Saturday, September 12, 2020

AOD, BK, CSCO, EBGEF, ED, FAX, FIVG, GBDC, HBNC, NTB, ORCC, SLGPRI, STK, VIAC,

Economy: 


U.S. consumer prices surge for third month as cost of used cars soar, but inflation still low and expected to stay that way - MarketWatch CPI rose .4% seasonally adjusted last month. On a non-seasonally adjusted basis, CPI rose 1.3% over the 12 month period ending in August, with core CPI up 1.7%: 

Sourced: Consumer Price Index Summary The decline in energy and apparel prices were the main contributors to subdued annual inflation. CPI has increased at a 5.1% annualized rate since May. 

 Trump touts big job gains, says the U.S. is 'rounding the corner' on the coronavirus (9/7/20) About 1/2 of the jobs lost in March and April have returned through August. Donald also claimed that the U.S. economy was in a "super" V-Shaped recovery. 


Temporary Layoffs Are Starting to Look Permanent. That’s Bad for the Recovery. | Barron's There will be an unusually high number of businesses that will not survive the pandemic and recession. 





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Markets and Market Commentary: 

The Nasdaq index gained 75.7% between its March 23rd low through 9/2 and then declined 10% in 3 days.  In September 2020, the Nasdaq 100 to S & P 500 ratio was near 1 to 1. That ratio is now at 3.32+. Is the 2020 Stock Market in a Bubble? Yes, Here’s What to Know. | Barron's And that is with many of the stocks that have led the market higher being in both indexes. 

10 Year Total Return Numbers (through 9/11/2020): 

Invesco QQQ Trust (Nasdaq 100 ETF) = +539.41%
Sourced from DRIP Returns Calculator | Dividend Channel  (9/11/2010 start date)

P/E Ratios as of 9/11/20: Sourced P/E & Yields

Trailing 12 Month GAAP:
Nasdaq 100 : 36.25
S & P 500: 36.58

Estimated Future 12 Months Non-GAAP: 
Nasdaq 100 : 31.79
S & P 500: 25.57


Fed's strategy shift to bind big central banks from Frankfurt to Tokyo - Reuters Argues that FED policy will likely be a drag on the USD for years.  There are a lot of justifications for being long term bearish on the USD. The Fed's monetary policy that uses newly created money to buy U.S. treasuries and mortgage backed securities, leading to a suppression of interests rates below the current and anticipated inflation rates, is just one reason. 

 Wealthy Investors and Business Owners in the U.S. Becoming More Optimistic | Barron's

 Bond king Jeffrey Gundlach says the surge in retail investor activity is 'downright terrifying'

How Retail Investors Are Fueling the Nasdaq’s Wild Ride | Barron's Novice retail investors have discovered that less money is required to buy a call option than the shares. Data indicates that individual investors have been buying call options on Apple, Tesla and other other higher flyers that have fueled the stock market's parabolic rise. 

Option volume in single-stock equities averaged a record 18.4 million contracts a day in August, up 80% from the average monthly volume in 2019. 

Through 9/8/20, the daily average this month is 23.8M contracts. 

Professional investors are taking the other side. 

When retail investors buys a call option, it is frequently sold by professionals who hedge their position by buying the underlying stock and to continue buying more shares as the price goes higher. That hedging strategy provides fuel for a continued rise in the stock price. 

However, when the price starts to fall, which has been happening recently, the hedge is unwound by selling the individual shares and that contributes to a price decline and the call option becoming worthless. 

I believe that it is only a question of time before those new retail investors lose their money, particularly those who have been buying calls with out-of-the money strike prices nearing expiration. 

SoftBank is also rumored to have been a major buyer of call options that contributed to the price parabola. SoftBank reportedly bought billions worth of high-flying tech stocks, helping propel the market's recent record rally | Markets Insider The retail investor added more fuel to propel those high flyers higher. When they lose their money, one of the non-fundamental drivers for stock prices will no longer exist. 

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Trump: 

Trump isn’t talking about the wildfires in Oregon, California and Washington - The Washington Post (9/11/20)  Those are blue states and can consequently be ignored by the Duck even though those fires have displaced over 500,000 Americans, destroyed countless homes and businesses, and have blotted out the sun with smoke. Former DHS official: Trump wanted to withhold California wildfire money for political reasons - POLITICO; 

 Trump's Routine Disparagement of Military Service and Sacrifices: 

 Trump Demands that Fox  Reporter Jennifer Griffin Who Confirmed Part of Atlantic Story Be Fired 


Jennifer Griffin defended by Fox News colleagues after Trump Twitter attack over confirmation of Atlantic reporting - The Washington Post  

 The most probable main source for the Atlantic article and Ms. Griffin's confirmation is General John Kelly. 

