COTY, DG, FDUS, FSK, GIS, GMRE, KHC, KMI, LYB, ON, PGX, PNFPP, REXRPRB, REXRPRC, REYN, SPTN, WMB

Economy: 

The December Services PMI was reported by ISM at 54.1, up from 52.1 in the prior month. The new orders component increased by .5 to 54.2. The price component rose 6.2 to 64.4.   

CoreLogic: Northeastern, New England States Continue to Lead US for Annual Home Price Growth in November The national home price gain through November 2024 was reported at 3.4%. 

The ADP reported that private payrolls increased by 122,000 in December. 

Mortgage demand dives nearly 22% to end 2024

Trump’s tariffs are ‘recipe for economic decline’ - YouTube

Fed minutes January 2025 

Excerpt from Minutes: 

"With regard to the outlook for inflation, participants expected that inflation would continue to move toward 2 percent, although they noted that recent higher-than-expected readings on inflation, and the effects of potential changes in trade and immigration policy, suggested that the process could take longer than previously anticipated."

Sourced: The Fed - Monetary Policy:

Be mindful of moves in longer term yields, says Charles Schwab's Liz Ann Sonders - YouTube

When Trump starts talking crazy, which he did last Tuesday (1/7), that will be unsettling for a lot of investors. Crazy talk from Trump will be the norm for the next 4 years, and no one should be surprised about the frequency and the Orwellian nature of the crazy talk. Key lines from Trump’s Mar-a-Lago news conference 

Closing Index prices on 1/7/24: 

DJIA -178.2 or -.42%

S&P 500  -66.25% or -1.11%

Nasdaq -375.3 or -1.89%

+++

Allocation Shifts Discussed in this Post: 

Treasury Bills Purchased at Auction: $10,000 in principal amount

Corporate Bonds: $10,000 in principal amount

Treasury Notes Purchased in Secondary Market: $3,000 in principal amount

Treasury Note Purchased at Auction: $2,000 in principal amount

U.S. Common Stocks: +$1,360.64

(consisting of $2,197.77 in purchases - $831.13 in proceeds)

Realized Gains Common Stocks: +$407.89 

Outflow Equity Preferred Stocks/Preferred Stock ETF: -$1,833.11 (realized gain at +$263.6)

Trades Discussed in Blog: 

2023 Net Outflow Stocks/Stock Funds: -$27,091.82

2024 Net Outflow Stocks/Stock Funds: -$65,632.15 

2025 Net Inflow Stocks/Stock Funds: +$1,360.64

Breakeven Inflation Rate of the 10 Year TIP as of 1/8/24: 2.4%

The breakeven inflation rate was at 2.12% on 9/17/24, the day before the FED's 50 basis point cut in the federal funds rate. The ten year nominal yield closed that day at 3.65%. The real yield on the 10 year TIP closed at 1.53%, 

The 10 TIP breakeven inflation rate is generally viewed as the market's forecast for the average annual CPI over the next ten years. 

There is some advantage to my portfolio management to add stocks that pay qualified dividends and have yields near or above the dividend yields of money market funds that are taxed as ordinary income. 

My stock allocation is 10% of the total portfolio. 

This is the allocation in my Fidelity account as of 1/9/24. 

The bond allocation would includes treasury bills and CDs. About 87% of the bond allocation, as defined by Fidelity, is short term (0-3 years); 9% is in intermediate term (5-12 years or 2030-2037) and the 3% in long term (more than 12 years or after 2037).  Most of my Tennessee Municipal bonds will fall into the intermediate term category, with some maturing within 3 years or in more than 12.   

My Vanguard and IB accounts would have a lower percentage allocation to stocks.  

The Vanguard account is where I keep my cash reserves: 

As of 1/9/25

My Schwab account generally hovers near a 20% allocation to stocks. 

So there is plenty of room to take more stock risks. I would benefit if stocks crashed or interest rates started a long term trend higher.   

I do not believe that an insanity premium is priced-yet-into U.S. bond yields. Is There an Insanity Premium on Interest Rates? Every adult in the U.S. must have been fully aware of Trump's mental condition in November 2024. Investors are now just waiting to see whether he will actually do what he said he would do, including starting a trade war. 

Currently, I would attribute the rise in intermediate and long term yields starting last September to concerns about inflation trending up as the Fed lowers short term rates and other more probable than not conditions contributing to inflationary pressures building and to less appetite for U.S. treasury securities as supply surges higher. Part of the concern is that the Fed stoked inflationary pressures in 2021-2022 by continuing its extremely abnormal monetary policies knowns as ZIRP and Q/E even as inflation surged. Possibly a few basis points in intermediate term yields now is due to an insanity premium and more may be added as the year progresses. 

++++

Trump, GOP allies falsely blame New Orleans attack on immigration failures This headline was at a financial news site and my eyes saw the headline before I could stop them. I did not read the article since I am currently avoiding, as much as possible, contact with Demagogue Don's constant and overwhelming stream of false and misleading statements unless they are specifically relevant to my investment decisions. 

I am aware that the New Orleans truck attack had absolutely nothing to do with immigration and was carried out by a former army veteran born in the U.S. as was the Tesla vehicle explosion in Los Vegas. The guy who killed himself in Las Vegas was a Trump supporter. 

Any substantive statement made by Trump is most likely either false or at best misleading. 

Trump will make a few substantive statements that are accurate or at least arguably accurate, but why bother trying to find a needle dropped in a 1,000 acres of dense forest. 

I do not need to review the Washington Post documenting 30,000 to 50,000 false or misleading statements made by Trump during his second term. Washington Post counts 30,573 false or misleading claims in four years by Trump; False or misleading statements by Donald Trump - Wikipedia  Fact check: Trump makes false claims about January 6, Europe, NATO and Canada | CNN Politics I do not need to read more crazy statements that he makes to form an opinion about his mental condition.  

NY judge says Trump will face no penalties in his criminal hush money case but upholds conviction 

This is a link to Judge Merchan's decision: Opinion.pdf 

Patrick Thomas Egan accused of attacking TV reporter, saying ‘This is Trump’s America now’  

New filings point to widening House ethics investigation of Rep. Andy Ogles This guy is my congressional representative. He reminds me of George Santos. 

