Economy:
Key Fed inflation gauge rises 4.9% from a year ago, fastest gain since 1983 The article is referring to the core personal consumption price index. That number is released monthly as part of the Personal Income and Outlays report:
ADP National Employment Report | January 2022 ADP estimated in this report that the economy lost 301,000 private payroll jobs last month. The consensus estimate was for a 200K gain. The Stock Jocks dismissed the decline as temporary and related to the omicron infection surge that is now abating.
U.S. fourth-quarter labor productivity rises 6.6% - MarketWatch; Productivity and Costs, Fourth Quarter and Annual Averages 2021, Preliminary
The new BA.2 omicron subvariant is already circulating in half of U.S. states According to Danish scientists, this omicron variant is 1.5 times more contagious than omicron.
U.S. National Debt Tops $30 Trillion as Borrowing Surged Amid Pandemic - The New York Times When tracking that number, it is important to keep in mind that the debt was at less than $1 trillion in 1981, just the grand total over almost 200 years.
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Markets and Market Commentary:
Jim Cramer likes most of top holdings in Cathie Wood's Ark Innovation ETF (ARKK). I view Cathie Wood as a growth at any price speculator. The Morningstar page for ARKK has the P/E ratios for the top 25 holdings. Innovation ETF (ARKK) Portfolio - ARCX | Morningstar Of the top 10 holdings, 5 have negative P/Es, 1 stock has a P/E for 424+ and two have P/E ratios over 85. The remaining 2 stocks out of the top 10 holdings have P/E ratios, using non-GAAP earnings, of 27+ and 34+. YTD, ARKK is down 22.68% through yesterday and at a -23.38% total return for 2021 which includes a short and long term capital gains distribution of $.7826, of which $.5249 was classified as short term.
Facebook-parent Meta (FB) Q4 2021 earnings I will start a position today with a $50 purchase just to prove that I can be a wild and crazy guy. Valuation after today's price plunge is somewhat more appealing.
PayPal Gets Stung by ‘Bad Actors,’ Shuts 4.5 Million Accounts I do not own shares and do not intend on starting a position anytime soon.
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Earnings Reports-Owned Stocks:
Beazer Homes (BZH) SEC Filed Press Release (net income of $34.9M or $1.14 per share, with the consensus at $.673 per Fidelity; "Homebuilding revenue of $446.7 million, up 5.3% on a 15.1% increase in average selling price to $438.4 thousand, partially offset by a 8.5% decrease in home closings to 1,019": "new orders of 1,141, down 20.9% on a 16.2% decrease in average community count to 114 and a 5.6% decrease in orders/community/month to 3.3"; "Dollar value of backlog of $1,405.2 million, up 20.9%. The average selling price of homes in backlog was $483.2 thousand, up 17.9% from $409.7 thousand.")
Cathay General Bancorp (CATY) SEC Filed Press Release (net income of $75.3M or $.98 per share with the consensus at $.925 per Fidelity; NIM = 3.23%, up from 3.12% in the 2020 4th Q; efficiency ratio = 41.77% (excellent); NPA Ratio = .3%; Coverage Ratio = 202.36%; ROA = 1.48%; ROE = 12.12%; dividend payout ratio = 34.5%; total risk based capital ratio = 14.41%)
Central Pacific Financial (CPF) SEC Filed Press Release (Net income of $22.327M or $.80 per share, with the consensus at $.65 per Fidelity; NIM = 3.08%, down from 3.32% in the 2020 4th quarter; efficiency ratio = 65.61%; NPA Ratio = .08%; "Net recoveries in the fourth quarter of 2021 totaled $0.9 million, compared to net charge-offs of $1.8 million in the year-ago quarter, and net charge-offs of $0.2 million in the previous quarter."; ROA = 1.22%; ROE = 16.05%; dividend payout ratio = 31.25%; total risk based capital ratio = 14.5%; average cost of deposits at .06%; repurchased 305,594 shares during the quarter at a total cost of $8.4M)
Colgate-Palmolive (CL) SEC Filed Press Release (GAAP E.P.S. = $.18; Non-GAAP E.P.S. = $.79 with the consensus at $.786 per Fidelity; revenues $4.403B, up 2%; "During the fourth quarter, the Company took a non-cash, after-tax charge of $518 million to adjust the carrying values of goodwill and a trade name intangible asset related to the Filorga skin health business. The impairment was due primarily to the impact of the COVID-19 pandemic on the Filorga business as a result of government restrictions and reduced consumer mobility, which negatively impacted consumption in the duty-free, travel retail and pharmacy channels."; for 2022, "expects organic sales growth to be within its long-term targeted range of 3% to 5%")
CVB Financial (CVBF) SEC Filed Press Release (net income of $47.7M or $.35 per share, with the consensus at $.305 per Fidelity; NIM = 2.79%, down from 3.33% in the 2020 4th quarter; efficiency ratio = 41.8%; NPA ratio = .04%; ROE = 9.05%; ROTE 13.89%; total risk based capital ratio at 15.6%"; "Noninterest expense of $189.8 million for the year ended December 31, 2021 was $3.1 million lower than the prior year.")
