Economy:
The Stock Jocks have ignored the worldwide deterioration in manufacturing data.
The lowest reading in ISM's manufacturing PMI since the Near Depression, released yesterday, may have awakened them to this prevailing trend that has been ongoing for months. I use the word "may" since the Stock Jocks are still in a frame of mind where negative economic data is viewed as either immaterial or merely temporary. Negative economic news can be shaken off before the market opens the next day.
The September ISM manufacturing PMI was reported at 47.8, down from 49.1 in August. The new orders component remains in contraction territory at 47.3. ISM Report - September 2019 Manufacturing While the September PMI of 47.8 was the lowest reading since June 2009, I would emphasize that this index was in a rising mode back in June 2009, flashing a leading indicator since early Spring that the recession had ended or was about to end. The situation is different now since the index is in a declining mode.
Slumping manufacturers experience worst month since Great Recession, ISM finds - MarketWatch
Clueless Don blamed the FED for the manufacturing slowdown even though the contraction is worldwide:
Euro Area Manufacturing PMI | 2019 ("The IHS Markit Eurozone Manufacturing PMI fell to 45.7 in September of 2019 from 47.0 in the previous month") So if the U.S. manufacturing decline was currency related as claimed by Doofus Don, why is manufacturing contracting in Europe with lower PMI readings than in the U.S.
German manufacturing PMI for September fell to 41.7: German manufacturing recession deepens, growth outlook darkens- Reuters
Construction spending rose .1% in August, below the consensus estimate of a .4% gain. The July gain was revised down slightly to flat. Construction spending up 0.1% in August after revised flat reading in July - MarketWatch
Consumers are really starting to worry about the trade war
The Stock Jocks have ignored the worldwide deterioration in manufacturing data.
The lowest reading in ISM's manufacturing PMI since the Near Depression, released yesterday, may have awakened them to this prevailing trend that has been ongoing for months. I use the word "may" since the Stock Jocks are still in a frame of mind where negative economic data is viewed as either immaterial or merely temporary. Negative economic news can be shaken off before the market opens the next day.
The September ISM manufacturing PMI was reported at 47.8, down from 49.1 in August. The new orders component remains in contraction territory at 47.3. ISM Report - September 2019 Manufacturing While the September PMI of 47.8 was the lowest reading since June 2009, I would emphasize that this index was in a rising mode back in June 2009, flashing a leading indicator since early Spring that the recession had ended or was about to end. The situation is different now since the index is in a declining mode.
Slumping manufacturers experience worst month since Great Recession, ISM finds - MarketWatch
Clueless Don blamed the FED for the manufacturing slowdown even though the contraction is worldwide:
Euro Area Manufacturing PMI | 2019 ("The IHS Markit Eurozone Manufacturing PMI fell to 45.7 in September of 2019 from 47.0 in the previous month") So if the U.S. manufacturing decline was currency related as claimed by Doofus Don, why is manufacturing contracting in Europe with lower PMI readings than in the U.S.
German manufacturing PMI for September fell to 41.7: German manufacturing recession deepens, growth outlook darkens- Reuters
Construction spending rose .1% in August, below the consensus estimate of a .4% gain. The July gain was revised down slightly to flat. Construction spending up 0.1% in August after revised flat reading in July - MarketWatch
Consumers are really starting to worry about the trade war
Average cost of employer-provided family health coverage clears $20,000-a-year mark - MarketWatch; 2019 Employer Health Benefits Survey | The Henry J. Kaiser Family Foundation
Money spent on health insurance by individuals, an already major expense, can not be spent on discretionary consumer purchases.
Record U.S. tariff award over Airbus aid could fuel trade tensions - Reuters; Trump's global trade war comes to Alabama A potential trade war with the EU is simmering in the background.
Goldman Sachs CEO: Negative rates are a ‘failed experiment’ - Financial News
Money spent on health insurance by individuals, an already major expense, can not be spent on discretionary consumer purchases.
Record U.S. tariff award over Airbus aid could fuel trade tensions - Reuters; Trump's global trade war comes to Alabama A potential trade war with the EU is simmering in the background.
Goldman Sachs CEO: Negative rates are a ‘failed experiment’ - Financial News
+++++
Markets and Market Commentary:
Treasury yields sink after ISM manufacturing gauge stays in contraction territory - MarketWatch
Peter Navarro: Reports that US would bar Chinese firms are 'fake news' The report last Friday was not that the U.S. "would" bar Chinese firms from U.S. listings, but that this matter was being considered by the Trump administration. Navarro refused to specify which claims in the report were false.
Treasury yields sink after ISM manufacturing gauge stays in contraction territory - MarketWatch
Peter Navarro: Reports that US would bar Chinese firms are 'fake news' The report last Friday was not that the U.S. "would" bar Chinese firms from U.S. listings, but that this matter was being considered by the Trump administration. Navarro refused to specify which claims in the report were false.
US pulling investments from China would be an 'unmitigated disaster'; Trump administration deliberates block on all US investments in China
Chinese companies rethink U.S. IPOs after Trump's delisting threat - Reuters
This issue is too amorphous to have any impact on my investment decisions.
I would view it as a major negative to ban all Chinese companies from listing on U.S. exchanges.
There are bills pending in Congress that would require more accounting transparency and Nasdaq is moving to restrict listings. Exclusive: Nasdaq cracks down on IPOs of small Chinese companies - Reuters I have no problems with that private regulatory move.
