Saturday, August 8, 2020

ASB, AVK, CSWC, D, FIDI, GLQ, IBM, KW, LMHA, OFS, SMMV, TANNI, TPVG, XRE:CA

Note to Readers: 

 I have lost the post that contained the snapshots of regional bank trades. 

 Whenever I have a new trade, I would include a snapshot in that October 2011 post. Google just created a new blogger interface. When I hit the edit icon on that post, nothing happened. So I scrolled through the posts until I found it and hit the new revert to draft button so I could add a snapshot. When that happened all snapshots since 2014 were deleted by Google. When I hit publish, even that post was deleted by Google. So it is gone. 

 The new interface also screwed up my snapshots since they would no longer fit on the page. I had to go back and downsize them. 

 +++++     

 Economy: 



Donald believes that he has the authority to appropriate money without congressional approval and then spend the money to increase unemployment benefits. Trump says he may suspend payroll tax collection without Congress: 'I have the absolute right' | Fox Business Donald is also considering a suspension of payroll tax collection. In Trump's America,  Donald can do whatever he wants, as he has claimed many times. 

Any Executive Order suspending the payroll tax or appropriating money to pay for extra unemployment benefits will be challenged in the courts. My prediction is that enforcement of those orders will be enjoined, meaning that nothing will happen other than Donald's posturing for political purposes. So if that prediction proves to be prescient, the implications will be serious for the economy assuming Congress is unable to reach any deal. 

ADP reported that private employers added 167K jobs last month. ADP National Employment Report The consensus estimate was for a 1.9M gain. "Job gains totaled 4.3 million in June and 3.3 million in May after a loss of 19.4 million in April, according to ADP data." Private sector job growth slows sharply in July: ADP - MarketWatch

U.S. weekly jobless claims total 1.186 million, vs 1.423 million expected This was for the week ending 8/1 and represented the 20th consecutive week where new initial claims exceeded 1M.  

Notwithstanding the new initial unemployment claims filed during July and the ADP report, the federal government claimed that the economy added 1.763M jobs in July. Employment Situation Summary The U-6 number declined to 16.5% from 18%. Table A-15. Alternative measures of labor underutilization; Jobs report July 2020 It is not possible IMO to reconcile this report with other data. 


The July ISM manufacturing index rose to 54.2 from 52.6. The consensus was at 54. The new orders component rose 5.1 to 61.5. Employment remained in contraction territory at 44.3, up from 42.1 in June. July 2020 Manufacturing ISM® Report On Business®

The July ISM services index rose to 58.1. The new orders component rose 6.1 points to 67.7. Service side of the U.S. economy shows surprising growth in July, ISM finds, but employment worsens - MarketWatch

For the First Time Ever, Uncle Sam’s Aid to U.S. Tops Quarterly GDP - Barron's During the second quarter, the Federal Reserve and U.S. government pumped about $5 trillion into the economy, more than nominal GDP of $4.85 trillion. U.S. stocks "hit two times nominal GDP, eclipsing the previous record of 1.87 times at the peak of the dot-com bubble in 2000’s first quarter." This article cites Joe Carson's blog: Biggest Decline In Nominal Output & Income In Our Lifetime.


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In Work-From-Home Era, Income Investors Need to Do Homework on Office REITs - Barron's

Retail rents plummet across New York City, a warning for other areas

Hyatt Hotels' revenue per room plunges 89% in Q2 - MarketWatch

Trump: Microsoft should pay 'key money' to Treasury for TikTok deal; TikTok Microsoft deal: State media says China could retaliate Donald asserted that Microsoft needs to pay a substantial sum to the U.S. for facilitating an acquisition of TikTok by Microsoft. Donald facilitated the purchase by threatening to block TikTok from the U.S. unless it is sold to a U.S. company. Donald has not said yet whether he expects a commission.

BP sets new low-carbon goals as it slashes dividend in half and reports $16.8 billion loss - MarketWatch 

Ares Capital Corporation Announces June 30, 2020 Financial Results and Declares Third Quarter 2020 Dividend of $0.40 Per Share ("For the second quarter of 2020, Ares Capital reported GAAP net income of $277 million or $0.65 per share (basic and diluted), Core EPS(2) of $0.39 per share (basic and diluted), net investment income of $165 million or $0.39 per share (basic and diluted), and net realized and unrealized gains of $112 million or $0.26 per share." Net asset value per share was reported at $15.83, down from $17.32 as of 12/31/2019 but up from $15.58 as of 3/31/20) I own shares. 

 TCG BDC, Inc. Announces Second Quarter 2020 Financial Results and Declares Third Quarter 2020 Regular Dividend of $0.32 Per Common Share and Special Dividend of $0.05 per Common Share (Net asset value per share reported at $14.8, up from $14.18 as of 3/31/20; NII per share at $.38; decreased regular dividend from $.37 to $.32 but added for this quarter a 5 cent special dividend) I own shares.

