from $60.784M for the same 9 month period in 2023. While these expenditures will be lumpy quarter-to quarter, year-over-year, the uptick in costs over the past two years may be related, in part, to significant inflation in material and product costs (e.g. new appliances).
Weighted average interest rate: 3.43%
Weighted average debt maturity: 5.4 years
Interest Expense: $50.214M, up from $44.644M
4th Quarter and 2024 Guidance:
C. Added to LKQ - Bought 2 at $36.96:
Quote: LKQ Corp. (LKQ)
Cost: $73.93
Reuters Key Metrics -Valuation Page
Investment Category: Contrarian Value
LKQ Analyst Estimates | MarketWatch
New Average Cost per share: $37.24 (7 shares)
Dividend: Quarterly at $.30 per share, last raised from $.275 effective for the 2023 4th quarter payment.
Yield at $37.34:
Next Ex Dividend: 11/14/24
Last Earnings Report (Q/E 9/30/24): I discussed this report in a recent post: Item # 3.D. Restarted LKQ - Bought 5 at $37.49 (10/31/24 Post); SEC Filed Press Release and LKQ 10-Q for the Q/E 9/30/24
Last Sell Discussion: Item # 4.F. Eliminated LKQ - Sold 5 at $42.64 (8/29/24 Post)
D. Added 5 PFE at $27.79; 5 at $27.34:
Quote: Pfizer Inc. (PFE)
Cost: $248.4
PFE | Pfizer Inc. Analyst Estimates | MarketWatch
Investment Categories: Bond Substitute/Contrarian Value As previously discussed the bond substitute category does not address the safety of the common stock dividend, but the goal of the investment. Stocks that I label as bond substitutes will have a significantly higher dividend yield than a S&P500 ETF and will generally be higher than the yield-to-maturity of senior unsecured debt issued by the company. The goal is simply to harvest the dividend and escape at some point with an annualized profit of 2% or higher on the stock.
Failure of Growth by Acquisition Strategy: Pfizer's growth by acquisition strategy has failed miserably, an obvious conclusion which I reached over a decade ago.
Cost of Acquisitions 1999 to Date: $338.6B
Market Capitalization at $27.79: $157.31B
Notwithstanding the obvious failure, Pfizer's Board and management continue to pursue this strategy, as reflected in the recently completed $43B acquisition of Seagen. Pfizer's $43B buyout of ADC specialist Seagen is a done deal Maybe that one will work out.
I will try to profitably trade the stock which has been successful so far. I am currently in the red and have been averaging down in small lots.
I characterize PFE as a deservedly hated stock but there is a glimmer of hope when starting a position near the current price.
Last Buy Discussion: Item # 2.A. Added 4 PFE at $28.73; 1 at $28.28 (9/5/24 Post) I discussed the second quarter report in that post. SEC Filed Earnings Press Release for the Q/E 6/30/24
New Average cost per share: $30.21 (45+ shares)
Dividend: Quarterly at $.42 ($1.68 annually), last raised from $.41 effective for the 2024 first quarter payment.
Pfizer Inc. (PFE) Dividend History | Seeking Alpha
The quarterly rate was slashed from $.32 to $.16 per share in 2009.
I would rate the dividend history as poor starting with that cut. The increase from $.32 to $.42 is only 31.25% over a 15 year period.
The stock price and dividend histories starting in 2009 reflect the failure of Pfizer's growth by acquisition strategy.
The average annual total return starting on 1/1/1999 through 11/4/2024 was 2.1%. Total return includes dividend reinvestment. DRIP Returns Calculator | Dividend Channel The average annual total return over the past ten years was 3.6% compared to 12.95% for the S&P 500 ETF SPY.
Yield at New AC = 5.56%
Next Ex Dividend: 11/8/24
Last Earnings Report (Q/E 9/30/24): SEC Filed Press Release
This was a better than expected earnings report but that had no impact on the price.
Revenues: $17.702B, up 31% compared to the 2023 third quarter.
GAAP E.P.S. = $.78
Non-GAAP E.P.S. = $1.06
Pfizer will invariably have a large percentage difference between its GAAP and Non-GAAP E.P.S. numbers due to restructuring charges and expenses related to its non-stop acquisitions
Reconciliation:
I have included only a snapshot of footnotes 3-5 below (4 & 5 are particularly aggravating to me):
There is probably some discounting among investors in the non-GAAP numbers based on the regularity of the "extraordinary" items that are removed from GAAP to make non-GAAP much higher.
Product Revenues:
Some Sell Discussions: Item # 3.E. Eliminated PFE in Schwab Account - Sold 9 at $29.28 (5/24/24 Post)(profit snapshot = $187.81); Item # 1.E. Eliminated PFE in 2 Accounts: Sold 7 at $41.26 and 3+ at $41.29 (3/6/23 Post)(profit snapshot = $48.92; snapshots of prior realized gains over $100, staring in 2006, can be found in that post.); Item # 3.J. Sold PFE Shares Bought with Dividends at $51.714 and at $60.93(12/16/21 Post); Item # 2.M. Sold 6 at $36.69 (11/28/20 Post)(profit snapshot = $43.6); Item # 4.A. Sold Remaining 33 PFE shares at $33.44 (8/13/2017 Post)(profit snapshot = $90.67); Item # 3.A. Sold 100 PFE at $34.03 (7/13/17 Post)(profit snapshot = $143.42); Item # 3.A. Sold 100 PFE at $34.65 (3/13/17 Post)(profit snapshot = $235.86); Item # 1 Sold: 100 PFE at $31.68 (5/17/14 Post)(profit snapshot = $282.12) Buy discussions are linked in those posts.
PFE Realized Gains to Date: $1,316.21
E. Restarted LYB - Bought 1 at $87.49; 1 at $84.81, 1 at $83.7:
Quote: LyondellBasell Industries N.V. Cl A - one of the largest worldwide "producers of polymers and a leader in polyolefin technologies"
Cost: $256
Disaggregation of Product Revenues
LYB Analyst Estimates-MarketWatch
Products & Technology | LyondellBasell
Investment Category: Bond Substitute with dividend growth.
Last Discussed: Item # 1.C. Eliminated LYB - Sold 6 at $98.42 (2/13/23 Post)(profit snapshot = $58.35- combined long and short term capital gains)
Last Buy Discussion: Item # 4.D. Bought 1 LYB at $85.34 (6/28/22 Post)
Average cost per share: $85.33 (3 shares)
Dividend: Quarterly at $1.34 per share ($5.36 annually), last raised from $1.25 effective for the 2024 second quarter payment. The dividend was at $.70 in the 2014 second quarter.
