Economy:
Businesses are feeling stronger inflation and paying higher wages, Fed's 'Beige Book' says
ECB dials back support but signals no end to stimulus | Reuters The ECB will decrease slightly debt purchases that have averaged €80B per month. While inflation in the Euro Zone is at ten year highs, the ECB justifies continuing extraordinary monetary policies based on a belief that inflation will fall next year and languish below 2% starting in 2023 according to the ECB's current forecast.
Top 1% dodge $163 billion in annual taxes, Treasury estimates
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Markets and Market Commentary:
I am continuing to reduce my stock allocation which in part means selling many small ball and low yielding stock ETF positions and redirecting some proceeds into higher yielding individual stocks which I view as either fairly value or undervalued. I will increase my dividend income this year compared to 2020.
So far, the Stock Jocks are ignoring the acceleration in U.S. Covid infections, hospitalizations and deaths as highly unlikely to meaningfully disrupt the ongoing economic recovery.
CDC COVID Data Tracker; COVID Data Tracker Weekly Review | CDC
One benefit from the recent infection surge is that it convinced people on the fence to get vaccinated.
Natural gas prices are rising and could be the most expensive in 13 years this winter
Max Levchin explains how Affirm handled negotiations with Amazon
Affirm (AFRM) skyrockets after company reports 71% revenue growth, strong guidance
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Earnings Reports-Owned Stocks:
In this section, I have grouped together most of my owed pipeline stocks (OKE, PBA, TRP, WMB) that will report GAAP net income and distributable cash flow ("DCF"). These companies have heavy non-cash depreciation expenses which reduce the GAAP net income number. Since I own them primarily for their dividends, I am most interested in the dividend coverage ratio using DCF rather than GAAP, similar to Equity REITs in that respect.
Amcor (AMCR) reports record full year earnings and strong outlook for fiscal 2022 (AMCR provides information for the fiscal year ending 6/30/21; GAAP E.P.S. = $.602, up from $.382; adjusted E.P.S. at $.744; "adjusted Free Cash Flow of $1.1 billion, at upper end of guidance range"; Fiscal 2022 outlook: "Adjusted EPS growth of 7-11% on a comparable constant currency basis and Adjusted Free Cash Flow of $1.1-$1.2 billion. Allocating approximately $400 million of cash towards share repurchases." The fiscal 4th quarter results are not broken out separately in the press release which is aggravating. By taking the adjusted E.P.S. total for the first 3 fiscal quarter, which was $.515, I calculated the 4th Quarter at $.229 with the consensus at $.22)
American Finance Trust (AFIN) SEC Filed Press Release (FFO per share = $.23; AFFO per share = $.26; revenue grew 8.6% to $81.6M; quarterly dividend at $.21 per share; annual rent escalator at a weighted average 1.2%; collected approximately 100% of cash rent for the second quarter; 94.9% leased with a weighted average 8.5 years remaining lease term)
Cisco Reports Fourth Quarter And Fiscal Year 2021 Earnings (Non-GAAP E.P.S. at $.84 with the consensus at $.825; GAAP E.P.S = $.71; revenues up 8% to $13.1B; 2021 F/Y cash flow of $15.5B, flat with fiscal 2020; guides 2022 fiscal year non-GAAP E.P.S. to $3.38-$3.45 with revenues up 5 to 7% over fiscal 2021; guides fiscal 2022 first quarter non-GAAP E.P.S. to $.79 to $.81 with revenues increasing 7.5% to 9.5% Y-O-Y)
Clipper Realty Inc. (CLPR) Announces Second Quarter 2021 Results (adjusted AFFO of $4.1M or $.10 per share, up from $3.1M in the prior quarter; properties are 94% leased; second quarter rent collection rate was 96%; declared a quarterly dividend of $0.095 per share)
Flowers Foods, Inc. (FLO) Reports Second Quarter 2021 Results (Adjusted Net income of $68.8M or $.32 per share with the consensus at $.283 per Fidelity; GAAP E.P.S. at $.26; revenues = $1.017B, down .8%; increases guidance for fiscal 2021 to "diluted EPS in the range of approximately $1.17 to $1.22, an increase over prior guidance of $1.10 to $1.17. The effect of one fewer week in fiscal 2021 impacts EPS by approximately $0.02."; depreciation expenses are a major item; cash and cash equivalents at end of 2nd Q = $292.3M)