Square (SQ) earnings Q2 2020 Investors responded positively (Close 8/5/2020: SQ $146.55 +$9.72 +7.10%)

New Mountain Finance Corporation Announces Financial Results for the Quarter Ended June 30, 2020 (NII per share = $.3 adjusted and $.28 non-adjusted; net asset value per share = $11.63, up from $11.14 as of 3/31/20; declared a quarterly dividend of $.30 per share; invested "in 109 portfolio companies, with a weighted average YTM at Cost of approximately 8.6%)"  I own shares. 

Manulife reports 2Q20 net income of $0.7 billion, core earnings of $1.6 billion, a strong LICAT capital ratio of 155%, and an expense efficiency ratio of 48.9% Manulife Financial EPS beats by C$0.17- Seeking Alpha; Manulife declares common share dividend I own shares.

Fidus Investment (FDUS) NII beats by $0.06, beats on total investment income -Seeking Alpha; Fidus Investment Corporation Announces Second Quarter 2020 Financial Results (Board declared a quarterly dividend of $.30 per share; NII per share = $.38; Net asset value per share at $15.39; estimated spillover income of $1.12 per share) The Stock Jocks' response yesterday was positive: FDUS $10.25 +$1.44 +16.35%  I own shares. 

CubeSmart FFO beats by $0.02, beats on revenue-Seeking Alpha; CubeSmart Reports Second Quarter 2020 Results (FFO per share = $.41; same-store occupancy at 93%, down from 94%: "As of July 31, 2020, same-store occupancy was 94.5% compared to 93.5% as of July 31, 2019"). I own shares. The Stock Jocks responded favorably to this report yesterday.  CUBE $30.21 +$1.07  +3.67% 


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Trump:

Trump Organization under investigation for 'insurance and bank fraud,' filing suggests

Donald claimed last week that he has the authority to address mail-in voting by executive order. Trump claims the right to issue an executive order on vote-by-mail-POLITICO The executive order will first need to repeal Article 1, Section 4, Clause 1 of the U.S. Constitution, which specifically grants that authority to the states which can be overridden only by Congress. The President has no role whatsoever. 


Hereby Deleted by Executive Order: Signed Donald I, the first of his line, Anointed by God As the Chosen One and an Extremely Stable Genius that Knows Everything 

Role of Congress in Regulating Federal Elections | Constitution Annotated | Congress.gov | Library of Congress The fact that the President has no power to make or alter the election rules and procedures mandated by the States or Congress is irrelevant in Trump's America, where Donald has the power to do whatever he wants.

Nevada passes bill to mail all voters ballots amid coronavirus pandemic - CBS News

This is how Donald described the law passed by the Nevada legislature and signed by Nevada's governor:


Trump campaign sues Nevada over expanded mail-in voting | TheHill

Trump pledges lawsuit to block mail-in voting in Nevada - POLITICO


Nevada's Secretary of State Cegavske told Nevada's lawmakers that there was no evidence of a fraudulent ballot being cast in the June 2020 primary when Nevada mailed all active voters absentee ballots.

My idea on Donald's executive order is not to ban mail-in ballots since some Trumpsters may actually want to vote that way during a pandemic, particularly the old white folks with beer bellies.

Instead, Donald could simply proclaim than any mail-in vote for Biden was cast by an illegal or was a fake ballot manufactured and filled out by Chinese communists. And, of course, any vote for Donald will be counted as legal as coming from real Americans. 

Trump suddenly supports mail-in voting-for the key swing state of Florida - MarketWatch 

 Don the Authoritarian views compliance with Supreme Court decisions as optional for him. Opinion | Trump didn’t like rulings on DACA. So he’s defying them. - The Washington Post

Demagogue Don has claimed on many occasions that he can do whatever he wants as President.

The 5 republican Justices have given Donald the green light to repurpose money appropriated by Congress, thereby allowing the President to usurp the Constitutional powers specifically delegated to Congress. Supreme Court ruling hands Trump a big victory on funding his border wall - Vox

Trump suggests freezing evictions and payroll-tax collection through executive orders - MarketWatch

In her seminal book "The Authoritarian Dynamic", Dr. Karen Stenner predicted the rise of authoritarism in western democracies. The Authoritarian Dynamic Explained; Authoritarianism: The Terrifying Trait That Trump Triggers - Pacific Standard; Opinion | Democracy Is in Grave Danger at This Moment- The New York Times In her book, Stenner made the following observations: (1) "Disagreement, dissent, and disobedience; determination of the 'common good' by debate and negotiation between partisans of competing worldviews: none of this comprehensible, let alone palatable from the authoritarian perspective." and  (2) Authoritarians are best understood as "simple-minded avoiders of complexity". 

 This is ‘the cognitive test Trump didn’t pass’: Internet reacts to president’s ‘shocking’ Axios interview - MarketWatch

Trump’s Latest Interview Was Full Of False Claims & Baffling Moments

Trump's Mind-Numbing Interview with Axios | NowThis - YouTube

Trump’s Train-Wreck Interview with Jonathan Swan on HBO | The Tonight Show - YouTube

This Presidential Candidate Is Not Well | The Daily Social Distancing Show - YouTube


The Trumpster Tucker Carlson was very upset that anyone would dare to discover that his chief writer had posted clearly racist remarks:

Tucker Carlson's top writer quits after secretly posting racist and sexist remarks in online forum; Tucker Carlson slams critics of former top writer, announces vacation - Business Insider

He vented his anger against Obama:

Tucker Carlson calls Obama 'one of the sleaziest and most dishonest figures' in US political history | TheHill;

Tucker Carlson Calls Barack Obama a ‘Greasy Politician’ Who ‘Desecrated’ John Lewis’ Funeral Donald did not attend the funeral. That was payback, as Donald said in his Axios interview last week, for Lewis refusing to attend his inauguration.