Yield at AC per share: 6.28%
Special Dividend: $5.2 which went ex dividend on 6/3/22. I owned 4+ shares on the ex dividend date.
LyondellBasell Announces $5.20 Special Dividend and Increases Quarterly Dividend by 5 Percent
Last Ex Dividend: 8/26/24
Last Earnings Report (Q/E 9/30/24): SEC Filed Press Release
Revenues: $10.322B, down from $10.625B
Net Income of $573M
GAAP E.P.S. $1.75
Non-GAAP Income: $617M
Non-GAAP E.P.S. $1.88, down from $2.44
The adjustment is for costs relating to exiting the refining business.
Analyst Reports (available to Schwab customers):
S&P (9/27/24): 3 stars with a 12 month PT of $93, lowered by $7 using a combination of a 7.8 times the analyst's estimated 2025 E.P.S. of $9.33 and a DCF model.
Morningstar (11/1/24): 4 stars with a fair value estimate of $115 and a narrow moat. In response to the third quarter report, the analyst trimed the price target to $115 from $118. The analyst notes that LYB is one of the largest petrochemical producers in the world. About 70% of its production is located in North America that gives the company a cost advantage due to low natural gas prices.
Argus (8/8/24): Buy with $112 PT.
Neither the Argus nor the S&P reports include a discussion of the third quarter earnings report.
Goal: Given the dividend yield, I would view a win as selling the stock at over $95 after collecting at least 4 dividends.
Purchase Restriction: Each subsequent purchase must be at the lowest price in the chain and will be no more than 2 share lots.
Maximum Position: 10 shares.
Other Sell Discussion: Item # 3.J. Eliminated LYB in Vanguard Taxable Account - Sold 2 at $110.24 (5/19/22 Post)(profit snapshot = $41.8)
F. Added to HRZN in Schwab Account - Bought 5 at $9.23:
Quote: Horizon Technology Finance Corp. (HRZN) - Externally managed BDC
Cost: $46.13
New average cost per share: $10.55 (40 shares)
Dividend: Monthly at $.11 per share ($1.32 annually)
HRZN Stock Dividend History & Date
Yield at $10.55: 12.51%
Next Ex Dividend: 11/15/24
Last Discussed: Item # 2.I. Eliminated Duplicate Position in HRZN - Sold 10 at 10.01 (10/31/24 Post) I have nothing further to add to my recent discussion. I have classified this BDC as deservedly hated but the dividend yield is sufficiently attractive that I will likely continue averaging down some. I discussed the third quarter earnings report in Item #3.E. of that post. SEC Filed Earnings Press Release
Last Sell Discussions: Item # 2.A. Eliminated HRZN in my Vanguard Account - Sold 20 at $12.05 (11/25/23 Post); Item # 6.C. Pared HRZN - Sold 5 at $13.32 (11/15/22 Post)
G. Added to DOW - Bought 2 at 48.39; 1 at $47.82:
Quote: Dow Inc. (DOW)
Cost: $144.6
Last Discussed: Item # 1.E. Added to DOW - Bought 1 at $51.07 (12/16/23 Post) As noted in that post, I am not a fan.
DOW Analyst Estimates | MarketWatch As of 11/6/24, the average E.P.S. estimate for 2024 is at $2.12; at $3.19 in 2025 and at $4.03 in 2026. I do place much reliance on the analyst estimates for this company. Earnings will be highly cyclical.
3 Years GAAP Results: Note that E.P.S. was reported at $6.28 in 2022 and at $8.38 in 2021.
Investment Category: Bond Substitute
Removal from DJIA: DOW declined in response to being removed from the DJIA effective 11/8.
That event has nothing to do with the valuation of the stock, but will create downside action based on market dynamics. Sherwin Williams (SHW) is taking DOW's place.
Two Year Chart: Possible bottom formation near the current price
New average cost per share: $51.23 (10+ shares)
Dividend: Quarterly at $.70 per share ($2.8 annually)
Yield at New AC: 5.465%
Next Ex Dividend: 11/29/24
Last Earnings Report (Q/E 9/30/24):
Revenues: $10.879B, up from $10.73B
GAAP E.P.S. = $.30
Non-GAAP E.P.S. = $.48, down from $.47
Reconciliation:
3. Small Ball Sells:
Most of my sell transactions made yesterday will be discussed in my next post.
I am taking some small realized losses where I lower my average cost per share and increase my dividend yield. Those losses will partially offset the realized gains that I am harvesting late in the year partly in response to the election results and my pre-existing concerns about stock valuations.
Realized Gains this Section: +$386.97
Realized Losses this Section: -$46.4
Net Realized Gain: +$340.57
A. Pared EPRT - Sold 5 at $32.47:
Proceeds: $162.35
EPRT "is an internally managed REIT that acquires, owns and manages primarily single- tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of September 30, 2024, the Company’s portfolio consisted of 2,053 freestanding net lease properties with a weighted average lease term of 14.1 years and a weighted average rent coverage ratio of 3.6x. In addition, as of September 30, 2024, the Company’s portfolio was 99.9% leased to 407 tenants operating 583 different concepts in 16 industries across 49 states."
Management: Internal
10-Q for the Q/E 9/30/24 Debt is discussed starting at page 27. There is excessive reliance in my opinion on credit facilities. EPRT sold $400M in a 3% senior unsecured note due in 2021. The remaining debt originates from credit facilities that have a significantly higher current interest rates.
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Website: Single-Tenant Real Estate Firm
Profit Snapshot: +$38.81
Last Discussed: Item # 2.C. Sold 5 EPRT at 32.25 (9/12/24 Post)(profit snapshot = $24.84)
Last Buy Discussions: Item # 6.I. Added to EPRT - Bought 2 at $19.19 (11/1/22 Post); Item # 4.N. Added to EPRT - Bought 2 at $19.95 (10/11/22 Post)
Two Year Chart as of 10/30/24 Intraday:
Old Average cost per share: $21.89
New Average cost per share: $21.19 (20 shares)
 |
| Snapshot Intraday on 10/30/24 |
Dividend: Quarterly at $.29 per share ($1.16 annually), last raised from $.285 effective for the 2024 first quarter payment.
Dividends – Essential Properties
Yield at $21.19: 5.47%
Last Ex Dividend: 9/30/24
Last Earnings Report (Q/E 9/30/24):
SEC Filed Earnings Press Release and Supplemental (top 10 tenants and diversification by industries can be found at page 10)
Revenues: $117.132M
Diluted AFFO per share: $.43, up from $.42 in the 2023 3rd Q.