Kyle Bass: IP reform needs to be included in US-China trade deal
Bank of America says European stocks should climb as market starts quarter lower - MarketWatch
Chinese companies rethink U.S. IPOs after Trump's delisting threat - Reuters
This issue is too amorphous to have any impact on my investment decisions.
I would view it as a major negative to ban all Chinese companies from listing on U.S. exchanges.
There are bills pending in Congress that would require more accounting transparency and Nasdaq is moving to restrict listings. Exclusive: Nasdaq cracks down on IPOs of small Chinese companies - Reuters I have no problems with that private regulatory move.
Kyle Bass: IP reform needs to be included in US-China trade deal
Bank of America says European stocks should climb as market starts quarter lower - MarketWatch
Charles Schwab is eliminating online commissions for trading in US stocks and ETFs TD Ameritrade quickly responded by lowering its commissions on the same products to zero, effective 10/3. TD Ameritrade joins race to the bottom on fees -- announces zero-commission trades to match Schwab - MarketWatch
+++++
Trump:
As we all know, Donald is an "Extremely Stable Genius" or just a "Very Stable Genius", since he has told us so many times. Of course, anyone who is actually stable and/or a genius does not have to make those claims once.
The fact of the matter is that Donald is probably the most ignorant person of average intelligence in world history that has a megaphone capable of delivering false and misleading information daily to tens of millions.
And, the Duck must enjoy sending out vicious and false tweets designed to stoke divisions in the country since he regularly does so. The Trumpsters really eat that stuff up.
The purpose of Donald's tweets is not to inform but to mislead for his own personal political gain.
Just a nutcase: Trump promotes conspiracy theory: Clinton's deleted emails are in Ukraine; CrowdStrike myth gets new life in Trump's call with Ukraine's President-The Washington Post
Trump Was Repeatedly Warned That Ukraine Conspiracy Theory Was ‘Completely Debunked’
The Fake News President routinely gives a megaphone to conspiracy theories that have no factual foundation.
Whistleblower's lawyer says Trump endangering his client And that is obviously the case.
Trump asks if Schiff should face 'arrest for treason' over impeachment probe
Trump Raises Idea of Arresting House Chairman for Treason - The New York Times If Donald could get away with it, Schiff would simply be among the first 100 American citizens executed by Donald for what he views as treason, which is defined in Trump's America as making accurate statements that Donald does not like.
Donald, the undisputed leader of the GOP, is an authoritarian demagogue to his core. That is not a debatable opinion, but a fact.
Just more tweets from an obviously mentally unstable President of the United States who is an authoritarian demagogue:
The Inspector General rebutted Donald's claim that all of the information provided by the whistleblower was second hand. ICIG Statement on Processing of Whistleblower Complaints.pdf (dated 9/30/19)
Will that statement made by the IG cause republicans to change their false assertions?
Of course not.
Trump and other republican politicians know that false narratives will work on a slender majority of Americans, so why tell the truth when it is so inconvenient to maintaining their power.
Perhaps Donald needs to read the summary of his call with Ukraine's President with some brain cells in working order.
Zelensky then added that Ukraine was "almost ready to buy more Javelins from the United states for defense purposes". What are Javelin missiles and why did Trump discuss them in call with Ukraine's president? - ABC News To receive its first order of Javelins in 2018, Ukraine had to cease investigating Paul Manafort. Ukraine, Seeking U.S. Missiles, Halted Cooperation With Mueller Investigation - The New York Times (5/2/18)
Donald's immediate reply was as follows:
This summary obviously supports the statements made by the whistleblower.
Disgusting Don of course wants the whistleblower's name which will come out soon enough. Trump Wants to ‘Interview’ Whistle-Blower - The New York Times
Donald just wants to publicly tar and feather the whistleblower with false statements that are specifically contradicted by the summary reproduced in part above. Republicans are rewriting the transcript into something unrecognizable, knowing that only a tiny fraction of voters will actually read it and many who read it will not care since the republicans are giving them what they want (possible overturn of Roe v. Wade decision; and tax cuts for the GOP's wealthy donors).
Secretary of State Pompeo has now admitted that he was on the call and knew then that Donald had put a hold on military aid to the Ukraine. Pompeo confirms he was on Trump’s call with the leader of Ukraine - The Washington Post
Pompeo and AG Barr will do whatever they can to obstruct the impeachment investigation since they are now implicated in it and will do anything possible to protect Donald even if they were not directly implicated.
The Daily 202: Mike Pompeo and Bill Barr are increasingly implicated in the impeachment inquiry - The Washington Post
The Latest: Pompeo Says Impeachment Depositions Not Feasible-US News;
Giuliani, Pompeo Drawn Deeper Into Trump Impeachment Inquiry - Bloomberg;
Pompeo says State Dept. officials won’t show up for scheduled impeachment depositions this week
Live updates: House committee chairs counter Pompeo, say secretary should stop intimidating witnesses
Donald's own words are incriminating on several issues which explains why Barr and Pompeo will do whatever they can to stymie and delay an investigation knowing it will take months, or even a year or more, for the courts to finally resolve the issues.
First, Trump explicitly tied U.S. cooperation with Ukraine on the Ukraine doing a personal favor for him. The favor was to investigate Joe Biden. The clear inference was that the result of the investigation needed to be unfavorable to Biden's candidacy for President. Donald went beyond asking a foreign government to interfere in the 2020 election. He made it clear what the end result of that interference needed to be.