The republicans have a supermajority in Tennessee state legislature (House and Senate) and used that power to decide that Nashville would no longer be allowed by the republicans to elect a Democrat to Congress. 

The city was gerrymandered into three parts with each part joined with rural areas and small towns that were 70% to 80% occupied by fervent Trump supporters. The republicans were only trying to protect Democracy with this gerrymander, or so they claimed at least. 

In 2024, Trump carried Tennessee by 64.2% as rural and small town voters overwhelmed the Democrats living in Memphis and Nashville. Three Trumpster congressman now represent parts of Nashville, and none of them live in Nashville/Davidson county Tennessee. 

And all lost by wide margins that part of Davidson County that they represent.  

November 5, 2024 Election Results (Certified) | Nashville.gov Since no Democrat has a prayer to carry any of the new districts that include parts of Davidson County, only poorly funded and unknown candidates will be running in future elections.  

Prior to this gerrymander, a Democrat represented Nashville and received 100% of the vote in 2020 since no republican bothered to run against him. He retired since it was futile to run after the republican legislature decided that no Democrat would be allowed to represent Nashville for decades, possibly forever. 

Results for entire congressional districts that include parts of Nashville: 

John Rose lives in Cookeville, TN, located about 80 miles east of Nashville. 

Andy Ogles is from Columbia, Tennessee. 

Mark Green lives in Clarksville. He is a family values republican like Andy Ogles.  Congressman Green's wife alleges affair, divorce imminent - Nashville Banner; Mark Green Continues to Show Us Who He Is -nashvillescene.com  

Republican Justices on the North Carolina Supreme Court Make Moves to Steal Latest Election Lost by a Republican - YouTube; Republicans on North Carolina Supreme Court Block Certification of Democratic Justice’s Victory An incumbent democrat North Carolina Supreme Court beat a republican challenger in the November election. The republican lost the recounts. The republicans then asked the Republican North Carolina Supreme Court Justices, a super majority, to throw out about 60,000 votes which would help their party member win notwithstanding the vote count. As one would expect, those Republican Justices enjoined the certification of the election results won by the Democrat, which has already been confirmed by  recount, until they can consider the petition to cancel lawfully cast votes.  

It needs to remembered that Mark Robinson received 2,241,309 votes for North Carolina's governor last November. Mark Robinson, NC GOP nominee for governor, called himself a ‘black NAZI!,’ supported slavery in past comments made on porn forum Michele Morrow received 2,706,953 votes as a candidate for the North Carolina School Superintendent. GOP nominee to run North Carolina schools advocated pro-Trump military coup in January 6 video; Michele Morrow | GOP nominee to run North Carolina schools advocated pro-Trump military coup in January 6 video She also called for the pay-per-view execution of Obama. And, she had zero qualifications for the job and did not even send her own children to public schools. 

+++

1. Small Ball Buys: 

I am continuing to buy small lots in packaged foods stocks notwithstanding their price declines. The most recent fear appears to be that RFK Jr. will do something that disrupts their businesses and makes them less profitable.   

A. Added to GMRE - Bought 50 at $7.63:   

Quote: Global Medical REIT Inc. (GMRE)

Cost: $381.5

I am done buying GMRE shares except through dividend reinvestment which I will continue at least through 2025.  

SEC Filings

10-Q for the Q/E 9/30/24

Website: Global Medical REIT 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

New Average cost per share: $7.86 (112+ shares)

Snapshot Intraday on 1/3/25 after add

This does not include shares purchased with a dividend reinvestment on 1/8/25.

Dividend: Quarterly at $.21 per share 

GMRE Stock Dividend History & Date

Yield at New AC = 10.687%

Last Ex Dividend: 12/20/24 (owned 42+ as of) 

Last Discussed: Item # 1.M. Added to GMRE - Bought 5 at $7.55 (1/1/25 Post) 

Last Earnings Report (Q/E 9/30/24): I discussed this report in a recent post and have nothing further to add here.  Item # 1.B. Added to GMRE - Bought 5 at $8.43; 5 at $8.96; 10 at $7.77 - Schwab Account (12/26/24 Post); SEC Filed Press Release; SEC Filed Supplemental This post also contains links to prior sell discussions. 

GMRE Realized Gains to Date: $507.2

B. Added to GIS - Bought 5 at $62.25; 5 at $61.3: 

Quote: General Mills Inc. (GIS)

Cost: $617.75

General Mills Investor Relations

GIS Analyst Estimates | MarketWatch

GIS SEC Filings

General Mills: Brands overview

New Average cost per share: $57.33 (50 shares)

Dividend: Quarterly at $.60 per share 

GIS Dividend History & Date

Yield at New AC: 4.186%

Next Ex Dividend: 1/10/25 (tomorrow)

I discussed this stock in my last post and have nothing further to add here: Item # 1.A. Added to GIS - Bought 5 at $63.2 (1/1/25 Post); SEC Filed Earnings Press Release for the F/Q ending 11/24/24 

Maximum Position: 100 shares

C. Added to KHC - Bought 5 at $30.25; 2 at $29.85; 3 at $29.55: 

Quote: Kraft Heinz Co.

Cost: $299.6

KHC Analyst Estimates | MarketWatch

KHC SEC Filings

The Kraft Heinz Company Brands 

Last Discussed: Item # 1.A. Added to KHC - Bought 5 at $30.69 (12/12/24 Post) 

New average cost per share: $31.93 (55+ shares)

Dividend: Quarterly at $.40 per share

KHC Dividend History & Date

I am currently reinvesting the dividend as a way to randomly average down. 