Dow (DOW) SEC Filed Press Release (GAAP E.P.S. at $2.32; Operating E.P.S. at $2.15, with the consensus at $2.052 per share per Fidelity; revenues up 34% to 14.4B; "volume decreased 4% versus the year-ago period and 3% sequentially, primarily driven by supply constraints from maintenance and lingering effects from Covid and weather-related outages, as well as global logistics constraints across several key value chains; free cash flow of $2.091B)"
First Horizon (FHN) SEC Filed Press Release (Non-GAAP income of $260M or $.48 with the consensus at $.378 per share; GAAP E.P.S. at $.40 which includes expenses relating to the recent acquisition of Iberiabank; NIM = 2.42%, down from 2.72% in the 2020 4th quarter; adjusted efficiency ratio = 63.31% (which I view as too high); NPL Ratio = .5%; Net charge-offs of 0.01%; adjusted ROTE 17.5%; adjusted ROA = 1.21%; total capital ratio = 12.4%)
Fulton Financial (FULT) SEC Filed Press Release (net income of $59.3M or $.37 per share with the consensus at $.373 per share; 2021 diluted E.P.S. at $1.62; NIM = 2.77%; efficiency ratio = 65.2% (too high); NPL Ratio = .83%; NPA Ratio = .6%; Coverage ratio = 164%; Charge off ratio = .07%; ROA = .94%; ROE= 9.34%; ROTE = 11.89%; total risk based capital ratio = 14.3%; Tangible book value per share = $12.35, up from $11.62 as of 12/31/20)
Hologic (HOLX) SEC Filed Press Release (This is for the first fiscal quarter. GAAP E.P.S. = $1.95; non-GAAP E.P.S. = $2.17 with the consensus at $1.283 per Fidelity; "revenue of $1.471 billion decreased (8.6%) for the quarter, or (8.2%) in constant currency, driven by lower sales of COVID-19 assays compared to the prior year period. Revenue, however, was significantly higher than the Company’s guidance of $1.1 to $1.15 billion provided last quarter"; "Excluding revenue from COVID-19, organic revenue grew 9.0% on a constant currency basis, comparing favorably to the Company’s long-term goal of 5% to 7% growth."; the primary adjustment to GAAP is a non-cash expense of $85.7M for amortization of acquired intangible assets. As previously discussed, HOLX has been using its prodigious free cash flow from Covid testing to acquire businesses in other sectors; repurchased 2.3M shares for $167M; HOLX does not pay dividends; cash flow at $564.2M for the quarter; for the second fiscal quarter, HOLX guides to non-GAAP E.P.S. of $1.5 to $1.6 and $4.9 to $5.2 for fiscal 2022. The guidance is substantially lower than the actual results for fiscal 2021 and the fiscal 2021 second quarter due to projected lower Covid related sales. More details are provided in the press release.)
Horizon Bancorp (HBNC) SEC Filed Press Release (GAAP net income of $21.4M or $.49 per diluted share; non-GAAP E.P.S. at $.54 with the consensus at $.529 per Fidelity; expenses removed from GAAP are related to a 14 branch acquisition costs and a "non–recurring Employee Stock Ownership Plan (“ESOP”) settlement expense" of $1.9M "related to a dispute with the U.S. Department of Labor (“DOL”) concerning valuations and sale transactions related to Horizon's ESOP trustee business", which was sold by HBNC "to a third party on September 30, 2021 and recorded a $2.3 million gain on the sale in the third quarter"; NIM = 2.86%, down from 3.44% in the 2020 4th quarter; adjusted efficiency ratio = 58.25%; NPA Ratio = .31%; Charge off ratio = .04%; total capital ratio =15.39%; tangible book value per share = $12.58; SEC Filed Investor Presentation for the 4th Q.)
KeyCorp (KEY) SEC Filed Press Release (from continuing operations, net income of $601M or $.64 per share with the consensus at $.567 per Fidelity; NIM = 2.5%, down from 2.76% in the 2020 4th Q; efficiency ratio = 59.9%; NPL Ratio = .45%; coverage ratio = 268.9%; charge off ratio .08%; branches: 999; ROA = 1.46%; ROE = 15.9%; ROTE = 19.37; total risk based capital ratio =12.4%)
MarineMAX (HZO) SEC Filed Press Release (Net income of $35.943M or $1.59 per diluted share, with the consensus at $1.133 per Fidelity; "Revenue increased 15% to a record $472.7 million for the quarter ended December 31, 2021 from $411.5 million in the comparable period last year. The revenue growth was due to contributions from recent strategic acquisitions and strong same-store sales growth of 9%, driven by increased unit sales. The 9% same-store sales growth was on top of over 20% growth in the comparable quarter last year."; "Based on current business conditions, retail trends and other factors, as well as contributions from acquisitions closed in the December 2021 quarter, the Company is raising its fiscal year 2022 guidance for earnings per diluted share to a range of $7.60 to $8.00, which is increased from its previously provided guidance of $7.20 to $7.50 per diluted share.")