GAAP Net Income to AFFO Reconciliation:
The major adjustments to GAAP net income to arrive at Core FFO are to add back the non-cash charges for depreciation and impairments to real estate. The major adjustment to Core FFO to arrive at AFFO is to deduct non-cash revenues created by the straight line accounting convention or what I call pretend cash.
Guidance:
2024 AFFO per share of $1.72 to $1.75
2025 AFFO per share of $1.84 to $1.89
Other Sell Discussions: Item # 4.D. Pared EBRT - Sold 4 at $31.5 (8/29/24 )(profit snapshot = $14.62); Item # 2.G. Pared EPRT-Sold 5 at $30.81 (7/26/24 Post)(profit snapshot = $16.15)
EPRT Realized Gains to Date: $55.61
My first purchases were in 2022.
B. Pared SBRA in Schwab Account - Sold 5 at $19.66:
Quote: Sabra Healthcare REIT Inc. (SBRA) - Primarily a nursing home and senior living REIT
Proceeds: $98.28
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 2.J. Pared SBRA Again - Sold Highest Cost 7 Shares in Fidelity Account at $19.25 and Item # 2.K. Pared SBRA in Schwab Account - Sold 10 at $19.22 (10/31/24 Post)(profit snapshots = $79.17)
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)
Website: Sabra Health Care REIT
Profit Snapshot: $31.47
New Average cost per share this account: $12.73 (50+ shares)
 |
| Snapshot Intraday on 10/31/24 after pare |
The average cost per share in my Fidelity account is $11.6 (42 shares)
Dividend: Quarterly at $.30 per share
Yield at $12.73: 9.43%
Next Ex Dividend: 11/15/24
Last Earnings Report (Q/E 9/30/24): This report was released shortly after this last pare.
SEC Filed Press Release and SEC Filed Supplemental
Revenues: $178M
FFO per share: $.34
AFFO per share: $.36
Normalized AFFO per share: $.37
Reconciliation Net Income to Normalized AFFO:
SBRA Net Realized Gains to Date: +$191.01
Most of the gain is not yet realized as I have sold my highest cost lots in both my Fidelity and Schwab accounts at a net profit.
C. Eliminated MDLZ - Sold 5 at $69.38:
Proceeds: $346.88
Our Brands | Mondelēz International, Inc.
MDLZ Analyst Estimates | MarketWatch
Profit Snapshot: $20.51
Last Discussed: Item # 2.B. Restarted MDLZ - Bought 3 at $65.57; 2 at $64.83 (7/19/24 Post)
Dividend: Quarterly at $.47 per share, last raised from $.425 effective for the 2024 4th quarter payment.
Dividend Info | Mondelēz International, Inc.
Last Ex Dividend: 9/30/24
Last Earnings Report (Q/E 9/30/24):
GAAP E.P.S. = $.63
Non-GAAP E.P.S. = $.99
I do not like that large percentage differential.
Reconciliation:
D. Eliminated BXSL - Sold 5 at $31.1:
Proceeds: $155.5
2023 SEC Filed Annual Report (Risk factor summary starts at page 27 and ends at page 112)
The CEO of this company, Stephen A. Schwarzman, is a major donor to Trump's campaign and a Trump supporter. Blackstone CEO Steve Schwarzman backs Trump, will raise money for him
Forbes estimated earlier this year that Schwarzman had a net worth of $49.7B.
He once compared Obama's plan to tax carried interest as ordinary income, rather than as a capital gain, to Hitler's invasion of Poland in 1939. How billionaires destroy democracy | Salon.com I read that statement for the first time shortly before selling the stock and found it to be repulsive. See also, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer
Carried interest is a tax loophole that lowers the tax rate for super rich people so that they can become richer. What is the Carried Interest Loophole, and Why Is It So Difficult to Close? Taxing carried interest as ordinary income would raise about $12B over ten years which includes revenues from increased federal income taxes and self employment taxes. Carried interest is not currently subject to the 15.3% self-employment which is the amount paid by employees and employers to fund Social Security and Medicare.
I will no longer own any stock in a company whose CEO is a major campaign contributor to Trump. This is a completely inconsequential act of protest.
I do own 4 Blackstone Private Credit bonds that mature early next year. I will allow those to mature but will never buy any more.
 |
| Third Party Price as of 11/1/24 |
Profit Snapshot: $16.5
Last Discussed: Item # 2.A. Bought 5 BXSL at $27.8 (11/18/13 Post) In that section, I discussed the reasons why BDC stocks are so risky.
Dividend: Quarterly at $.77 per share ($3.08 annually), last raised from $.70 effective for the 2023 4th quarter payment.
Last Ex Dividend: 9/30/24
Last Earnings Report (Q/E 6/30/24): SEC Filed Press Release
NII per share: $.89
Net Asset Value per share: $27.19
98.8% of loans are floating rate. Coupons of those loans are at spreads to short term rates like the 3 month SOFR. The coupons started to decline with the 50 basis point cut in the FF rate and will decline further with each subsequent cut.
The .5% FF rate cut occurred on 9/18/24. Federal Reserve Board - Federal Reserve issues FOMC statement There would have been a meaningful impact on the third quarter investment income number. The negative impacts will start to flow in the current quarter, with the magnitude in part dependent on when the floating rate loans reset their coupons reset at the currently lower SOFR or other short term interest rates. Secured Overnight Financing Rate (SOFR) Updates
The cost of refinancing senior unsecured debt, on the other hand, has increased as low coupon SU notes mature.
Last SU Debt Offerings:
Prospectus (10/24): 5.35% SU note maturing in 2028
Prospectus (5/24): 5.875% SU note maturing in 2027
The following SU notes will likely have to be refinanced at significantly higher coupons.
This BDC has a $700M 2.75% SU maturing on 9/16/26. Bond Page | FINRA.org
A $619+M 2.15% SU note matures on 2/15/27. Bond Page | FINRA.org
A $800+M 3.625% SU note matures on 1/15/26. Bond Page | FINRA.org
E. Eliminated Duplicate Position in PEO - Sold 10 at $23.51:
Quote: Adams Natural Resources Fund Inc. Overview - Stock CEF
Proceeds: $235.11
Sponsor's Website: Adams Funds
SEC Filed Semiannual Report for the period ending 6/30/24
SEC Filed Report for the Q/E 9/30/23
Profit Snapshot: $12.16
Top 10 Holdings as of 9/30/24:
Principal Portfolio Changes 2024 3rd Q.
Data Date of 11/1/24 Trade:
Closing Net Asset Value per share: $26.4
Closing Market Price: $23.53
Discount: -10.36
Average 3 Year Discount: -14.7% (5 year at -14.36)
One consideration for paring or eliminating a CEF is a discount to net asset value per share significantly lower than the 3 year average.