FS KKR Capital (FSK)(adjusted net investment income per share at $.74, up from $.63 in the 2021 first quarter; net asset value per share increased to $26.84 from $26.03 as of 3/31/21; increased quarterly dividend to $.65 from $.60; % of investments on nonaccrual = 3%)
Gladstone Commercial (GOOD) SEC Filed Earnings Press Release (core FFO at $.37 per share; collected 100% of rents in the second quarter; square feet leased = 96.5%; quarterly dividend rate at $.37545 paid in monthly installments; raised $100.0 million with the issuance of our new 6.00% Series G Preferred Stock and used the majority of the proceeds to redeem our 7.00% Series D Preferred Stock, saving on dividend costs to lower our overall cost of capital."; "issued 95,218 shares for net proceeds of $2.1 million" under ATM program)
II-VI (IIVI) SEC Filed Earnings Press Release (fiscal 4th quarter ending 6/30/21; Non-GAAP E.P.S. at $.88 with the consensus at $.764 per Fidelity; revenues at $808M, backlog at $1.3B; full fiscal year non-GAAP $3.73, up 31%; full year record free cash flow =$428M; "The outlook for the first fiscal 2022 quarter ending September 30, 2021 is revenue of $780 million to $830 million and earnings per diluted share on a non-GAAP basis of $0.75 to $0.90. . . This range includes the company’s expected investment of up to $20M in the quarter ended September 30, 2021 for compound semiconductor expansion, the majority of which is for SiC expansion. The non-GAAP earnings per share include the pre-tax amounts of $21 million in amortization, $22 million in share-based compensation, and $11-15 million in other costs, including costs to facilitate the integration of Coherent Inc.")
Kellogg (K) SEC Filed Earnings Press Release (non-GAAP E.P.S. = $1.14 with consensus per Fidelity at $1.03; net revenues = $3.555B; predicts 2021 organic sales growth of 0-1%, a slight increase from flat growth in the previous guidance; anticipates currency neutral adjusted EPS growth of -1 to -2% Y-O-Y which equates to 4% annual growth with 2019 as the base year)
Oneok (OKE) SEC Filed Press Release (net income of $342.1M or $.77 per share; 50% increase in EBITDA to $801.5M; distributable cash flow = $570M; distributable cash flow in excess of dividend = $153.1M; dividend coverage ratio = 1.37)
Paymentus (PAY) SEC Filed Press Release (GAAP net income of E.P.S. $.6M; Non-GAAP net income of $2.6M or $.02 per share, in line; revenue = $93.5M, up 30.3% from the 2020 second quarter; "processed 64.2 million transactions, an increase of 39% from the second quarter of 2020"; cash and cash equivalents = $266.4M; "expects revenue for the full year 2021 to be between $378 million and $382 million or 25% to 27% growth. Contribution profit is anticipated to be between $152 million and $154 million or 26% and 28% growth. It expects adjusted EBITDA to be between $25 million and $28 million, which is a margin of 16.5% to 18.5%.")
Pembina Pipeline (PBA) SEC Filed Earnings Press Release (all amounts are in Canadian dollars; E.P.S. = $.39 per share; adjusted DCF per share at $.98 with unadjusted at $1.06; quarterly dividend at $.63 per share paid in monthly installments)
Novo Nordisk (NVO) SEC Filed Press Release (diluted E.P.S. at DKK5.26, up 16% Y-O-Y; consensus at DKK4.752; NVO only had a few days of revenues from its blockbuster weight loss drug, brand name Wegovy, that was approved by the FDA last June)
Organon (OGN) Reports Results for the Second Quarter Ended June 30, 2021 and Announces Inaugural Dividend (GAAP net income from continuing operations = $431M or $1.7 per share; non-GAAP E.P.S. = $1.72; consensus at $1.401 per Fidelity; revenues = $1.595B, up 5% from the 2020 second quarter; announced first quarterly dividend of $.28 per share)
Plymouth Industrial REIT (PLYM) SEC Filed Earnings Press Release (Core FFO per share = $.41; AFFO per share = $.32; collected approximately 99.7% of second quarter rent; "acquired 4 buildings totaling 780,000 square feet for $30.3 million, a weighted average price of $47 per square foot and a weighted average initial projected yield of 7.3%."; "issued approximately 2.6 million common shares through its ATM program at an average price of $18.86 per share, raising approximately $48.6 million in net proceeds.")