Mercantile Bank (MBWM) SEC Filed Press Release (GAAP Diluted E.P.S. of $.74; 2021 GAAP E.P.S. = $3.69; "Costs and a charitable contribution related to the formation and initial funding of The Mercantile Bank Foundation decreased net income during the fourth quarter of 2021 and full year 2021 by approximately $3.2 million, or $0.20 per diluted share. Excluding the impacts of these transactions, diluted earnings per share increased $0.07, or 8.0 percent, during the fourth quarter of 2021, and $1.18, or 43.5 percent, during the full year 2021 compared to the respective 2020 periods."; 4th Quarter Non GAAP E.P.S. at $.94, with the consensus at $.88; NIM 2.74%, down from 3% in the 2020 4th quarter; efficiency, ROA, ROE ratios negatively impacted by extraordinary items noted above; NPA Ratio = .1%; net recovery of $1.3M; during the quarter; tangible book value per share = $25.61; total risk based capital ratio = 13.95%; "As part of $20.0 million common stock repurchase programs announced in May of 2019 and 2021, respectively, Mercantile repurchased approximately 683,000 shares for $21.4 million, at a weighted average all-in cost per share of $31.29, during 2021, including approximately 47,000 shares for $1.6 million, at a weighted average all-in cost per share of $33.35, during the fourth quarter." )
OP Bancorp (OPBK) SEC Filed Press Release (net income of $8.3M, up 129% Y-O-Y; E.P.S. = $.54, up $.31 compared to the 2020 4th quarter; consensus at $.52; efficiency ratio = 47.28%; charge off ratio = zero; NPL ratio = .09%; ROA = 2.02%; ROE = 21.3%). Those numbers are about as good as I have seen lately from a small bank.
Seagate Technology (STX) SEC Filed Press Release (this earnings report was for the 2022 second fiscal quarter ending on 12/31/21; GAAP diluted E.P.S. = $2.23; non-GAAP E.P.S. at $2.41, with the consensus at $2.364 per Fidelity; free cash flow of $426M; non-GAAP operating margin at 19.9%, up from 14.7% in the 2021 fiscal second quarter; Board declared a $.70 per share quarterly cash dividend; for the fiscal third quarter, the guidance is for non-GAAP E.P.S. of $2, plus or minus $.20)
Texas Instruments (TXN) SEC Filed Press Release (net income 2.138B or $2.27 per share, up from $1.80 in the 2020 4th Q.; consensus at $1.943; revenues at $4.832B, up 19%; free cash flow = $1.075B in the 4th quarter and $6.294B for 2021)
Truist (TRC) SEC Filed Press Release (GAAP net income of 1.5B or $1.13 per share; non-GAAP E.P.S. at $1.38 with the consensus at $1.259 per Fidelity; adjusted numbers exclude "merger-related and restructuring charges of $212 million ($163 million after-tax) and incremental operating expenses related to the merger of $215 million ($165 million after-tax)."; adjusted 2021 E.P.S. = $5.53 with GAAP at $4.47; core NIM = 2.55%; adjusted efficiency ratio = 56%; NPA ratio = .25%; Charge off ratio = .25%; Adjusted ROA =1.43%; Adjusted ROE = 11.9%; adjusted ROTE = 22.6%; repurchased $500M of stock; "Noninterest expense was $3.7 billion for the fourth quarter, down $95 million, or 2.5%, compared to the prior quarter.")
TrustCo (TRST) SEC Filed Press Release (net income of $16.2 million or $0.845 diluted earnings per share with the consensus at $.74 per Fidelity; NIM = 2.69%, down from 2.79% in the 2020 4th quarter; efficiency ratio = 58.5%; NPL Ratio = .42%; Coverage Ratio = 236%; Charge off Ratio = .01%; ROA = 1.05%; ROE 10.92%; banking offices = 147)
Unum (UNM) SEC Filed Press Release ("net income of $159.7 million ($0.78 per diluted common share) for the fourth quarter of 2021; after-tax adjusted operating income was $182.0 million" or $0.89 per diluted share; the non-GAAP Consensus was at $.841; the non-GAAP number excludes "the amortization of the after-tax cost of reinsurance of $15.5 million ($0.08 per diluted common share), as well as a net after-tax investment loss on the Company’s investment portfolio of $6.8 million" or $0.03 per share; for 2021 GAAP diluted E.P.S. was reported at $4.02 with non-GAAP "operating income" at $4/35 per diluted share)
Washington Trust Bancorp (WASH) SEC Filed Press Release (GAAP net income of $20.2M or $1.15 per share, with the consensus at $.978 per Fidelity; 2021 E.P.S. at $4.39; NIM = 2.71%; efficiency ratio = 60.7%; NPL Ratio = .33%; Coverage ratio = 275.21%; Charge offs: net recovery of $2.8M; ROE = 14.34%; ROTE = 16.39%; ROA = 1.36%; loan to deposit ratio = 85.3%)
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Trump: “If I run and if I win, we will treat those people from January 6 fairly. And if it requires pardons, we will give them pardons, because they are being treated so unfairly."
Of Course Trump Is Already Talking about Pardoning Insurrectionists Come 2024 | Vanity Fair
Trump suggests Pence should have 'overturned' 2020 election - ABC News Trump: "If the Vice President (Mike Pence) had 'absolutely no right' to change the Presidential Election results in the Senate, despite fraud and many other irregularities, how come the Democrats and RINO Republicans, like Wacky Susan Collins, are desperately trying to pass legislation that will not allow the Vice President to change the results of the election?"
As previously discussed, the Tennessee republicans decided that the voters of Nashville/Davidson County Tennessee will no longer be allowed to elect a Democrat to Congress.
That was done, not because this was the voters' choice, but simply by legislative fiat in the republican controlled state government. Republicans have super majorities in both the state House and Senate, and a Trumpster serves as governor.
The republicans decided that Nashville, a Democrat stronghold, would instead by represented by 2 existing Trumpster congressman and 1 new one. Opinion | Gerrymandering and Voter Injustice in Nashville - The New York Times
Most of the area known as North Nashville, primarily black voters who overwhelming support democrat candidates, will have the Trumpster Mark Green as their representative. That area is home to the traditional black colleges Tennessee State University and Fisk University as well as the Meharry Medical College. The purpose is to dilute black votes for democrats by placing them a newly drawn district with a super majority of white caucasian Trumpsters.