Sourced: PEO - CEF Connect
Dividends: Paid quarterly
PEO recently started a managed distribution policy "to pay at least 2% of average net asset value each quarter." (emphasis added) Adams Natural Resources Fund Declares Distribution (7/18/24) The prior policy was to pay at least 6% annually but most of the dividend was paid in the 4th quarter which included primarily a long term capital gains distribution. The dividend for the first three quarters was $.10 per share.
Last Dividend: $.54 per share of which $.22 was sourced from a long term capital gain.
Last Ex Dividend: 8/2/24
Some Sell Discussions: Item # 2.B. Eliminated PEO-Sold 15 at $23.94 (4/12/24 Post)(profit snapshot = $50.72); Item # 1. Eliminated PEO - Sold 182+ at $22 (1/16/23 Post)(profit snapshot = $853.25); Item # 1 Sold 104+ PEO at $27.06 (8/10/13 Post)(profit snapshot = $205.94); Item # 3. Sold 100 PEO at $26.19 (11/15/2010 Post)(profit snapshot = $144.29)
PEO Realized Gains to Date: $1,266.36
F. Pared FHB - Sold 5 at $24.89 and Remaining Fractional Shares purchase with dividends at the price shown in the profit snapshot:
Quote: First Hawaiian Inc. (FHB) - Bank Holding Company
Proceeds with fractional shares: $147.93
I sold my highest cost lots. The pare occurred before the rally yesterday.
FHB Analyst Estimates | MarketWatch
48 branches
Profit Snapshot: +$46.23
New Average Cost per share: $14.86 (20 shares)
 |
| Snapshot Intraday on 11/1/24 after pare |
Dividend: Quarterly at $.26 ($1.04 annually), last raised from $.24 effective for the 2019 first quarter payment.
Dividend History: Unfavorable, based on a lack of meaningful dividend growth.
2023 E.P.S. was down from 2018.
2018 E.P.S. = $2.09, 10-K at page 38
2023 E.P.S. = $1.84, 10-K at page 51
With that earnings history, I would expect the dividend to remain at best unchanged.
As of 11/1/24, the average E.P.S. estimate for 2025 was at $1.77 and at $2.2 in 2026.
Yield at $14.86: 7%
Next Ex Dividend: 11/18/24
Last Earnings Report (Q/E 9/30/24): SEC Filed Press Release
Comparisons are to the 2023 third quarter.
E.P.S. $.48 up from $.46
NIM 2.95%, up from 2.86%
Efficiency Ratio: 59.77%, up from 58.31%
Charge off ratio: .11%, up from a net recovery of .01%
NPL Ratio: .13%, up from .1%
Tangible Book Value per share: $12.92, up from $10.62
Prior Sell Discussions: Item # 4.C. Pared FHB in Fidelity Taxable Account - Sold 5+ at $26.355 (1/10/23 Post)(profit snapshot = $18.33); Item # 3.B. Sold 11 FHB at $29.21-Highest Cost Lots in my Fidelity Account (3/17/22 Post)(profit snapshot = $78.07); Item # 3.G. Pared FHB in Fidelity Taxable Account-Sold 12+ at $29.07 (7/9/21 Post)(profit snapshot = $51.02); Item # 1.B. Pared FHB in Fidelity Taxable Account-Sold 5 at $28.61 and Item #1.C. Pared FHB in Schwab Taxable Account-S0ld 55 at $28.62 and 6 at $29.9 (3/13/21 Post)(profit snapshots = $79.88); Item 1.A. Pared FHB in Schwab Account: Sold 40 at $29.65; 5 at $30.81 and Item #1.B. Pared 10 FHB in Fidelity Account at $29.65 and 10 at $30.02 (2/12/20 Post)(profit snapshots= $39.45 and $21.59 respectively); Item # 1.A. Sold 10 FHB at $30.76 (6/21/18 Post)(profit snapshot = $17.55; includes a snapshot of 100 shares, held for 6 trading days, booking a $40.11 profit); Item # 1.P. Continued Paring FHB in Fidelity Taxable Account-Sold 5.891 Shares bought with dividends at $30.47 (3/20/21 Post)(profit snapshot = $26.28); Item # 3.D. Pared FHB - Sold 7+ at $22.34 (2/2/24 Post)(profit snapshot = $33.31)
FHB Realized Gains to Date: $816.21
G. Pared VTV - Sold 1 at $173.94:
Proceeds: $173.94
Sponsor's website: VTV-Vanguard Value ETF | Vanguard
Expense Ratio: .04%
Number of Stocks as of 9/30/24: 336
Profit Snapshot: $70.27
New Average cost per share: $100.32 (5 shares)
 |
| Price as of close on 10/30/24 |
The AC per share was reduced from $100.88. I will not be able to reduce the average cost by much since the remaining shares were purchased in 1 share lots close to the current AC.
Top 20 holdings as of 9/30/24:
H. Pared CTO in Schwab Account - Sold 10 at $19.72:
Quote: CTO Realty Growth Inc. (CTO) - Externally Managed REIT
I sold only the lots where I had an unrealized loss.
Proceeds: $197.22
Property Portfolio Summary:
Last Discussed: Item # 3.H. Pared Duplicate Position in CTO - Sold 5 at $19.36 in Fidelity Account (10/24/24 Post)(profit snapshot = $6.11) The new average cost per share in that account is at $16.76.
Last Buy Discussion: Item # 1.B. Added to CTO - Bought 5 in Schwab Account at $17.13 (5/10/24 Post)
Loss Snapshot: -$13.48
Old Average cost per share this account: $17.66
New Average cost per share this account: $17.35 (110+ shares)
 |
| Snapshot Intraday on 10/30/24 after pare |
Dividend: Quarterly at $.38 per share ($1.52 annually)
I am no longer reinvesting the dividend. This is something that I would reconsider only when the reinvestment price would lower my average cost per share.
Yield at $17.35: 8.76%
Last Ex Dividend: 9/12/24
Last Earnings Report (Q/E 9/30/24):
GAAP E.P.S. = $.17
Core FFO per share: $.5
AFFO per share: $.51
Reconciliation:
"During the three months ended September 30, 2024, the closing stock price of PINE increased by $2.64 per share, with a closing price of $18.20 on September 30, 2024. During the three months ended September 30, 2023, the closing stock price of PINE increased by $0.11 per share, with a closing price of $16.36 on September 30, 2023. The change in stock price resulted in an unrealized non-cash gain on the Company’s investment in PINE in the amount of $6.2 million and $0.3 million which is included in investment and other income in the consolidated statements of operations for the three months ended September 30, 2024 and 2023, respectively." (10-Q at page 43)
Raised $127M from its ATM stock offerings during the quarter. That is a lot for this small REIT. The company sold "6,851,375 common shares under its common stock ATM offering program at a weighted average gross price of $18.63 per share, for total net proceeds of $125.7 million." The weighted average diluted shares during the 2024 second quarter was reported at 22.828+M.
