AOD, BMY, CJREF, DUK, FISI, GIS, IGR, JQC, K, LARK, MFNC, MSGN, ORRF, PFE, PSEC, SCM, SJR, WEC,

Economy: 

Retail sales in March 2021 explode as consumers use stimulus checks

Sourced: Census Bureau Press Release.pdf

The Fed - Industrial Production and Capacity Utilization - G.17 ("For the first quarter as a whole, total industrial production rose 2.5 percent at an annual rate. . . At 105.6 percent of its 2012 average, total industrial production in March was 1.0 percent higher than its year-earlier level, but it was 3.4 percent below its pre-pandemic (February 2020) level. Capacity utilization for the industrial sector increased 1.0 percentage point in March to 74.4 percent, a rate that is 5.2 percentage points below its long-run (1972–2020) average.")

Powell says it's 'highly unlikely' the Fed will raise rates this year, despite stronger economy

U.S. CPI March 2021: Consumer prices rise more than expected (seasonally adjusted +.6% vs. consensus at .5%) In annual non-seasonally adjusted rate was reported at 2.6%, inflated by the recent rise in energy prices. 

Sourced: Consumer Price Index Summary

I would emphasize that the 1 year U.S. treasury bill has had a coupon of close to zero for the past year, producing a negative real rate of return before taxes of almost 2.5%. 1 Year Treasury Rate - 54 Year Historical Chart | MacroTrends; 2021 Daily Treasury Yield Curve Rates In my book, that is just obscene. 

The initial response to a higher than expected 2.6% annual inflation rate was to take the 10 year treasury down in yield. U.S. Treasury yields slip despite surge in inflation to 2½-year high - MarketWatch

I currently have an overweight position in Canadian reset equity preferred stocks, which reset their coupons at a spread to 3 month Canadian government treasury bill or its 5 year bond. 

That is one way to play the possible increase in interest rates that may result from a combination of higher current inflation and anticipated inflation. 

I say "may" rather than will since central banks including the one in Canada have been and are likely to continue suppressing interest rates below the current and anticipated inflation rates. 

Canada's central bank IMO is more likely to lose total control over its 5 year bond yield than the FED, meaning simply that the 5 year Canadian government bond will likely have a higher percentage yield increase compared to the 5 year U.S. treasury due to inflationary pressures. Canada 5 Year Government Bond Overview 

Policy and fiscal risk could hamper a long-term economic recovery

The economy is on the cusp of a major boom and economists believe it could last

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Markets and Market Commentary: 

JPMorgan Sees ‘a Bad Omen’ for Chinese Stocks. Here’s Why. | Barron's

Pfizer CEO says third Covid vaccine dose likely needed within 12 months

Portfolio Management: 

My bond portfolio is in a run off phase as securities mature or are called early. From my perspective, there is no reason to bother with redeploying the proceeds into new bond purchases given the current or likely negative real yields. 

The operating company of Corporate Office Properties Trust (OFC) has just redeemed its 3.6% SU note that would would have matured on 5/15/23. To exercise that optional redemption right, the issuer had to pay a 6.49% premium to par value as a result of a "make whole" provision. 

Profit Snapshot for my 2 Bonds: +$164.56

The issuer was willing to pay the penalty since it had just sold $600M in 2.75% SU notes maturing in 2031. Prospectus 

The call protection for corporate bonds, which is contained in a "make whole" provision in the prospectus, is generally better than for municipal bonds since the protection generally extends almost to the maturity date. Call protection becomes important when interest rates are declining.  

While I am a bit fuzzy on the call protection for my Tennessee Municipal bonds, my memory is that redemption may occur at par value 10 years after issuance which is better than the 5 years of call protection found in exchange traded bond prospectuses. 

Next Monday, I will be credited with the $5,000 par value plus accrued interest due to an issuer early redemption of my five 3% Knoxville Gas Revenue bonds that would have matured on 6/1/33. This bond recently made its semi-annual interest payment, so the accrued and unpaid interest was only $20. 

That bond was originally issued in 2011. Given the current interest rate environment, I would be content to hold a Aa2 rated bond that pays 3% tax exempt interest, but that is not going to be allowed when the issuer can now redeem the bond at par value. My cost basis is $5K.  

Other redemptions in my Fidelity taxable account over the past week are as follows: 

Highwoods, an office REIT, was allowed to redeem at par value, plus accrued and unpaid interest, up to 2 months prior to maturity, and that is what the company did with my 2 bonds. 

Last week, I had a 3.2% GIS SU bond mature. 

 

If I wanted to use the proceeds to buy the 3.2% GIS bond maturing in 2027, I would have to pay an 8%+ premium to par value that would knock the YTM down to about 1.6%. Bond Detail That bond has come down in price recently after trading over 112. I would prefer going with the higher yielding GIS common shares and just ignore its bonds for now. 

Intermediate and longer term treasury yields are trending down this month: 

Daily Treasury Yield Curve Rates

All of these CD rates lock in a likely negative real rate of return before taxes: 

Sourced - Fidelity

This post will be focused entirely on actual risk mitigation strategies for several common stocks that involves selling my highest cost lots and shares purchased with dividends.  