Yield at New AC = 5.01%

Last Ex Dividend: 11/29/24

Last Earnings Report (F/Q ending 9/28/24): 

I discussed this report here: Item # 2.C. Added to KHC - Bought 10 at $31 (11/27/24 Post)

Last Sell Discussions: Item # 2.I. Eliminated Duplicate Position in KHC - Sold 6 at $35.48 - Fidelity Account (8/8/24 Post); Item # 2.E. Pared KHC - Sold 6 at $38.34 - Schwab Account (1/12/24 Post)

Maximum Position: 100 shares

D. Added to SPTN - Bought 5 at $18.23; 5 at $17.9: 

Quote: SpartanNash Co. (SPTN)

Cost: $180.65

Descriptions of Businesses: 

10-Q at page 20

I would describe the company as a food distributor that also owns grocery stores that has its own private label brands which is commonplace among grocery store chains now. The contract with the U.S. military is up for renewal in December 2025. 10-K at page 12

SPTN Analyst Estimates | MarketWatch

SPTN SEC Filings

Last Discussed: Item # 5.A. Pared SPTN - Sold 5 at $20.84 (8/21/24 Post)  

Last Buy Discussions: Item # 2.G. Added to SPLN - Bought 5 at $18.06 (7/5/24 Post); Item # 2.E. Added to SPTN - Bought 5 at $18.46 (6/20/24 Post)

Average cost per share: $18.4 (30 shares)

Dividend: Quarterly at $.2175 per share ($.87 annually), last raised from $.215 effective for the 2024 first quarter payment.  In 2014, the company paid a quarterly dividend of $.12 per share ($.48 annual payments that year)

SPTN Dividend History | Nasdaq

Yield at AC: 4.73%

Last Ex Dividend: 12/9/24 (owned 20 as of)

Last Earnings Report (Fiscal Quarter ending 10/5/24): This was the third fiscal quarter. 

Both the food distribution and grocery businesses are low margin. 

SEC Filed Earnings Press Release and 10-Q

Net Sales: $2.25+B

Net Earnings: $.32

Adjusted E.P.S. = $.48, down from $.54 in the prior fiscal third quarter

Reconciliation: 

The largest adjustments, present in every quarter, will fall under the "LIFO expense" category. LIFO stands for the last-in-first-out accounting standard. When food prices are rising, LIFO will lead to lower profits since the profit is determined by using the most recent price paid for inventory. LIFO: Tax Treatment of Inventory | Tax Foundation The adjustment to reported earnings adds back the hit taken when using LIFO during a period of rising food inventory costs. 

Fiscal Year Guidance (1 more quarter left): Adjusted E.P.S. of $1.85 to $1.95 revised from the earlier guidance of $1.85 - $2.10. 

The top end guidance was revised down by $.15 which is not going to be look out favorably by investors. The revised guidance is also below the actual adjusted E.P.S. of $2.18.  

Even with the current guidance, the P/E using $1.9, the middle point of the adjusted E.P.S. guidance, is less than 10 at my last purchase price with a decent dividend yield and historical dividend growth providing some additional reasons to stay with the stock. 

Last Elimination: Item # 2.F. Eliminated SPTN - Sold 15 at $29.01 in Fidelity Account; 20 at $31.05 in Vanguard Account; 10 at $30.64 in Schwab Account (3/23/22 Post)(profit snapshot = $421.49)

E. Restarted COTY As a Lotto  - Bought 10 at $6.895: 

Quote:  Coty Inc. Cl A (COTY)

Cost: $68.95

SEC Filings

Coty and its subsidiaries "manufacture, market, sell and distribute branded beauty products, including fragrances, color cosmetics and skin & body related products throughout the world."  

Segment Data: 

10-Q for the Q/E 9/30/24 at page 10.  

A list of brands that fall into the consumer beauty and prestige segment categories can be found in the 2024  SEC Filed Annual Report for the fiscal year ending 6/30/24 at page 2.

COTY Analyst Estimates | MarketWatch As of 1/3/25, the average 2025 E.P.S. was .56, rising to $.66 in 2026 and $.76 in 2027. Those are non-GAAP estimates. I do not know whether those numbers are for the calendar years or Coty's fiscal years that end on 6/30.

Investment Category: Lottery Ticket Basket

The classification is based on the elimination of the common share dividend back in 2020, the five year chart, the extremely high debt level and meagre earnings. It is not a hopeless stock IMO, however and can be traded for gains as I have somehow managed to do so far.

5 Year Chart: 

Last Discussed: Item # 4.A. Eliminated COTY - Sold 103+ at $13.17 (11/16/2019)(profit snapshot = $81.62, with some shares sold at a loss) COTY was still paying a $.125 per share quarterly dividend when I sold those shares. 

Dividend: None. The last dividend was made in the 2020 first quarter.  COTY Dividend History | Nasdaq

Last Earnings Report (Q/E 9/30/24): This is the first fiscal quarter.  

Revenues: $1.6715B

E.P.S. = $.09

Adjusted E.P.S. = $.15

The value of Coty's 25.8% retained stake in Wella was reported at $1.085B. Coty raised funds to pay down debt by selling a 60% stake to KKR for $2.5B in cash. Coty completes sale of Wella stake to KKR (11/30/20). Subsequent to that transaction, COTY has been reducing its percentage ownership stake through additional sales to KKR and at least one other firm.  Coty Agrees to Sell Partial Stake in Wella to KKR at a 50% Valuation Premium Versus Initial Wella Sale in Exchange for Approximately Half of the Preferred Coty Shares Owned by KKR (10/1/21); Coty Agrees to Sell $150M of Its Retained Wella Stake  to IGF Wealth Management (7/19/24)

Debt: Note that almost all of the debt is senior secured. 

$3.9344B

On a more positive note, the long term debt was at $8.1557B as of 6/30/20, 10-K at page 51 

Other Sell Discussions: Item 2.C. Sold 10 COTY at $21.46 (2/19/18 Post)(profit snapshot = $45.85); Item 1.D. Sold 20 COTY at  $20.89 (1/28/18 POST)(profit snapshot = $80.61)

COTY Net Realized Gains to Date: +$208.08

Analyst Reports (available to Schwab customers): 

Morningstar (11/7/24): 4 stars with a $10.4 fair value estimate, no moat, and poor capital allocation. The analyst has a positive opinion about the CEO Sue Nabi, who was hired in 2020 after working for L'Oreal for 20 years. 

S&P (11/14/24): 3 stars with a 12 month PT of $8. 