 Donald once said that his "Vietnam" was avoiding sexually transmitted disease in the NYC party scene during that conflict. Donald Trump Calls Avoiding STDs His 'Personal Vietnam'-PEOPLE.com; Even Donald Trump’s Draft-Dodging May Have Required His Father to Pull Strings 

 UnAmerican - YouTube

 Donald “Bone Spurs” Trump Thinks Americans Who Die in War Are “Suckers” and “Losers” | Vanity Fair

 Donald Trump, Human Parasite, Has Also Said Soldiers Missing In Action Should Be Left for Dead | Vanity Fair

 Trump said U.S. soldiers injured and killed in war were ‘losers,’ magazine reports - The Washington Post ("A former senior administration official, who like others spoke on the condition of anonymity to speak candidly, confirmed to The Washington Post that the president frequently made disparaging comments about veterans and soldiers missing in action, referring to them at times as 'losers'.")

 Trump, under fire for alleged comments about veterans, has a long history of disparaging military service - The Washington Post

 Trump attacks Laurene Powell Jobs for her majority stake in The Atlantic 

 Trump appears to call for harassment of Steve Jobs’s widow in wake of contentious Atlantic article - MarketWatch

 Trump ordered his cult members to harass Steve Jobs' widow: 

Trump "Call her, write her, let her know how you feel!!!"


 Trump Instructs His Followers to Spam Laurene Powell Jobs Over Damning Atlantic Story | Vanity Fair Trump is probably the biggest, totally classless asshole among well known, living  people in the world today. There are no limits to expressing his assholeness since he is constantly reaching new heights virtually on a daily basis. 

 Authoritarians, like Trump, use fear and intimidation to deter and punish criticism and opposition. 

 When the comedian Jim Gaffigan made critical remarks recently about Donald, he of course received death threats from the Trumpsters. Jim Gaffigan says he received threats This is to be expected whenever anyone with a significant audience criticizes Donald, even in the mildest of terms. 

 Fact check: Trump repeats numerous false claims in campaign-style press briefing from White House (9/3/20).  

 Video Manipulated to Show Biden Asleep - FactCheck.org

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 Trump Claims Top U.S. Generals Want To Start Wars So That Arms Dealers Can  Make More Money: 

 Last Monday, Demagogue Don made the following comment: 

 "And it’s one of the reasons the military--I’m not saying the military is in love with me--the soldiers are. The top people in the Pentagon probably aren’t because they want to do nothing but fight wars so that all of those wonderful companies that make the bombs and make the planes and make everything else stay happy." 

 White House tries to walk back Trump attack on Pentagon chiefs as beholden to arms dealers - ABC News

 War is 'a last resort,' Army chief says after Trump's comments - POLITICO

The Duck's comment was picked up by Putin's state media. 

 ++

 Donald and Putin: 

 Donald and Putin are invariably on the same page. Intelligence bulletin warns Russia amplifying false claims mail-in voting will lead to widespread fraud The fact that Donald is constantly promoting Putin's objectives and /or talking points about the U.S. does not cause republican politicians any concern that is expressed publicly. 

 When asked to comment on the poisoning of  Alexei Navalny, a Russian dissident, Donald claimed there was no proof that Navalny was poisoned and came to Putin's defense. Alexei Navalny: Trump refuses to condemn Russia over poisoning - BBC News Trump: "We haven't had any proof." Before Donald made that statement in Putin's defense, I had read a story that Germany and Nato had conclusively determined "beyond doubt" that Navalny was poisoned with the Russian manufactured Novichok-type nerve agent.

 Why does Donald praise Putin as a strong leader? Donald Trump’s gushing praise of Vladimir Putin 

 Why did Donald remain silent when intelligence officials concluded that Russia had likely placed bounties on killing U.S. troops in Afghanistan?

 Why did Donald call Montenegro "very aggressive" when that nation was admitted to NATO over Russia's opposition? Montenegro responds to Trump: After being called 'aggressive, Montenegro insists it's a friend to America - The Washington Post; Finger Pointed at Russians in Alleged Coup Plot in Montenegro - The New York Times

 Why did Donald's Justice Department call off an investigation into his financial dealings in Russia? Justice Department called off probe into Trump's Russia ties: report - MarketWatch

 Why is Donald unwilling to accept the fact that Russia is meddling in U.S. elections? 

Whistleblower says top DHS officials tried to stifle intel reports on Russian interference - CBS News (9/10/20); Trump officials altered intel on Russia, White supremacists, DHS whistleblower says. The whistleblower is Brian Murphy, the former head of the DHS Office of Intelligence and Analysis. He also claimed that he was told to downplay the threats from white supremists, an important part of the GOP's core base.   

 Why did Donald lie during the 2016 campaign when he denied have any financial relationship in Russia when he was negotiating with Russia for a Trump hotel in Moscow, reportedly offering Putin a penthouse free of charge?  Donald Trump pursued a business deal in Russia and hid it from voters: USA Today Donald signed a deal letter for the Moscow hotel on the day of the first presidential debate. 

 Why do republicans increasingly view Russia as a U.S. ally? Polling editor: Increased support for Russia among Republicans is 'disturbing' | TheHill
Donalds Dark Vision of America-Part of his Governing through Fear: 

 Quote from Trump's 2020 Convention Speech: "Your vote will decide whether we protect law-abiding Americans or whether we give free rein to violent anarchists and agitators and criminals who threaten our citizens. And this election will decide whether we will defend the American way of life or allow a radical movement to completely dismantle and destroy it."