 

Earnings Reports Owned Stocks: 

Bank of America (BAC) and SEC Filed Presentation Materials (E.P.S. at $.86 vs. consensus at $.66; revenues at $22.9B vs. $22.1 consensus; earnings juiced by releasing $2.7B in loan loss reserves that flows into income; deposits rose $366B or 25%; ROE =12.3%; ROTE = 17.1%; tangible book value per share = $20.9)

Citizens Financial Group, Inc. (CFG) Reports First Quarter 2021 Net Income of $611 million and EPS of $1.37 and SEC Filed Supplemental (underlying E.P.S. at $1.41, consensus at $.97)

BNY Mellon (BK) Reports First Quarter 2021 Earnings of $858 Million or $0.97 Per Common Share (Consensus E.P.S. at $.872 according to Fidelity; ROE = 9%; ROTE = 16%; $83M benefit from loss reserve release; repurchased 16.8M shares for $699M; earnings are being negatively impacted by fee waivers on money market funds) 

J.P. Morgan (JPM) and SEC Filed Supplemental (Diluted E.P.S. of $4.5 with consensus at $3.097 according to Fidelity; the quarter included $5.2B in credit reserve releases or $1.28 per share; ROE = 23%; ROTE = 29%; ROA = 1.61%; total capital ratio = 15%; net revenue = $33.1B; average loans up 1%; assets under management $2.8T, up 28%; tangible book value per share = $66.56, up from $60.71 as of 3/31/20) 

Morgan Stanley (MS) First Quarter 2021 Earnings Results (Net income $4.1B or $2.19 per share with consensus at $1.72); Morgan Stanley had $911 million loss in Q1 tied to Archegos meltdown 

Truist (TRC)(1st Q net income of $1.3B or $.98, adjusted to $1.18 vs. the consensus non-GAAP at $1.114 according to Fidelity; ROA was 1.17 percent; adjusted ROA was 1.39 percent; ROE = 8.69%, adjusted to 10.41%;  Adjusted ROTE = 19.36%; core NIM at 2.69%; NPA Ratio - .25%; Charge off ratio = .33%; total risk basis capital ratio = 14.3%; Coverage Ratio 484%; adjusted efficiency ratio = 56.9%; adjustments to GAAP are primarily merger related costs, see page 17 of the Press Release lined above)

US Bancorp (USB)(E.P.S. of $1.42, up from $.72 in the heavily reserved 2020 first quarter with consensus at $.957 according to Fidelity; net income at $2.28B; NIM = 2.5%, down from 2.91% in 2020 1st Q; Charge off ratio = .31%; ROA 1.69%; ROE= 19%)  

++++

Trump hits McConnell as "dumb son of a bitch" in Florida speech - The Washington Post The republican mega-donors cheered Donald's attacks on a few republicans and his usual array of demonstrably false statements. Donald is viewed as honest by 81% of Republicans, which is just tangible proof of how a lying, demagogic authoritarian can acquire and maintain power in the U.S. (sourced: Question 11 National (US) Poll - June 18, 2020) The greatest threat to America's Democracy and freedoms comes from within our borders. Hopefully, more voters will come to that realization before it is too late.  

Texas Senate advances voter restrictions as part of bigger Republican push | The Texas Tribune Lying is just normal in certain quarters. PolitiFact | Yes, the Texas Senate's election bill SB7 changes early voting rules Dan Patrick, the republican Lt. Governor claimed there was no change, rated a pants on fire false statement.  

Domestic terrorism data shows right-wing violence on the rise - Washington Post

Tucker Carlson Leans Into White-Power Hour, Promotes Racist Replacement Theory | Vanity Fair; Tucker Carlson sneers at critics as he doubles down on 'replacement theory' remarks; Lachlan Murdoch dismisses Anti-Defamation League complaint, says Fox sees no problem with Tucker Carlson's 'replacement theory' remarks 

Watching Fox "news" is potentially hazardous to one's health and life.  PolitiFact | Tucker Carlson falsely claims COVID-19 vaccines might not work; Study Finds More COVID-19 Cases Among Viewers Of Fox News Host Who Downplayed Pandemic: NPR

DOJ sues Trump ally Roger Stone, wife over alleged $2M in unpaid taxes;  Roger Stone Sued For $2 Million In Unpaid Taxes

++++

1. Small Ball: 

This post will only include pares and eliminations, a constant process now given the elevated stock valuations and my emphasis on capital preservation. 

Shares purchased with dividends are currently being eliminated in most stocks since I can do so profitably and the current prices are outside of my consider to buy range. 

The objective for me is to mitigate risk while still participating to a limited decree in the stock market.  

A. Pared GIS in Fidelity Account-Sold 4 at $61.37: 

            

Quote: General Mills Inc

GIS SEC Filings

General Mills: Brands overview

General Mills Inc. Interactive Charts

GIS Analyst Estimates

I mentioned this pare in a 3/25/21 comment. 

Profit Snapshot: +$9.95

Last Buy Discussions: Item # 1.G. Added to GIS in Fidelity Taxable Account-Bought 5 at $55.9; 5 GIS at $55.5; 5 at $55.2; 5 at $54.9; 5 at $54.5; 5 at $54 (2/6/21 Post); Item # 1.A. and 1.B. Started GIS in Schwab Taxable account and Added to GIS in Fidelity Taxable Account (1/9/21 Post); Item # 1.F. Bought 2 GIS at $47.88 (3/28/20 Post); Item # 5 A. Bought 2 GIS at $40.25, 2 at $39.45, 10 at $38.3 and 5 at $36.75-Used Commission Free Trades (12/29/18 Post) 

Average Cost Before Pare: $56.34 (65+ shares)

Average Cost after Pare: $56.17

Dividend: Quarterly at $.51 per share 

I will continue to reinvest the dividend in this account when the likely reinvestment price is less than $65. 