Second, Donald was willing to use the machinery of the U.S. government, including a rogue U.S. Attorney General, to help implement his personal favor.
Third, it would have been clear to the Ukrainians that U.S. military aid was linked to opening an investigation of Biden. Trump wanted dirt on Biden, former Ukrainian lawmaker says "It was, like, well-known fact in Ukraine" according to Serhiy Leshchenko, a former advisor to Ukraine's President. Trump wanted "compromising" information on Biden, former Ukrainian lawmaker says - CBS News
Republican senators are busy attacking the whistleblower rather than criticizing Donald which could have been predicted with 100% accuracy. GOP senators attack whistleblower's credibility
It is just ludicrous to believe that any of the republican senators would vote for impeachment based on the Ukraine matter or anything divulged to date.
Maybe two or three would vote to convict, provided the ballot was cast in secret and God guaranteed that their identity would never be known by anyone. Donald enjoys around 90% support among republicans and a clear majority view him as honest and a role model for their children. In a recently released poll, 43% of republicans said that it was proper for Trump to request a foreign government to investigate a political opponent. Impeachment Support Up Slightly But Trump Job Rating Steady | Monmouth University Polling Institute
The Democrats need to accept that fact and realize the futility of seeking removal through the impeachment process.
The better course would be to continue their investigations, produce evidence for the public to examine (which will of course be ignored or dismissed by the Trumpsters no matter how credible), pursue all court cases to compel testimony and document production and then vote on a censure resolution in the House. It would probably help IMO on the document and testimony requests for the House to pass a formal impeachment investigation bill.
The people can then decide whether to reelect Donald and his senate enablers and protectors in just over a year from now.
The censure motion could include those in Trump's administration who obstructed the investigation including Barr and Pompeo.
Instead, the Democrats will successfully pass one or more Articles of Impeachment within a few months, and there will be another impeachment trial in the senate starting early next year, probably in the Spring, that will not result in a conviction.
How a Shadow Foreign Policy in Ukraine Prompted an Impeachment Inquiry Notwithstanding the findings of the intelligence community, supported by strong evidence, that Russia was responsible for interfering in the 2016 election, Donald "was driven to seek proof that the meddling was linked to Ukraine and forces hostile to him, even fixating on a fringe conspiracy theory suggesting that Hillary Clinton’s missing emails might be found there."
I am curious whether Putin put these ideas in the Duck's head. Possibly we will find out down the road when more is known about his conversations with Vlad.
As we all know, Donald is an "Extremely Stable Genius" or just a "Very Stable Genius", since he has told us so many times. Of course, anyone who is actually stable and/or a genius does not have to make those claims once.
The fact of the matter is that Donald is probably the most ignorant person of average intelligence in world history that has a megaphone capable of delivering false and misleading information daily to tens of millions.
And, the Duck must enjoy sending out vicious and false tweets designed to stoke divisions in the country since he regularly does so. The Trumpsters really eat that stuff up.
The purpose of Donald's tweets is not to inform but to mislead for his own personal political gain.
Just a nutcase: Trump promotes conspiracy theory: Clinton's deleted emails are in Ukraine; CrowdStrike myth gets new life in Trump's call with Ukraine's President-The Washington Post
Trump Was Repeatedly Warned That Ukraine Conspiracy Theory Was ‘Completely Debunked’
The Fake News President routinely gives a megaphone to conspiracy theories that have no factual foundation.
Whistleblower's lawyer says Trump endangering his client And that is obviously the case.
Trump asks if Schiff should face 'arrest for treason' over impeachment probe
Trump Raises Idea of Arresting House Chairman for Treason - The New York Times If Donald could get away with it, Schiff would simply be among the first 100 American citizens executed by Donald for what he views as treason, which is defined in Trump's America as making accurate statements that Donald does not like.
Donald, the undisputed leader of the GOP, is an authoritarian demagogue to his core. That is not a debatable opinion, but a fact.
Just more tweets from an obviously mentally unstable President of the United States who is an authoritarian demagogue:
The Inspector General rebutted Donald's claim that all of the information provided by the whistleblower was second hand. ICIG Statement on Processing of Whistleblower Complaints.pdf (dated 9/30/19)
Will that statement made by the IG cause republicans to change their false assertions?
Of course not.
Trump and other republican politicians know that false narratives will work on a slender majority of Americans, so why tell the truth when it is so inconvenient to maintaining their power.
Perhaps Donald needs to read the summary of his call with Ukraine's President with some brain cells in working order.
Zelensky then added that Ukraine was "almost ready to buy more Javelins from the United states for defense purposes". What are Javelin missiles and why did Trump discuss them in call with Ukraine's president? - ABC News To receive its first order of Javelins in 2018, Ukraine had to cease investigating Paul Manafort. Ukraine, Seeking U.S. Missiles, Halted Cooperation With Mueller Investigation - The New York Times (5/2/18)
Donald's immediate reply was as follows:
This summary obviously supports the statements made by the whistleblower.
Disgusting Don of course wants the whistleblower's name which will come out soon enough. Trump Wants to ‘Interview’ Whistle-Blower - The New York Times
Donald just wants to publicly tar and feather the whistleblower with false statements that are specifically contradicted by the summary reproduced in part above. Republicans are rewriting the transcript into something unrecognizable, knowing that only a tiny fraction of voters will actually read it and many who read it will not care since the republicans are giving them what they want (possible overturn of Roe v. Wade decision; and tax cuts for the GOP's wealthy donors).