Green is not from Nashville but lives in Clarksville, a Trump city and county, located about 60 miles north of Nashville. Green voted against any background checks for firearm purchases, "raising the minimum wage, against requiring campaigns to report offers of foreign assistance, against restoring parts of the Voting Rights Act, against the $1.5 trillion infrastructure bill in 2020, against the pandemic aid bill and against raising coronavirus stimulus payments from $600 to $2,000. On Jan. 6, 2021, Green objected to Arizona’s presidential electors hours after the U.S. Capitol was the subject of an insurrection by Trump loyalists. The next day, he objected to Pennsylvania’s electors, and a week later he voted against an impeachment charge of inciting the insurrection for Trump." Nashville, Get to Know Your (Probable) New U.S. Representatives-nashvillescene.com
The area known as East Nashville, filled with liberals, will get the republican John Rose as their new congressman. Rose voted with Trump about 95% of the time and resides in Cookeville located about 81 miles from Nashville.
Both Rose and Green signed the petition filed with the Supreme Court requesting that the republican state legislatures in Arizona, Georgia, Michigan and Wisconsin be allowed to appoint presidential electors, with the certified election results, showing that Biden won those states, thrown out by judicial fiat since Donald was claiming fraud. House Members Who Signed a Brief Asking the Supreme Court to Consider Overturning the Election | Represent | ProPublica If those congressman had represented the liberals and blacks in Nashville in 2020, that would not have changed their insurrection effort to cancel the certified election results and to allow republican state legislatures to choose the next President who would not have been Biden of course.
The newly redrawn 5th congressional is designed to be a lock for a republican candidate so the Democrat incumbent, Jim Cooper, who ran unopposed in 2020 and won 100% of the vote, decided to retire rather than to be beaten with almost 100% certainty by a republican. The republicans took away Cooper's base and left him with primarily republican precincts.
The Tennessee republicans are just proving their bona fides, once again, as enthusiastic members of an obvious anti-democracy party. Promoting democracy and voting rights are key conservative values.
Since I view myself as a conservative, I am not a republican.
There is no conservative political party in the U.S.
The GOP has morphed into the antithesis of a conservative party.
No true conservative could vote for Donald in 2020.
I am curious why lying all the time about almost everything became a conservative value.
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1. Small Ball:
I have discussed previously the reasons for knocking down my utility allocation. The summary explanations are that their dividend yields are at historically low levels while their P.E ratios are near historically high levels. I have been investing in utility stocks starting in the late 1970s with a 400 share purchase of Duke Energy.
While I am willing to tolerate those abnormalities in small doses, I am less willing to do so when there is a danger that interest rates will rise to such an extent that the support to their share prices as bond substitutes is eroded and prices consequently start to decline. That has not happened yet.
The stocks that I own in that sector were up yesterday.
A. Bought 5 UL at Various Prices during meltdown on 1/18/22:
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| 1 at $46.98 |
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| 1 Share purchases at $48.14, $47.88, $47.31 and $46.42 |
The annual average total return starting on 4/1/17 through 1/28/22 was 4.16%, only slightly above the dividend yield. Over that same period, the annual average return of SPY was 15.97%. A $10K investment in UL made on 4/1/17 would be worth $8,265.15 less than one made in SPY that day. DRIP Returns Calculator | Dividend Channel
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| +$2,412.20 |
Quote: FirstEnergy Corp.
Investment Category: Bond Substitute
Profit Snapshot = $29.62
Last Buy Discussion: Item # 2.H. Started FE in Vanguard Taxable-Bought 5 at $35.71 (11/18/21 Post) I discussed the third quarter report in that post and have nothing further to add here.
Dividend: Quarterly at $.39 per share
Last Ex Dividend: Today, 2/4/22.
Largest Round-Trips were in 2011: Item # 3 Sold Remaining FE shares at $45.1 (5/18/2011 Post); Item # 1 Pared FE: Sold 50 FE at 41.32 (5/9/2011 Post); Item # 3. Sold FE at $40.9 (2/3/11 Post) Those trades involving 182+ shares resulted in a $807.12 profit.
C. Eliminated PEG in Vanguard Taxable-Sold 5 at $65.34; Sold 3+ in Schwab Taxable at $65.63; and Sold 2+ in Fidelity Taxable at $65.68:
History Vanguard Account:
Quote: Public Service Enterprise Group Inc. (PEG)
PEG is a utility holding company that owns Public Service Electric & Gas Company, New Jersey's largest, and Public Service Electric & Gas Long Island. Public Service Enterprise Group January 2022 Investor Update
Investment Category: Bond Substitute
Public Service Enterprise Group Inc - Home
As of 2/1/22, the average E.P.S. estimate for 2022 is at $3.51. Earnings growth is predicted to be anemic with the average 2023 E.P.S. estimate at $3.66. At $65.68, the P/E using the 2022 E.P.S. estimate of $3.51 is 18.71.
SEC Filed Earnings Press Release for the Q/E 9/30/21
Profit Snapshots: +$135.25
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| 5 Shares = $62.73 |
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| 2+ Shares: +$29.83 |
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| 3+ Shares: +$42.69 |
Last Substantive Buy Discussion: Item # 1.B. Started PEG in Vanguard Taxable Account-Bought 1 at $55.08; 1 at $54.5; 1 at $53.32; 1 at $53; 1 at $52, 1 at $51.16 (9/19/20 Post)
Dividend: Quarterly at $.51 per share, last raised from $.49 effective for the 2020 4th quarter payment. There was no increase in 2021.