Yield at AC = 3.63%

Last Ex Dividend:  4/8/21

Last Earnings Report (Fiscal Q/E 2/28/21): General Mills Reports Fiscal 2021 Third-Quarter Results This report was released the day after my pare and was for the third fiscal quarter. 

Diluted E.P.S. = $.96

Adjusted E.P.S. = $.82, missing consensus by 2 cents. 

Investors will judge performance based on the adjusted numbers. 

The adjustments include mark-to-market effects arising from commodity positions; restructuring costs, and investment activities. 

Net Sales = $4.52B vs. FactSet consensus at $4.454B

GIS will resume share buybacks which were suspended after the Blue Buffalo acquisition. 

Pet Food Revenues: +14% to $436M with segment operating profit increasing 9% to $102M. 

"Third-quarter net sales for General Mills’ North America Retail segment increased 9 percent to $2.73 billion, reflecting positive competitive performance amid elevated demand for food at home due to the pandemic. Organic net sales increased 9 percent, driven by higher organic pound volume. Net sales increased 15 percent in U.S. Meals & Baking, 13 percent in Canada, 9 percent in U.S. Cereal, and 3 percent in U.S. Yogurt. U.S. Snacks net sales were down 3 percent. Segment operating profit increased 14 percent to $606 million . ."

"Third-quarter net sales for the Asia & Latin America segment increased 12 percent to $456 million, driven by volume growth and favorable net price realization and mix, partially offset by 3 points of unfavorable foreign currency exchange. Organic net sales increased 14 percent."

"Third-quarter net sales for the Europe & Australia segment increased 15 percent to $484 million, primarily driven by 9 points of favorable foreign currency exchange and positive net price realization and mix. Organic net sales increased 7 percent, led by growth for Old El Paso Mexican food and Häagen-Dazs ice cream. Segment operating profit of $29 million was up 33 percent as reported and up 24 percent in constant currency."

The convenience store and foodservice segment continued to hit by the pandemic with net sales declining 10% to $417M. 

Sell Discussions:  Item # 1.A. Eliminated GIS-Sold 27+ at $54.86 (3/21/20 Post)(profit snapshot = ($426.37); Item # 1.A. Sold 13 GIS at $55.02-Used Commission Free Trade (8/17/19 Post)(profit = $134.13); Item 1.B. Sold Highest Cost GIS lots at $51.69 (4/7/2019 Post); Item #2.A. Sold 10 GIS at $56.18-Used Commission Free Trade  (12/21/17 Post) Snapshots of 2007 through 2017 round-trip trades can be found in Item 1.B. The largest single gain was $1,285.51 realized on a 52 share lot in 2016. There have not yet been any realized losses.  

Purchase Restriction: Each subsequent purchase, other than through dividend reinvestment, must reduce my average cost per share. 

Depending on the price, I may go as high as 1000 shares in all accounts, though I will need a price below $50 to go that high with no material adverse development causing the price decline. Aggregating shares in all of my accounts, I currently own close to 100 shares. 

The current approach is to consider selling a few of my highest-cost shares when the price goes over $61 and then buy whatever is sold when and if the price falls below my average cost per share.  

B. Eliminated LARK in Schwab Taxable-Sold 10 at $27.75:

History this Account: 

Quote: Landmark Bancorp Inc.  (LARK)

LARK SEC Filings

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: +$79.73

Last Purchase Discussion: Item # 1.F. Bought 5 LARK at $21; 5 at $20.5 (9/19/20 Post) 

During my ownership period, LARK paid a 5% stock dividend that Schwab turned into cash ($11.54) rather than giving me a factional share.  

Dividend: Quarterly at $.20 per share

I received 2 quarterly dividends. 

Last Ex Dividend: 2/16/21

Last Earnings Report (Q/E 12/30/20): 

As with other small regional banks, LARK's earnings have received an unusually large boost from mortgage banking activities.   

Prior Sell Discussions: Item # 3 Sold 52 LARK at $18.75 (1/9/12 Post); Item # 4 Sold 50 LARK at $23.5 (6/29/14 Post); Item # 3.B. Sold 50 LARK at $22.42 (9/29/14 Post); Item # 2 Eliminated LARK: Sold 50 AT $25.27 and 50 at $25.4 -Update For Regional Bank Basket Strategy As Of 7/1/16 - South Gent | Seeking Alpha

LARK Trading Profits to Date : $586.05  ($506.32 in prior trades)

C. Pared SCM in Fidelity Taxable Account-Sold 13+ at $12.46 and 13+ at $13.25: 

Quote: Stellus Capital Investment Corp. (SCM)- an externally managed BDC

Website: Stellus Capital

SEC Filings

Profit Snapshot:  $69.04

New Average Cost Per Share this account = $7.46 (63+ shares)

Snapshot Intraday on 4/8/21 after second pare

Dividend: Monthly at $.083 per share ($.996 annually, recently transitioned from a $.25 per share quarterly dividend)

Dividend reinvestment has been turned off. 