Maximum Position: 30 shares

F. Added to REYN - Bought 2 at $26.6; 5 at $26: 

Quote: Reynolds Consumer Products Inc. (REYN)

Cost: $183.2

Last Discussed: Item #1.J. Added 3 REYN at $26.84 (1/1/25 Post) 

Brands | Reynolds Consumer Products

REYN SEC Filings

REYN SEC Filings

10-Q for the Q/E 9/30/24

New Average cost per share: $26.7 (15 shares)

Dividend: Quarterly at $.23 per share ($.92 annually) 

REYN Dividend History | Nasdaq

REYN Dividend History | Nasdaq

Yield at New AC = 3.446%

Last Ex Dividend: 11/15/25 (owned 5 as of)

Last Earnings Report (Q/E 9/30/24): I discussed this report in a 11/21/24 post: Item # 3.A. Restarted REYN - Bought 5 at $27.36 (11/21/24 Post) 

Last Eliminations: Item # 2.A. Eliminated REYN - Sold 40+ at $29.64 (3/1/2024 Post)(profit snapshot = $60.56); Item # 4.F. Eliminated Duplicate REYN in Schwab Taxable Account - Sold 20+ at $32.55 (12/6/22 Post)(profit snapshot = $95.96)

Purchase Restriction: 2 to 5 share lots with each subsequent purchase required to be at the lowest price in the chain. 

Maximum Position: 50 shares.

G. Added 1 LYB at $73: 

Quote: LyondellBasell Industries N.V. Cl A (LYB) 

Chemical stocks are in a bear market of unknowable duration. 

10-Q for the Q/E 9/30/24

LYB Analyst Estimates-MarketWatch

Products & Technology | LyondellBasell

New Average cost per share: $79.95 (9+ shares)

Dividend: Quarterly at $1.34 per share ($5.36 annually)

Yield at $79.95 AC = 6.7%

Last Ex Dividend: 12/2/24 (owned 4 as of)

I discussed the last earnings report in this post: Item # 2.E. Restarted LYB - Bought 1 at $87.49; 1 at $84.81; 1 at $83.87 (11/7/24 Post); SEC Filed Press Release

Last Elimination: Item # 1.C. Eliminated LYB - Sold 6 at $98.42 (2/13/23 Post)(profit snapshot = $58.35)

H. Added 1 DG at $75.17; 1 at $70.25: 

Quote: Dollar General Corp. (DG)

Cost: $145.42

DG SEC Filings

The stock is currently in a bear market of unknowable duration.  

Website: Dollar General | Save time. Save money. Every day.

Last Discussed: Item # 2.D. Started DG - Bought 1  at $86.89' 1 at $80 (9/5/24 Post) I discussed the earnings report for the fiscal quarter ending 8/2/24 in that post. SEC Filed Earnings Press Release I also discussed in that post the reasons why I believed this stock was in a bear market. 

New Average cost per share: $78.02 (4 shares)

Snapshot Intraday on 1/8/24 after last add

Dividend: Quarterly at $.59 per share ($2.36 annually), last raised from $.55 effective for the 2023 first quarter report. 

DG Dividend History & Date

I doubt that there will be a dividend raise until DG returns to a pesistent pattern of earnings growth. 

DG Diluted E.P.S.:   

F/Y Ending 2/2/18: $5.63

F/Y Ending 2/1/19: $5.97

F/Y Ending 1/31/20: $6.64 10-K at page 23 

Update: Three rounds of stimulus checks. See how many went out and for how much. | Pandemic Oversight

F/Y Ending 1/28/21: $10.62 10-K at page 44 

F/Y ending 1/28/22: $10.17

FY ending 2/3/23: $10.68

FY ending 2/2/24: $7.55, 10-K at page 45

Yield at New AC = 3.235%

Last Ex Dividend: 1/7/25 (owned 3 as of)

Last Earnings Report (F/Q ending 11/1/24): This is the third fiscal quarter. 

SEC Filed Earnings Press Release 

E.P.S. = $.89, down from $1.26

Net Sales: $10.183+B, up from $9.694B

For 36 weeks, E.P.S. at $4.24, down from $5.73.

Ending Store Count: 20,523

Guidance for Fiscal Year (1 more quarter): Diluted E.P.S. $5.5-$5.9, down from prior guidance of $5.5 - $6.2. 

E.P.S. has returned to a fiscal 2018 level,  not exactly a recommendation for backing up the truck.    

Maximum Position: 5 shares provided the price remains above $50, then increasing to 10 when and if the price falls below $50. 

Purchase Restriction: 1 share lots with each subsequent purchase required to be at the lowest price in the chain. 

SU Bond Ownership: I own 2 Dollar General 4.15% SU maturing on 11/1/25. Bond Page | FINRA.org (currently rated Baa2/BBB)

I. Started ON as a Lotto - Bought 1 at $63.32; 1 at $60.45; 1 at $59.62; 1 at $58.31:

Quote: ON Semiconductor Corp. (ON) 

Cost: $241.7

Website: Intelligent Power and Sensing Technologies | onsemi

ON SEC Filings 

10-Q for the F/Q Ending 9/27/24 

"With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure."

This is another stock that is clearly in a bear market. A new 52 week low was hit on 1/8/25. 

This is my first purchase. I noticed that the stock had fallen a lot, and the P/E ratio had returned to something that I generally recognize as reasonable. I do not have the technical background to understand, except in a superficial way, the products made by this company.  

Average cost per share: $60.43 (4 shares)

Dividend: None and none expected

Last Earnings Report (F/Q ending 9/27/24) SEC Filed Earnings Press Release

The problem with the stock is revealed in this snapshot: 

Free cash flow: $293.6, up from $133.6

It remains to be seen whether the earnings, revenue and operating margin declines year-over-year are merely cyclical or the start of longer term decline. I have zero insight into that issue.  

Analyst Reports (available to Schwab customers)

Morningstar (10/24/24): 4 stars with an estimated fair value at $86 and a narrow moat. The analyst states that this company was negatively impacted last year by cyclically weak automotive and industrial chip demand (roughly 80% of revenues) and from customers working down inventory. 