Over the past several months, virtually on a daily basis, Donald has attempted to stoke fear and panic among white Americans. The Predicate Is Fear - The Atlantic

These tweets were published by Demagogue Don last Thursday, 9/10/20: 
 



 
Interspersed with those tweets was a video, with violent imagery and  flag burning, that purports to show what will happen in America with Joe Biden as President.  

Since the advent of mass communications, no one has engaged in demagoguery  more often than Donald-no one even comes close. 


Yet, Don the Con claims that he had to lie about the seriousness of the pandemic to avoid a panic reaction. Trump admitted to Woodward he downplayed coronavirus threat in early days of outbreak - CBS News; U.S. Could Have Saved 36,000 Lives If Social Distancing Started 1 Week Earlier: Study-NPR (I will discuss Woodward's book in a subsequent post. I want to read most of it first.)  


A study "found the U.S. could have avoided at least 700,000 fewer infections if actions that began on March 15 had actually started on March 8".   Fast and decisive action is imperative in the early stages of a pandemic. To justify those actions, leaders have to be honest with the public, which Donald is incapable of doing. Differential Effects of Intervention Timing on COVID-19 Spread in the United States | medRxiv) 

During the RNC convention speeches, other Trumpsters warned Americans that Democrats will empty the prisons, take away your guns, invite MS-13 to live next door and just generally "destroy this country and everything that we have for and hold dear."

 The republican core approach is to create a fear and panic response when it suits their purpose. 

This year the message is that Democrats will allow brown and black skin Americans to invade the suburbia to rape white women, pillage and then burn down caucasian homes. Donald and his cult will prevent that from happening. 

 In 2018, leading up to the mid-term elections, the republican message was that the Democrats would allow hoards of criminals, drug traffickers, middle eastern terrorists with brown skin, and assorted rapists to invade white America from Central America.         
Fact check: A guide to 9 conspiracy theories Trump is currently pushing Donald is the primary spreader of fact free conspiracy theories in the world. 

Trump is a wartime leader. He leads the red Americans against the blue Americans using the most divisive language and tactics imaginable for a U.S. President. 

 Maybe the Orange King will be a template for future republican Presidents who will govern by fear and intimidation, deny the truth as being inconvenient to their hold on power, lie all of the time about everything, and who will be given a green light by a republican controlled senate for abuses of presidential power and repeated violations of U.S. law and the Constitution while claiming with a straight and most sincere face to be a "law and order" President. 

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 Privately built border wall will fail, engineering report says | The Texas Tribune By fail, the engineering report means fall down.   

 Poll: Trump and Biden are neck and neck in Florida - POLITICO

 Pence expected to attend fundraiser hosted by QAnon supporters 


Donald told Woodward that he deserved an "A" for his handling of the pandemic. 

As of 9/11/20



Last Thursday, Trump held a campaign rally in Michigan where social distancing was of course ignored by the Trumpsters who were packed together, most of whom of course were not wearing masks either. Donald Trump’s Michigan rally draws estimated 5,500 supporters to crowded aircraft hangar - mlive.com 

One Trumpster told a reporter that “The pandemic is over, has been over. Never was.” 

Another said that he was not worried about the "whole COVID b.s..” 

Another Trumpster said "we need to build our immune systems and if a few people die here and there, if I die, so be it." 

Donald of course was not wearing a mask and did not urge anyone to wear one. But, unlike the crowd of Trumpsters, Donald was socially distanced from the crowd. 

The Duck did represent that the nation was turning the corner on the pandemic. 


Trump held 6 indoor rallies after he told Bob Woodward that the coronavirus was 5 times more deadly than the flu and was spread through the air.  Trump held six indoor rallies after acknowledging the coronavirus was airborne - CBS News So is he concerned more about the health of those people who attended those rallies or his reelection? The answer is obvious.  

Stanford Medical faculty lambaste former colleague and Trump coronavirus advisor Dr. Scott Atlas; Trump Adviser Scott Atlas Tweets 'Truth Will Prevail' After 78 Ex-Stanford Colleagues Denounce COVID-19 Claims Truth will never prevail in the Trump White House. 

 AstraZeneca CEO says participant had neurological symptoms, could be discharged today (9/9/20) The patient developed neurological symptoms that were consistent with a rare disease called  transverse myelitis, a serious inflammation of the spinal cord, soon after receiving a vaccine injection. The general tendency IMO is to attribute whatever happens to some cause other than the vaccine until there are just too many cases to make that argument plausible. .  

 Another patient receiving the AZN vaccine developed multiple sclerosis. We are just finding out that the trial was stopped earlier for this reason. An "independent" panel concluded that the onset of MS was unrelated to receiving the AZN vaccine. COVID vaccine: AstraZeneca trial is on hold-USA Today  The claim is that the person had MS before taking the vaccine, but was unaware  of it. 

 The swine flu vaccine was associated with the onset of Guillain–Barré syndrome in about 8.8 cases per million vaccinations.  Even today, the CDC will not admit that the vaccine definitely caused this paralyzing disease. The CDC director at the time,  David Sencer, did lose his job. 