PPL (PPL) SEC Filed Press Release (adjusted E.P.S. of $.19; announced plans to repurchase approximately $500M in PPL common shares in 2021; completed sale of its U.K. business in June 2021 and is on track to acquire Narragansett Electric by March 2022; "With a view toward maximizing shareowner value, PPL continues to evaluate the best uses for the remaining proceeds from the U.K. sale, which resulted in net cash proceeds of $10.4 billion after taxes and fees. In addition to utilizing a portion of the proceeds to strengthen its balance sheet, the company plans to use an additional $3.8 billion to acquire Narragansett Electric. Potential uses for the remaining proceeds include investing incremental capital at PPL's utilities or in renewable energy, as well as repurchasing PPL shares. PPL’s Board of Directors recently authorized a new share repurchase program pursuant to which the company may purchase up to $3 billion in outstanding common shares at the discretion of management.")
Reynolds Consumer Products (REYN) SEC Filed Earnings Press Release (E.P.S. = $.38; Adjusted E.P.S. = $.39 with the consensus at $.379 per Fidelity; revenues increased 6% to $873M; company lowered earnings estimate for 2021 based on cost pressures; now expects adjusted E.P.S. of $1.54 to $1.64; expects Adjusted E.P.S. for the 3rd quarter to range between $.30 to $.33)
Sanofi (SNY) Sales growth accelerated - Full-year guidance raised (Non-GAAP at €1.38; free cash flow = €1.428B; revenues up 6.5% to €8.744B; "; Dupixent "(collaboration with Regeneron) sales increased 56.6% to €1,243 million."; USD ADR equivalent was $.83 beating the consensus of $.75 per Fidelity; 2 ADR shares = 1 ordinary share, so $1.38 per ordinary share would be €.69 per ADR share multiplied by the EUR/USD exchange rate, currently near 1.17)
TC Energy (TRP) SEC Filing (all amounts are in Canadian Dollars; "comparable" net income of C$1.045B or $1.07 per share with consensus at $.98 per Fidelity; comparable funds from operations = $1.754B; declared quarterly dividend of $.87 per share)
Williams Companies (WMB) SEC Filed Earnings Press Release (net income of $304M or $.25 per share; adjusted E.P.S. = $.27, up 8% compared to the 2020 second quarter; cash flow from operations = $1.057B; dividend coverage ratio = 1.85 AFFO basis)
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Dying in the Name of Vaccine Freedom-YouTube
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1. Canadian Reset Equity Preferred Stocks:
Over the past several months, I have been reducing my exposure to the Canadian reset equity preferred stocks based on a concern that many will reset their coupons at lower levels than the prior resets and to harvest profits in them.
After the two sell transactions mentioned in this section, I am left with the following (snapshots intraday on 9/8/21; all amounts in Canadian Dollars):
Unrealized Gain as shown = C$10,028.5
A. Sold 200 BPOPRP at C$18.48:
Quote: BPO-PP.TO
Issuer: Brookfield Office Properties, a REIT.
Preferred Shares Link: Preferred Shares-Brookfield Office Properties
Profit Snapshot: +C$1,322.5
Buy Discussions: Item # 5.B. Bought 50 BPOPRP at C$7.95 (3/28/20 Post); Item # 2.A. Bought 50 BPOPRP at C$13.86 (9/11/19 Post); Item # 1.A. Bought 50 BPOPRP at C$15.95 (7/27/19 Post)
Par Value: C$25
Coupon: 3% spread to the five year Canadian government bond with a five year reset.
Last Reset: March 2017 at a 4.161% coupon. This coupon will last until the next reset.
Next 5 Year Reset: March 2022 and that is the problem.
The five year Canadian bond is currently trading near a .8% yield. Canada 5 Year Government Bond Overview | MarketWatch I currently view it as likely that this preferred stock will reset its coupon for 5 years at a lower rate than the current one. If that occurs and yields start to rise thereafter, this preferred stock will likely fall in price without any change in the credit risk.