S&P (10/28/24): 3 stars with a 12 month PT of $80. 

Maximum Position: 5 shares at greater than $50, expanding to 10 with a price less than $50. 

2. Corporate Bonds: 

There is some income shifting occuring into 2026-2027 with the following bond purchases that consists of the "profit" recognized at maturity that will be taxed as interest. 

I live in Tennessee which has no state income tax. This will make corporate bonds slightly more attractive to me. If I lived in a state with an income tax, I would probably buy corporate bonds only in my Roth IRA accounts. 

A. Bought 2 Virginia Electric Power 3.5% SU Maturing on 3/15/27 at a Total Cost of 97.391:

Issuer: Operating utility owned by  Dominion Energy Inc. (D) 

Virginia Electric Power is now known as Dominion Energy Virginia.    

10-Q for the Q/E 9/30/24 (Dominion Virginia results can be found at page 65)

Finra Page: Bond Page | FINRA.org

Credit Ratings: A2/BBB+

YTM at Total Cost: 4.752%

Current Yield at TC: 3.594%

I am starting to stack maturities from this issuer: 

Third Party Price as of 12/24

B. Bought 2 Manulife 4.15% SU Maturing on 3/14/26 at a Total Cost of 99.445: 

Issuer: Manulife Financial Corp.  (MFC)

I own the commons stock and have been paring my position. 

Last Discussed: Item # 2.A. Pared MFC Again - Sold 5 at $32.79 (11/27/24 Post)(profit snapshot = $106.95) 

SEC Filed Earnings Press Release for the Q/E 9/30/24 

Finra Page: Bond Page | FINRA.org

Credit Ratings: A

Credit Ratings | Manulife Financial

YTM at Total Cost: 4.6314%

Current Yield at TC: 4.173%

I now own 4 bonds. 

C. Bought 1 AT&T 3.8% SU Maturing on 2/15/27 at a Total Cost of 98.021: 

Issuer: AT&T Inc. (T) 

I own the common shares. 

T 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: 4.785%

Current Yield at TC: 3.877%

D. Bought 2 Southwestern Electric Power 2.75% SU Maturing on 10/1/2026 at a Total Cost of 96.525: 

Issuer: An operating subsidiary of American Electric Power Co. (AEP) 

AEP 10-Q for the Q/E 9/30/24 The Southwestern Electric results can be found starting at page 100. 

Finra Page: Bond Page | FINRA.org

Credit Ratings: Baa2/BBB+

YTM at Total Cost: 4.839% 

Current yield at TC:  2.849%

The "profit" realized when the bond matures on 10/1/26 will be $69.5. The first interest payment will be in 2025. The annual interest f0r 2 bonds is less at $55.  

E. Bought 2 Kroger 3.5% SU Maturing on 2/1/26 at a Total Cost of 98.804: 

Issuer: Kroger Co. (KR) 

KR Analyst Estimates | MarketWatch

KR SEC Filings 

KR SEC Filed Earnings Press Release for the F/Q Ending 11/9/24

Finra page: Bond Page | FINRA.org

Credit Ratings: Baa1/BBB 

YTM at Total Cost: 4.639%

Current Yield at TC: 3.54%

F. Bought 1 Entergy Arkansas 4% First Mortgage Bond Maturing on 6/1/2028 at a Total Cost of 97.8: 

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

I discuss $1,000 par value first mortgage bonds in this video: First Mortgage Bonds $1,000 Par Values - YouTube

Prospectus 

Lien is generally described at page 6. 

ETR SEC Filed Earnings Press Release for the Q/E 9/30/24 

10-Q for the Q/E 9/30/24 Entergy Arkansas results can be found starting at page 100

Finra Page: Bond Page | FINRA.org

Credit Ratings: A2/A

YTM at Total Cost: 4.704%

Current Yield at TC: 4.09%

I own shares in the Entergy Arkansas First Mortgage baby bond that trades like a stock under the EAI symbol. Entergy Arkansas LLC First Mortgage Bonds 4.875% due 2066 (EAI) 

Last EAI Discussions: Item # 5.C. Bought 10 EAI in Vanguard Account at $22.07 (8/2/24 Post); Item # 7.A. Added to EAI in Vanguard Account - Bought 5 at $21.7; 10 at $21.5; 10 at $21.27 (5/24/24 Post); Item # 6.A. Added to EAI in Vanguard Taxable Account - Bought 10 at $21.64 and Item # 6.B. Added 20 EAI in My Fidelity at $21.62 and Added 30 at $21.5 in my Schwab Account (12/30/23 Post); see my YT video: First Mortgage Bonds Traded Like Stocks - YouTube

3. Treasury Bills Purchased at Auction: 

A. Bought 2 Treasury Bills at the 1/2/25 Auction: 

119 Day Bills

Matures on 5/6/25

Interest: $27.73

Investment Rate: 4.313%

B. Bought 3 Treasury Bills at the 1/6/25 Auction: 

182 Day Bills: 

Matures on 7/10/25 

Interest: $62.33

Investment Rate: 4.256%

C. Bought 5 Treasury Bills at the 1/16/25 Auction: 

91 Day Bill

Matures on 4/10/25

Interest: $53.15

Investment Rate: 4.309%

4. Treasury Notes Purchased in the Secondary Market: 

A. Bought 1 Treasury Note 4.125% Coupon Maturing on 7/31/28 at a Total Cost of 99.3239: 

YTM at 4.33%

B. Bought 1 Treasury Note 4% Coupon Maturing on 1/31/29 at a Total Cost of 98.818: 

YTM: 4.32%

C. Bought 1 Treasury Note 4.125% Coupon Maturing on 11/15/27 at a Total Cost of 99.4796: 

YTM: 4.319%

I now own 2. 

5. Treasury Notes Purchased at Auction: 

A. Bought 2 Treasury Notes at the 1/6/25 Auction: 

3 Year Notes

Mature on 1/15/28

Coupon  4.25%

Purchased at 

YTM:  4.332%

6. Small Ball Sells: 

I view BDC stocks as high risk and consequently will manage my small ball positions to mitigate that risk. The goal is to realize any total return in excess of the dividend payments. 