DHS analyzed protester communications, raising questions about previous statements by senior department official - The Washington Post

AP FACT CHECK: Trump's election agitations and distortions

Barr Makes It Official—He’s Trump’s New “Fixer”

Key impeachment inquiry witness says nation's values threatened under Trump

Trump continues to promote this canard: PolitiFact | Donald Trump draws false distinction between absentee, mail-in voting Mary Trump is right when she claimed that Donald enjoyed lying. I believe it feeds his need to feel superior to millions who are easily manipulated by demonstrably false statements.

The President's Trumped-Up Claims of Voter Fraud - FactCheck.org Trump is an authoritarian. It should surprise no one that he continually tries to undermine institutions and activities that are fundamental and essential to a properly functioning democracy. In that effort, he has the support of the republican party.

This is common in Trump's America: Viral Video Manipulates Pelosi's Words - FactCheck.org

The Federal Clampdown On Portland Shows Just How Fragile Our Democracy Is | FiveThirtyEight

Portland protests against police brutality, anti-Black racism continue for 69th day - oregonlive.com

He Predicted a Trump Win in 2016. What's His Forecast For 2020? | NYT Opinion - YouTube

After Trump fired his predecessor in May, acting State Department IG says he is leaving too - Reuters They can not be an independent Inspector General in Trump's America.


++++

Covid-19 Updates: 

U.S: As of Friday 8/7/2020 





'Peaceful protest': Trump defends audience at Bedminster golf club (most of the audience were not wearing face masks, nor were any of them  practicing social distancing) 

Based on the revelations in the following linked NYT article, Pelosi said that she had no confidence in Dr. Deborah Birx. Inside Trump’s Failure: The Rush to Abandon Leadership Role on the Virus - The New York Times

Poor Dr. Birx. Telling the truth, which Trump does not want anyone to know, will draw the Duck's ire: Trump attacks Dr. Birx after she said U.S. reached 'new phase' in coronavirus fight

Fauci defends Birx warning about a ‘new phase’ in U.S. - The Washington Post

This is to be expected from Trumpsters: Dr. Fauci says his daughters need security as his family continues to get death threats

There are a large number of videos showing flagrant violations of mask-wearing and social distancing regulations. N.J. sees spike in COVID-19 cases as residents slack off on masks and social distancing 

Nashville had an example last weekend and numerous other examples. Nashville police action is under review after Saturday night house party | News | wsmv.com; The party continues on lower Broadway despite bar closures and mask mandate | WKRN News 2

Doctor Don took issue with what Doctor Fauci had to say, making the asinine and false assertion, once again, that there were more cases since there was more testing. 
Doofus Don's earlier tweet on the same subject matter indicates that Donald failed math at Trump University:



Since he keeps repeating that lie, Donald must believe it works on the intended audience. 


Why the Pandemic Is So Bad in America - The Atlantic

Report: Coronavirus infected scores of children and staff at Georgia sleep-away camp ("A new report suggests that children of all ages are susceptible to coronavirus infection and may also spread it to others") Doctor Don, after burning the midnight oil reading medical books and studying intently data published about Covid-19 in medical journals, concluded that children are "almost immune" from infections, nor transmit the disease to others.  Trump: Young People 'Almost Immune' to Coronavirus. WHO Chief: No.; Children Often Carry More Coronavirus than Adults Do: Study | The Scientist Magazine® We will find out soon enough.


As of 7/31/2020, more than 330,000 children have been diagnosed with Covid-19.  Obesity, race play roles in severe COVID-19 illness among kids


Facebook removes Trump's post falsely claiming children are 'almost immune' to Covid-19; Facebook removes first coronavirus misinformation post by Trump Very few of Trump's tweets could survive a fact-check. Trump lies all of the time about matters relating to the pandemic and routinely spreads misinformation about it. That has no negative repercussions in his approval rating among Republicans, most of whom view him as honest and a role model for their children who hopefully will not become infected attending in-person classrooms in republican controlled school districts and states where mask-wearing is optional. 








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Donald claims to have a 96% approval rating among republicans


8/3/20 Tweet
While that is probably a bit high, his approval rating among Republicans is probably no lower than 90%. And, that needs to be remembered by all U.S. voters, who are non-Trumpsters, for as long as they live.

Demagogue Don is tweeting most every day his false claims about mail-in voting, which he equates with stealing the election unless, of course, the vote is cast for him. This is one from 8/3/20: 


In a recent role, 76% of those voting for Trump in 2016 believe that the U.S. is handling the pandemic better than other countries or as well. 