While there is dividend growth, the rate is slow. The quarterly dividend was at $.36 in 2013.
Bonds: I have bought and sold PEG's senior unsecured and first mortgage debt. An example of a first mortgage bond is this 2.25% coupon bond maturing in 2026 (rated Aa3 by Moody's). Item # 2.A. Bought 1 Public Service E& G 2.25% First Mortgage bond Maturing in 2026 at a T.C. of 94.387 (5/28/17 Post) That bond went over 108 in 2019 and is now trading near par value due to a shorter time to maturity and a rise in interest rates. I no longer own it.
D. Eliminated WEC in 2 Taxable Accounts- Sold 7 at $96.45 and 3+ at $97.04:
Quote: WEC Energy Group Inc.
WEC Analyst Estimates | MarketWatch
Investment Category: Bond Substitute
Profit Snapshots: +$129.44
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| 7 Shares +$87.88 |
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| 3+ Shares +$41.56 |
Last Buy Discussion: Item # 1.I. Started WEC in Fidelity Taxable Account-Bought 2 at $87.8; 1 at $86.9; 1 at $86.5; 1 at $85.1; 1. at $84.25; 1 at $82.8 and 1 at $81.9 (2/20/21 Post)
Dividend History: The dividend was raised to $.7275 per share ($2.91 annually), effective for the 2022 first quarter payment.
At $97.04, the yield at the new penny rate is about 3%.
Next Ex Dividend: 2/11/21
Last Earnings Report (Q/E 9/30/21): WEC Energy Group (WEC) SEC Filed Press Release
E.P.S. of $.92 based on net income of $290M, with the consensus at $.791;
operating revenue at $1.7465B, up from $1.651B in the 2020 third quarter;
raised "its earnings guidance again for 2021, to a range of $4.05 to $4.07 per share, with an expectation of reaching the top end of the range. This assumes normal weather for the remainder of the year. The company previously raised its annual guidance to a range of $4.02 to $4.05 per share, from its original guidance of $3.99 to $4.03 per share."
2022 E.P.S. guidance of $4.29-$4.33.
Last Sell Discussion: Item # 1.D. Pared WEC - Sold 1 at $92.27; 1 at $94; 1.058 at $97.18(4/17/21 Post)(profit snapshot = $21.81)
I favor WEC as an electric utility holding, but I am simply not willing to buy or to hold at its current price.
Reports Available to Schwab customers:
Morningstar (12/3/21): 3 stars with a fair value of $94
S & P (12/2/21): 3 stars with a 12 month PT of $95
Argus (12/13/21): Buy with a $104 target
E. Pared AMCR in Schwab Account-Sold 30 out of 130 at $12.36:
Quote: Amcor PLC - a global manufacturer of packaging
Investment Category: Bond Substitute with a small flavor of dividend growth.
This kind of position reduction is pure risk mitigation. I will consider buying back some or all of the 30 shares sold when the price would reduce my average cost per share.
Profit Snapshot: +$11.67
Buy Discussions: Item # 2.J. Added to AMCR in Schwab Account-Bought 10 at $11.64 (1/7/22 Post)(I discussed the 2021 third quarter report in that post); Item # 4.A. Added to AMCR-Bought 10 at $11.45; 10 at $11.27 (7/30/21 Post); Item # 2 Bought 100 AMCR at $11.97 (6/12/21 Post)
Average Cost after pare this account: $11.81
The AC was reduced from $11.85.
Dividend: Quarterly at $.12 per share, last raised from $.1175 effective for the 2021 4th quarter payment.
Yield at $11.81 = 4.06%
Last Earnings Report (Q/E 12/31/21): This was for Amcor's second fiscal quarter. This report was released after I sold the 30 share lot.
SEC Filed Press Release and SEC Filed Investor Presentation (at page 7, AMCR notes that price increases during the six months ending 12/31/21 added about $170M to revenues. Industry wide supply chain problems persisted through year end)
GAAP Diluted E.P.S. = $.148, up from $.139 in the 2020 fiscal second Q.
Non-GAAP E.P.S. = $.181
In the prior quarterly report, the company provided a non-GAAP E.P.S. number which was $.177. The last report provided only a non-GAAP E.P.S. number for 6 months which was $.358. I arrived at the fiscal second quarter non-GAAP E.P.S. by subtracting $.177 from $.358.
Consensus at $.18 per Fidelity
Net Income = $225M
Revenues: $3.507B, up from $3.103B
Fiscal 2022 guidance unchanged with adjusted free cash flow estimated at $1.1 to $1.2B and adjusted E.P.S. growth of 7 to 11% on a comparable constant currency basis.
Raised the amount of cash allocated to share repurchases during the 2022 fiscal year to $600M from $400M.
F. Pared ENB Fidelity Account-Sold 3 at $42.18:
Quotes:
USDs: Enbridge Inc. (ENB)
CADs: Enbridge Inc. (Canada: Toronto)
Investment Categories: Bond Substitute/Dividend Growth/Contrarian Value
Profit Snapshot: $22.89
Last Buy Discussions: Item # 1.F. Added to ENB in Vanguard Taxable Account-Bought 5 at $29.51; 5 at $28.95; 5 at $27.4 (10/31/20 Post); Item # 1.C. Added 5 ENB at $30.65-Fidelity Taxable (8/15/20 Post): Item # 1.C. Added 1 ENB at $27.23; 1 at $26.21; 1 at $25.49; 1 at $24.29; 1 at $23.68 (4/18/20 Post)
Average cost after pare this account = $30.51 (40 shares)
 |
| Snapshot Intraday on 1/19/22 after pare |
The AC was reduced from $30.79.