Secretary of State Pompeo has now admitted that he was on the call and knew then that Donald had put a hold on military aid to the Ukraine. Pompeo confirms he was on Trump’s call with the leader of Ukraine - The Washington Post
Pompeo and AG Barr will do whatever they can to obstruct the impeachment investigation since they are now implicated in it and will do anything possible to protect Donald even if they were not directly implicated.
The Daily 202: Mike Pompeo and Bill Barr are increasingly implicated in the impeachment inquiry - The Washington Post
The Latest: Pompeo Says Impeachment Depositions Not Feasible-US News;
Giuliani, Pompeo Drawn Deeper Into Trump Impeachment Inquiry - Bloomberg;
Pompeo says State Dept. officials won’t show up for scheduled impeachment depositions this week
Live updates: House committee chairs counter Pompeo, say secretary should stop intimidating witnesses
Donald's own words are incriminating on several issues which explains why Barr and Pompeo will do whatever they can to stymie and delay an investigation knowing it will take months, or even a year or more, for the courts to finally resolve the issues.
First, Trump explicitly tied U.S. cooperation with Ukraine on the Ukraine doing a personal favor for him. The favor was to investigate Joe Biden. The clear inference was that the result of the investigation needed to be unfavorable to Biden's candidacy for President. Donald went beyond asking a foreign government to interfere in the 2020 election. He made it clear what the end result of that interference needed to be.
Second, Donald was willing to use the machinery of the U.S. government, including a rogue U.S. Attorney General, to help implement his personal favor.
Third, it would have been clear to the Ukrainians that U.S. military aid was linked to opening an investigation of Biden. Trump wanted dirt on Biden, former Ukrainian lawmaker says "It was, like, well-known fact in Ukraine" according to Serhiy Leshchenko, a former advisor to Ukraine's President. Trump wanted "compromising" information on Biden, former Ukrainian lawmaker says - CBS News
Republican senators are busy attacking the whistleblower rather than criticizing Donald which could have been predicted with 100% accuracy. GOP senators attack whistleblower's credibility
It is just ludicrous to believe that any of the republican senators would vote for impeachment based on the Ukraine matter or anything divulged to date.
Maybe two or three would vote to convict, provided the ballot was cast in secret and God guaranteed that their identity would never be known by anyone. Donald enjoys around 90% support among republicans and a clear majority view him as honest and a role model for their children. In a recently released poll, 43% of republicans said that it was proper for Trump to request a foreign government to investigate a political opponent. Impeachment Support Up Slightly But Trump Job Rating Steady | Monmouth University Polling Institute
The Democrats need to accept that fact and realize the futility of seeking removal through the impeachment process.
The better course would be to continue their investigations, produce evidence for the public to examine (which will of course be ignored or dismissed by the Trumpsters no matter how credible), pursue all court cases to compel testimony and document production and then vote on a censure resolution in the House. It would probably help IMO on the document and testimony requests for the House to pass a formal impeachment investigation bill.
The people can then decide whether to reelect Donald and his senate enablers and protectors in just over a year from now.
The censure motion could include those in Trump's administration who obstructed the investigation including Barr and Pompeo.
Instead, the Democrats will successfully pass one or more Articles of Impeachment within a few months, and there will be another impeachment trial in the senate starting early next year, probably in the Spring, that will not result in a conviction.
How a Shadow Foreign Policy in Ukraine Prompted an Impeachment Inquiry Notwithstanding the findings of the intelligence community, supported by strong evidence, that Russia was responsible for interfering in the 2016 election, Donald "was driven to seek proof that the meddling was linked to Ukraine and forces hostile to him, even fixating on a fringe conspiracy theory suggesting that Hillary Clinton’s missing emails might be found there."
I am curious whether Putin put these ideas in the Duck's head. Possibly we will find out down the road when more is known about his conversations with Vlad.
Trump’s false claims about Hunter Biden’s China dealings - The Washington Post; The gas tycoon and the vice president’s son: The story of Hunter Biden’s foray into Ukraine Based on what I have read so far, Giuliani has manufactured a case against Joe Biden and is largely the instigator for the mess that Demagogue Don finds himself now. Donald is ultimately responsible for listening to Showboat Rudi and acting upon what Giuliani told him. And, I would add that Biden should have told Hunter Biden to stay away from Ukraine, a known hot bed for corrupt officials.
White House Classified Computer System Is Used to Hold Transcripts of Sensitive Calls This is the computer system where the White House hides information that would hurt Donald politically. Russia warned the U.S. about releasing transcripts of Putin's calls with Trump. Kremlin says it hopes U.S. would not release Trump-Putin calls, like it did with Ukraine
Kurt Volker, Trump’s Envoy for Ukraine, Resigns
Rudy Giuliani's former DOJ colleagues believe he committed crimes in pushing Biden probe There is no way that AG Barr would permit a federal criminal prosecution irrespective of the evidence supporting an indictment against Giuliani.
Fact check: Trump and other Republicans falsely claim whistleblower rules changed just before Ukraine complaint
Last week, Trump referred to the press as "scum" and "animals". Fox News
Don the Authoritarian attacks the press, the judiciary, and scientists as arbiters of facts for one simple reason. His purpose is purely authoritarian.
Donald wants voters to view him and his acolytes as the only truth tellers and to dismiss accurate information as Fake News generated by "scum","animals" and "enemies of the people".