Doofus Don claims Biden is "against God"and will "hurt the Bible" Donald, the Extremely Stable Genius, also claimed that Biden was against energy. Donald better hope there is no God sitting in judgment on him.  


 Trump appointed a mega-donor to be Postmaster General, who, upon assuming control, cut back on funding for timely mail deliveries.  



Despot Don, the unquestioned leader of the republican party who can not be criticized by the True Believers, is also attempting to manipulate the results of the U.S. Census that will result in an undercount of hispanic and black voters. How Trump hopes the census ending early will help him politically - Vox; Opinion | Trump Is Plotting Against the Census. Here’s Why. - The New York Times; Trump Issues Memo On The Census And Unauthorized Immigrants : NPR 


Jerry Falwell Jr.’s Long String Of Scandals He is a committed Trumpster though. The latest one is probably his best, the one with the racy photo with his pants unzipped, with his arm around the waist of a young woman, and his speech impaired phone call trying to explain it.


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1. Small Ball:

Small Ball Rules:

(1) Each purchase has to be at the lowest price in the chain;

(2) Purchases are made in small lots, using commission-free trades;

(3) On price pops, I will consider selling my highest cost shares at a profit, no matter how small;

(4)Some positions will be eliminated altogether on price pops when the goal is achieved: 

For some purchases, I scrap (1) above and substitute a purchase restriction that permits purchases when the price lowers my existing cost per share.

The overreaching goal is to reduce risk through a controlled trading strategy that realizes gains particularly through selling the highest cost lots that reduce my average cost per share which increases my dividend yield. When this works, I end up with less at-risk money-producing income at or near the highest yield.

Risks are controlled by a variety of techniques including the limitations on dollar exposures to each stock and on each purchase. The strategy is primarily one for bear markets that will be characterized by strong cyclical rallies and declines.

The reasons for selling the highest cost lots first are (1) to reduce my income tax obligation resulting from a sell; (2) to generate a total return in excess of the dividend payments; (3) to increase my dividend yield on the remaining shares; (4) to take advantage of normal up and down volatility by selling the highest cost lots profitably and then by buying when the price falls below the lowest price paid in the chain; (5) to make it more likely that I will buy during a meltdown after selling higher cost shares (psychological); and (6) to mitigate risk through less at risk monetary exposure. Risk is also controlled through small odd lot trades

A. Started ASB-Bought 10 at $12.35; 5 at $11.9: 




Closing Price 8/7/20: ASB +$13.87 +$0.69  +5.24%

"Associated Banc-Corp (NYSE: ASB) has total assets of $36 billion and is one of the top 50 publicly traded U.S. bank holding companies. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from more than 240 banking locations serving more than 120 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas."

ASB | Associated Banc-Corp. Analyst Estimates

SEC Filings

I mentioned this purchase in a 7/24/20 comment.

Average Cost Per Share: $12.2

Dividend: Quarterly at $.18, last raised from $.17, effective for the 2019 4th quarter.

Next Ex Dividend: 8/31/20

Dividend Yield at Average Cost: 5.9%

5 Year Financials:

ASB 2019 Annual Report at page 34

Last Earnings Report (6/30/20): Associated Banc-Corp Reports Second Quarter 2020 Earnings of $0.94 Per Common Share Including the Gain on Sale of Associated Benefits and Risk Consulting

Net income for the quarter was reported at $145M or $.94 per share. Excluding the gain realized from selling a business, E.P.S. was $.26 per share.

Tangible Book Value Per Share: $16.11

Net Interest Margin: 2.49%

Quotes from Press Release:

"The second quarter 2020 provision for credit losses was $61 million, up from $53 million in the prior quarter and up from $8 million in the same period last year, driven by increased charge offs and further reserve builds.

Nonaccrual loans of $172 million were up $35 million from the prior quarter and up $5 million from the same period last year. The nonaccrual loan to total loans ratio was 0.69% in the second quarter, up from 0.56% in the prior quarter and down from 0.72% in the same period last year.

Net charge offs of $26 million were up $9 million from the prior quarter and up $13 million from the same period last year.

The Company’s capital position remains strong, with a CET1 capital ratio of 10.3% at June 30, 2020."


SEC Filed 2nd Quarter Earnings Presentation

ASB Non-Cumulative Equity Preferred Stocks (rated Baa2/BB):

I currently have no interest in these securities. All of them are selling over their $25 par values.

Associated Banc-Corp. 6.125% Non-Cumulative Preferred Series C

B. Added 10 CSWC at $12.9:




Quote: Capital Southwest Corp. - A BDC

Closing Price 8/7/20: CSWC $14.57 +$ 0.21 +1.46%

Management: Internal

CSWC SEC Filings

Website: Capital Southwest

Dividend: Quarterly at $.41 (regular rate)($1.64 annually)

The next payment will include a $.10 per share special dividend.

For any BDC, no one should be surprised by a dividend cut.

Next Ex Dividend: 9/14/20

Average Cost Per Share This Account: $13.1

Dividend Yield at Average Cost: 12.52% using regular penny rate and 15.58% with continuation of $.1 per quarter special dividend.