Dividend: Quarterly at C$.86 (C$3.44 annually), last raised from C$.835 effective for the 2022 first quarter payment.
Yield at AC: The yield will fluctuate with the CAD/USD exchange rate. If I assumed a constant .80 conversion rate, the yield would be 8.94% at a constant cost of US$30.51.
Next Ex Dividend: 2/14/22
Goal: Any profit in excess of the dividend payments.
Sell Discussions: Item # 1.E. Sold Remaining Shares Purchased with Dividends in Fidelity Account at 40.14 (10/15/21 Post)(profit snapshot $20.93)(discussed 2021 second quarter earnings report in that post); Item # 1.B. Sold 8 ENB at $42.36 (2/19/20 Post); Item # 3.B. Sold 17 ENB at $40.21 (1/18/20 Post); Item # 1.B. Sold 15 ENB at $37.61-Used Commission Free Trade (2/20/19 Post); Item # 3 Sold 50 ENB at $39.03 (12/21/17 Post); Sold 10 ENB at $40.14 (1/5/18 Post)
Last Earnings Report (Q/E 9/30/21): ENB is scheduled to release its 2021 4th quarter report on 2/11/22. I will discuss it in the earnings section. Enbridge (ENB) SEC Filed Press Release
With pipeline companies, I pay more attention to DCF per share than reported E.P.S.
All amounts are in Canadian Dollars;
Adjusted earnings of $1.2B or $.509 per share with the consensus at $.579 per Fidelity;
Distributable Cash Flow (DCF) of $2.3 billion or $1.13 per common share, compared with $2.1 billion or $1.03 per common share in 2020;
Reaffirmed 2021 full year guidance range for EBITDA of $13.9 billion to $14.3 billion and DCF per share of $4.70 to $5.00;
"Completed and placed into service the U.S. Line 3 Replacement Project ensuring safe, reliable supply of Western Canadian crude";
"Company expects full year 2021 EBITDA and DCF to remain within its previously provided guidance range of $13.9 billion to $14.3 billion and $4.70 to $5.00 per share, respectively."
ENB Trading Profits to Date: $303.78
I currently own ENB's common shares in five accounts including 2 Roth IRAs.
The following are snapshots of my common stock positions in two other taxable accounts:
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| 20 shares at a average cost per share of $29.14 |
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| 12 shares at a $28.79 AC per share |
My largest dollar position is in an ENB reset equity preferred stock. Realized gains from the ENB preferred stock positions can be found in Advantages and Disadvantages of Equity Preferred Floating Rate Securities (+C$3,510 which excludes US$351.63 in realized gains from EBGEF which is priced in USDs):
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| 300 ENBPRP/Unrealized gain at C$1,570 |
That reset currently has a 4.35% coupon paid on a C$25 par value. The next reset is in 2024. Item # 1.A. Sold 100 out of 400 ENBPRP:CA at C$20.2 (12/10/21 Post) If not redeemed on the reset date, the coupon will reset at a 2.5% spread to the then existing 5 year Canadian government bond yield, currently trading near a 1.62% yield. Canada 5 Year Government Bond Overview | MarketWatch If the yield was at 1.62% on the 2024 reset date, the coupon would be 4.12% for the next 5 years.
I also own 10 shares of an ENB exchange traded junior bond (not an equity preferred stock which is implied in the following snapshot), which was bought at $15.16 and has a $25 par value:
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| $26.57 Price as of 2/2/22 Close |
Enbridge Inc. 6.375% Fixed-to-Floating Rate Subordinated Notes Maturing in 2078 (ENBA), discussed at Item # 7.A. (3/28/20 Post)
G. Eliminated SHBI-Sold 10 at $20.7:
Quote: Shore Bancshares Inc.
Investment Category: Regional Bank Basket Strategy
Profit Snapshot: +$100.27
Buy Discussion: Item # 1.G. Started SHBI -Bought 5 at $11.4; 5 at $10.9; 5 at $10.4 (11/13/20 Post)
Sell Discussion: Item # 1.D. Sold 10 SHBI at $15.4 (3/10/21 Post)(profit snapshot = $39.99)
Dividend: Quarterly at $.12 per share, last raised from $.10 effective for the 2019 third quarter payment.
Last Ex Dividend: 11/10/21
SHBI has not yet released its 4th quarter earnings report. Unlike other regional bank stock pares and eliminations, yet to be discussed here, this elimination was based on profit taking after an almost 100% run up since my late 2020 purchases.
The two analysts who cover this bank holding company currently estimate 2022 E.P.S. at $1.59 and $1.83 in 2023. Without a significant expansion in NIM, my gut tells me that $1.83 for 2023 is a stretch.