Yield at New AC = 13.35%

Last Substantive Buy Discussions: Item # 1.E. Bought 5 SCM at $7.41 in Fidelity Account (8/15/20 Post); Item # 3.J. Added 10 SCM at $7.85; 5 at $7.65; 10 at $7.5 (7/18/20 Post); Item # 2.B. Added 10 SCM at $7.8; 2 at $6.26, 3 at $5.30; 5 at $7.53 (5/9/20 Post)

Net Asset Value Per Share History:

12/31/20:  $14.03 10-K at page 74 
12/31/19:   $14.14
12/31/18:   $14.09
12/31/17:   $13.81
12/31/16    $13.69
12/31/15:   $13.19
12/31/14:   $13.94
12/31/13:   $14.54

November 2012: IPO at $15 ($14.46 after underwriters discount)

5 Year Financial Data: 

Last Earnings Report (Q/E 12/31/20): 

Stellus Capital Investment  Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2020

NII per share = $.26 per share

Net Asset value per share = $14.03

Sell Discussions: Item # 1.F. Pared SCM in Fidelity Taxable-Sold 20 at $11.08 and Item #1.G. Pared SCM in Vanguard Taxable-Sold 20 at $11.17 (12/19/20 Post)(profit snapshots = $14.23); Item # 3 Sold 50 SCM at $13.72 (9/21/19 Post)(eliminating position as of that date; profit snapshot = $3.75); Item # 1.I. Sold 20 SCM at $7.61 (8/22/20 Post)(contains snapshots of prior trades; profit snapshot = $10.84); Item # 1.B. Sold 32+ SCM at $14.22-Used Commission Free Trade (2/2/19 Post)(profit snapshot = $78.09); Item # 1.A. Sold Highest Cost Lot-50 Shares at $12.63 (5/3/18 Post)(profit snapshot = $34.24); Item 2.B. Sold 100 SCM at $14.23 (2/27/17 Post)(profit snapshot=$285.96); Item # 2 Sold 100 SCM at $13.02 (1/12/17 Post)(profit snapshot= $141.96) 

Goal: Total Return in excess of the dividend payments which has been accomplished so far for this BDC stock

SCM Realized Gains to Date: $638.11

D. Pared WEC-Sold 1 at $92.27; 1 at $94; 1.058 at $97.18: 

Quote: WEC Energy Group Inc.- a Utility Holding Company

WEC Analyst Estimates | MarketWatch

WEC SEC Filings

Investor | WEC

Investment Categories: Bond Substitute/Dividend Growth  

Buy Discussion: Item # 1.I. Started WEC in Fidelity Taxable Account-Bought 2 at $87.8; 1 at $86.9; 1 at $86.5; 1 at $85.1; 1. at $84.25; 1 at $82.8 and 1 at $81.9 (2/20/21 Post) I discussed the 2020 4th quarter report in that post. SEC Filed Press Release

Profit Snapshot: $21.81

New AC after pares this account = $83.91 (7  shares) :

Snapshot Intraday 4/16/21 after 3rd pare

Dividend: Quarterly at $.6775 per share ($2.71 annually); last raised from $.6325 effective for the 2021 1st quarter payment. 

Yield at new AC = 3.23%

Last Ex Dividend: 2/11/21

Dividend History: 

E. Eliminated CJREF in Schwab Taxable Account-Sold 150 at $4.79: 

History this Account:

I still own the ordinary shares priced in CADs and traded in Toronto which I intend to keep. . 

Website: Corus Entertainment

Investor Relations

Quotes: 

USD Pink Sheet Exchange: CJREF 

Symbols that end in "F" denote ordinary shares, rather than an ADR, of a foreign company stock. 

CADs in Toronto: CJR-B.TO (I currently own 200 CAD priced shares bought on the Toronto exchange)

Profit Snapshot: +US$121

Last Discussions: Item # 1.D. Added 50 CJREF at $3.8 (2/12/20 Post); Item # 1.D. Bought 100 CJREF at $4.08 (1/22/2020 Post)(last substantive) The timing was less than optimal.   

Dividend: Quarterly at C$.06 per Class B shares

Last Earnings Report before CJREF elimination (Fiscal Q/E 11/30/20): Corus Entertainment Announces Fiscal 2021 First Quarter Results

Net Income Per Share = C$76.7M or C$.37 per share 

Revenues declined 10%. 

Free Cash Flow = C$62.4M

The pandemic has caused a decline in advertising revenues. 

Cord cutting is a longer term headwind.  

Last Earnings Report released after CJREF elimination (Q/E 2/28/21): Corus Entertainment Announces Fiscal 2021 Second Quarter Results

Net Income: C$35.3M or C$.17 per share

Free Cash Flow for the Quarter: C$89.7M

Revenues: C$358.874, down 5% Y-O-Y

"Achieved recent milestone of over 500,000 paying subscribers on streaming platforms, doubled from the prior year."

F. Pared FISI in Schwab Taxable Account-Sold 5 at $29.15: 

Quote: Financial Institutions Inc.  (FISI)

FISI SEC Filings

FISI Analyst Estimates | MarketWatch

Investment category: Regional Bank Basket Strategy

Last Buy Discussions: Item # 1.C. Restarted FISI-Bought 10 at $16.17 (6/6/20 Post); Item # 1.D. Added to FISI-Bought 5 at $15.85; 5 at $15.20; 10 at $14.9; 10 at $14.6 and Sold Highest Cost 10 Share lot at $18.07 (8/22/20 Post)

Profit Snapshot: +$69.85

New Average Cost per share this account = $14.78 (20+ shares) 

Snapshot Intraday 3/24/21 after pare

Dividend: Quarterly at $.27 per share ($1.08 annually); last raised from $.26 effective for the 2021 second quarter payment 

Financial Institutions, Inc. Common Stock (FISI) Dividend History | Nasdaq

Yield at New AC = 7.31%

Last Ex Dividend: 3/18/21

Last Earnings Report (Q/E 12/30/20): Financial Institutions, Inc. (FISI) Announces Fourth Quarter and Full Year 2020 Results 

E.P.S. $.84 vs. $.696 consensus according to Fidelity and up from $.79 in the 2019 4th quarter; 

NPL Ratio = .26%; 

NPA ratio = .25%; 

Coverage ratio = 541%; 

Tangible book value per share = $23.52;  

Discount to Tangible Book Per Share at AC = -37.16%

NIM = 3.13%, down from 3.33% in the 2019 4th quarter; 

$1.597M gain from sales of loans held for sale, up from $324K in the 2019 4th quarter with 2020 gains at $3.858M up from $1.677M in 2019

FISI Realized Gains to Date: $817.78 

The largest gain was $442.07 realized in 2015. Item # 3 Sold 50 FISI at $24.71 Update For Regional Bank Basket Strategy As Of 8/21/15 - South Gent | Seeking Alpha The second largest was $254.18. Item # 2 Sold 51+ FISI at $24.1 (5/3/2015 Post).

