Economy:
Last Wednesday the FED raised the FF rate by .75% to a 2.25%-2.5% target range. Federal Reserve Board - Federal Reserve issues FOMC statement
Earlier this morning, the CME FedWatch had a 100% probability that the FED will increase the FF rate in September by at least .5%. The odds of a .75% increase is currently hovering near 20%, down from 41% a week ago. Countdown to FOMC: CME FedWatch Tool
The government estimated that real GDP declined at a .9% annualized rate in the second quarter. Gross Domestic Product, Second Quarter 2022 (Advance Estimate) | U.S. Bureau of Economic Analysis (BEA) This is the first of several estimates. If the last estimate remains negative, then there would be two consecutive quarters of negative growth. Real GDP declined at a 1.6% annualized rate in the first quarter.
Discussed at GDP Q2 and U.S. economy shrank at annual rate of 0.9% in the second quarter - CBS News
I would agree with Chairman Powell that robust job growth in the first six months is inconsistent with an ongoing recession during that time period. That assumes that the job growth numbers are close to being accurate.
The annual PCE inflation rate was 6.8% through June 2022:
Personal Income and Outlays, June 2022 | U.S. Bureau of Economic Analysis (BEA)
Previously, investors had taken some comfort when the annual PCE price index fell from 6.6% in March to 6.3% in April and then remaining at 6.3% in May.
Several pundits and politicians argue that the FED will cause a recession by increasing the FF rate from zero to 3% or thereabouts this year. (see e.g. Senator Warren in Wall Street Journal Op-Ed: The Fed’s Aggressive Interest-Rate Hikes Risk Triggering a Recession)
The problem for the economy is not increasing the FF rate from zero to an economically benign and historically low FF rate.
The impact of inflation on consumer discretionary spending is the problem, and the FED allowed that problem to germinate and grow by keeping ZIRP and QE for far too long, irresponsibly dismissing the obvious onset and growth of problematic inflation as temporary.
Equally ridiculous is the notion that a 3%+ FF rate will have any material impact on reducing inflation or the totally irrational and historically debunked FED forecast that such a low rate will cause inflation to decline back to 2%.
Corporations on the front lines of the economy say cracks are forming - The Washington Post
China's manufacturing sector declined in July. China's manufacturing PMI in July as Covid flares up China's Covid lockdowns are contributing to supply chain disruptions.
Covestro, a German Chemical Firm, warns of supply chain collapse as gas concerns mount
Earnings reports from regional banks released during the first six months, which I have reviewed to date, are inconsistent with a recession during that period. NPL and charge off ratios remain low. A few of those reports are discussed in Items # 2.C, 2.D., 2.E. and 2.F. below. This does not mean that a recession has been avoided but does support the thesis that one did not exist in the 2022 first half, notwithstanding the negative real GDP reports.
++++
Trump Legal Team Files 282-Page Document Threatening to Sue CNN The alleged defamation is calling Trump's election fraud claims "baseless". I hope that Donald files suit since he needs to testify in a deposition about those claims under oath. It is extremely easy to make false statements and time consuming to rebut them, particularly when a deponent utters them in a rapid and continuous manner while hurling insults and spitting venom at the person asking questions.
Trump’s America First Speech Revealed a Plan for Power - The Atlantic The plan is consistent with authoritarianism supplanting democracy in the U.S. How Six States Could Overturn the 2024 Election - The Atlantic The GOP is not a conservative party.
Jan. 6 texts missing for Trump Homeland Security secretary and deputy - The Washington Post
Trump’s Jan. 6th National Guard Lie Crumbles - The Bulwark; Secretary Miller’s Testimony Debunks Lie Pushed By Trump, Fox News—And Miller - YouTube
Hear what GOP voters in Wyoming have to say about Liz Cheney; Poll: Cheney trails Trump-backed challenger in Wyoming by 22 points | The Hill I would be shocked if Liz Cheney survived a primary challenge from the Trumpster candidate Harriet Hageman. The primary will be on 8/18. Cheney has already been censured by the Wyoming GOP for being a fact based and principled critic of Don the Authoritarian.
In the latest poll, 83% of republicans still have a favorable opinion of Donald. NPR_PBS-NewsHour_Marist-Poll: Page 13.pdf Almost as many republicans view him to be honest (79%) and a role model for their children.
Trump-Backed Conspiracy Theorist Mark Finchem Vies to Take Over Arizona Elections - The New York Times This guy is a member of Oath Keepers and was at the capital on 1/6, though he claims that he did not enter with the other Oath Keepers. Finchem claims that he would not have certified Biden's victory in Arizona and would have declared Trump to be the winner. He will not concede if he loses.
Senator Hawley (R-MO) vows to vote ‘no’ on adding Sweden and Finland to NATO | The Hill Hawley is best known for raising his arm and making a fist to show his solidarity with the mob shortly before they attacked the capital. If he had opened his hand, rather than making a fist, it would have been an appropriate Nazi salute to the mob.