Tracking Covid at U.S. Colleges and Universities - The New York Times As of 9/10/2020, there have been 88,000 confirmed Covid-19 infections spared over 1,190+ colleges.  The highest number at 1 college was 3,045 at the University of Georgia followed by 2,225 at the University of Alabama. The University of South Carolina is currently in third place with 1,904. It is not surprising in the least that southern universities lead the pack.   


As expected, the republican governor of South Dakota did nothing to stop this Mass Infection Event and even encouraged people to come.  Noem says South Dakota proud to host Sturgis motorcycle rally; The future of the GOP? Look at the Sturgis motorcycle rally - Hartford Courant  

 South Dakota's move toward fringe right wing politics started in the 1970s with Bill Janklow, a two term republican governor and member of the Motorcycle Hall of Fame, whose contribution to western civilization was his comment that "the only way to deal with the Indian problem in South Dakota is to put a gun to AIM (American Indian Movement") and pull the trigger."  Who Killed Anna Mae? - The New York Times

Sturgis Motorcycle Rally was 'superspreading event' that cost public health $12.2 billion: analysis | TheHill Perhaps Governor Noem will agree to pick up the tab. 

With freedom goes responsibility. Unfortunately, tens of millions believe that wearing a mask infringes on their freedom to infect others. That is freedom without responsibility. Facts and truth will never have a fair hearing with those people. 

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Portfolio Management: 

No thought is being given to buying CDs, treasuries, corporate or municipal bonds since yields are incredibly unattractive. 

I am continuing to use a small ball trading strategy that focuses primarily on beaten up dividend paying stocks. Monthly net investments in common stocks and stock funds per month are running close cash flow received just from dividend and interest payments plus about $1K. The use of the small ball strategy with that kind of limitation is an expression, of course, of extreme caution. 

Proceeds from maturing CDs, treasuries and corporate bonds are simply piling up in my broker sweep accounts earning .01%. I am hoping for another major stock decline where the risk/reward  balance is at least tilted somewhat in my favor. 

If I see an earnings report that I do not like, the likely result will be to eliminate a position, as I did with GBDC discussed below.

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 All trades are commission free except as otherwise noted. 

1. Small Ball-Extreme Caution on Steroids: 

 A. Bought 50 AOD at $8.17: 
Quote: Aberdeen Total Dynamic Dividend Fund Overview 

 AOD SEC Filings 

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

 Dividend: Monthly at the current penny rate of $.0575 per share

 Last Ex Dividend:  8/19/20  (owned as of)   

Next Ex Dividend Date: 9/21/20
Yield at $8.17:  8.45% (assumes $.69 annual rate)

Dividend Reinvestment: Yes for as long as the likely reinvestment price will be at a greater than 10% discount to net asset value per share. 

Data Date of 8/13/20 Trade: 
Net Asset Value Per Share: $9.49
Closing Market Price: $8.13
Discount: -14.33%
Sourced: AOD- CEF Connect

 Top 10 Holdings as of  6/30/20:

B. Eliminated GBDC  


Profit Snapshots (2 taxable accounts): +$24.01


 I mentioned this elimination in a 8/11 comment.

 Last Earnings Report (Q/E 6/30/20): I did not like this report. 

 Golub Capital BDC, Inc. Announces Fiscal Year 2020 Third Quarter Financial Results (Net asset value per share: $14.05, down from $14.62 as of 3/31/20); adjusted NII per share = $.28, down from $.33 as of 3/31/20)  

C. Eliminated VIAC in Fidelity Account-Sold 93+ at $27.18: 





Profit Snapshot: +$74.24 (NET)

Shares Sold at a Loss-Left Hand Side-Part of 93.477 shares sold 

I wanted to rid myself of the highest cost shares while still realizing a gain on the total position. Once I wait 30 days to avoid the wash sell rule, I may restart a position in this account somewhere below $25. While I view the stock as undervalued over the intermediate and long term, the pandemic has caused a massive decline in advertising revenues, and it is currently unclear when those revenues will return to pre-pandemic levels. The company also faces a long term headwind from cord cutting. 

 I still own shares in another taxable account and 1 ROTH IRA account. I am reinvesting the dividend in both of those accounts. 

 Dividend: $.24 per shares ($.96 annually) 

Ex Dividend: 9/14/20 

Other 2020 Sell:  +$81.71


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

"Advertising revenue declined 27% year-over-year, driven by the adverse effects of COVID-19 on global advertising demand, the comparison against the broadcast of the national semifinals and championship games of the NCAA Tournament in the prior-year quarter, as well as the cancellation and postponement of professional golf tournaments." (emphasis added)

"Domestic streaming and digital video revenue – which includes streaming subscription and digital video advertising revenue – rose to $489M, up 25% year-over-year, driven by 52% growth in streaming subscription revenue and robust growth in Pluto TV advertising revenue." I subscribe to CBS All Access. 