Last Earnings Report (Q/E 9/30/21)
Shore Bancshares (SHBI) SEC Filed Press Release
GAAP E.P.S. = $.39 based on net income of $4.031M;
GAAP includes a $538K expense relating to SHBI's acquisition of Severn Bancorp;
adjusted E.P.S. = $.44 (my calculation) with the consensus at $.40 per Fidelity;
NIM = 2.99%, down from 3.17% in the 2020 third quarter;
NPL Ratio = .15% ;
NPA Ratio = .19%;
Charge off ratio: small net recovery;
Tangible book value per share = $15.55
H. Added to Lotto FBIO-Bought 5 at $2.15; 5 at $1.99:
Quote: Fortress Biotech Inc.
Programs-Fortress Biotech, Inc.
Investment Category: Blackjack Hand, part of the Lottery Ticket Basket
Many of the quality biotech stocks have been mauled over the past several months. FBIO is not a quality stock IMO.
I characterize FBIO as "I have a dream" biotech incubator. With the exception of Caelum Biosciences, which was acquired by AZN, the public companies founded by FBIO are trading in the slow single digits, except for Journey Medical Corp. (DERM) which is currently priced in the mid-single digits, almost 50% below its November 2021 IPO price. Fortress Biotech Announces Closing of Acquisition of Caelum Biosciences by AZN; Journey Medical Corporation Announces Closing of Initial Public Offering
Perhaps some of the decline is related to the FDA placing a hold on Mustang Bio's gene therapy treatment treatment for bubble boy disease. Mustang Bio (MBIO) Provides an Update on its IND Application for MB-207, a Lentiviral Gene Therapy for Treatment of X-linked Severe Combined Immunodeficiency (“XSCID”) in Previously Transplanted Patients | Mustang Bio FBIO has a major ownership interest in MBIO. This hold is pending a "Chemistry, Manufacturing and Controls" clearance. MBIO will more likely succeed or fail based on its cancer drugs currently in clinical stage trials. The Stock Jocks are betting on failure given the stock price and market cap. I am working my way up to 100 shares slowly in MBIO, currently priced near $1 per share Mustang Bio Inc. (MBIO).Mustang Bio Announces MB-106 CD20-Targeted CAR T Data Selected for Presentation at 63rd American Society of Hematology (ASH) Annual Meeting; Mustang Bio Awarded NIH Grant For MB-106 CD20-Targeted CAR T Cell Therapy for the Treatment of B Cell Non-Hodgkin Lymphomas
I am just averaging down on FBIO until I hit 100 shares.
Current FBIO Position: 50 Shares with an AC at $2.74 per share. Item # 2.M. Added to FBIO-Bought 5 at $2.48 (12/16/21); Item # 2.N. Added to Lotto FBIO-Bought 5 at $2.6 (12/3/21 Post); Item # 2.F. Bought 30 FBIO at $3.04 (11/26/21 Post)
FBIO realized gains to date = $62.04
I have nothing further to add to those recent discussions.
I. Eliminated HIW-Sold 7 at $47.22:
Quote: Highwoods Properties Inc- an office REIT
Website: Highwoods
Website: Highwoods
Investment category: Equity REIT Common and Preferred Stock Basket Strategy
Profit Snapshot: $15.31
Last Discussed: Item # 1.D. Added to HIW-Bought 2 at $43.32 (10/15/21 Post); Item # 1.I. Bought 5 HIW at $45.68 (9/3/21 Post)
I have cut back my office REIT allocation based on concerns that Covid may create an oversupply situation and pressure rents to the downside. I just want more clarity on those issues before restarting HIW or at least a starting price below $40.
Dividend: Quarterly at $.50 per share, last raised from $.48 effective for the 2021 third quarter payment. Highwoods Properties, Inc. Common Stock (HIW) Dividend History | Nasdaq
2021 Dividend Tax Information: 2021-Form-8937-Final.pdf
There was no ROC funded distribution.
Last Ex Dividend: 11/12/21
Last Financial Report (Q/E 9/30/21): 10-Q and Highwoods Properties, inc (HIW) Q3 2021 Earnings Call Transcript | The Motley Fool
I will continue holding my 5 HIW 3.65% SU bonds, maturing on 1/15/23, until those bonds are redeemed by HIW:
Quote: Vertex Pharmaceuticals Inc.
VRTX Analyst Estimates | MarketWatch
Pipeline | Vertex Pharmaceuticals
Profit Snapshot = +$16.84
Average Cost after pare = $198.4 (2.8+ shares)
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| Snapshot Intraday on 1/14/22 after pare |
The AC was reduced from $202.4
Dividend: None and none expected.
Last Buy Discussions: Item # 3.L. Multiple VRTX Small Dollar Buys (6/12/21 Post) I discussed in that post the failure of another compound, VX-864. Vertex Announces Primary Endpoint Achieved in Phase 2 Study of VX-864 in Alpha-1 Antitrypsin Deficiency The result was unlikely to achieve a meaningful clinical result so the company ended the trial. Item # 1.A. Bought 1 VRTX at $213.65; $50 at $211.32; $50 at $201.33 (4/30/21 Post)
Last Earnings Report (Q/E 12/31/21): This report was released after this pare.
GAAP E.P.S. = $3.00
Non-GAAP E.P.S. at $3.37 with the consensus at $3.30 per Fidelity and up from $2.51 in the 2020 4th Q.
Revenues = $2.073B, up from $1.627B in the 2020 4th Q.
Profits and revenues are currently highly dependent on its cystic fibrosis drugs.
Product Revenues:
TRIKAFTA/KAFTRIO at 81.67% of total revenues.