In the earnings presentation filed with the SEC at page 7, CSWC says it has an undistributed net investment ("UNI") income of $1.27 per share as of 6/30/20 and expects "to pay $.10 per share Supplemental Dividend per quarter going forward, subject to Board approval." The current UNI would run out in about 3 years at $.10 per quarter. Circumstances may change including an increase in nonaccruals that would cut that time period short.

Last Discussed: Item # 4.F. Started CSWC-Bought 10 at $13.3 (6/27/20 Post)

Last Earnings Report (Q/E 6/30/20): This report was released after this purchase.

NII per share = $.38 ($.4 before taxes*)
90% First Lien
Net Asset Value Per Share: $14.95, down from $15.13 as of 3/31/20 (see Capital Southwest Announces Financial Results for the Fourth Quarter and Fiscal Year Ended March 31, 2020)
No new non-accruing loans
Capital Southwest Announces Financial Results for First Fiscal Quarter Ended June 30, 2020

*I suspect, but have not confirmed, that CSWC is paying some federal income taxes on undistributed net investment income. I may look into this issue more when and if I become so inclined which is not my current condition.  

C. Added 1 IBM at $116.16:


Quote: International Business Machines Corp.

Closing Price 8/7 (ex dividend): IBM $124.96 +$0.47 +0.38%

IBM SEC Filings

IBM Consensus Analyst EPS

IBM Investor relations

The 1 share add reduced my average cost per share to $121.89 from $122.22.

I discussed this purchase in a 7/21/20 comment.

Current Position: 18+ shares

Average Cost Per Share: $121.89

Dividend: Quarterly at $1.63 ($6.52 annually)

IBM Board Approves Regular Quarterly Cash Dividend

I view this stock primarily as a bond substitute. Harvesting the dividend and selling shares at whatever profit is available defines victory.

Last Ex Dividend: 8/7/20 (owned all shares as of)

Dividend Reinvestment: Yes at less than $150

Dividend Yield at Average Cost: 5.35%

Highest Cost Lots (excluding shares purchased with dividends): 1 at 144.68; 1 at $143.72; 1 at $142.25 (likely will be sold together when and if the price exceeds $145

Last Buy Discussion: Item # 2.G. Added 1 IBM at $95, 1 at $100; 1 at $102.75; 1 at $105.5; 1 at $92 (5/2/2020)

Last Sell Discussion: Item # 1.B. Sold 2 IBM at $155.40 (2/16/20 Post)

Last Earnings Report (Q/E 6/30/20): SEC Filed Press Release

This report was released after my last purchase.

Non-GAAP E.P.S. $2.18, beat by 9 cents

Revenues: $18.12B, down 5.4% Y-O-Y (or 3.9% on a constant currency basis), but beat the consensus forecast by $400M.

Discussed at IBM earnings and at IBM outlook remains cloudy at best as new CEO fails to plot the way forward - MarketWatch

IBM initially rose in response to this report on 7/21 but spent the day giving up its early price pop and finished in the red:

Closing Price 7/21 (initial response to report): IBM $126.06 -$0.31 -0.25% (day's range between $125.8 and $132.17 with the open at $131.16)

Broker Reports (available to Schwab customers):

Argus (7/21/20): Buy, raised from hold, with a new PT of $155.

Credit Suisse (7/21/20): Outperform with a 12 month PT of $155

Morningstar (7/20/20):  3 stars with a FV of $120

S & P (7/22/20): 4 stars with a 12 month PT of $144 (reduced 2020 E.P.S. estimate to $11.28 from $11.95 and 2021 estimate to $12.56 from $13.25, with protracted recovery being the most likely scenario)

Maximum Position: 30 Shares

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

D. Eliminated D-Sold 3 at $74.04:




Dominion Energy Inc

Profit Snapshot: $24.97 (7/10 sell only)




Dominion lowered its earnings estimates and stated an intention to slash its dividend. Both actions resulted from the decisions to abandon the  Atlantic Coast Pipeline Venture with Duke Energy and to sell its gas, transmission, and storage assets to Berkshire Hathaway. 

Dominion Energy Agrees to Sell Gas Transmission, Storage Assets to Berkshire Hathaway Energy-- Strategic Repositioning Toward 'Pure-Play' State-Regulated, Sustainability-Focused Utility Operations ("To reflect today's announcements, Dominion Energy is revising its 2020 operating earnings guidance. The company now expects 2020 operating earnings of $3.37 to $3.63 per share. The company's previous guidance was $4.25 to $4.60 per-share. . . The company now expects to target an approximately 65 percent payout ratio to be effective upon completion of the transaction. This new payout ratio implies a 2021 dividend payment of around $2.50 per share. The projected reduction in the annual dividend reflects the absence of income from the divested assets and a revision to the company's target payout ratio to align with best-in-class industry peers.")

The 3 share position was not worth the time to monitor since I was not going to add to it. 