"Affiliate revenue increased 2%, reflecting growth in station affiliation and retransmission fees, as well as subscription streaming revenue, which more than offset declines in pay-TV subscribers."
D. Restarted HBNC-Bought 10 at $11.45; 5 at $11.1; 5 at $10.8; 5 at $10.65: 


Quote:  Horizon Bancorp Inc.  (HBNC)

 HBNC Analyst Estimates

 Investment Category: Regional Bank Basket Strategy 

 Average Cost Per Share: $ 11.09

HBNC SEC Filings 

SEC Filed Investor Presentation July 2020 

 I eliminated my position on 4/25/12, holding the position for about 1 month. Item # 2 Sold 60 HBNC at $24.96  (4/30/12 Post)(profit snapshot = $428.68). I do not recall what caused the stock to pop, but it was probably a takeover rumor that never materialized. 

  Since that elimination, HBNC has had three 3 for 2 stock splits. 
If someone had bought at the closing price on 4/25/12, the price would have been at $25.19, with an adjusted price at $7.46. The adjustment factor to account for the splits is 3.375. 

 Dividend: Quarterly at $.12

 Last Ex Dividend: 7/1/20 

 Dividend Yield at Average Cost:  4.33%

 Stock Information as of 9/11/20: 


5 Year Chart as of 9/11/20: 

5 Year Financials: 
 2019 Annual Report at page 39 

 Properties: Owns most of its offices
Last Earnings Report (Q/E 6/30/20): SEC Filed Press Release

 The bank has implemented the Current Expected Credit Losses (“CECL”) accounting method as of 1/1/20 that resulted in a $55.1M addition to loan loss reserve YTD. 

 E.P.S. $.33
Efficiency Ratio: 56.49% (okay +)
NIM: 3.47%
NPL Ratio: .7%
Charge-Off Ratio: .01% (excellent)
Tangible Book Value Per Share: $10.87


 "payment deferrals to loans representing 14.3% of the total loan portfolio at period end"

 "2,340 PPP loans during the quarter, providing approximately $308.1 million in funding for local employers in the communities Horizon serves"

 "strong liquidity position including approximately $1.3 billion in cash and investment securities, which is approximately 22.6% of total assets, and approximately $910.7 million in unused availability on lines of credit, at June 30, 2020."

 Capital Ratios as of 6/30/20: 

Good at Holding Company Level IMO

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

 E. Pared FAX-Sold 130 at $4.19 (highest cost lots): 

Quote: FAX | Aberdeen Asia-Pacific Income Fund Inc. Overview

 FAX SEC Filings

 Last FAX SEC Filed Shareholder report 

 Leveraged: Yes at a substantial level. 

 Profit Snapshot: +$18.89


 Since the dividend is supported by ROC, the reportable profit will be higher after the tax basis adjustment is made next year. 

 I reduced my average cost from $3.63 to $3.33: 

Snapshot Intraday 8/12/20 
Dividend: Monthly at $.0275 ($.33 annually)

 The dividend has significant ROC support. 

 Last Ex Dividend: 8/20/20

Next Ex Dividend Date: 9/18/20

 Dividend Reinvestment: Yes, for as long as the likely reinvestment price will be at a greater than 10% discount to net asset value per share. 

 Dividend Yield at $3.33= 9.91% 

 Last Discussed: Item # 2.F.  Added 10 FAX at $3.29 and 100 at $3.43(5/30/20 Post);  Item # 2.E. Restarted FAX-Bought 100 at $4.18; 10 at $3.5; 20 at $3.25; 10 at $2.95; 10 at $2.7  (3/21/20 Post) I wanted to get rid of the 100 share lot bought at $4.18 and 20 more of the highest cost lots referenced in that 3/31/2020 post.   

 Data Date of 8/12/20 Trade: 
Net Asset Value Per Share: $4.69
Closing Market Price: $4.21
Discount: -10.23%

 Sourced: FAX-CEF Connect 

 Purchase Restriction: Any future purchases, other than through dividend reinvestment, must lower my average cost per share that currently stands at $3.33.  

 F. Started NTB-Bought 1 at $27.23; 9 at $26.9; 2 at $26.38; 1 at $25.79; 2 at $25.54; 5 at $25.2; 2 at $24.9; 2 at $24.7 : 









Quote: Bank of Butterfield Ltd.

 "Butterfield is a full-service bank and wealth manager headquartered in Hamilton, Bermuda, providing services to clients from Bermuda, the Cayman Islands, Guernsey and Jersey, where our principal banking operations are located, and The Bahamas, Switzerland, Singapore and the United Kingdom, where we offer specialized financial services."

 Investment Category: Regional Bank Basket Strategy

 NTB | Bank of Butterfield Ltd. Analyst Estimates

 Investor Relations: Butterfield Group

 Credit Ratings – Butterfield Group

 Dividend: Quarterly at $.44 per share ($1.76 annually)

 Last Ex Dividend: 8/4/20

Average Cost Per Share: $ 25.97 (24 shares) 
Dividend Yield at AC: 6.78%

Stock Information as of 9/11/20: 
5 Year Chart:

 Last Earnings Report (Q/E 6/30/20): Butterfield Reports Second Quarter 2020 Results The bank has adopted CECL.