FSK 10 Year Chart: 

A. Pared FSK in Fidelity Account - Sold 4 at $21.97: 

Quote: FS KKR Capital Corp. (FSK) - Externally Managed BDC

Proceeds: $87.88

I sold my highest cost shares using the specific identification cost method.

FSK SEC Filings

10-Q for the Q/E 9/30/24 (A summary of investments starts at page 5). 

2023 SEC Filed Annual Report (Summary of risk factors starts at page 17 and ends at page 47)

Last Discussed: Item # 5.A. Pared FSK in Schwab Account -Sold 10 at $21.45 and Item #5.B. Pared FSK in Fidelity Account - Sold 6 at $21.44 (12/19/24 Post)(profit snapshots = $34.72)  

Last Buy Discussion: Item # 4.E. Added to FSK - Bought 5 at $18.66 (6/24/23 Post)

Last Reported Net Asset Value per share (9/30/24): $23.82, down from $24.46 as of 12/31/23. This number always needs a caveat. That is a claimed by the company net asset value per share. 

Profit Snapshot: +$12.72

New Average cost per share this account: $15.34 (33+ shares)

Snapshot Intraday on 1/2/24 after pare

The average cost per share was reduced from $15.71. 

Regular Dividend: Quarterly at $.64 ($2.56 annually)

FSK Stock Dividend History & Date

Special Dividends: $.34 per share paid in 2024, see previous link for details. 

Yield Using Regular Dividend Only = 16.69% 

Last Ex Dividend: 12/4/24

Last Earnings Report (Q/E 9/30/24): I discussed this report in this post: Item # 1.M. Pared FSK - Sold 25 at $21.57 - Fidelity Account (11/27/24 Post)(profit snapshot = $49.24); SEC Filed Press Release

Goal: Any total return in excess of the dividend payments. 

There was a 1 for 4 reverse stock split in 2020. FS KKR Capital Corp. Announces Effectiveness of Four-to-One Reverse Stock Split

Some Other Recent Sell Discussions: Item # 4.B. Eliminated 1 of 3 Duplicate Positions in FSK - Sold 12 at $20.35 (9/16/23 Post)(profit snapshot = $14.71); Item # 2.M. Pared FSK - Sold 9+ at $23.04 (3/24/22 Post)(profit snapshot = $.34)(noting that FSK had been a problematic stock for me and is consequently on a short leash)

B. Pared FSK in Schwab Account - Sold 8 at $22: 

See Item # 6.A. above. 

Proceeds: $176.01

I thought that I used the specific identification method, where I selected the highest cost lots to sale, but something got mixed up and the shares were actually sold using FIFO.  

Profit Snapshot: $72.12

New average cost per share this account: $16.28 (39+ shares)

Snapshot As of 1/2/25 Closing Price 

Yield at $16.28 (regular dividend only): 15.72%

C. Pared WMB - Sold 5 at $56.69:

Quote: Williams Cos. (WMB) - Energy Infrastructure Company

Proceeds: $283.45

Homepage | Williams Companies

WMB SEC Filings

10-Q for the Q/E 9/30/24

Profit Snapshot: $163.25

Remaining Shares: 60+

New Average Cost per share = $23.88

Dividend: Quarterly at $.475 per share ($1.9 annually) 

Williams Companies, Inc - Dividend History

Yield at AC of $23.88: 7.956%

Last Earnings Report (Q/E 9/30/24): I discussed this report in a recent post and have nothing further to add.  Item # 4.A. Pared WMB Again- Sold 5 at $55.58 (11/14/25 Post)(profit snapshot = $158.29); SEC Filed Press Release

Last Buy Discussions: Item # 2 Added 95 WMB at $24.98 and 5 at $23.8 (8/20/21 Post); Item # 3.B. Added 5 WMB at $24.2 (10/8/21 Post)

Other Small Ball Sell Discussions: Item # 4.D. Sold 5 WMB at $52.28  (10/24/24 Post)(profit snapshot = $141.2); Item # 3.C. Pared WMB Again - Sold 5 at $50.3; 5 at $51.31 (10/16/24 Post)(profit snapshots = $267.84); Item # 2.A. Pared WMB - Sold 5 at $47.32; 5 at $49.33 (10/10/24 Post)(profit snapshots = $251.11); Item # 1.B. Sold 5 WMB at $45.29 (9/5/24 Post)(profit snapshot = $106.34); Item # 3.C. Pared WMB - Sold 4 at $40.27 (5/17/24 Post)(profit snapshot = $65.02); Item # 1.A. Pared WMB - Sold 10 at $36.12 (1/12/2024 Post)(profit snapshot = $127.61); Item # 6.A. Eliminated WMB Duplicate Positions - Sold 10+ at $35.23; 5 at $35.33 (8/12/23 Post)(profit snapshot = $190.8)

WMB Realized Gains to Date: $1,472.74 (excludes gains in my Roth IRA accounts)

WMB SU Bonds Owned: 

6 of the 3.9% Maturing on 1/15/25  

I am looking to buy more WMB bonds. 

4 of the 4% Maturing on 9/15/25 

I had 4 WMB 4.55% SU bonds mature on 6/24/24 

D. Pared KMI - Sold 10 at $28.38: 

Quote:Kinder Morgan Inc. (KMI)

Proceeds: $283.79

Company Website: Energy Infrastructure & Solutions | Kinder Morgan

Asset Map | Kinder Morgan

KMI SEC Filings

10-Q for the Q/E 9/30/24

Profit Snapshot: $143.73

Average cost per share: $14.01 (80 Shares remaining)

The average cost per share remained unchanged since I am selling shares that are part of a 100 share lot bought at $15.89. Item # 1. Bought 100 KMI in Vanguard Taxable Account at $15.89 (1/7/22 Post) The tax cost basis has been reduced to $14.01 based on ROC adjustments in 2022 and 2023 as previously discussed. That part of the 2022 and 2023 dividends classified a ROC were not taxed in those years. A tax is recognized when the share with ROC adjustments are sold at a profit. 