Government Watchdog Lawsuit Seeks To Force Trump To Preserve Records Of All Calls With Foreign Leaders. Justice Department Hesitates to Assure Records will not be destroyed
White House Classified Computer System Is Used to Hold Transcripts of Sensitive Calls This is the computer system where the White House hides information that would hurt Donald politically. Russia warned the U.S. about releasing transcripts of Putin's calls with Trump. Kremlin says it hopes U.S. would not release Trump-Putin calls, like it did with Ukraine
Kurt Volker, Trump’s Envoy for Ukraine, Resigns
Rudy Giuliani's former DOJ colleagues believe he committed crimes in pushing Biden probe There is no way that AG Barr would permit a federal criminal prosecution irrespective of the evidence supporting an indictment against Giuliani.
Fact check: Trump and other Republicans falsely claim whistleblower rules changed just before Ukraine complaint
Last week, Trump referred to the press as "scum" and "animals". Fox News
Don the Authoritarian attacks the press, the judiciary, and scientists as arbiters of facts for one simple reason. His purpose is purely authoritarian.
Donald wants voters to view him and his acolytes as the only truth tellers and to dismiss accurate information as Fake News generated by "scum","animals" and "enemies of the people".
Government Watchdog Lawsuit Seeks To Force Trump To Preserve Records Of All Calls With Foreign Leaders. Justice Department Hesitates to Assure Records will not be destroyed
+++++++
1. Bought 100 EAF at $13.06:
Quote: GrafTech International Ltd. (EAF)
Closing Price Yesterday: EAF $12.73 -$0.07 -0.55%
Website: GrafTech International Ltd. - Home
GrafTech International Ltd. - Investors
EAF | GrafTech International Ltd. Analyst Estimates (as of 9/24)
2019 $2.67
2020 $2.89
P/E at $13.06 and $2.88 E.P.S. = 4.53
EAF is "a leading manufacturer of high quality graphite electrode products essential to the production of electric arc furnace (or EAF) steel and other ferrous and non-ferrous metals. We believe that we have the most competitive portfolio of low-cost graphite electrode manufacturing facilities in the industry, including three of the five highest capacity facilities in the world (excluding China). We are the only large scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, the primary raw material for graphite electrode manufacturing, which is currently in limited supply. This unique position provides us with competitive advantages in product quality and cost."
The company is an integrated producer since it owns Seadrift Coke that provides 75% of the petroleum needle coke used by EAF.
I have zero expertise in EAF's products which explains why I am simply quoting EAF's own description of its business.
My decision to buy is based primarily on the P/E ratio, some dividend support, and contracts locking in most revenues for the next several years.
More detailed information about this company can be found in the 2018 Annual Report.
EAF had its IPO in 2018 with a shareholder selling 35M shares at $15. Prospectus
Risks and Major Negative:
I view the substantial cash dividends paid out to the selling shareholder to be a major negative. See 8-K and pages 56-57 from 2018 Annual Report
Another major risk is the volatility of graphite electrode prices based in substantial part on the price of steel. Graphite electrode prices declined to about $2,500 per MT in 2016
Chart Since IPO:
EAF Information:
Last Earnings Report: GrafTech Reports Second Quarter 2019 Results
GAAP:
Non-GAAP:
Long Term Debt as of 6/30/19: $1.991+B
Locked in Revenues Through Take or Pay Contracts:
MT = Metric Tons
Page 10 SEC Form 10-Q for the Q/E 6/30/19
Broker Reports:
I have access to only one brokerage report.
Credit Suisse (8/7/19): Outperform with a 12 month PT of $18
I am most likely at my maximum position with this 100 share purchase.
Consider to Sell Range: $15 to $18
1. Bought 100 EAF at $13.06:
Closing Price Yesterday: EAF $12.73 -$0.07 -0.55%
Website: GrafTech International Ltd. - Home
GrafTech International Ltd. - Investors
EAF | GrafTech International Ltd. Analyst Estimates (as of 9/24)
2019 $2.67
2020 $2.89
P/E at $13.06 and $2.88 E.P.S. = 4.53
EAF is "a leading manufacturer of high quality graphite electrode products essential to the production of electric arc furnace (or EAF) steel and other ferrous and non-ferrous metals. We believe that we have the most competitive portfolio of low-cost graphite electrode manufacturing facilities in the industry, including three of the five highest capacity facilities in the world (excluding China). We are the only large scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, the primary raw material for graphite electrode manufacturing, which is currently in limited supply. This unique position provides us with competitive advantages in product quality and cost."
The company is an integrated producer since it owns Seadrift Coke that provides 75% of the petroleum needle coke used by EAF.
I have zero expertise in EAF's products which explains why I am simply quoting EAF's own description of its business.
My decision to buy is based primarily on the P/E ratio, some dividend support, and contracts locking in most revenues for the next several years.
More detailed information about this company can be found in the 2018 Annual Report.
EAF had its IPO in 2018 with a shareholder selling 35M shares at $15. Prospectus
Risks and Major Negative:
I view the substantial cash dividends paid out to the selling shareholder to be a major negative. See 8-K and pages 56-57 from 2018 Annual Report
Another major risk is the volatility of graphite electrode prices based in substantial part on the price of steel. Graphite electrode prices declined to about $2,500 per MT in 2016
Chart Since IPO:
EAF Information:
GAAP:
Non-GAAP:
Long Term Debt as of 6/30/19: $1.991+B
Locked in Revenues Through Take or Pay Contracts:
MT = Metric Tons
Page 10 SEC Form 10-Q for the Q/E 6/30/19
Broker Reports:
I have access to only one brokerage report.