 E.P.S. $.67
NIM = 2.48% (very low)
NPL Ratio: 1.5% (high)
NPA Ratio: .7%
Coverage Ratio: 54.8% (prefer over 100%)
Tangible Book Value Per Share: $17.94
Capital Ratios: Excellent as of 6/30/20
Core Efficiency Ratio: 66.7% (too high)


Key Balance Sheet Ratios
Unlike many other banks, Butterfield continued to buy back shares during the second quarter: 

 "During the second quarter of 2020, Butterfield repurchased 1.2 million common shares under the Bank's current 3.5 million common share repurchase plan authorization."

In response to this report, Raymond James lifted its PT to $29 from $26, keeping its outperform rating; and Piper Sandler raised it PT to $32 from $30 while keeping its overweight rating. I do not have access to those reports.

 10-Q for the Q/E 6/30/20 

 Other News: Butterfield Announces Pricing of Registered Offering of $100,000,000 5.250% Fixed to Floating Rate Subordinated Notes Due 2030; Prospectus Net proceeds were $98M. This security qualifies as Tier 2 regulatory capital. 

 G. Started BK-Bought 5 at $36.9; 1 at $35.98; 1 at $35.77: 



Quote: Bank of New York Mellon Corp.

 BK Analyst Estimates | MarketWatch

 For the most part, I have trafficked in BK senior unsecured bonds. Bondholder Information - Investor Relations | BNY Mellon

 Founded by Alexander Hamilton in 1784

 "BNY Mellon is a global company that manages and services assets for financial institutions, corporations and individual investors in 35 countries. BNY Mellon has two business segments, Investment Services and Investment Management, which offer a comprehensive set of capabilities and deep expertise across the investment lifecycle, enabling the Company to provide solutions to buy-side and sell-side market participants, as well as leading institutional and wealth management clients globally."

BNY Mellon and State Street Corp (SST) are the major players in the custody and administration businesses. 

 BNY's hedge fund administration business generates close to $600M in annual revenues. BNY has a number of other fee generating businesses including Pershing (custody and clearing services); ADR issuer servicing: mutual fund sub-accounting platforms; and wealth and investment management. (see 2019 annual report for more details)
Investment Strategy:  Regional Bank Basket Strategy

 BK SEC Filings 

Stock Information as of 9/11/20: 
5 Year Chart as of 9/11/20: 

5 Year Financials: 

2019 Annual Report at pages 2-3

 Fee and Other Revenue Breakdown 2019 vs. 2018:


 Dividend: Quarterly at $.31 per share ($1.24 annually)

 The quarterly dividend was last raised from $.28 to $.31 effective for the 2019 third quarter payment. There was no raise for the 2020 third quarter payment.  

 Dividend History 

 Last Ex Dividend: 7/24/20

Average cost per share =  $36.61 (7 shares)

Yield at Average Cost: 3.39%

 Last Earnings Report (6/30/20): BNY Mellon Reports Second Quarter 2020 Earnings Of $901 Million Or $1.01 Per Common Share


 The provision for credit losses was small at $143M, compared to other large banks, and "primarily reflecting increased downgrades and the continuation of the challenging macroeconomic outlook."  BNY Mellon, unlike other other large banking institutions, is primarily engaged in a variety of fee generating businesses. 

 Capital: 

As of 6/30/20-Solid

The neutral brokerage ratings emphasize statements made by management during the conference call regarding the impact of low interest rates. Management estimated that net interest revenue will be down sequentially 8% to 11% in the current quarter; and money market fee waivers will cost $30M-$45M and then increase by another $25M in the 4th quarter. The money market fee waivers are necessary since no fee waivers would cause the those funds to break the $1 per share net asset value given the low short term rates near zero. In other words, charging a normal fee would result in part of the fee being paid out of assets rather than income.   

 Broker Reports (available to Schwab customers):  

 Credit Suisse (8/7/20): Outperform with a 12 month PT of $44. 

 Morningstar (7/15/20): 3 stars with a FV of $40

 S & P (7/27/20): 3 stars with a 12 month PT of $40

 Argus (7/17/20): Hold

 Stress Test Results: BNY Mellon Releases Results of the 2020 Comprehensive Capital Analysis and Review and Dodd-Frank Act Stress Test
 
H. Started CSCO-Bought 1 at $42.62; 1 at $42.1; 1 at $41.88; 2 at $41; 5 at $40.75; 1 at $40.33; 1 at $39.85: 




Quote Cisco Systems Inc.

 CSCO Analyst Estimates 

 CSCO SEC Filings 

 Annual Report for the F/Y Ending on 7/25/20 

 Average Cost Per Share: $41.04 

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

 Last Ex Dividend: 7/2/20

Next Ex Dividend date: 10/1/20

Dividend Yield at $41.04: 3.51%

Stock Information as of 9/11/20: 

5 Year Chart as of 9/11/20: 


5 Year Financials: 


Tech Stocks Aren’t Immune to Covid-19. Just Look at Cisco’s Earnings. - Barron's (quoting from a William Blair analyst report: "we believe Cisco missed a golden opportunity to fundamentally reshape its business post tax reform/repatriation, instead opting to repurchase nearly $37 billion in stock in 2018 and 2019."  