GOP Pa. governor nominee under fire for ties to white nationalist, antisemitic organization - The Washington Post; The Trump loyalist who could be a major threat to US democracy
Blindsided veterans erupt in fury after Senate Republicans suddenly tank PACT Act; Watch: GOP Senators Slammed For Fist Bump After Blocking Vet Health Bill - YouTube
Last Sunday, Russia murdered the owner of one of Ukraine's grain producing and exporting companies and his wife. A Russian missile hit their home located in Mykolaiv. Russia hits southern Ukraine city, killing grain exporter Russia hit residential areas in Nikopol with up to 50 GRAD missiles. Russia continues to deny that it is hitting civilian targets.
Videos allegedly show Russian soldiers castrating a Ukrainian soldier | CNN
Russia is plundering gold in Sudan to boost Putin's war effort in Ukraine | CNN
The attack on a prison holding Ukraine POWs, explained - Vox Russia routinely commits war crimes and crimes against humanity.
Russia faces 'economic oblivion' despite short-term resilience
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1. Corporate Bonds and Treasuries:
A. Bought 2 McCormick 3.15% SU Maturing on 8/15/24 at a Total Cost of 99.563:
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Issuer: McCormick & Co. Inc. (MKC)
MKC Analyst Estimates | MarketWatch
Earnings Report F/Q Ending 2/28/22
FINRA Page: Bond Detail
Credit Ratings: Baa2/BBB
YTM at Total Cost = 3.358%
Current Yield at TC = 3.16%, rounded down.
B. Bought 1 Consolidated Edison 2.9% SU Maturing on 12/1/26 at a Total Cost of 96.02:
%202.9%25%2012:1:26%20.png)
Issuer: Consolidated Edison Inc. (ED)
I have eliminated my common stock position.
ED Analyst Estimates | MarketWatch
FINRA page: Bond Detail
Credit Ratings: Baa1/A-
YTM at Total Cost = 3.877%
Current Yield at TC = 3.02%
C. Bought 2 Cigna 3.25% SU Maturing on 4/15/25 at a Total Cost of 99.340:
%203.25%25%204:15:25.png)
Issuer: Cigna Corp. (CI)
CI Analyst Estimates | MarketWatch
Finra Page: Bond Detail (prospectus not linked)
Credit Ratings: Baa1/A-
YTM at Total Cost = 3.494%
Current Yield at TC = 3.27%, rounded down.
D. Bought 2 Vornado 3.5% SU Maturing on 1/15/25 at a Total Cost of 98.676:
Issuer: Operating Subsidiary of Vornado Realty Trust (VNO)
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings: Baa3/BBB-
YTM at Total Cost = 4.04%
Current Yield at TC = 3.547%
I recently initiated a small ball position in the common stock.
E. Bought 2 Huntington Bancshares 2.65% SU Maturing on 8/6/24 at a Total Cost of 98.29:
Issuer: Huntington Bancshares Inc. (HBAN)
I own the common in several accounts.
HBAN Analyst Estimates | MarketWatch
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings: Baa1/BBB+
YTM at Total Cost = 3.453%
Current Yield at TC = 2.7%, rounded up.
F. Bought 1 Toronto Dominion 4.4% SU Maturing on 1/29/26 at Par Value-Fidelity Corporate Notes Program:
%201:29:26%20.png){kind=small}
Purchased 7/26/22. Discussed out of time order.
Interest Paid Monthly:
G. Bought 1 Public Service E & G 3.15% First Mortgage Bond Maturing on 8/15/24 at a Total Cost of 98.988:
Purchased 7/14/22. Discussed out of time order.
Issuer: Wholly owned subsidiary of Public Service Enterprise Group Inc. (PEG)
Finra Page: Bond Detail (prospectus linked)
Credit Ratings: A1/A
YTM at Total Cost: 3.66%
Current Yield at TC = 3.1822%
H. Bought 1 Treasury 2.75% Coupon Maturing on 2/15/24 at 99.4725:
%202.75%25%202:15:24.png){kind=small}
Purchased 7/15/22. Discussed out of time order.
YTM at Total Cost = 3.099%
Current Yield at TC = 2.7646%
I. Bought 1 Boston Properties 3.2% SU Maturing on 1/15/25 at a Total Cost of 97.529:
%203.2%25%201:15:25.png)
Purchased on 7/20/22. Discussed out of time order.
I now own 2 bonds. The prior purchase was at 99.01 executed on 6/2/22.
Issuer: Operating entity for Boston Properties Inc. (BXP)
SEC Filed Earnings Press Release for the Q/E 3/31/22
Finra Page: Bond Detail (prospectus not linked)
Credit Ratings: Baa1/BBB+
YTM at Total Cost = 4.26%
Current Yield at TC = 3.28%
J. Bought 1 Treasury 2.75% Coupon Maturing on 8/31/23 at 99.5585:
%20%20.png){kind=small}
Purchased on 7/20/22. Discussed out of time order.
YTM at Total Cost = 3.146%
Current Yield at TC = 2.7622%
K. Bought 2 Eversource 2.9% SU Maturing on 101/24 at a Total Cost of 98.319:
%202.9%25%2010:1:24%20.png)
Purchased 7/22/22. Discussed out of time order.