Credit Suisse (8/7/19): Outperform with a 12 month PT of $18
I am most likely at my maximum position with this 100 share purchase.
Consider to Sell Range: $15 to $18
2. Eliminations:
A. Sold 50+ KR at $25.68-Used Commission Free Trade:
Quote: Kroger Co. (KR)
KR | Kroger Co. Analyst Estimates | MarketWatch
Closing Price Yesterday: KR $25.59 -$0.19 -0.74%
Profit Snapshot: +$227.05
Item # 1 Bought 50 KR at $21.16-Used Commission Free Trade (7/24/19 Post)
Given my capital preservation objectives, I am not likely to leave a 22+% total return, achieved in less than 2 months, to the whims of fate.
There were some parts of the recent earnings and conference call that supported the decision to harvest the gain. I discussed those issues, relating to forward guidance, in this comment.
See also, Kroger retreats on light earnings call guidance-Seeking Alpha
Last Earnings Report: Kroger Reports Second Quarter 2019 Results
B. Sold 100 MNRPRC at $25.1-Used Commission Free Trade:
Quote: Monmouth Real Estate Investment Corp. 6.125% Cumulative Preferred. Series C Stock
MNR.PC Stock Chart
Profit Snapshot: +$76.24
This transaction eliminated my position in the Fidelity account.
I still own 50 in my Schwab account. Item # 3.B. Bought 50 MNRPRC at $23.12 (12/16/18 Post)
Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
Investment Strategy: Equity REIT Common and Preferred Stock Basket Strategy
Last Ex Dividend: 8/14/19
Dividend Received on Lot:
Issuer: Monmouth Real Estate Investment Corp. Cl A (MNR)
Issuer Website: Monmouth Real Estate Investment
Par Value: $25
Dividends: Quarterly, non-qualified and cumulative
Last Ex Dividend Date:
Optional Call: On or after 9/15/21
Prior Sells: Item 5.A. Sold 100 MNRPRC at $24.85 (1/21/17 Post)(profit snapshot = +$71.93); Item # 1.D. Sold 50 MNRPRC at $24.57 (2/20/19 Post)(profit snapshot = +$23.75)
MNRPRC Realized Gains To Date: $171.92
At the moment, it would be difficult IMO to generate more than razor thin capital gains in most new equity REIT purchases, given that many of them are selling at premium to par prices and have less than 6% yields at available prices.
There are exceptions but those generally come with a significant decree of credit risk.
I am not likely to hold onto for long a REIT preferred stock selling at more than its par value.
In the past, I have not had to wait that long for a more reasonable price for a re-entry.
3. Short Term Bond/CD Ladder Basket Strategy:
A. Sold 1 Deere Capital 2.875% SU Maturing on 3/12/21:
Profit Snapshot: $17.04
Item # 3.A. Bought 1 Deere Capital 2021 at a Total Cost of 98.631 (5/21/18 Post) YTM was then at 3.019%.
FINRA Page: Bond Detail
Issuer: Wholly owned subsidiary of Deere & Co. who does not guarantee the notes
Sold at 101.411
YTM at 101.411 = 1.928%
Proceeds at 101.311 (after $1 commission)
B. Sold 1 Paccar Financial 2.5% SU Maturing on 9/14/19:
Profit Snapshot: +$8.86
Item #1.B. Bought 1 Paccar Financial 2.5% SU at a TC of 99.508 (3/13/19 Post)
Finra Page: Bond Detail (prospectus linked)
Issuer: Wholly owned subsidiary of Paccar Inc. (PCAR)
PCAR | Paccar Inc. Analyst Estimates | MarketWatch
PACCAR Achieves Record Quarterly Revenues and Excellent Profits
Truck makers log sharply lower orders
Sold at 100.494
YTM at 100.494 = 1.966%
Proceeds at 100.394 (after $1 commission)
C. Sold 2 Stryker 2.625% SU Maturing on 3/15/21:
Profit Snapshot: $22.41
Item # 5.A. Bought 2 Stryker 2021 SU at a Total Cost of 99.156 (3/19/18 Post) YTM was then at 2.919% at TC.
FINRA Page: Bond Detail
Issuer: Stryker Corp. (SYK)
SYK Analyst Estimates
Sold at 100.885
YTM at 100.885 = 2%
Proceeds at 100.685 (after Vanguard $2 per bond commission)
D. Bought 3 NASB Financial 2% CDs Maturing on 11/4/19:
Frequently the size of a purchase is dependent on the proceeds received in an account on the day of purchase.
Holding Company: NASB Financial Inc.
E. Bought at Auction 10 Treasury Bills 56 Day Maturing on 11/12/19:
1.958%IR
Auction Results:
Profit Snapshot: +$8.86
Finra Page: Bond Detail (prospectus linked)
Issuer: Wholly owned subsidiary of Paccar Inc. (PCAR)
PCAR | Paccar Inc. Analyst Estimates | MarketWatch
PACCAR Achieves Record Quarterly Revenues and Excellent Profits
Truck makers log sharply lower orders
Sold at 100.494
YTM at 100.494 = 1.966%
Proceeds at 100.394 (after $1 commission)
C. Sold 2 Stryker 2.625% SU Maturing on 3/15/21:
Item # 5.A. Bought 2 Stryker 2021 SU at a Total Cost of 99.156 (3/19/18 Post) YTM was then at 2.919% at TC.