 Last Earnings Report (FY Q/E  7/25/20):  SEC Filed News Release

 GAAP E.P.S. = $.62
Non-GAAP E.P.S. = $.8
Cash Flow: $3.8B
Total Gross Margin: 63.2% GAAP

 This was Cisco's fiscal 4th quarter. 

Revenue was reported at $12.154B, down 9.5% Y-O-Y.  

 Revenue Breakdown by Business Lines: 
Fiscal Year E.P.S. Results: 

GAAP: $2.64
Non-GAAP: $3.21

 Part of the revenue decline is attributable to reduced spending for Cisco's infrastructure equipment that is tied to the pandemic and recession. 

There was a 15% decline in infrastructure revenues in the Q/E 4/25/20. Earnings Press Release. However, this business segment suffered an 8% Y-O-Y decline in the Q/E 1/25/20 (possibly impacted by the pandemic in China and other foreign countries). For the Q/E 10/26/19, revenues from infrastructure equipment fell 1% Y-O-Y while "applications" rose 6%. So infrastructure revenues were struggling to show Y-O-Y growth before the pandemic. 

Guidance Current Fiscal Year: Expects 1st fiscal quarter revenue to decline 9 to 11%, with adjusted E.P.S. range of $.69 to $.71. The market reacted most negatively to the guidance for F/Y 2021:  


 Brokerage Reports (available to Schwab customers)

Argus (8/18/20): Buy with a $65 twelve month PT

Morningstar (8/12/20):  4 stars with a FV of $48

Credit Suisse (8/13/20): Neutral with a $45 PT

S & P (8/18/20): 4 stars with a $52 twelve month PT 

CSCO is now at best, IMO, a contrarian value play based, in part, on a hope that revenues will return to a growth mode in 2021 or 2022.  

Trading Strategy: Buy up to 50 shares using small lot purchases. Each subsequent purchase must reduce my average cost per share. Consider selling the highest cost shares on price pops when I can do so profitably. 
Prior Trades: I have not owned CSCO since I eliminated a position in 2017. I have kept records on trades starting in 2009. 

Prior Realized Gains: +$1,804.65
2009 CSCO 30 Shares +$45.48
2010 CSCO 50 Shares +$185.57
2010 CSCO 50 Shares +$62.07 
2012 CSCO 50 Shares +$64.48
2013 CSCO 155+ Shares +$231.4
2017 CISCO 30 Shares +$330.37


2018 50 Shares CSCO +$885.28
I. Started ED-Bought as a Placeholder 1 share at $73.44: 
Quote: Consolidated Edison Inc.  (ED) 

 "Consolidated Edison, Inc. is one of the nation's largest investor-owned energy-delivery companies, with approximately $13 billion in annual revenues and $59 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following subsidiaries: Consolidated Edison Company of New York, Inc. (CECONY), a regulated utility providing electric, gas and steam service in New York City and Westchester County, New York; Orange and Rockland Utilities, Inc. (O&R), a regulated utility serving customers in a 1,300-square-mile-area in southeastern New York State and northern New Jersey; Con Edison Clean Energy Businesses, Inc., which through its subsidiaries develops, owns and operates renewable and energy infrastructure projects and provides energy-related products and services to wholesale and retail customers; and Con Edison Transmission, Inc., which through its subsidiaries invests in electric and natural gas transmission projects."

 SEC Filings 

 2019 Annual Report

 Dividend: Quarterly at $.765 per share ($3.06 annually)

 Con Edison Declares Common Stock Dividend

 Last Ex Dividend: 8/18/20

 Dividend Yield at $73.44 = 4.17%

 Last Earnings Report (Q/E 6/30/20): Con Edison Reports 2020 Second Quarter Earnings
10-Q for the Q/E 6/30/20 

 Prior Round-Trip (153+ shares): +$786.28 

Item # 3 Sold 50 ED at $51.30 (4/7/11 Post)

 Item # 1 Pared ED-Sold 25 at $52.5 (5/9/11 Post)

 Item # 2 Eliminated Position in ED at $53.7 (7/14/11 Post)(profit snapshot = $786.28 for all trades in 2011)

 I was more adventuresome in 2011 compared to now.

 Governor Andrew Cuomo is demagoguing the recent power outages experienced after tropical storm Isais. ConEd faces Cuomo's wrath for storm response -Seeking Alpha, citing New York’s ConEd Faces ‘Steep Penalties’ for Storm Response - BNN Bloomberg; Isaias knocked out power to 2.2 million homes and businesses along the East Coast - CNN  

 J. Added 4 ORCC at $12.02:

Quote: Owl Rock Capital Corp. (ORCC)-A BDC



Management: External 

2019 Annual Report (risk summary starts at page 28 and ends at page 57) 

 Last Discussed: Item # 4.E. Started ORCC-Bought 10 at $12.67; 1 at $12.59; 5 at $12.27 and 5 at $11.95 (6/27/2020 Post)

 Dividend: Quarterly at  $.31 per share + special dividends of $.08 per share through year end


Next Ex Dividend: 9/29/20 ($.31 regular and $.08 special)

 Current Position This Account:  25 Shares

Average Cost Per Share This Account: $12.37
Dividend Yield at AC:  10.02% (based on regular $.31 per share dividend)   



"As of June 30, 2020, 2 investments with an aggregate fair value of $165.0 million were on non-accrual status, representing less than 2% of the total fair value of the portfolio."