B. Sold 100 TAPRE at C$13.75:
Quote: TA-PE.TO
Preferred Share Information | TransAlta
Profit Snapshot: C$58
Coupon: 2.03% spread to the 3 month Canadian T Bill with resets every 3 months.
Par Value: C$25
This one did not work out since the 3 month Canadian treasury bill did not continue to increase in yield and instead started to decline after the purchase and then collapsed in response to the pandemic.
The optimal condition for a new purchase would be a severely depressed price reflecting a consensus opinion that meaningful increases in the 3 month bill will not occur for a long time, but that proves incorrect after purchase with a persistent rise in that yield.
I view the 3 month resets to be better than the 5 year resets when short term interests rates start a persistent and long term rise due to the Bank of Canada continually increasing its benchmark rate in response to inflation concerns. While there are inflation concerns now, central banks in developed countries are dismissing them as merely temporary and consequently continue their extraordinarily abnormal monetary policies.
Canada 3 Month Government Bond Overview | MarketWatch
The yield is currently hovering near .15%. At that yield the coupon is 2.18% which translates into a 3.96% at a C$13.75 price. I bought at C$13.15. The commission rate at IB was C$1 for each trade.
2. Small Ball:
A. Restarted EAF-Bought 10 at $10.55:
Quote: GrafTech International Ltd.
Another 10 share lot was eliminated at $11.2:
Profit $.79
Investment category: Lottery Ticket Basket, recently downgraded to that category based on chart history, recent financial reports, cyclical business, expiring fixed rate contracts, and dividend cut.
A continued worldwide economic expansion is a predicate for this stock to work out.
Website: GrafTech International Ltd. - Home
EAF Analyst Estimates | MarketWatch
10-Q For the Q/E 6/30/21 Graftech is a leading manufacturer of high quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. . . . (The) only reportable segment, Industrial Materials, is comprised of our
Factbox: What are graphite electrodes and needle coke? | Reuters (takes about 6 pounds of graphite electrodes to make 1 ton of steel)
Investment Category: Lottery Ticket Basket Strategy
Last Elimination: Item # 1.R. Eliminated EAF-Sold 53+ at $12.37 (2/13/21 Post)(profit snapshot = $110.97)
Dividend: $.01 per share, cut from $.085 effective for the 2020 second quarter payment.
I view this cut to be understandable under the circumstances. The company has been using free cash flow to reduce. debt. For the first six months of 2021, the company reduced debt by $250M and expects debt repayments will be the primary use of cash for the remainder of 2021. As of 6/30/21, the company had approximately $1.2B in debt and $114M in cash or cash equivalents.
Last Earnings Report (Q/E 6/30/21): SEC Filed Press Release
Adjusted E.P.S. = $.43 with the consensus at $.38 per Credit Suisse
Broker Report (available to Schwab customers)
Credit Suisse (8/6/21): Outperform with at 12 month PT of $16. The main argument is that pricing will improve during 2022 when most of the remaining long term contracts will be renegotiated. With the expiration of long term contracts noted above, the stock's performance will be sensitive to graphic electrode pricing trends.
Realized EAF Gains to Date: $341.21
EAF Lotto Purchase Limit: $1,370.42. (general limit for Lottos is $1K but can be increased by net realized gains)
B. Added to TLS-Bought 2 at $26.21; 2 at $24.05:
Quote: Telos Corp.
Closing Price 9/9/21: TLS $34.10 +$0.52 +1.55%
TLS Analyst Estimates | MarketWatch
Average Cost Per share: $26.17 (7 shares)
Last Discussed: Item # 4.H. Started TLS-Bought 2 at $27.95; 1 at $26.75 (7/30/21 Post)
Investment Category: Lottery Ticket Basket
Last Earnings Report (Q/E 6/30/21): Telos Corporation Reports Strong Second Quarter Results
Adjusted E.P.S. = $.04
Consensus at $.019 per Fidelity
GAAP E.P.S. = ($.28)
The primary adjustment to arrive at GAAP is to add back $21.366M in stock based compensation.