FINRA Page: Bond Detail
Issuer: Stryker Corp. (SYK)
SYK Analyst Estimates
Sold at 100.885
YTM at 100.885 = 2%
Proceeds at 100.685 (after Vanguard $2 per bond commission)
D. Bought 3 NASB Financial 2% CDs Maturing on 11/4/19:
Holding Company: NASB Financial Inc.
E. Bought at Auction 10 Treasury Bills 56 Day Maturing on 11/12/19:
1.958%IR
Auction Results:
4. Pared JRI-Sold Highest Cost 100 Shares out of 300 at $17.23-Used Commission Free Trade:
Quote: Nuveen Real Asset Income & Growth Fund Overview
Closing Price Yesterday: JRI $17.42 -$0.09 -0.51%
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen
Profit Snapshot: +$40.45
I sold this lot: Item # 5 Added 100 JRI at $16.83-Used Commission Free Trade (8/24/19 Post)
I kept the 100 share lot bought first in this account and the 100 shares bought in my IB account: Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Remaining Shares This Account: Average Cost = $16.59
Data Date of Trade (12/12/19):
Closing Market Price: $17.24
Closing Net Asset Value Per Share = $19.31
Discount: -10.72
The discount on the date of purchase was -11.11%, with the net asset value per share then at $18.9 (8/21/19).
Sourced: JRI Nuveen Real Asset Inc & Growth CEF Connect
The surge in interest rates caused me to lighten up.
Dividends: Monthly at $.1060 (partial ROC support)
Last Ex Dividend Date: 9/12/19 (day of sell)
5. Lottery Ticket Basket:
A. Bought 100 RIGL at $1.71-Used Commission Free Trade:
Quote: Rigel Pharmaceuticals Inc.
Closing Price Yesterday: RIGL $1.7300 -$0.1400 -7.49%
Website: Rigel Pharmaceuticals
This purchase was an average down from two prior odd lot buys (20 shares at $2.65 and 30 shares at $3.04 using commission free trades); Item # 1.B. (8/26/18 Post) and Item # 1.D. Bought 30 RIGL at $3.04 (6/28/18 Post)
Current Position: 150 shares with an average cost per share of $2.1.
I have no expertise whatsoever in medicine or science.
I noted that JP Morgan had resumed its coverage with a buy rating and a $7 price target. Rigel Pharmaceuticals assumed with an Overweight at JPMorgan RIGL - The Fly Even though I do not have access to that report, the mere existence of that price target caused me to risk $171 by buying a 100 share lot.
I also noted this development: Rigel's fostamatinib Enters Phase 3 Clinical Trial in Japan with Kissei Pharmaceuticals for the Treatment of Chronic Immune Thrombocytopenia
Rigel entered into a licensing agreement with Kissei in October 2018 "for the development and commercialization of fostamatinib in all current and potential indications in Japan, China, Taiwan and the Republic of Korea." Kissei made an upfront payment of $33M to Rigel as well as "the potential for an additional $147 million in development and commercial milestone payments and will receive product transfer price payments in the mid to upper twenty percent range based on tiered net sales."
Rigel Pharmaceuticals Enters Collaboration and License Agreement with Kissei Pharmaceutical Co., Ltd. to Develop and Commercialize TAVALISSE™ (fostamatinib disodium hexahydrate) in Japan and other Asian Countries
The U.S. brand name for fostamatinib is Tavalisse, which has been approved by the FDA. Product sales increased 26% during the 2nd quarter to $10.2M. Rigel Announces Second Quarter 2019 Financial Results and Provides Business Update
Pipeline:
Rigel pipeline
Rigel Enrolls First Patient in Phase 3 Clinical Trial of Fostamatinib Disodium Hexahydrate in Warm Autoimmune Hemolytic Anemia
I have one round-trip: South Gent's Comment Blog # 4: Sold 150 RIGL at $2.93 ($109.24 profit)-Update For Healthcare Basket Strategy As Of 7/29/16: Bought 150 RIGL at $2.15
H.C. Wainwright Sticks to Its Buy Rating for Rigel (RIGL)(9/24/19/PT of $8)
Chart:
6. Cash Flow into Fidelity Taxable Account 9/30 and 10/1/2019:
Closing Price Yesterday: JRI $17.42 -$0.09 -0.51%
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen
Profit Snapshot: +$40.45
I sold this lot: Item # 5 Added 100 JRI at $16.83-Used Commission Free Trade (8/24/19 Post)
I kept the 100 share lot bought first in this account and the 100 shares bought in my IB account: Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Remaining Shares This Account: Average Cost = $16.59
Data Date of Trade (12/12/19):
Closing Market Price: $17.24
Closing Net Asset Value Per Share = $19.31
Discount: -10.72
The discount on the date of purchase was -11.11%, with the net asset value per share then at $18.9 (8/21/19).
Sourced: JRI Nuveen Real Asset Inc & Growth CEF Connect
The surge in interest rates caused me to lighten up.
Dividends: Monthly at $.1060 (partial ROC support)
Last Ex Dividend Date: 9/12/19 (day of sell)
5. Lottery Ticket Basket:
A. Bought 100 RIGL at $1.71-Used Commission Free Trade:
Quote: Rigel Pharmaceuticals Inc.