Dividend: Quarterly at $.2875 per share ($1.15 annually)

Kinder Morgan Dividend History

Yield at AC of $14.01: 8.208% based on the ROC (return of capital) adjusted tax cost basis through 2023. KMI recently indicated that there would likely be no ROC adjustments for 2024 dividends, but I will not know, one way or the other, until I receive my 1099. 

If I used the unadjusted tax cost basis per share, which was $15.89, the yield at the current quarterly dividend rate would be 7.237%. 

Last Earnings Report (Q/E 9/30/24): I discussed this report in a recent post and have nothing further to add here. Item # 3.A. Sold 10 of 100 KMI at $26.44 (12/26/24 Post)(profit snapshot = $124.08); SEC Filed Press Release 

E. Pared FDUS - Sold 2 at $20.96: 

Quote: Fidus Investment Corp. - Externally Managed BDC 

Proceeds: $41.92

This was part of my highest cost lot purchased on 3/11/20. I have been selling my highest cost lots for awhile now. 

Last Discussed: Item # 3B. Eliminated Duplicate FDUS Position - Sold 20+ at $18.89 (9/23/23 Post)(profit snapshot =  $194.21)

Last Buy Discussion: Item # 3.C. Bought Back FDUS in Fidelity Account Bought 20 at $13.7; 5 at $11.99; 5 at $11.5; 5 at $9, 2 at $8.56, 2 at $5.98, 1 at  $4.65 (3/28/20 Post)

SEC Filings

2023 SEC Filed Annual Report (Risk factor discussion starts at page 29 and ends at page 56)

Profit Snapshot: $16.07

Remaining Shares Average Cost: $9.55 (28+ shares)

Price Intraday 1/7/24 after pare

Regular Dividend: Quarterly at $.43 per share  ($1.72 annually)

FDUS Dividend History & Date

Special Dividends: 4 quarterly special dividend were paid in 2024 totalling $.70 per share, down from $1.22 in 2023. I am anticipating that this number will decline again in 2025. 

Net investment income for BDCs trended higher as the FED raised the FF rate. Variable rate coupons, priced at spreads to short term rates, rose during the FED rate hiking cycle and have declined since the cutting cycle started last September.   

Yield at $9.55 = 18.01% (regular dividend only)

(If I added the $.70 special dividends paid in 2024 to the annual regular of $1.72, the yield at $9.55 would be 25.34%). 

Last Ex Dividend: 12/17/24 (included $.43 regular quarterly per share dividend special and an $.18 per share special dividend)   

Net asset value per share history: 

For a BDC, this is a good history since the net asset value per share has risen since the IPO in 2011.   

9/30/24:      $19.42, 10-Q at p. 3

12/31/23:     $19.69 10-K at page 123

 6/30/23:    $19.13, 10-Q at p. 3

12/31/22     $19.03, 10-K at p. 122

12/31/21:    $19.96, " at page 122

6/30/21:     $17.57

12/31/20:   $16.81
9/30/20:    $15.94
12/31/19:    $16.85
9/30/19:     $16.47 10-Q
12/30/18:   $16.47
9/30/18:     $16.41
3/30/18      $16.28
12/31/17     $16.05
12/31/16     $15.76 
12/31/15     $15.17
12/31/14     $15.16
12/31/13     $15.35
12/21/12     $15.32

IPO at $15 June 2011

10 Year Chart: Compare with the FSK chart above

BDCs will crash and burn during events like the 2008 Near Depression and the pandemic period in 2020. 

Average Annual Total Return 10 Years Through 1/8/25: +15.53% (the past may not be prologue for the future) This compares to +6.36% for FSK and 4.74% for the deservedly hated PSEC. The annual average total return for ARCC over that 10 year period, a BDC viewed generally as the best externally managed BDC, was +13.75%. I have been paring my ARCC position as well.    

Sourced: DRIP Returns Calculator | Dividend Channel

Last Earnings Report (Q/E 9/30/24): SEC Filed Earnings Press Release 

Net Investment income per share: $.64 

Adjusted NII per share: $.61

The difference is a reversal of a $.03 capital gain incentive fee expense.

Consensus estimate at $.57

Estimated Spillover Income: $1.27 per share

Weighted average yield on debt investments: 13.8%

10-Q: Summary of investments starts at page 7.  

Portfolio by Investment Types: 63.9% first lien

10-Q at page 46

75.6% variable rate, remainder of loans at fixed rates. (page 46) 

Company Assessment of Loan Credit Quality: 

10-Q at page 48

3 loans were on non-accrual status as of 9/30/24. One had been marked down to a zero value that had a cost basis of 5.2M. The total cost of those three loans is $32M with a fair value as of 9/30/24 listed at $10.4M.   

Company Assessment of Estimated Impacts on Net Investment Income from changes in interest rates: 

10-Q at pages 58-59

Other Sell Discussions: Item # 1.K. Pared FDUS in Schwab Account - Sold 3 at $17.5- Highest cost shares (10/15/21 Post); Item # 1.E. Sold 7 FDUS purchased with Dividends at $16.44-Schwab Account (4/30/21 Post); Item # 1.G. Pared FDUS in Fidelity Taxable Account-Sold 10 at $15.01(3/20/21 Post); Item # 1.I. Pared FDUS in Fidelity Taxable Account-Sold 2 at $13.6 and Item # 1J. Pared FDUS in Schwab Taxable Account-Sold 13 at $14.01 (2/13/21 Post); Item # 2.O. Continued Paring FDUS -Sold Highest Cost Lots in Fidelity Taxable Account at $13.75 (11/28/20 Post); Items 1.L, 1.M; 1.N (11/30/20 Post); Item 1.D. and E. Pared FIDUS in Schwab Account-Sold 50 at $15.34 and Sold 20 FDUS (Fidelity Account) at $15.4 (2/22/20 Post); Item # 1.C. Pared FDUS-Sold 52 at $15.15 (3/6/19 Post) By March 23, 2020, the price would sink below $5. 

FDUS Realized Gains to Date: $474.82 

Goal: Any total return in excess of the dividend payments.