G. Eliminated MFNC-Sold 10 at $14.03:

Quote: Mackinac Financial Corp.   (MFNC)

MFNC Analyst Estimates | MarketWatch

SEC Filings

2020 Annual Report 

Profit Snapshot: +$47.09

Investment Category: Regional Bank Basket Strategy

Last Discussed: Item # 4.K.  Bought 10 MFNC at $9.32 (8/29/20 Post) 

Subsequent to this sell, MFNC agreed to be acquired by Nicolet Bankshares Inc. (NCBS) for $4.64 in cash plus .22 NCBS shares for each MFNC share. 

Nicolet Bankshares, Inc. To Acquire Mackinac Financial Corporation 

Dividend: Quarterly at $.14 per share; last raised from $.12 effective for the 2019 third quarter payment. The 12 cent penny raise was a raise from $.10 effective for the 2017 1st quarter payment.    

Last Ex Dividend : 4/12/21

Last Earnings Report (Q/E 12/31/20): SEC Filed Press Release 

"fourth quarter 2020 net income of $3.64 million, or $.35 per share, compared to 2019 fourth quarter net income of $3.30 million, or $.31 per share"

H. Pared AOD-Sold 6+ Shares at $9.26: 

Quote: Aberdeen Total Dynamic Dividend Fund Overview - A CEF

AOD SEC Filings 

SEC Filed Portfolio Report as of 1/31/21 (cost at $849.4+M; value then at $1.084+B)

Last SEC Filed Shareholder Report (Annual, period ending 10/31/20; unleveraged but had been very lightly leveraged during the 1 year reporting period, see page 25)

Profit Snapshot: +$6.09

Last Discussed: Item # 1.F. Added to AOD-Bought 5 at $7.45 (11/22/20 Post); Item # 1.A. Added to AOD-Bought 10 at $8.08 (10/24/20 Post); Item # 1 Started AOD -Bought 50 at $8.17 (9/12/20 Post)

New Average Cost in this account = $8.09 (61+ shares)

Snapshot Intraday 3/25/21 after pare

Dividend: Monthly at $.0575 ($.69 annually) 

Over the past year, the dividend has not been supported by ROC according to CEF Connect. Over the past 5 years the dividend has been lightly supported by ROC, see page 18 of the last Annual Report. 

Yield at new Average Cost  = 8.53%

Data Date of 3/25/21 Trade: 

Closing Net Asset Value Per Share: $10.49

Closing Market Price: $9.32

Discount: -11.15%

Sourced: AOD- CEF Connect (Click "Pricing Information" tab)

Goal: Any total return in excess of the dividend payments before ROC adjustments to the tax cost basis. 

I. Pared DUK-Sold 1.453 at $95.46; 1 at $97.14; 1.471 at $100.71: 

I no longer have any shares purchased with dividends and have turned off dividend reinvestment.

Quote: Duke Energy Corp. (DUK)

DUK Analyst Estimates-MarketWatch

DUK SEC Filings

DUK 2020 Annual Report 

SEC Filed Press Release-2020 4th Quarter Earnings (affirms 2021 adjusted E.P.S. guidance range of $5.00 to $5.30)

I mentioned this pare in a 3/25/21 comment. 

Last Substantive Buy Discussion: Item # 1.A. Added 1 DUK at $81.69; 1 at $79.25 (9/19/20 Post)

Profit Snapshot: $38.39

New Average Cost Per Share this account: $81.27 (18 shares)

Snapshot Intraday 4/16/21 after last pare 

The old AC before these pares was at $82.48. 

Dividend: Quarterly at $.965 per share ($3.86 annually); last raised from $.945 effective for the 2020 third quarter payment. 

Dividend History: 

Yield at New AC of $81.27 = 4.75%

Last Ex Dividend: 2/11/21

Investment Category: Bond Substitute/Dividend Growth 

Last Sell Discussions: Item # 2.M.-Sold 4 DUK at $95.50 (11/13/20 Post) 

Broker Reports (available to Schwab Customers): I would summarize these reports as being unenthusiastic about the stock at the current prices. At best IMO, the stock is a hold for those who bought at a lower price. I am  far more likely to sell a few shares than to buy more. My current consider to add price is anywhere below my current AC per share.   

Morningstar (4/5/21): 3 Stars with a $93 FV

S & P (2/16/21): 4 stars with a 12 month PT of $103 

Argus (3/30/21): Hold with a long term buy recommendation. 

Credit Suisse (2/12/21): Neutral with a $96 PT. 

 

Goal: Annualized 2+% return on the shares + the dividend which is standard and viewed as acceptable for a commons stock categorized as a bond substitute. 