2024 AFFO per share guidance: $1.96 -$2.0
Most of the debt is at spreads to SOFR. The company uses swap agreements to fix the rates.
Other Sell Discussion: Item # 1.B. Sold 10 CTO at $19.34 and Item # 1.C. Eliminated CTO Position in Vanguard Account - Sold 25 at $19.98 (8/2/24 Post)(profit snapshots = $14.95). I discussed the 2024 second quarter report in that post. SEC Filed Press Release and SEC Filed Supplemental
I. Sold 1 USB at $49.13:
Quote: U.S. Bancorp (USB)
Proceeds: $49.13
This pare occurred before the rally yesterday. USB closed yesterday at $51.26, up $3.65.
USB Analyst Estimates | MarketWatch As of 11/1/24, the average E.P.S. estimate for 2025 was $4.3, up from $3.85 in 2024.
Profit Snapshot: +$11.26
New average cost per share: $32.54 (10 shares)
 |
| Snapshot Intraday on 10/30/24 after pare |
Dividend: Quarterly at $.50 per share, last raised from $.49 effective for the 2024 4th quarter payment. In the 2014 4th quarter, the dividend was at $.245 so an exact doubling in 10 years.
Yield at $32.54: 6.146%
Last Ex Dividend: 9/30/24
Last Earnings Report (Q/E 9/30/24): SEC Filed Press Release
Comparisons are to the 2023 third quarter.
E.P.S. $1.03, up from $.91
NIM: 2.74%, down from 2.81% but up from 2.67% in the 2024 second quarter. NIM remains under pressure compared to the 2023 third quarter.
Net Interest Income: $4.125B, down from $4.236B
Efficiency Ratio: 60.2%, down from 64.4%
Charge Off Ratio: .6%, up from .44%
NPA Ratio: .49%, up from .35%
ROTE 17.9%, down from 18.4%
ROA $1.03%, up from .91%
USB Realized Gains to Date: $210.45
The only round-trip was a 51+ shares sold in 2016:
J. Pared TFC - Sold 1 at $43.36:
Profit Snapshot: $14.51
Last Buy Discussion: Item # 2.B. Restarted TFC Bought 2 at $30.87; 1 at $28,85; 1 at $28.53; 1 at $27.45; 2 at $26.8 (5/30/20 Post)
New Average cost per share: $27.18 (5 shares)
 |
| Snapshot Intraday on 10/31 after pare |
Dividend: Quarterly at $.52 ($2.08 annually), last raised from $.48 effective for the 2022 third quarter payment. The dividend was at $.24 in the 2014 4th quarter. The dividend was slashed from $.45 to $.15 effective for the 2009 third quarter payment. That was in response to the Near Depression created a meltdown in the financial sector.
TFC Stock Dividend History & Date
Yield at $27.18: 7.65%
Next Ex Dividend: 11/8/24
Last Earning Report (9/30/24): SEC Filed Press Release
Net income: $1.3B available to common shareholders (equity preferred stocks are outstanding and have a superior claim to cash)
GAAP E.P.S. = $.99
Non-GAAP E.P.S. = $.97, up from $.8 in the 2023 3rd Q.
NIM: 3.12%, up from 2.92%
Adjusted Efficiency Ratio: 55.2%, down from 58.9% (down is good)
NPL Ratio: .48%, up from .46%
Charge off ratio: .55%, up from .51%
Coverage ratio: 330%
ROTC: 13.8%
Tangible Book Value per share: $30.64
SEC Filed Slides for Earnings Call Presentation
Prior Sell Discussions (formerly traded under the BBT symbol): Item # 3.A. Eliminated TFC Position in Schwab Account - Sold 18+ at $36.43 (1/20/24 Post)(profit snapshot = $110.03); Item # 3.J. Pared TFC- Sold 2 at $48.4 - Highest Cost Lot (12/19/20 Post)(profit snapshot = $35.06); Item # 1.A. Sold 71+ BBT at $50.72 (7/12/18 Post)(profit snapshot =$1,391.84); Item # 1. A. Sold Highest Cost 50 BBT Shares at $55.45 (2/8/18 Post)(profit snapshot= $1,061.02); Item # 3.A. Sold Highest Cost 50 BBT Shares at $47.24 (3/28/17 Post)(profit snapshot = $586.45)
Realized Gains TPC-BBT: $3,197.25 (includes RI trades that were not discussed in posts)
Some of the profit originated from National Penn shares that were exchanged for BB&T stock in a merger.
K. Pared GILD - Sold 1 at $89.46 - Schwab Account:
Proceeds: $89.46
GILD Analyst Estimates | MarketWatch
Last Discussed: Item # 1.D. Bought 1 GILD at $63.45 (7/7/24 Post); Item # 1.A. Restarted GILD - Bought 5 at $64.83 (5/31/24 Post)
Revenue by Product Category:
The stock popped after Gilead released its positive trial results for the twice-yearly injectable HIV-1 capsid inhibitor, lenacapavir. Gilead’s Twice-Yearly Lenacapavir for HIV Prevention Reduced HIV Infections by 96% and Demonstrated Superiority to Daily Truvada® in Second Pivotal Phase 3 Trial (9/12/24) The stock closed at $80.94 on 9/11 and at $83.16 the next day, with volume almost doubling. GILD Stock Historical Prices & Data
Profit Snapshot: $24.63
New Average cost per share: $64.55 (5 shares)
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| Snapshot Intraday on 11/1/24 after pare |
Dividend: Quarterly at $.77 ($3.08 annually), last raised from $.75 effective for the 2024 first quarter payment.
Gilead Sciences, Inc. - Stock Information - Dividend History
Yield at $64.55: 4.77%
Last Ex Dividend: 9/13/24
Last Earnings Report (Q/E 6/30/24)
Guides 2024 Non-GAAP E.P.S. to $3.6-$3.9, up from the prior guidance of $3.45-$3.85
Reconciliation:
Last Sell Discussion: Item #6.F. Eliminated GILD - Sold 10+ at $82.99; 6+ at $83.01; 1 at $83.83 (11/15/22 Post)(profit snapshots = $394.77).