Revenues: $52.6M, up 8%
Cash Flow = $3.5M
Reaffirmed 2021 revenue guidance of $283M to $295 and Adjusted EBITDA of $33M to $36M which would amount to 190% to 216% growth
C. Eliminated GSK-Sold 8 at $41.93:
Quote: GlaxoSmithKline PLC ADR
Closing Price 9/9/21: GSK $39.78 -$0.74 -1.83%
Last Buy Discussion: Item # 1.B. Started GSK in Schwab Account-Bought 5 at $36.36; 5 at $36.13 (1/16/21 Post)
SEC Filings (foreign issuer)
GSK | GlaxoSmithKline PLC ADR Analyst Estimates | MarketWatch
Closing Price on 9/9/21:
Profit Snapshot: $50.2
Last Earnings Report (Q/E 6/30/21): GlaxoSmithKline (GSK) SEC Filed Earnings Press Release
revenues ups 6% at £8.092B with the consensus at £7.6;
adjusted earnings per share at 28.1p with the estimate at 19.6p;
reaffirms 2021 guidance: adjusted E.P.S. to decline mid-to-high single digits compared to 2020
GSK will slash its dividend when it completes the spin off of its consumer product businesses. GlaxoSmithKline to Spin Off Consumer Division, Cut Dividend - TheStreet The targeted dividend will go from 80 pence to 55 pence, split 44 pence for GSK and 11 pence for the new consumer product company.
Last Sell Discussion: Items 3.I. and 3.J. (7/9/21 Post)
As previously discussed, GSK has been a poor long term investment. GSK Chart Since 1984 The stock was near $64 in December 1998; $57 in June 2006; and $56 in December 2013.
I am going back to ignoring this company. I no longer have a position.
E. Eliminated PLYM in Schwab and Vanguard Taxable Accounts--Sold 20 shares at $22.75:
Quote: Plymouth Industrial REIT Inc.
Closing price 9/9/21: PLYM $23.30 -$0.25 -1.06%
Plymouth "is a real estate investment trust focused on the acquisition, ownership and management of single and multi-tenant industrial properties, including distribution centers, warehouses, light industrial and small bay industrial properties, located in primary and secondary markets within the main industrial, distribution and logistics corridors of the United States. As of June 30, 2021, the Company, through its subsidiaries, owned
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Portfolio - Plymouth Industrial REIT
Website: Plymouth Industrial REIT - Boston
PLYM 2020 Annual Report (property list and summary descriptions start at page 27)
I am keeping for now the 20 shares owned in my Fidelity account with a $12.34 average cost per share. I previously sold the fractional share purchased with dividends. Item # 2.L (5/23/21 Post)(contains average cost per share snapshot)
Last Buy Discussions: Item # 1.Q. Started PLYM in Schwab Taxable-Bought 10 at $12 and Item 1.R. Started PLYM in Vanguard Taxable-Bought 10 at $11.92 (10/24/20 Post); Item #1.F. Started PLYM Fidelity Account-Bought 10 at $12.85; 5 at $12.1; 5 at $11.8 (8/1/2020 Post)
Profit Snapshots: +$216.98
Last Earnings Report (Q/E 6/30/21):
I also own Plymouth's equity preferred stock. Plymouth Industrial REIT Inc. 7.5% Cumulative Preferred Series A Stock Quote; last discussed here: Item # 2.A. (9/5/20 Post)
F. Pared BMY in Fidelity Taxable-Sold 1.203 at $68.8:
Quote: Bristol Myers Squibb Co.
Closing Price 9/9/21: BMY $63.58 -$1.34 -2.06%
BMY Analyst Estimates | MarketWatch
Bristol Myers Squibb: Investor Relations
Pharmaceutical Research & Development Pipeline BMY states that it has 50+ compounds in development which includes trials for new treatment indications for established drugs, particularly Opdivo/Yervoy.
I own shares in multiple accounts.
Profit Snapshot: +$6.89
I sold the remaining fractional shares bought with dividends and 1 more.
Last Buy Discussions: Item # 1.M. Added to BMY-Bought 1 at $59.9; 3 at $59.7 (2/21/21 Post); Item # 3.A. Started BMY-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- Bought 2 at $61.05 (1/1/21 Post)
Average Cost this account after pare: $60.85 (15 shares)
Dividend: Quarterly at $.49 ($1.96 annually), last raised from $.45 effective for the 2021 first quarter payment.