J. Sold SJR Shares Purchased with Monthly Dividends at $26.36 and $26.52-Turn Off Reinvestment Option: 

6.938  SJR Shares-All Bought with Monthly Dividends

.363 SJR Share Bought with last monthly dividend

I had turned off the dividend reinvestment option before SJR paid its last dividend, but I was apparently too late to stop the dividend reinvestment which explains the two sell transactions.  I believe that Fidelity requires that the reinvestment option be turned off prior to the ex dividend date in order to receive just the cash.

Rogers Communications Buyout: 

Shaw has accepted an offer to be acquired by Rogers Communications for C$40.50 per share. SEC Filed Press Release Shaw will continue paying its monthly dividend until the merger closes. 

The shares are currently trading a significant discount to that price based on concerns that regulators will refuse to allow the merger. CADUSD (at a CAD/USD of .8, the USD equivalent would be US$32.4 for SJR)  

Quote: 

USD:  Shaw Communications Inc. Cl B NV (SJR)

CAD: Shaw Communications Inc. Cl B NV (Canada: Toronto) 

Company Website: About Shaw

Last Buy Discussions: Item # 3.E. Added to SJR-Bought 2 at $18; 1 at $17.95; 1 at $16.61;  1 at $16.2 (11/7/20 Post); Item # 3.D. Added 5 SJR at $16.88; 5 at $16.4; 5 at $15.8; 1 at $12.48 (4/11/20 Post) 

Profit Snapshot: +$61.21

Dividend: Monthly at C$.09852 per share. (C$1.18 round annually) 

Historical Dividends.pdf

Average Cost per share this account: $18.33 (136 shares)

Only Prior Sell Discussion: Item # 3.B. Sold 50 SJR at $20.85-Highest Cost Lot (11/27/19 Post) I have sold a few shares in 2 of my Roth IRA accounts. 

The stock price will  move up or down based on progress or lack thereof in securing regulatory approval rather than Shaw's earnings reports. 

If Rogers does not secure the requisite approval, then I would anticipate that SJR will fall back into a $17 to $19 trading range.  

Last Earnings Report (Fiscal Quarter Ending 2/28/21): Shaw Announces Second Quarter and Year-to-Date Fiscal 2021 Results or SEC Filed Press Release 

E.P.S =C$.43 vs. consensus at C$34.

My inclination is to keep the remaining 136 shares in this account and hope that the transaction goes through. I will take the monthly dividends in cash however going forward, possibly resuming reinvestment when and if the deals falls through due to regulatory opposition which is the only obstacle IMO. 

K. Eliminated MSGN-Sold 10 at $16: 

Quote: MSG Networks Inc. Cl A

MSGN SEC Filings

Profit Snapshot: +$35.29 

Item #1.H. Bought 10 MSGN at $12.45 (1/1/21 Post) 

This was my response to this announcement: MSG Entertainment to Acquire MSG Networks (MSGN)("MSG Networks stockholders would receive 0.172 shares of MSG Entertainment Class A or Class B common stock for each share of MSG Networks Class A or Class B common stock they own"). In my opinion, the offer is ridiculously inadequate and clearly favors the shareholders of the acquirer. I would chalk it up to home cooking. (see page 17 of MSGN's Annual Report starting with "We Are Controlled by the Dolan Family. As a Result of Their Control, the Dolan Family Has the Ability to Prevent or Cause a Change in Control or Approve, Prevent or Influence Certain Actions by the Company, " emphasis supplied)  

Madison Square Garden Deal for Network Gets Shareholder Boos | Barron's (3/29/21) The offer made my Dolan and accepted by Dolan is an outrage.   

L. Pared K-Sold 2 at $65: 

Quote: Kellogg Co. (K)

Kellogg Co. Analyst Estimates | MarketWatch

SEC Filings

Kellogg Company | Our Brand Portfolio

Annual Report for the F/Y Ending 1/2/21 

Last Buy Discussions: Item # 1.L. Added to Kellogg (K)-Bought 2 at $61; 1 at $60.5; 1 at $59.9; 1 at $59.4; 1 at $58.8; 1 at $58; 1 at $57.6 (1/30/21 Post); Item # 3.D. Added to Kellogg-Bought 4 at $62.7; 2 at $62.44; 2 at $61.3 (12/19/20 Post)(last substantive discussion)

Profit Snapshot: +$1.57

New Average Cost per share this account: $60.85 (24+ shares)

Snapshot Intraday 3/29/21 after pare

The AC was reduced from $61.02. 

 

Dividend:  Quarterly at $.57 per share ($2.28 annually), last raised from $.56 effective for the 2019 second quarter payment.  

Yield at New AC = 3.75%

Last Ex Dividend Date: 3/1/21 

Last Earnings Report (Fiscal Quarter Ending 1/2/21): SEC Filed Press Release 

2021 Guidance: Y-O-Y comparisons will be flattish due to elevated sales related to the pandemic. 

Last Sell Discussions: Item # 1.B. Sold 30 K at $66.3 (3/21/20 Post); Item # 2. Pared Kellogg- Sold  10 at $69.3 (1/8/2020 Post); Item # 2.C. Sold 10 K at $66.3 (12/28/19 Post); Item # 3.B. Sold 10 K at $63.95 (8/10/2019 Post) I realized a $525.98 gain from those sells. The lots were bought at $55.44 and $54.68: Item # 1 Bought 50 Kellogg at $55.44 and 10 at $54.68-Used Commission Free Trades (7/20/19 Post)

    

M. Sold All JQC Shares Bought with Dividends- 9+ at $6.48: 

Quote: - A Highly Leveraged Junk Bond/Loan CEF

Credit Quality: 

SEC Filings 

Sponsor's Website: JQC ("Effective 17 December 2018, the fund adopted a capital return plan and will return to shareholders approximately 20 percent of common assets over the next three years through supplemental amounts included in the fund’s regular monthly distributions.") 