L. Pared Duplicate Position in PDM - Sold 15 at $10.03 (Fidelity Account):
Quote: Piedmont Office Realty Trust Inc. Cl A (PDM) - An Office REIT
Proceeds: $150.46
Website: Home - Piedmont Office Realty Trust
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 4.C. Pared PDM Sold 10 at $10.9 - Fidelity Account (10/24/24 Post)(loss snapshot = -$18.36); Item # 2.B. Eliminated Duplicate Position in PDM - Sold 31 at $8.67 - Vanguard Account (8/8/24 Post)(profit snapshot = +$45.52, SEC Filed Earnings Press Release)
Last Buy Discussions: Item # 1.F. Added to PDM - Bought 3 at $6.37; 3 at $6.14 (4/29/23 Post); Item # 1.F. Added to PDM - Bought 5 at $7.03; 5 at $6.52 (3/25/23 Post)
Loss Snapshot: -$32.92
New Average cost per share: $8.45 (86+ shares)
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| Snapshot Intraday on 11/4/24 after pare |
Dividend: Quarterly at $.125 per share ($.50 annually), last slashed from $.21 effective for the 2024 first quarter payment. Understandable under the circumstances but still a negative.
I am not reinvesting the dividend.
Yield at $8.45 AC: 5.917%
Next Ex Dividend: 11/22/24
Last Earnings Report (9/30/24): The earnings report was released on 10/24 after the market closed. The stock closed at $10.88 that day and at $10.33 the next day with volume accelerating to 1,841,200 on the 25th compared to 509,500 on the 24th. The reaction to this report was consequently mildly negative. PDM Stock Historical Prices & Data - Yahoo Finance
SEC Filed Press Release and Supplemental
Revenues: $139.5M, down from $147M
FFO per share: $.36, down from $.42
AFFO per share: $.23, down from $.32
Reconciliation:
10-Q at page 33 Debt and swaps are discussed at pages 14-17.
Leased Percentage: 88.8%
As of 9/30/24, PDM "had approximately 1.5 million square feet of executed leases for vacant space that is yet to commence or is currently under rental abatement, representing approximately $48 million of future additional annual cash rents. . . (T)he Company had a pipeline of approximately three million square feet of leasing in the proposal stage."
Other Sell Discussions: Item # 4.A. Pared PDM in Schwab Account - Sold 5 at $10.13 (10/3/24 Post)(Loss snapshot = -18.36); Item # 1.A. Eliminated PDM in Schwab Account - Sold 5 at $18.71 and 34+ at $18 (12/31/21 Post)(profit snapshot = $235.88); Item # 2.H. Eliminated PDM- Sold 10 at $17.95 in Fidelity Account and 10 at $18.02 in Vanguard Taxable Account (1/7/22 Post)(profit snapshots = $128.95)
PDM Net Realized Gain to Date: +$336.54
Realized Gains: $410.35
Realized Losses: $73.81
PDM SU Bonds: I no longer own any PDM bonds.
The impact of the pandemic on the stock price has been severe. Refinancing costs of debt will create a significant headwind for several years.
I owned 6 Piedmont Operating Realty LP 4.45% SU notes that matured on 3/15/24. 4 bonds were called in 2023 and the remaining 2 SU notes were paid off at maturity. The LP notes are guaranteed by PDM.
The refinancing costs have risen compared to that 4.45% SU that was issued in 2014. Prospectus
The Operating LP issued a $400M 6.875% SU note maturing in 2029 during the second quarter. Prospectus
In 2023, the Operating LP issued $200M of 9.25% SU notes maturing in July 2028. Prospectus
Interest costs also increased for borrowings under PDM's credit facilities.
The increase in interest costs have pressured cash flow to the downside.
M. Eliminated NFBK - Sold 20 at $13.67:
Proceeds: 273.32
NFBK Analyst Estimates | MarketWatch As of 11/6/24, the average E.P.S. estimate for 2024 was at $.63, down from $.83 in 2023.
This position went into an unrealized loss position soon after purchase. I used the rally yesterday to exit the position, selling on the ex dividend day.
The stock closed yesterday at $13.77, up 17.09%, which was sufficient for me to sell at a net profit.
Profit Snapshot: Net of +$14.87
Dividend: Quarterly at $.13 per share
Last Ex Dividend: 11/6/24
Last Earnings Report (Q/E 9/30/24): I am not going to discuss this report but will simply include a snapshot of some information contained therein.
N. Eliminated WTBA - Sold 10 at 23.85:
Quote: West Bancorp Inc. (WTBA)
Proceeds: 238.51
WTBA Analyst Estimates | MarketWatch As of 11/6/24, the average E.P.S. estimate for 2024 was at $1.4.
I eliminated the position on the ex dividend day.
Investment Category: Regional Bank Basket Strategy Given the number of regional bank stocks sold yesterday, I will take me a day or so to update this post with profit snapshots.
Last Discussed: Item # 1.D. Restarted WTBA - Bought 10 at $16.7 (7/12/24 Post)
Profit Snapshot: +$71.51
Dividend: Quarterly at $.25 per share, last raised from $.24 effective for the 2022 first quarter.
WTBA Dividend History | Nasdaq
Last Ex Dividend: 11/6/24 (owned as of)
Last Earnings Report (Q/E 9/30/24):
Comparisons are to the 2023 third quarter.
E.P.S. = $.35, unchanged
NIM: 1.91%, unchanged
Efficiency Ratio: 63.28%, up from 60.83% (up is not good)
NPL Ratio: .01% (excellent)
Other Sell Discussions: Item # 3.E. Eliminated WTBA - Sold 20+ at $20.52 (1/26/24 Post)(profit snapshot = $86.46); Item # 7.A. Eliminated Duplicate Position in WTBA - Sold 25+ at $17.72 (11/11/23 Post)(profit snapshot $49.83); Item 1.K. Eliminated WTBA in Vanguard Account-Sold 5 at $21.4 and 20 at $21.2 (2/6/21 Post)(profit snapshots = $116.92);Item # 2.F. Pared WTBA-Sold .313 at $27.42 (5/28/21 Post); Item # 3.A. Sold 100 WTBA at $23.12 (4/29/17 Post)(profit snapshot = $1,146.24)
Some profitable small trades were not discussed.
WTBA Realized Gains to Date: $1,532.54
Current Position: None
O. Pared GOOD - Sold 3 at $16.87:
Quote: Gladstone Commercial Corp. (GOOD) - Externally Managed REIT
Proceeds: $50.61
Historically, GOOD has "entered into, and intend in the future to enter into, purchase agreements primarily for real estate having net leases with remaining terms of approximately seven to 15 years and contractual rental rate increases. Under a net lease, the tenant is required to pay most or all operating, maintenance, repair and insurance costs and real estate taxes with respect to the leased property." As of 9/30/24, the REIT owned 135 properties with an occupancy rate of 98.5%. The weighted average remaining lease term was then at 6.9 years. 10-Q at page 25
I sold my highest cost lots.