Bristol Myers Squibb Announces Dividend
Yield at $60.85 Total Cost = 3.22%
Last Ex Dividend: 7/1/21
Product Revenues: Revlimid, acquired as a result of BMY's acquisition of Celgene, would lose its U.S. patent production in 2022. For the first 6 months of 2021, Revlimid produced $6.146B out of $22.776B in total revenues.
Last Earnings Report (Q/E 6/30/21): Bristol Myers (BMY) SEC Filed Earnings Press Release
adjusted net income of $4.3B or $1.93 per share with the consensus at $1.891 per Fidelity;
revenues reported at $11.7B, 16% higher compared to the 2020 second quarter driven by a 16% increase in Opdivo sales to $1.91B;
maintains guidance of 2021 adjusted E.P.S. of $7.35 to $7.55;
the most important near term issue remains Revlimid's loss of U.S. patent protection next year;
Revlimid 2nd quarter sales at $3.202B up from $2.884B in the 2020 second quarter
I noted that multiple companies launched generic Revlimid earlier this month in Canada.
The U.S. patent protection loss for Revlimid will weigh heavily IMO on the stock price until pipeline success diminishes the impact and provides clarity on future earnings after Revlimid's profits and revenues start their decline.
What is interesting is that the analyst consensus estimate for 2022 is currently at $8.13 and at $8.6 for 2023, as compared to $7.48 in 2021. So in spite of Revlimid's loss of patent protection, the analysts are forecasting a nice acceleration of earnings in 2022 and in 2023. The Stocks Jocks are not buying into those future estimates IMO. If BMY actually earned $8.6 in 2023, the P/E at yesterday's closing price of $63.58 would be 7.38 with an anticipated growth rate off $7.48 through 2023 at 15.37%. The PEG would be less than 1.
5 year chart:
Morningstar (7/28/21): 3 stars with a FV of $68 (hold recommendation based on patent expiration for Revlimid being "offset over time" by pipeline successes; expects over $1B in annual sales from recently launched drugs Reblozyl, Zeposia, Abecma and Breyanzi)
Argus (8/6/21): Buy with a $83 PT. (notes that a recent favorable patent ruling extended protection for Eliquis through "2026, and potentially through 2031")
S & P (7/28/21): 4 stars with a 12 month PT of $74
G. Sold 1 AMCW at $106 and 1 at $105.68:
Quote: iShares Edge MSCI Minimum Volatility Global ETF Overview
iShares MSCI Global Minimum Volatility Factor ETF
Sponsor's Website: iShares MSCI Global Min Vol Factor ETF
Expense Ratio = .2%
Profit Snapshots: +$16.61
Last Discussed: Item # 2.C. Bought 1 ACWV at $97.48 (4/24/21 Post)
H. Sold 2 DUK at $107.40; 1 at $106.18:
Quote: Duke Energy Corp. (DUK)
Closing Price 9/9/21: DUK $104.62 -$0.71 -0.67%
DUK Analyst Estimates-MarketWatch
Investment Category: Bond Substitute with historical annual dividend growth.
Last Substantive Buy Discussions: Item # 1.A. Added 1 DUK at $81.69; 1 at $79.25 (9/19/20 Post); Item # 1.H. Added 1 DUK at $65.7 (5/16/20 Post)
Profit Snapshot: +$65.11 (8/18/21 and 9/1/21 sales only)
I have sold all shares purchased with dividends and have turned off dividend reinvestment.
The 2021 realized gain shown above represents a 17.3% return on the total dollar amount invested in the shares sold so far this year. The general goal for a stock classified as a Bond Substitute is the dividend payments + a greater than a 2% annual profit on the shares.
Average Cost per share for 12 shares = $78.77
Dividend: Quarterly at $.985 per share, raised 2 cents effective for the 2021 3rd quarter payment. Duke Energy announces dividend payments to shareholders
Yield at new AC = 5%
Last Ex Dividend: 8/12/21
Last Earnings Report (Q/E 6/30/21): Duke Energy (DUK) SEC Filed Earnings Release
Non-GAAP E.P.S. of $1.15 with the consensus at $1.097 per Fidelity;
GAAP E.P.S. at $.96;
reaffirms 2021 non-GAAP E.P.S. guidance of $5 to $5.3 and long term E.P.S. growth of 5 to 7% through 2025;
revenues = $5.758B, up from $5.421 in the 2020 second quarter";
"Duke Energy is executing an aggressive clean energy strategy to create a smarter energy future for its customers and communities – with goals of at least a 50% carbon reduction by 2030 and net-zero carbon emissions by 2050. The company is a top U.S. renewable energy provider, on track to operate or purchase 16,000 megawatts of renewable energy capacity by 2025. The company also is investing in major electric grid upgrades and expanded battery storage, and exploring zero-emitting power generation technologies such as hydrogen and advanced nuclear."