I sold all shares bought with dividends and have turned off the dividend reinvestment option. 

Profit Snapshot: +$4.34

Last Buy Discussion: Item # 2 Bought 100 JQC in Vanguard Account at $5.82(7/11/20 Post) This lot has been sold.

New Average Cost per share =  $5.58 (85 shares)

Snapshot Intraday 3/29/21 after pare

The old AC number was $5.62. 

Dividend:  Monthly and variable as of late, with heavy ROC support. Last dividend was at $.0681 per share ($.8172 annually), down from $.081 constant penny rate between June-December 2020. 

Yield at New AC = 14.65%   (using constant monthly $.0681 per share)

Data Date of 3/29/21 Sell: 

Closing Net Asset Value Per Share: $7.01

Closing Market Price: $6.48

Discount: -7.56%

Average 5 Year Discount: -10.19%

Sourced: JQC- CEF Connect (Click "Pricing Information" Tab)

Some Sell Discussions: Item # 1.I. Sold 100 JQC at $6.19 (10/3/20 Post); Item # 5 Sold 804+ JQC at $9.35 (5/16/12)(profit snapshot +$1,060.29) 

N. Continued to Pare PSEC-Sold 18+ Shares Purchased with Dividends at $7.8: 

Quote: Prospect Capital Corp. -A Deservedly Hated BDC

SEC SEC Filings 

Annual Report for the Fiscal Year Ending 6/30/20 (risk factor summary starts at page 27 and ends at page 69)

Investor Relations: Prospect Capital Corporation

Last Discussed: Item #1.P. Multiple Small Ball Purchases of PSEC-Sold 105 and Kept 42+ (2/27/21 Post) I discussed the earnings report for the fiscal quarter ending 12/31/20 in that post and nothing further to add. SEC Filed Press Release

I sold all of the shares held in this account that had been bought with PSEC's monthly dividends. 

I also turned off dividend reinvestment based on price. 

I sold these shares on the ex dividend day.   

Profit Snapshot: +$46.97 (3/30/21 sell only)

AC per share this account after pare = $5.08 (25 shares)

Snapshot Intraday 3/20/21 Day of Pare

Dividend: Monthly at $.06 per share 

Prospect Capital Corporation Dividends

Yield at New AC  = 14.17%

Last Ex Dividend: 3/30/21 (day of last pare)

Net Asset Value Per Share History: 

12/30/20  $8.96 10-Q p. 4 

6/30/20:  $8.18  10-K p. 122 

6/30/19:   $9.01

6/30/18    $9.35

6/30/17    $9.32

6/30/15    $10.31

6/30/14    $10.56    PSEC 2014 10-K

6/30/09   $12.40    Form 10-K at page 46

6/30/08   $14.55

6/30/06   $15.31

IPO in July 2004 at $15   

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

O. Pared BMY in Schwab Taxable Account-Sold 5 on Ex Dividend Date at $63.31: 

Quote: Bristol Myers Squibb Co.

BMY Analyst Estimates | MarketWatch

BMY SEC Filings

2020 Annual Report

Investment Categories: Bond Substitute/Dividend Growth/Contrarian Value

Recent Buy Discussions: I discussed the last earnings report in the first linked post: Item # 1.M. Added to BMY in Fidelity Taxable Account-Bought 1 at $59.9; 3 at $59.7 (2/21/21 Post); Item # 3.A. Started BMY in Schwab Taxable account-Bought 5 at $63; 1 at $61.5; 1 at $61.24; 2 at $61 and 2 at $60.4 (12/19/20 Post); Item #3.M. Added to BMY in Fidelity Taxable- Bought 2 at $61.05 (1/1/21 Post)

Profit Snapshot: +$1.56

New Average Cost per share this account = $60.88 (14+ shares)

Dividend: Quarterly at $.49 per share ($1.96 annually)

Last Increase: From $.45 2020 4th Q

Yield at New AC = 3.22%

Last Ex Dividend: 3/31/21

P. Sold 5 ORRF at $23.26-Vanguard Account: 

Quote: Orrstown Financial Services Inc.

ORRF Analyst Estimates | MarketWatch

SEC Filings

Profit Snapshot: +$25.3

Last Buy Discussion: Item #1.F. Started ORRF in Fidelity Taxable-Bought 10 at $18.15; 5 at $17.5;  and  5 at $17.25 (2/27/21 Post) I discussed the 4th quarter earnings report in that post. SEC Filed Press Release

Last Sell Discussion: Item # 2.J. Pared ORFF-Sold 10 at $24.42 (3/27/21 Post)(profit snapshot = $62.74) 

Dividend: Quarterly at $.18 per share 

Last Ex Dividend: 1/29/21

Q. Pared PFE-Sold 10 at $37.48: 

Quote: Pfizer Inc. (PFE)

PFE | Pfizer Inc. Analyst Estimates | MarketWatch

PFE SEC Filings

Pfizer Inc. - Investors Overview

Pfizer Products 

2020 Annual Report 

I mentioned this pare in a 4/13/21 comment. 

I sold my highest cost lots in pre-market trading. The shares were trading higher after the FDA "temporarily" halted use of JNJ's vaccine due to rare blood clotting. FDA halts use of Johnson & Johnson Covid vaccine due to rare blood-clotting issues in six women

Profit Snapshot: $10.87

Investment Category: Bond Substitute

For stocks classified as bond substitutes, the goal is to earn a 2%+ annualized return in excess of the dividend payments. 