Profit Snapshot: +$14.74
Last Discussed: Item # 2.E. Pared GOOD - Sold 2 at $15.99 (9/26/24 Post)(profit snapshot = $7.28) I discussed the second quarter report in that post.
New Average cost per share: $8.78 (40 shares)
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| Snapshot Intraday on 10/6/24 after pare |
Dividend: Monthly at $.10 per share
Monthly at $.10 per share, cut from $.1254 per share effective for the January 2023 payment. One cause was the amount of variable rate debt priced at spreads to SOFR. As interest rate costs rose, FFO is reduced and consequently there is less cash flow support for the dividend.
Dividend History-Gladstone Commercial Corporation (GOOD)
Yield at New AC per share: 13.67%
Next Ex Dividend: 11/20/24
Last Earnings Report (Q/E 9/30/24): SEC Filed Press Release
"Core FFO available to common shareholders and Non-controlling OP Unitholders for the three months ended September 30, 2024 was $16.3 million, an 11.2% increase when compared to the three months ended June 30, 2024, equaling $0.38 per share. Core FFO increased primarily due to a settlement received at one of our properties related to deferred maintenance."
10-Q Debt is discussed at pages 16-19.
Other Sell Discussions: Item # 2.E. Pared GOOD - Sold 5 at $15.31 A (8/8/24 Post)(profit snapshot = $14.2); Item # 2.B. Eliminated GOOD in my Vanguard Taxable Account - Sold 16 at $12.26 (11/25/23 Post)(profit snapshot = $65.77); Item # 3.B. Eliminated GOOD in Schwab Account - Sold 26+ at $13.33 (7/22/23 Post)(profit snapshot = $128.61); Item # 2.B. Pared GOOD in Fidelity Account - Sold 8 at $16.69 (2/5/23 Post)(profit snapshot = $14.77); Item # 3.F. Pared GOOD - Sold 2.197 shares at $20.8 and 2.352 shares at $20.84 (6/4/21 Post)(profit snapshot = $20.77); Item 1.M. Pared GOOD-Sold 12 at $18.72 and 10 at $19.76 (6/20/20 Post)(profit snapshot = $48.17); Item # 1.C. Eliminated GOOD in Schwab Account-Sold 50+ at $20.88 and Item # 1.D. Sold Highest Cost GOOD Share in Fidelity Account at $21.36 (3/3/19 Post)(profit snapshots = $165.33)
Preferred Stock: I prefer owning a preferred stock issued by GOOD whose dividend can not be cut, but only deferred after the cash common share dividend is eliminated. Gladstone Commercial Corp. 6.625% Pfd. Series E Stock (GOODN); Prospectus {dividends paid monthly, last discussed at Item # 2.C. Added to GOODN - Bought 10 at $18 (7/22/23 Post) and Item # 1.E. Added to GOODN - Bought 10 at $18.25 (7/8/23 Post)}
GOODN taxable accounts:
50 shares in my Schwab account with an average cost per share of $18.3 (yield at 9.05%)
20 shares in my my Fidelity Account at a $18.7 AC per share (yield at 8.86%)
10 shares in my Vanguard Account with a $17.3 AC per share (yield at 9.57%)
GOOD Realized Gains to Date: $416.93
3. Treasury Bills Purchased at Auction:
All purchases going forward will be made only in my Schwab account using proceeds from maturing treasury bills. The Schwab sweep account pays only .2%:
After the Fidelity and Vanguard sweep accounts adjust down to reflect a 25 basis point cut by the FED, I am not currently anticipating a change in the yields this year.
The FED may even be on hold until it can assess the future course of inflation after Trump implements his policies.
If these forecasts prove accurate, the yield advantage of buying T Bills in my Vanguard and Fidelity accounts will not be that much; and there is some potential advantage to maintaining liquidity in the MM sweep accounts that have yields close to the treasury bills.
A. Bought 3 Treasury Bills at the 11/4/24 Auction:
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182 Day Bills
Matures on 5/8/25
Interest: $64.61
Investment Rate: 4.414%
B. Bought 2 Treasury Bills at the 11/6/24 Auction:
%203:11:25.png){kind=small}
119 Day Bill
Matures on 3/11/25
Interest: $29.15
Investment Rate: 4.537%
4. Treasury Notes - Purchased in the Secondary Market:
All purchases of treasury notes in the secondary market are fillers in my bond ladder. I am adding to fixed income securities that mature in a particular month and/or filling a time gap.
A. Bought 1 Treasury Note 3% Coupon Maturing on 10/31/25 at a Total Cost of 98.7349:
%203%25%2010:31:25%20.png)
YTM at 4.31%
5. Leveraged Bond and Preferred Stock CEFs:
A. Eliminated BTZ - Sold 47+ at $10.78 - Schwab Account:
Proceeds: $508.82
This elimination was due to my increased concerns about a possible resurgence in inflation and the current upward trajectory of interest rates that were exacerbated by the election.
Last Discussed: Item # 2.B. Added to BTZ - Bought 5 at $9.21; 5 at $9.14 (10/28/23 Post)
SEC Filed Semiannual Report for the Q/E 6/30/24
Credit Quality:
Sponsor's website: BlackRock Credit Allocation Income Trust
Leveraged: Substantial at 34.9% as of 9/30/24
Effective Duration at 5.86 years as of 9/30/24
Profit Snapshot: +$49.96
BTZ-Morningstar (currently rated at 2 stars)
Data Date of 11/6/24 Trade:
Closing Net Asset Value per share: $11.42
Closing Market Price: $10.81
Discount: -5.34%
Average 3 Year Discount: -7.41%
Sourced: BTZ - CEF Connect
Dividends: Monthly at $.0839 per share
Next Ex Dividend: 11/15/24
Sell Discussions: Item # 1.C. Eliminated BTZ- Sold Remaining 37+ Shares at $14.88 (1/9/21 Post)(profit snapshot = $149.05); Item # 1.J. Pared BTZ-Sold Highest Cost Lots (6/13/20 Post)(profit snapshot = $31.09);Item # 3.A. Eliminated BTZ Sold 50+ at $12.42 (4/4/19 Post)(profit snapshot = $60.1); Item #1.B. Sold 50 out of 100 BTZ at $12.05 (2/23/2019 Post)(profit = $23.5); Sold 103+ at $13.4+ (5/8/17 Post) (contains snapshots of trading profits starting in 2010 through May 2017 = +$870.19);
Goal: Harvest the dividends and sell at any profit
B. Pared FPF - Sold 10 at $18.69 - Fidelity Account:
Proceeds: $201.61
I pared this position the day before the election as I grew more concerned about the rise in interest rates.