Recent Sell Discussions: Item # 2.D. Pared DUK-Sold 2 at 101.11; 1 at $104 (5/23/21 Post)(profit snapshot = $44.36); Item # 1.I. Pared DUK-Sold 1.453 at $95.46; 1 at $97.14; 1.471 at $100.71(4/17/21 Post)(profit snapshot = $38.39); Item # 2.M.-Sold 4 DUK at $95.50 (11/13/20 Post)(profit snapshot = $24.39); Item # 1.J. Pared DUK-Sold 2 at $91.81 (7/3/2020 Post)(profit snapshot = $4.82); Item # 1.C. Sold 2 DUK at $97.05 (2/16/20 Post)(profit snapshot = $15.29)
Largest Gains Starting in 2007:
 |
| 2011 DUK 187+ shares +$638.28 |
 |
| 2007 DUK 250 Shares $147.57 (doing a lot of selling that year) |
I am far less adventuresome now. The largest purchase was a 400 share lot bought around 1978. I do not have a snapshot of the realized gain which probably occurred in the 1980s.
Credit Ratings:
Fixed-Income Investors Credit Ratings - Duke Energy
For several years, most of Duke Energy exposure has been in its senior unsecured debt and the first mortgage debt of its subsidiaries.
I. Sold 10 MAC at $15.67:
Quote: Macerich Co.- A Mall REIT
As of 6/30/21, the wholly owned operating partnership owned and had an interest "in 50 million square feet of gross leasable area (“GLA”) consisting primarily of interests in 46 regional shopping centers and five community/power shopping centers".
Investment Categories: Equity REIT Common and Preferred Stock Basket Strategy; Lottery Ticket; Contrarian Value
Profit Snapshot: +$38.47
I sold on the ex dividend date.
Only Buy Discussion Ever: Item # 2. Bought 10 MAC at $11.83 (4/24/21 Post)
Dividend: Quarterly at $.15, slashed to $.10 from $.71 effective for the 2020 second quarter and then raised to the current $.15 penny rate effective for the 2020 third quarter.
Last Financial Report (Q/E 6/30/21): SEC Filed Press Release
Quote: Vimeo Inc.
Closing Price 9/9/21: VMEO $39.29 +$0.47 +1.21%
Vimeo Inc. Analyst Estimates | MarketWatch
Last Buy Discussions: Item # 3. Started VMEO- Bought 1 at $45.2; 1 at 44.5; 1 at $43.8; $20 at $43.36; 1 at $41.77 (7/9/21 Post)
The Stock Jocks reacted negatively to the last financial report released after those purchases that showed a decline in revenue growth rate. Revenues increased 43% Y-O-Y. The Y-O-Y rate of revenue growth continued to decline in July:
Investment Strategy: Lottery Ticket Basket
Last Loss Report (Q/E 6/30/21): SEC Filed Press Release
K. Started MCBC-Bought 10 at $8.27; 5 at $8.07; 10 at $7.95:
Quote: Macatawa Bank Corporation
"Headquartered in Holland, Michigan, Macatawa Bank offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities from a network of 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties." There were no Covid related loan modifications remaining as of 6/30/21.
This is a new name for me.
MCBC Analyst Estimates | MarketWatch (estimate is that peak earnings of $.82 will be hit in 2021, followed by a decline to $.69 next year and then increasing to $.79 in 2022). Profits in 2020 and 2021 have been juiced by unusually strong mortgage banking revenues.
Five Year Financials:
Investment Category: Regional Bank Basket Strategy
Properties as of 12/31/20: Mostly owned
Average cost per share = $8.10 per share (25 shares)
Dividend: Quarterly at 8 cents per share, last raised from 7 cents effective for the 2020 first quarter payment. The quarterly rate was 2 cents per share in 2014. The dividend coverage ratio over the trailing 12 months is 291.31%.