As of June 30, 2020, ORCC's portfolio, based on "fair value", "consisted of 80.2% first lien senior secured debt investments, 17.1% second lien senior secured debt investments, 0.1% unsecured notes, 1.1% investment funds and vehicles, and 1.5% equity investments."   

10 -Q for the Q/E 6/30/20 (list of investments starts at page 4)


Top 10 Holdings as of 7/31/20: 


Sourced from Sponsor's website


Data Date of 8/24/20 Trade:
Closing Net Asset Value Per Share: $22.44
Closing Market Price: $22.62
Premium: = .8%

This CEF normally sells at a premium to net asset value per share.

 Sourced:  STK-CEF Connect

 Dividends: Quarterly at $.463 per share ($1.852 annualy)

 STK Dividend History

 Last Ex Dividend: 8/14/20

Average Cost Per Share: $22.05

Dividend Yield at AC = 8.4%

Last SEC Filed Shareholder Report (period ending 6/30/20)

L. Started FIVG in Fidelity Taxable Account-Bought 5 at $29.6; 2 at $28:


Quote: FIVG | Defiance Next Gen Connectivity ETF Overview

 Sponsor's Website: The First 5G ETF - FIVG

 Holdings: 78

 Expense Ratio: .3%

 Last Discussed: Item #3.D. Started FIVG in Vanguard Account-Bought 8 shares at an average cost of $29.44  (7/29/20 Post); Item # 2.A. Started FIVG in Schwab Taxable Account- Bought 5 at $27.6 (8/15/20 Post)
2. Canadian Reset Equity Preferred Stocks: 

 A. Added 5 to EBGEF at $16.5 and 5 at $16.23:  


5 shares were bought shortly before the quarterly ex dividend date and the other 5 were purchased on the ex dividend date.  

 Position: 130 shares (125 owned as of last ex dividend date)

 Quote: EBGEF

 Last Discussed: Item # 3.B. Bought 10 EBGEF at $14.81 (7/3/20 Post); Item # 2.C. Added 10 EBGEF at US$13.1 (5/23/20 Post)

 Last Quarterly Dividend Payment: 
US $42 (15% tax withholding or $6.3)

Security: Cumulative, reset equity preferred stock issued by Enbridge Inc priced in U.S.D.s and traded on the U.S. Grey Market. 

Link to all ENB Preferred Shares and Hybrid Securities - Enbridge Inc. (prospectuses are linked)

Par Value: US$25 

Current Coupon: 2.82% spread to the 5 year U.S. treasury note, resets every five years As with other Canadian resets, a fixed coupon was initially paid.  

Daily Treasury Yield Curve Rates

The quarterly fixed coupon penny rate was $.275 (.044 x.  $25 par value =  $1.1 annually 4 quarters =  $.275)

When the coupon reset for five years effective for the 2019 second quarter, the new quarterly penny rate was $.33596 or a 22.17% increase

Current Coupon Penny Rate: Quarterly at $.33596 per share (or $1.34 rounded annually) The coupon is about 5.36% at that penny rate. The U.S. five year note would have been close to 2.56% on the reset date. 2019 Daily Treasury Yield Curve Rates The weakness in the price is mostly attributable IMO to a belief that the coupon will reset in March 2024 at much lower rate. 

Next Reset: 3/1/24

Last Ex Dividend: 8/13/20

The price for this security is depressed IMO based on a fear that the coupon will reset in March 2024 at a much lower rate. 

3. U.S. REIT Equity Preferred Stocks: 

A. Eliminated SLGPRI-Sold 20 at $25.96:  


Quote:  SLG-PI 

Profit Snapshot: $122


Security: Equity REIT Preferred Stocks
Coupon 6.5%
Par Value: $25
Dividends: Cumulative and non-qualified
Issuer Optional Call: At par + accrued and unpaid dividends on or after 8/10/17

Last Ex Dividend: 6/29/20 




I still own a few SLG common shares and 2 senior unsecured bonds maturing in 2022. Item # 2.C. Bought 2 S L Green Operating LP 3.25% SU Bonds Maturing on 10/15/22 at a TC of  99.579 (6/20/20 Post); Bond Detail. The common stock position in my Fidelity account is currently at 6+ shares, with an average cost per share of $40.45. Item # 1.H. Added to SLG-Bought 2 at $45.59; 1 at $44.23; 1 at $43; 1 at $42.5; 1 at $40; 1 at $38 and 1 at $35.5 and Sold 5 at $50; 2 at $52.19 and 1 at $61.54(6/20/20 Post) 
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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