SEC Filing - Portfolio Holdings as of 7/31/24
SEC Filed Semiannual Report for the period ending 4/20/24
Sponsor's website: First Trust Intermediate Duration Preferred & Income Fund (FPF)
Leveraged at 32.95% as of 11/5/24
Weighted Average Effective Duration: 4.65%.
Credit Quality as of 9/30/24:
Profit Snapshot: Net of +$5.22
New Average cost per share this account: $15.3 (83 shares)
 |
| Snapshot Intraday on 11/4/24 after pare |
Dividend: Monthly at $.1375 per share ($1.65 annually)
Yield at $15.3: 10.78%
Last Ex Dividend: 11/1/24 (owned all as of)
Data Date of 11/4/24 Trade:
Closing Net Asset Value per share: $19.62
Closing Market Price: $18.57
Discount: -5.35%
Average 3 year discount: -7.74%
Sourced: FPF - CEF Connect
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.
Ligand Pharmaceuticals Inc. (LGND)
ReplyDelete$127.67 +$10.77 +9.21%
Last Updated: Nov 7, 2024 at 2:23 p.m. EST
https://www.marketwatch.com/investing/stock/lgnd?mod=search_symbol
I own just 7+ shares with an average cost per share of $73.39. LGND does not pay a dividend and I have no expectation of one being started, at least for several years.
Investors are responding to a better than expected earnings report.
https://www.sec.gov/Archives/edgar/data/886163/000088616324000074/q32024earningsrelease_ex991.htm
Core E.P.S. was reported at $1.84 which excludes a charge GAAP E.P.S. was at a loss of $.39 which included a non-cash fair value adjustment of a failed royalty investment.
LGND also increased its "2024 full year financial guidance previously outlined in July. The company now expects total revenue of $160 million to $165 million (previously $140 million to $157 million) and is raising core adjusted earnings per diluted share to $5.50 to $5.70 (previously $5.00 to $5.50)."
LGND did not sell any Viking Therapeutic (VKTX) stock during the quarter, which has been a significant profit source for several prior quarters. LGND will received royalties when and if VKTX wins approval for its NASH drug that is currently in late stage trials.
"As of September 30, 2024, Ligand had cash, cash equivalents and short-term investments of $219.6 million which includes $63.3 million in Viking Therapeutics common stock. Ligand issued 334,325 shares under the company's At-the-Market (ATM) equity offering program at a weighted average share price of $104.70 for gross proceeds of $35 million during the third quarter of 2024."
The primary revenue source is royalty income from drug sales made by other companies.
"Royalties for the third quarter of 2024 were $31.7 million, compared with $23.9 million for the same period in 2023, with the 33% increase primarily attributable to royalties earned on Ligand’s recently acquired product, QARZIBA, and an increase in sales of Travere Therapeutics’ (Nasdaq: TVTX) FILSPARI."
This stock can be very volatile due in part to its relatively small market capitalization which is about $2.14B at $127.
I went bold.
ReplyDelete401k's small-mid cap that's the Russell completeness, sold $70k to get the bond fund cash "equivalent" (even though it's 6mos to years bond durations.)
Sold in Roth ~$7k IWM.
Not a thought through plan, but with such a big jump up .... and need to get less in small more in large or qqq ... I'm freezing the gain.
The problem is getting back in. This is counting on a downturn before it climbs to a point that I'm chicken to get back in.
Land: I have been selling into this rally, but most of my selling is just risk management like I did yesterday by liquidating positions in several regional bank stocks or by selling my highest costs to reduce my dollar exposure and to increase my dividend yields.
DeleteI am fine with earning 4% to 5% in treasury bills and short term corporate bonds. I will just wait for a buying opportunity where the risk/reward balance in stocks is better than now considering the fixed income alternatives.
I am nibbling on some beaten down dividend stocks. I mentioned two that I do not like in this post, PFE and DOW, which may be drifting near their bottoms now.
Another one that I bought today is BCE, just 5 shares at $27.9 as a starter.
BCE Inc.
$28.07 -$0.67 -2.33%
https://www.marketwatch.com/investing/stock/bce?mod=search_symbol
Dividends are paid in CADs and converted into USDs which by itself creates fluctuations in the dividend payments for the USD priced BCE. The last quarterly dividend was US$.7329 and US$3.87 over the past year.
https://www.nasdaq.com/market-activity/stocks/bce/dividend-history
Canada will withhold 15% as a tax when the shares are owned in a taxable account, but not when a U.S. citizen owns the shares in a retirement account.
I also added 5 ATLCZ at $24.87, a $25 par value SU exchange traded bond that matures in 2029.
https://www.marketwatch.com/investing/stock/atlcz?mod=search_symbol
The bond substitute stock sectors did better today as the 10 year treasury yield retreated 10 basis points in yield.
I read commentary from 2 market strategists who were arguing that Trump is all talk on tariffs and mass deportations.
They correctly point out he did make similar proposals on those issues during his first term and did not do that much.
I think that he will carry through during his second term since he does not have to worry about reelection and he made both an increase in tariffs and mass deportations a central theme of his pitch and probably needs to carry through.
Gilead Sciences Inc. (GILD)
ReplyDelete$97.90 +$6.21 +6.77%
https://www.marketwatch.com/investing/stock/gild?mod=search_symbol
I discussed selling 1 share in Item #2.K. of this post.
The pop today was due to a better than expected earnings report.
Adjusted E.P.S. was reported at $2.02 which beat the consensus estimate of $1.55 per Fidelity.
https://www.sec.gov/Archives/edgar/data/882095/000088209524000025/exhibit991earningspressrel.htm
Revenues were reported at $7.55B vs. the consensus at $7B.
GAAP E.P.S. was $1, down from $1.73 in the 2023 third quarter "primarily driven by a pre-tax in-process research and development (“IPR&D”) impairment of $1.75 billion, or $1.04 per share net of tax impact, related to assets acquired by Gilead from Immunomedics, Inc. (“Immunomedics”) in 2020, as well as higher acquired IPR&D expense. This was partially offset by higher product sales and higher net unrealized gains on equity securities."
Adjusted E.P.S. guidance for 2024 is now at $4.25 to $4.45, up from the prior guidance of $3.6 to $3.9.