E. Started AVK-Bought 10 at $13.69:


Quote: AVK | Advent Convertible & Income Fund Overview

Closing Price 8/7/20: AVK $14.14 -$0.01 -0.07%

Leveraged: Yes at substantial levels



Sponsor's Website: Advent Convertible and Income Fund | Guggenheim Investments

SEC Filings

Sector Weightings as of 5/31/20:
Last SEC Filed Shareholder Report period ending 4/30/20

Dividend: Monthly at $.1172 per share supported by ROC ($1.41 rounded annually)

Last Ex-Dividend: 7/14/20 (owned 10 as of)

Data Date of 7/13/20 Trade:
Closing Net Asset Value Per Share: $15.16
Closing Market Price: $13.52
Discount: -10.82%

F. Started KW-Bought 10 at $14.89:



Quote:  Kennedy-Wilson Holdings Inc.

Closing Price 8/7/20: KW $14.73 +$0.39 +2.72%

SEC Filings

Home | Kennedy Wilson
Investors | Kennedy Wilson

2019 Annual Report  (KW  has "an ownership interest in approximately 49 million square feet of property globally, including 29,705 multifamily rental units and 22.0 million square feet of commercial property. At December 31, 2019 and 2018, along with our equity partners, we held a portfolio with assets at a book value of approximately $13.3 billion and $11.3 billion.  For the years ended December 31, 2019 and 2018, these assets generated total revenues of approximately $1.0 billion and $1.0 billion.")

 5 Year "Performance Metrics": 


Dividend: Quarterly at $.22 per share, last raised from $.21 effective for the 2019 4th quarter payment.

Dividend Information | Kennedy Wilson

Last Ex-Dividend: 6/29/20

2019 Dividend Tax Classification:



IRS Form 8937
This is my first purchase of KW's common stock.

Last Earnings Report (Q/E 6/30/20): I viewed this report, released after my purchase, as unsatisfactory, which validates the go slow approach.

Kennedy Wilson Reports Second Quarter 2020 Results

Purchase Restriction: Each subsequent purchase, other than through dividend reinvestment, must be at the lowest price in the chain.

Maximum Position: 100 shares

I have previously owned KW's 7.75% SU baby bond that was redeemed by the issuer in 2017.








G. Started SMMV-Bought 5 at $28.96:



Closing Price 8/7/2020: SMMV $30.86 +$0.40 +1.31% 


Expense Ratio: .2%

Number of Holdings as of 7/31/20: 368

Some Top Holdings as of 8/5/20: 


Dividends: Quarterly at a variable rate

H. Started GLQ-Bought 10 at $11.37; 10 at $11.18: 






Quote: Clough Global Equity Fund Overview -A Highly Leveraged Global CEF

Closing Price 8/7/20: GLQ $11.81 -$0.08 -0.67%

Sponsor's Website: Clough Global - GLQ ("Having a global, flexible mandate, the Fund will invest at least 80% in equity and equity-related securities in U.S. and non-U.S. markets, and the remainder in fixed income securities, including both corporate and sovereign debt, in both U.S. and non-U.S. markets.")

Leverage: Substantial

Last SEC Filed Shareholder Report (period ending 4/30/20)

Dividend: Monthly at $.1104 per share

Last Ex Dividend:  7/20/20 (owned as of)

Next Ex Dividend: 8/20/20

Data Date of 7/14/20 Trade:
Closing Net Asset Value Per Share: $13.22
Closing Market Price: $11.37
Discount: -13.99%

Sourced from GLQ - CEF Connect

Some Top Holdings as of 6/30/20 (1% or higher weightings):



I. Started FIDI-Bought 10 at $16.56; 5 at $16.11; 5 at $15.91:





Quote: FIDI | Fidelity International High Dividend ETF Overview 

Sponsor's Website:  FIDI | ETF Snapshot - Fidelity

Expense Ratio: .39%

Average Cost Per Share (20 shares ): $16.28

Total Last Four Quarterly Dividends: $.687 per share

Dividend Yield Using Prior 4 Payments = 4.22% at $16.28 

Dividends: Quarterly at a variable rate
Some Holdings as of 8/5/20:  

J. Eliminated TPVG in Schwab Account-Sold 30 at $10.58:

I still own shares in other accounts. Eliminating a position in one account when shares are owned in multiple account is simply profit harvesting and the elimination is just a pare.

Quote: TPVG | TriplePoint Venture Growth BDC Corp. Overview

Closing Price 8/7/20: TPVG $11.89 +$0.08 +0.68%

TPVG SEC Filings

Website: TriplePoint Venture Growth

History This Account:





Profit Snapshot: $94.3

Dividend: Quarterly at $.36 per share ($1.44 annually)

Last Ex Dividend: 6/15/20 (owned as of)

Next Ex Dividend Date: 8/28/20 

Last Earnings Report (Q/E 6/30/20): I discussed this report in an 8/5/2020 comment.

TriplePoint Venture Growth BDC Corp. Announces Second Quarter 2020 Financial Results

Last Substantive Buy Discussion: Item # 3.B. Added 5 TPVG at $11.1; 5 at $10.7; 5 at $8.2; 5 at $6.92; 2 at $5.35; 2 at $4.45; 2 at $4; 2 at $3.5; 2 at $2.99; 5 at $4.96   (4/11/2020) I still own those shares in my Fidelity account. I also still own shares in two Roth IRA accounts and 1 other taxable account.