Yield at AC = 3.95%
Last Ex Dividend: 8/10/21
Last Earnings Report (Q/E 6/30/21):
GAAP E.P.S. = $.23 in line, up from $.22 in the 2020 second quarter. Earnings were, however, boosted by a negative provision of $750K for loan losses compared to a $1M provision expense in the 2020 second quarter.
Tangible Book Value Per share = $7.26
NIM decreased 55 basis points, compared to the 2020 second quarter, to 2.19%, "reflecting a significant increase in on-balance sheet liquidity and the continued low interest rate environment." That is most of the bad news.
I suspect there was a lot of cash on the balance sheet as of 6/30/21 in anticipation of paying off high yielding bank debt: "On July 7, 2021, the Company redeemed its remaining $20.0 million of trust preferred securities. The Company estimates that this will save nearly $600,000 of interest expense annually. . . "
Good news items:
NPL Ratio only .03%
NPA Ratio only .09%
Coverage Ratio = 3,881.29%
Total Capital Ratio = 19.66% (consolidate)
Charge Off Ratio: Net Recovery
Okay news:
Efficiency ratio = 56.81%
ROA = 1.11%
ROE =
Broker Reports: I do not have access to any broker reports. MCBC is a small bank holding company with a market capitalization of approximately $269M at yesterday's closing price.
There is some small broker coverage. On 7/30/21, Hovde cut its PT to $8.5 from $10. On 7/29/21, KBW cuts its PT to $9.5 from $10. So there is a lack of enthusiasm. The earnings report was released on 7/22/21.
I view the stock as a possible mid-to-high single digit total return over the next 12 months, assuming a continued economic recovery through September 2022, a continued above average profits from mortgage banking and probably more average downs at lower prices. At a $8.15 total cost, an 11% annual return could be achieved by receiving 4 dividend payments (assumes no dividend increases over that period) and then selling the stock at a greater than 7.05% gain or at greater than $8.73.
L. Added 1 IIVI at $59.34:
Quote: II-VI Inc.
9/9/21 Closing Price: IIVI $62.27 +$1.54 +2.54%
Website: II-VI Incorporated | Materials That Matter
IIVI Analyst Estimates | MarketWatch
Current Position: 13 shares
Average Cost per share: $67.85
Maximum Position: 100 shares
Last Discussed: Item # 3.A. (5/14/21 Post)
Major Pending Acquisition: II-VI Incorporated to Acquire Coherent, Creating Global Leader in Photonic Solutions, Compound Semiconductors, and Laser Technology and Systems
5 year Chart:
Last Earnings Report (Q/E 6/30/21): This was the 4th fiscal quarter. SEC Filing
Non-GAAP E.P.S. at $.88, beat the consensus by 12 cents.
revenues at $808M, backlog at $1.3B;
full fiscal year non-GAAP $3.73, up 31%;
full year record free cash flow =$428M;
"The outlook for the first fiscal 2022 quarter ending September 30, 2021 is revenue of $780 million to $830 million and earnings per diluted share on a non-GAAP basis of $0.75 to $0.90. . . This range includes the company’s expected investment of up to $20M in the quarter ended September 30, 2021 for compound semiconductor expansion, the majority of which is for SiC expansion. The non-GAAP earnings per share include the pre-tax amounts of $21 million in amortization, $22 million in share-based compensation, and $11-15 million in other costs, including costs to facilitate the integration of Coherent Inc."
M. Bought 10 PSFE at $8.28; 5 at $7.87:
The reaction to the last earnings report was negative with the stock closing at $8.62 falling 15.49% on 8/16, down 15.49% from the prior close. Volume accelerated to 43,394,300 that day compared to the average volume of 2.884M. PSFE Price History
Investment Category: Lottery Ticket Basket
Brokers cut their price targets in response:
Last Earnings Report (Q/E 6/30/21): SEC Filing
North America iGaming revenue increased 48%.
Broker Reports (available to Schwab customers):
Credit Suisse (8/16/21): Outperform with a $12 price target reduced from $16.
Other Recent News: Paysafe Completes Acquisition of PagoEfectivo; Paysafe to Acquire viafintech; Paysafe to Acquire SafetyPay ($441M, expected to close in the 4th quarter)
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.