I have a negative opinion about Pfizer which I have previously discussed in prior posts. The main issue for most of the past 20+ years is a relatively poor track record of internal drug discovery that is the underlying cause of overpaying for acquisitions in order to give a bloated salesforce something to sell.  

The end result is that Pfizer's stock is currently selling at a lower price now than in June 2000 when it closed over $45 per share. 

New Average Cost Per Share this account: $34.59 (10+ shares) 

Snapshot Intraday 4/13/21 during regular trading hours after pare

Dividend: Quarterly at $.39 per share. 

Growth by Acquisition Strategy: Failed

The current PFE market capitalization is substantially below what Pfizer has shelled out for acquisitions starting with Warner Lambert. The failure was primarily due to the prices paid for Wyeth and Pharmacia.  

1. Warner Lambert (2000)= $90.2B

2. Wyeth (2009) =    $68B

3. Pharmacia/Upjohn (2003) $60B

Pfizer/Pharmacia Merger: The Biggest Just Got Bigger - FindLaw

4. Hospira (2015) = $15.2B

5. Medivation (2016) = $14B

6. King (2010) =  $  3.6B

Total $251B

PFE Market Cap at $37.3 = $208.08B 

As previously discussed the dividend will likely be cut in the second quarter. Pfizer has stated that its payout after the Viatris spinoff will be adjusted down. Viatris expects its first dividend will be $.11 per share with the declaration expected in May. Viatris (VTRS) Declines on Lackluster Outlook, Announces Dividend | Nasdaq; Pfizer Declares First-Quarter 2021 Dividend ("The transaction to combine Upjohn with Mylan to form Viatris Inc. closed on November 16, 2020. It is expected that Viatris will begin paying a quarterly dividend in the second quarter of 2021, at which time Pfizer’s quarterly dividend will be reduced such that the combined dividend dollar amount received by Pfizer shareholders, based upon the combination of continued Pfizer ownership and approximately 0.124079 shares of Viatris which were granted for each Pfizer share in the spin-off, will equate to Pfizer’s dividend amount in effect immediately prior to the initiation of the Viatris dividend.") 

Last Discussion: Item # 2.M. Eliminated PFE in Fidelity Taxable Account-Sold 6 at $36.69 (11/28/20 Post)(profit snapshot = $43.6). I discussed some of the negative issues in that post. 

Last Earnings Report (Q/E 12/31/20):  SEC Filed Press Release 

With Pfizer, there is frequently a large percentage difference between GAAP and non-GAAP E.P.S. which I view as a major negative. The end result is that I am more likely to pay attention only to the GAAP results.

2020 GAAP E.P.S. = $1.71

2020 Non-GAAP    =$2.22

2019 GAAP E.P.S. = $2.87

2019 Non-GAAP   = $2.95

2018 GAAP E.P.S. = $1.87

2018 Non-GAAP    =$3.00

Sourced: 2018 SEC Filed Press Release 

I just selected a randomly picked year: 

2009 GAAP E.P.S. = $1.23

2009 Non-GAAP   = $2.02

Source: SEC Filed Press Release 

Last Sell Discussions: Item # 4.A. Sold Remaining 33 PFE shares  at $33.44 (8/13/2017 Post)(profit snapshot = $90.67); Item # 3.A. Sold 100 PFE at $34.03 (7/13/17 Post)(profit snapshot = $143.42); Item # 3.A. Sold 100 PFE at $34.65 (3/13/17 Post)(profit snapshot =$235.86); Item # 1 Sold: 100 PFE at $31.68 (5/17/14 Post)(profit snapshot = $282.12) Buy discussions are linked in those posts.

Broker Reports (available to Schwab customers): 

Morningstar (3/30/21): 4 stars with a FV of $40

Argus (2/10/21): Buy with a $55 PT. The analyst believes the Stock Jocks are underestimating the Covid vaccine franchise and the potential of PFE's partnership with BioNTech on mRNA-based therapies for other diseases. PFE is projecting $15B in 2021 revenues from this vaccine. 

S & P (3/17/21): 4 stars with a 12 month PT of $39; estimates 2021 non-GAAP E.P.S. of $3.26. 

For a 12 month PT, I regard $39-$40 as achievable and a $55 price as unlikely. PFE may also drift lower back into the $30-$35 trading range where I believe it is more comfortable. 

R. Pared IGR-Sold 42+ at $8.1: 

Quote: CBRE Clarion Global Real Estate Income Fund Overview

IGR SEC Filings

2020 Annual Report

Sponsor's Website: Global RE Income Fund - CBRE 

IGR-CEF Connect

I discussed this leveraged CEF in my last post. Item # 1.A. Pared IGR-Sold 100 at $7.64 (4/9/21 Post) 

Profit Snapshot: +$43.23 (4/15 sell only)

New AC Per Share this account = $5.20 (200+ Shares)

Snapshot Intraday 4/15/21 after pare

The AC per share was reduced from $5.46. 

Dividend Monthly at $.05 per share. Heavy ROC support. 

Yield at new AC = 11.54% 

Goal: Any total return in excess of the dividend payments before ROC adjustments to the tax cost basis 

Of the lots sold in this transaction, 12+ were bought with the monthly dividends in 2020 and this year. Dividend reinvestment has now been turned off. The 10 share lot (3/2/20) was bought at $7.18+ or $71.86. The 20 share lot (3/10) was bought at $6.92+ or $138.56. The lots were consequently sold at profit before the ROC adjustments to the tax cost basis which means the goal was achieved for those lots. 

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.