Other Sell Discussions: Item # 2.A. Pared TPVG-Sold 14 shares at $15.61-Used Commission Free Trade (9/1/2019 Post)(profit = $46.33); Item # 2.A. Sold 74+ TPVG at $14.87 (7/20/19 Post)(profit snapshot= $246.43); Item # 4.C. Eliminated  TPVG in Roth IRA Account (4/17/19 Post)(profit snapshot = $88.87); Item # 3.B.(4/14/19 Post)(profit = $71.76); Item 3.A. Sold 40 TPVG at $13.44-Schwab Account and Item #3B Sold 50 TPVG at $13.39 Vanguard Roth  IRA (3/13/19 Post)(profit snapshots of $4.17 and $4.49 ); Item 2.B. Sold 50 TPVG at $13.39 (3/4/2017 Post)(profit snapshot = $153.08); Item # 3 Sold 50 TPVG at $12.33 (1/16/17 Post)(profit snapshot = $83.48)

Trading Profits to Date: $800.47

Goal: Total Return in excess of the dividend payments. In other words, victory is defined as collecting dividends without losing money on the shares.

2019 Annual Report (risk factor summary starts at page 23; list of investments starts at page 72; unfunded commitment discussion list at page 61)

K. Added 3 OFS at $4.5:

I was not going to mention this buy. Since OFS just reported second quarter earnings, I decided to include a discussion in this post since I have soured on the management of this BDC.

I am in the hole on this one and may not be able to dig myself out.

Quote: OFS Capital Corp. (OFS)- A Mini Cap BDC

Closing Price 8/7/2020: OFS $4.8500 +$0.01 + 0.21%

2019 Annual Report (risk summary starts at page 27 and ends at page 55)

OFS SEC Filings

Website: Homepage - OFS Capital

Management: External

Dividend: Quarterly at $.17 per share ($.68 annually), recently reduced from $.34 per share. Slashed 50%. On the positive side, sort of, the new penny rate was covered by net investment income in the second quarter.

Position this Account: 130+ shares

Average Cost Per Share: $7.86

Dividend Yield at Current Rate: 8.65%

Dividend Reinvestment: Yes, given the discount to net asset value per share.

Next Ex-Dividend Date: 9/22/20

Net Asset Value Per Share History:

6/30/20:   $10.10
3/31/20:    $  9.71
12/31/19:   $12.46
9/30/19:    $12.74  
6/30/19:    $12.95   Page 2 10-Q
3/31/19      $13.04   10-Q
12/31/18    $13.10
6/30/18     $13.70
03/31/18   $13.67
12/31/17    $14.12
12/31/16    $14.82
12/31/15    $14.76
12/31/14    $14.24
12/31/13    $14.54

IPO Offering Price at $15 (November 2012) with proceeds after the underwriters' discount at $13.05 Final Prospectus Supplement


Last Discussed:  Item # 3.E. Added 5 OFS at $9.66; 5 at $9.2; 5 at $8.7; 5 at $6; 5 at $5.65; 2 at $3.7; 10 at $3.79 (4/11/20 Post)

Last Earnings Report (Q/E 6/30/20): SEC Filed Press Release

"Net investment income per share declined $0.17 from the corresponding quarter in the prior year primarily due to an approximately $0.24 decline in net interest margin—total interest income less interest expense—per share. Weighted average yield on debt and Structured Finance Notes for the three months ended June 30, 2020, declined to 9.01% from 11.10% in the second quarter ending June 30, 2019, due to the Company's continuing shift to lower-yielding, first lien senior secured loans of larger borrowers, and well as the placement of our loans to Online Tech Stores, LLC and 3rd Rock Gaming Holding, LLC, with an aggregate cost of $37.1 million, on non-accrual status during the six months ended June 30, 2020. These factors adversely impacted the weighted-average yield by 1.1% and net interest margin by $0.08 per share compared to the prior year quarter. Our weighted-average interest costs increased to 5.26% from 4.98%, principally due to borrowings under our Unsecured Notes Due October 2026 and the BNP Facility, as well as an increase in uninvested cash, which reduced net interest margin by $0.10 per share." 10-Q for the Q/E 6/30/20 at page 56 (emphasis added)

Note the Y-O-Y plunge in net investment income per share:




SEC Filed Press Release
There were some significant loans that went on non-accrual during the first six months:


Page 64 10-Q
(lists of investments starts at page 7 of the 10-Q)

One of new sour loans is a large one to 3rd Rock Gaming, as noted above. This is a private company whose business involves gaming software, which involves, at least in part, electronic bingo. In the conference call, management discussed this loan at page 3: OFS Capital (OFS) CEO Bilal Rashid on Q2 2020 Results - Earnings Call Transcript | Seeking Alpha OFS "rescheduled 3rd Rock Gaming's June 30th principal on interest payment."  This loan is first lien. OFS notes that the impact of the pandemic "on its customers which include gaming venues has been substantial due to social distancing needs. The delays in reopening the venues and the timing associated with the return of significant customer traffic is unknown."