Closing Price Yesterday: RIGL $1.7300 -$0.1400 -7.49%
Website: Rigel Pharmaceuticals
This purchase was an average down from two prior odd lot buys (20 shares at $2.65 and 30 shares at $3.04 using commission free trades); Item # 1.B. (8/26/18 Post) and Item # 1.D. Bought 30 RIGL at $3.04 (6/28/18 Post)
Current Position: 150 shares with an average cost per share of $2.1.
I have no expertise whatsoever in medicine or science.
I noted that JP Morgan had resumed its coverage with a buy rating and a $7 price target. Rigel Pharmaceuticals assumed with an Overweight at JPMorgan RIGL - The Fly Even though I do not have access to that report, the mere existence of that price target caused me to risk $171 by buying a 100 share lot.
I also noted this development: Rigel's fostamatinib Enters Phase 3 Clinical Trial in Japan with Kissei Pharmaceuticals for the Treatment of Chronic Immune Thrombocytopenia
Rigel entered into a licensing agreement with Kissei in October 2018 "for the development and commercialization of fostamatinib in all current and potential indications in Japan, China, Taiwan and the Republic of Korea." Kissei made an upfront payment of $33M to Rigel as well as "the potential for an additional $147 million in development and commercial milestone payments and will receive product transfer price payments in the mid to upper twenty percent range based on tiered net sales."
Rigel Pharmaceuticals Enters Collaboration and License Agreement with Kissei Pharmaceutical Co., Ltd. to Develop and Commercialize TAVALISSE™ (fostamatinib disodium hexahydrate) in Japan and other Asian Countries
The U.S. brand name for fostamatinib is Tavalisse, which has been approved by the FDA. Product sales increased 26% during the 2nd quarter to $10.2M. Rigel Announces Second Quarter 2019 Financial Results and Provides Business Update
Pipeline:
Rigel pipeline
Rigel Enrolls First Patient in Phase 3 Clinical Trial of Fostamatinib Disodium Hexahydrate in Warm Autoimmune Hemolytic Anemia
I have one round-trip: South Gent's Comment Blog # 4: Sold 150 RIGL at $2.93 ($109.24 profit)-Update For Healthcare Basket Strategy As Of 7/29/16: Bought 150 RIGL at $2.15
H.C. Wainwright Sticks to Its Buy Rating for Rigel (RIGL)(9/24/19/PT of $8)
Chart:
6. Cash Flow into Fidelity Taxable Account 9/30 and 10/1/2019:
I will redirect the $10K from a maturing treasury bill into a 58 day treasury bill that will be auctioned tomorrow.
I would not personally buy any of the bonds referenced in the preceding snapshots at current prices. All were bought at less than par value.
Overall, I owned 9 DTE bonds that matured on 10/1, with the other 3 owned in other brokerage accounts
DTE Profit = $88.78
The municipal bonds would be hard to sell.
On a total portfolio basis, the owned Tennessee municipal bonds have a current tax free yield of about 3% and a weighted average cost about $4K below their combined par values.
Several Maury County, Tennessee GO bonds are referenced in the preceding snapshots. For bonds, I am sitting on meaningful unrealized gains in them:
The Maury County GO bonds are rated Aa2 by Moody's.
The Williamson County, Tennessee GO bonds referenced in a snapshot above are rated AAA. I have unrealized gains in them as well.
The two Montgomery County, Tennessee GO bonds referenced in a snapshot above are among my shortest maturities:
Montgomery County can call at par value the 3% 2027 GO on or after 4/1/22 which I expect to happen. The 2022 call date for that bond will restrain price increases above par value. The 2.125% Montgomery County GO maturing in 2026 is of course less likely to be called than the 3% coupon, and the optional call date at par value is on or after 4/1/23. The Montgomery County GO bonds are rated Aa2/AA+.
Overall, the Tennessee municipal bond positions are up over $10K assuming it was possible to sell them at the prices indicated in my account. I have not even attempted to sell any of them.
Some of the stocks referenced in the snapshots were recently purchased in small odd lots using commission free trades (e.g. 30 shares of Macy's).
The CEF JRI was also purchased recently and pared already as well as noted above.
Bank CD interest payments are monthly.
The primary problem revealed by the snapshots above is what to do with the proceeds ($21K) from maturing bonds and treasury bills.
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 sell 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 family members.
I would not personally buy any of the bonds referenced in the preceding snapshots at current prices. All were bought at less than par value.
Overall, I owned 9 DTE bonds that matured on 10/1, with the other 3 owned in other brokerage accounts
DTE Profit = $88.78
The municipal bonds would be hard to sell.
On a total portfolio basis, the owned Tennessee municipal bonds have a current tax free yield of about 3% and a weighted average cost about $4K below their combined par values.
Several Maury County, Tennessee GO bonds are referenced in the preceding snapshots. For bonds, I am sitting on meaningful unrealized gains in them:
 |
| As of 9/30/19 |
The Williamson County, Tennessee GO bonds referenced in a snapshot above are rated AAA. I have unrealized gains in them as well.
 |
| As of 9/30/19 |
 |
| As of 9/30/19 |
Overall, the Tennessee municipal bond positions are up over $10K assuming it was possible to sell them at the prices indicated in my account. I have not even attempted to sell any of them.
Some of the stocks referenced in the snapshots were recently purchased in small odd lots using commission free trades (e.g. 30 shares of Macy's).
The CEF JRI was also purchased recently and pared already as well as noted above.
Bank CD interest payments are monthly.
The primary problem revealed by the snapshots above is what to do with the proceeds ($21K) from maturing bonds and treasury bills.
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 sell 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 family members.