As previously discussed, VRTX paid a lot of money to CRISPR Therapeutics for a 60% stake in its CTX001 gene editing therapy for sickle cell disease and transfusion-dependent beta-thalassemia. Vertex Pharmaceuticals and CRISPR Therapeutics Amend Collaboration for Development, Manufacturing and Commercialization of CTX001™ in Sickle Cell Disease and Beta Thalassemia | Vertex Pharmaceuticals (4/20/21).
In its 4th quarter earnings report, Vertex noted that CTX001 is currently in Phase 3 trials for both diseases and anticipates global regulatory filings for CTX001 in late 2022. Trial results released so far have been encouraging. I would note that CRSP has been clobbered in recent months subsequent to an initial and short lived enthusiasm last year, as have the other gene editing stocks. Several concerns are probably the price volatility of these stocks, particularly on the durability of positive results.
The stock received a boost last December after this press release. Vertex Announces Positive Results From Phase 2 Study of VX-147 in APOL1-Mediated Focal Segmental Glomerulosclerosis (12/1/21). The stock closed at $186.94 just prior to this release and at $205 the next day. Vertex Pharmaceuticals Historical Prices & Data - Yahoo Finance
It is extremely important for Vertex to successfully expand beyond drugs for cystic fibrosis. The price action after Vertex released the VX-147 Phase 2 trial results highlight what has suppressed the stock price to a low P/E multiple and caused wild fluctuations in the stock price. The concern is what happens when those drug lose their patent protection.
The price collapse from around $270 to $200 during October 2020 was directly related to a drug failure. Vertex's big move beyond cystic fibrosis hits a wall with lung drug failure | FierceBiotech So both CTX001 and VX-147 need to work out.
K. Pared SU in Fidelity Account-Sold 2+ at $28.78 and 12 at $30:
Quotes:
USDs: Suncor Energy Inc. (SU)
CADs: Suncor Energy Inc. (Canada: Toronto)
Suncor Energy Inc. Profile | Reuters
SU Analyst Estimates | MarketWatch
Profit Snapshot: +$14.99
Average Cost per share this account: US$22.19 (50+ shares)
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| Snapshot Intraday on 2/2/22 after second pare |
Last Buy discussion: Item # 2.K. Added to SU in Vanguard Taxable Account-Bought 2 SU at $20.93 (5/8/21 Post)
Dividend: C$.42 per share, raised from C$.21 effective for the 2021 4th quarter payment.
Dividends – Stock Information | Suncor
Understandably, the quarterly dividend was slashed from C$.465 per quarter to C$.21 effective for the 2020 second payment .
Yield at current AC of $22.19 this account: The yield will fluctuate with the CAD/USD exchange rate. Assuming a constant CAD/USD exchange rate of .8, which will not happen, the dividend yield at the current C$1.68 annual rate would be about 6.07%.
I still own a few high cost shares in this account, bought in 2019, that I will sell at some point: 8 shares at $29.79 (the 12 share lot was from this purchase) and 10 shares at $28.65. When those shares are sold profitably, the tax cost basis will be reduced to $18.37 per share.
Last Ex Dividend Date: 12/2/21
Last Earnings Report (Q/E 12/31/21, released on 2/2/22 after my sales): All amounts are in Canadian Dollars. SEC Filing
Adjusted FFO of $3.144B or $2.17 per share, up from $.80 in the 2020 4th quarter
Adjusted operating earnings of $1.294B or $.89 per share
I believe the consensus estimate of C$.939 is based on adjusted operating earnings but I am not certain. According to one report, the consensus USD equivalent was at US$.76 per share with the actual at $.71.
Net earnings per share at $1.553B or $1.07 per share. That number include a $25M unrealized foreign exchange gain on the revaluation of U.S. dollar denominated debt; a $227M gain from selling SU's interest in the Golden Eagle Area Development project; and an $11M unrealized gain on risk management activities.
Total upstream production was 743,000 barrels of oil equivalent per day.
Reduced debt in 2021 by $3.7B to $16.1B.
Last Sell Discussion: Item # 3.C. Sold 10 SU at $31.86-Highest Cost Lot (11/20/19 Post)
Last Elimination: Item # 2 Sold 50 SU at $40.95 (8/16/14 Post)(profit snapshot = $598.08) That transactions was close to when energy stocks started a long term secular bear market trend.
Other recent news: Suncor Energy announces 2022 production outlook and capital (12/13/21)
L. Added to FSPHX-Bought $50 at $28.03:
Quote: FSPHX | Fidelity Select Health Care Portfolio Overview
Sponsor's website: FSPHX - Fidelity Investments
Expense Ratio = .69%
Fidelity® Select Health Care (FSPHX) Performance | Morningstar (currently rated 4 stars) Performance in 2021 and so far in 2022 has been subpar.
15 year average annual total return =12.97% as of 1/2/22
Dividends are paid semi-annually in April and December. In December 2021, the fund paid a $1.848 per share long term capital gains distribution and another one in April 2021 at $.98 per share. Income from dividends was only $.041 last year with another $.059 per share source from short term capital gains. Health Care Ptf/Fidelity Select Portfolios (NASDAQ:FSPHX) Dividend History
M. Added 5 to TUP at 13.9:
Quote: Tupperware Brands Corp.
Investment Category: Contrarian value
TUP Analyst Estimates | MarketWatch
I discussed this stock in my last post and have nothing to add here. Item # 1.L. Bought 5 TUP at $14.53 (1/20/22 Post)
I am simply averaging down in 5 share lots.
Disclaimer: I am not a financial advisor, but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or 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.