7. Equity Preferred Stocks and Preferred Stock ETF: 

I have been discussing preferred stocks in several recent YouTube videos:  Preferred Stock ETFs - YouTube; Fixed Coupon Equity Preferred Stocks - YouTube; Floating Rate Equity Preferred Stocks Issued by U S Companies - YouTube

A. Eliminated REXRPRC - Sold 30 at $22.45: 

Quote: REXR-PC

Proceeds: $673.48

Issuer: Rexford Industrial Realty (REXR)

REXR SEC Filings

SEC Filed Earnings Press Release for the Q/E 9/30/24 

Profit Snapshot: $37.23

Last Discussed: Item # 4.A. Bought 10 REXRPRC at $21.4 (8/15/24 Post); Item # 6.A. Added to REXRPRC -Bought 5 at $20.76 (4/26/24 Post) 

REXRPRC Prospectus

Coupon: Par Value: $25

Coupon: 7.125%

Maturity: None, Potentially Perpetual 

Issuer Optional Call: On or after 9/1/25 at par value + accrued and unpaid dividends. 

Stopper Clause: Standard

Dividends: Paid quarterly, qualified and non-cumulative. 5.625% paid on a $2 PNFP Analyst Estimates | MarketWatch

PNFP SEC Filings  5 par value. 

Dividends: Paid Quarterly and Cumulative  

Stopper Clause: Standard.

Issuer Optional Call: On or after 9/20/24

Maturity: None, potentially perpetual.  

Last Ex Dividend: 12/16/24

Tax Treatment of Dividends - 2023: No ROC Support and Entire Amount Classified at 199A

Rexford Industrial Announces 2023 Tax Treatment of Dividend Distributions

Rexford Industrial Announces 2022 Tax Treatment of Dividend Distributions No ROC Support and all classified as 199A. 

B. Eliminated REXRPRB - Sold 15 at $23.6: 

Quote: REXR-PB

Proceeds: $354

Issuer: See Item 7.A. above

Profit Snapshot: $30.64

Last Discussed: Item # 3.B. Added to REXRPRB - Bought 5 at $21.58 (4/19/24 Post) 

REXRPRB Prospectus

Par Value: $25

Coupon: 5.875%

Optional Call: On or after 11/13/21 at par value + accrued and unpaid dividends. 

Dividend: Paid quarterly, cumulative and non-qualified (pass through entity)

Stopper Clause: Standard. The issuer must eliminate the common share cash dividend before it is legally allowed to defer the preferred stock dividend. The Stopper Clause enforces the preferred stock's superior claim to cash against the common stock only. 

Last Ex Dividend: 12/16/24

Prior Elimination:  Item # 3.A. Sold 30 REXRPRB at $24.99 (7/12/2018 Post)(profit snapshot = $49.82) 

C. Eliminated PNFPP - Sold 15 at $24.98: 

Quote: Pinnacle Financial Partners Inc. 6.75% Preferred  Series B (PNFPP)

Proceeds: $374.62

Issuer:  Pinnacle Financial Partners Inc. (PNFP) - A Bank Holding Company

PNFP Analyst Estimates | MarketWatch

PNFP SEC Filings 

SEC Filed Earnings Press Release for the Q/E 9/30/24 

Profit Snapshot: +$44.37

Last Discussed: Item # 6.A. Started PNFPP - Bought 10 at $22.15; 5 at $21.75 (8/19/23 Post) 

Prospectus

Par Value: $25

Coupon: 6.75%

Dividends: Paid Quarterly, non-cumulative, and qualified 

Callable on or after 9/1/25

D. Pared CCNEP - Sold 5 at $25.1: 

Quote: CNB Financial Corp. 7.125% Preferred Series A

Proceeds: $125.5

I sold my highest cost lot. 

Issuer: CNB Financial Corp. (CCNE) - A Bank Holding Company

I have eliminated my position in the common shares. 

CCNE Analyst Estimates | MarketWatch

SEC Filings

Last Discussed: Item # 2.A. Added to CCNEP - Bought 5 at $20 (11/11/23 Post) 

Profit Snapshot: $14.5

New Average Cost per share: $20.35 (35 Shares)

Snapshot Intraday on 1/7/25 after pare

Yield at New AC per share: 8.75%

(calculation .07125% coupon x. $25 par value = $1.78125 Annual Dividend per share ÷ $20.35 average cost per share = 8.7531%)

Last Ex Dividend: 11/15/24

Prospectus

Par Value: $25

Coupon: 7.125%

Maturity: None, Potentially Perpetual 

Issuer Optional Call: On or after 9/1/25 at par value + accrued and unpaid dividends. 

Stopper Clause: Standard

Dividends: Paid quarterly, qualified and non-cumulative.

Last Sell Discussion: Item # 5.A. Eliminated CCNEP - Sold 10 at $26  (1/16/23 Post)(profit snapshot = $7.08) 

E. Eliminated PGX  - Sold 26 at $11.75:

Quote: PGX | Invesco Preferred ETF Overview

Proceeds: $305.51

I discussed this ETF in a recent YouTube video: Preferred Stock ETFs - YouTube

Profit Snapshot: Net of $6.36

Last Discussed: Item # 4.B. Added to PGX - Bought 5 at $11.3 (8/5/23 Post); Item # 2.B. Bought 5 PGX at $11.04 (5/27/23 Post) 

Sponsor's website: Invesco Preferred ETF

Expense ratio: .5%

Holdings

I am averaging down in small lots when the purchase reduces my average cost per share. 

Invesco Preferred ETF (PGX) Dividend History | Seeking Alpha Dividends are paid monthly at a variable rate. 

Last Ex Dividend: 12/23/24

Morningstar: PGX – Invesco Preferred ETF – ETF Stock Quote | Morningstar PGX is currently rated at 2 stars. 

Sell Discussions: 

Item # 5 Sold: 200 PGX at $14.38 (11/12/2010)(profit snapshot = $155.96); 

Item # 1.A Sold 50 PGX at $14.35 (3/3/19 Post)(profit snapshot = $45.56);

Item # 3.A. Eliminated PGX - Sold 100 at $14.51 (8/1/2020)(profit snapshot = $61.46); 

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.