As of 6/30/20, the 3rd Rock loan was in the principal amount of $21.231M and had been written down to $12.916M, a big hit for this mini cap BDC.. 
3rd Rock Gaming may be owned by Planet Bingo since it owns that trademark. 3RD ROCK GAMING Trademark of PLANET BINGO, INC. 

Another big hit is the subordinated loan made to Online Tech Stores L.L.C. in the original principal amount of $16.129M that had been written down to $7.124M and is on nonaccrual. 

Q/E 6/30/20

It is difficult to comprehend why anyone would loan this company $16+M on a subordinated basis. 


Trading Profits to Date: $137.02

Goal: Total Return in excess of the dividend payments. I am barely motivated to make any effort to dig myself out of the hole. Management is extremely over-compensated for the results. The best solution now is to sell all of the holdings and distribute the proceeds to shareholders.

2. Exchange Traded Bonds:

A. Bought 5 TANNI at $24.03; 5 at $24.53 (2 different accounts):




Quote: TravelCenters of America Inc. 8.25% Senior Unsecured Notes due 2028 Overview 

Closing Price 8/7/2020: TANNI  $24.88 -$0.37 -1.47%

Investment Category: Exchange Traded Baby Bonds

Issuer: TravelCenters of America Inc. (TA)
TravelCenters of America - Investors
TA Analyst Estimates
TA SEC Filings

 I discussed in a recent post buying 5 shares of another exchange-traded bond, issued by TravelCenters, that matures in 2029.  Item # 4.A. Bought 5 TANNL at $23.5 (7/18/20 Post); TravelCenters of America Inc. 8% Senior Notes due 12/15/29

 I view TA's senior unsecured debt to be high risk.

 Security: Senior Unsecured Baby Bond
Prospectus
Par Value: $25
Interest Payments: Quarterly
Trades Flat:
Last Ex Interest Date:
Maturity Date: 1/15/28
Issuer Redemption Option: At par value whenever it chooses

 This exchange trade baby bond used to trade under the TANN symbol. This is my first purchase. I have a number of round trips on the other two SU exchange-traded bonds TANNL and TANNZ.

 Snapshots of Baby Bond round-trips can be found at Baby Bonds - South Gent | Seeking Alpha and  Stocks, Bonds & Politics: Exchange Traded Baby Bonds for sells starting in 2017.

 B. Eliminated LMHA-Sold 15 at $25.22:
I discussed the reason for selling this junior baby bond in an 8/3/2020 comment.

Profit Snapshot: $103.69


Item # 4.C. Bought 10 LMHA at $18; 5 at $18.92 (4/18/20 Post)

3. Bought 100 XRE:CA at C$15.12 (C$1 commission):



Quote: XRE | iShares S&P/TSX Capped REIT Index ETF Overview

Sponsor's Website: iShares S&P/TSX Capped REIT Index ETF | XRE

Expense Ratio: .61%
Dividend: Monthly at a variable rate


Last Ex Dividend: 6/27/20

Last Sell Discussion: Item # 1.A. Eliminated XRE:CA Sold 150 at C$16.61 (11/17/17 Post)(profit snapshot = C$47)

Total Holdings: 21 as of 8/3/20

Top 10 as of 8/3/2020:


My largest Canadian REIT holding is 1000 units of Northwest Healthcare Properties Real Estate Investment Trust which is not among the top 10. By buying the ETF, I gain exposure to Canadian REITs that are not owned. Among the top 10 holdings, I currently own only 10 shares of Riocan which was recently discussed here. 

4. Fixed-Coupon Investments-Fidelity Taxable Account:

I am no longer buying $1K par value corporate bonds and treasuries, nor am I even looking at CD rates. All redemptions proceeds from those types of fixed coupon investments are not being reinvested into similar securities. All fixed coupon investments are consequently in a runoff mode.

I own Tennessee Municipal bonds in 3 taxable accounts. Most of my CDs are owned in my Schwab account. 

The largest corporate bond positions are in the Schwab account. I own corporate bonds in 5 accounts (4 taxable and 1 Roth IRA) The other Roth IRA has had all of the bonds mature.

I can probably replace the income lost with redemptions with common stock purchases, but only a fraction of those proceeds is being directed now into dividend paying common stocks. 

To have a full replacement, I would not have to redirect 100% of the proceeds but could achieve parity with about 60% based on what I have been buying. The yields on maturing corporate bonds and treasuries were not that great before plummeting this year. The yields on older securities only look better compared to what is available now. 

Some of the lost interest income resulting from redemptions is being recouped through gains realized from trading which is a less reliable form of income generation compared to interest received from high quality corporate bonds, treasuries and FDIC insured CDs.  

Fidelity Taxable-Fixed Coupon-As of 7/31/20 (snapshot from my July statement):





























And, I have lost a lot of bonds, CDs and treasury bills to redemptions YTD in this account and others. Some of the pages reproduced above included 15 REIT common stocks that I own in this account, which I excised from the preceding  snapshots.  They were mixed up by Fidelity in a fixed coupon section of my July statement. 

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. 
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