Issuer: Eversource Energy (ES) - Utility
Finra Page: Bond Detail (prospectus linked)
Credit Ratings: Baa1/BBB+
YTM at Total Cost = 3.708%
Current Yield at TC = 2.9496%
L. Bought 2 182 Day T Bills at 98.523778:
%20IR%203%25%20%201:26:23.png){kind=small}
Purchased 7/25/22 at auction. Interest will be $29.52 and will be included in my 2023 1099 since the bill matures in 2023. Interest is effectively paid when the treasury redeems at par value.
Interest Income Reporting for Marketable Treasury Securities.pdf
Investment Rate (coupon equivalent): 3%
M. Bought at Auction 2 Treasury Floating Rate Notes Maturing on 7/31/24:
%202.94%25%203:21:24%20.png)
%208:30:22%20IR%202.173%25.png){kind=small}
%209:27:22%20IR%202.248%25.png){kind=small}
 |
| Old CUSIP # for HTA |
I suspect that all, or almost all of that distribution will be classified as ROC which will reduce my taxable cost basis in the HTA shares. That adjustment has not been made yet and probably will be delayed until early next year.
 |
| Price as of close on 7/29/22 |
History this Account:
Quote: INVESCO Ltd. (IVZ)
52 Week High: $27.03, hit on 9/17/21. The highest 2022 closing price was $24.89 (1/14/22)
Trend: Bear Market starting in June 2021. Invesco Ltd. (IVZ) Interactive Stock Chart
IVZ Analyst Estimates | MarketWatch (As of 7/30/22, the 2022 consensus E.P.S. was at $1.96, down from the $2.99 actual in 2021; at $2.21 in 2023; and at $2.42 in 2024. Using my AC of $16.7 and the 2023 consensus E.P.S. estimate, the P/E is 7.56)
Website: Optimize your portfolio | Invesco US
3 Years-Summary Operating Results:
 |
| Page 31, Annual Report |
Last Discussed: Item # 1.E. Eliminated IVZ in Vanguard Taxable Account-Sold 10 at $18.91 (2/6/21 Post)(profit snapshot = $105.91); Item # 1.A. Sold 83+ at $17.3-Schwab Account and Item # 1.B. Sold 71+ IVZ in Fidelity Taxable Account at $17.39 (1/1/21 Post)(profit snapshots = $330.88) Those sales eliminated my taxable account positions.
IVZ is a global investment management firm that offers mutual funds, CEFs, ETFs, Unit Trusts and wealth management. The most noteworthy ETF is Invesco QQQ which had a market value of $174.318B as of 7/29/22 and a .2% expense ratio.
Fees are based on the total assets managed by the funds. During the second quarter, there was a net outflow. The total amount of fees collected will also fluctuate with changes in security prices.
Dividend: Quarterly at $.188 per share ($.752 annually)
Yield at AC of $16.7 = 4.5%
Next Ex Dividend: 8/11/22
Last Earnings Report (Q/E 6/30/22) SEC Filed Press Release
Diluted E.P.S. = $.26, down from $.79 in the 2021 second quarter. Needless to say, with that kind of Y-O-Y decline, a stock is not going to be in a dominant uptrend.
Adjusted E.P.S. = $.39, down from $.78
Non-GAAP Consensus at $.50
Net Flows:
AUM declined to $1.390T, down 8.8% from the prior quarter, driven primarily by market losses.
As a IVZ shareholder once again, I would hope to see both net inflows and rising asset prices in its managed funds.
Analyst Reports (available to Schwab customers):
Morningstar (7/27/22): 3 stars with a FV of $20
Argus (7/27/22): Buy with a $25 PT, reduced from $27.
S&P (7/27/22): 3 stars with a 12 month PT of $18, cut from 4 stars with a $23 PT.
B. Bought 1 RTX at $90.59:
Quote: Raytheon Technologies Corp. (RTX)
"Raytheon Technologies Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. With four industry-leading businesses ― Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense ― the company delivers solutions that push the boundaries in avionics, cybersecurity, directed energy, electric propulsion, hypersonics, and quantum physics. The company, formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses."
RTX Analyst Estimates | MarketWatch (As of 8/1/22, the 2022 E.P.S. average estimate was $4.71; at $5.67 in 2023; and at $6.57 in 2024).
10-Q for the Q/E 6/30/22 (long term debt listed at pages 13-14)
2021 Annual Report (description of business segments starts at page 4)
Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release
GAAP E.P.S. at $.88
Non-GAAP E.P.S. at $1.16
Free Cash Flow = $807M
Revenues: $16.3B, up 3% (4% organic growth).
Bookings and Backlog:
Analyst Reports (available to Schwab customers):
Morningstar (7/26/22): 3 stars with a $96 FV, increased from $94, and a wide moat.
Argus (7/27/22): Buy with a 12 month PT of $112
S&P (7/27/22): 4 stars with a 12 month PT of $106
C. Bought 10 KEY at $17.74-Schwab account:
Quote: KeyCorp (KEY)
52 week high: $27.17, hit intraday on 1/18/22
KEY Analyst Estimates | MarketWatch
Investment Category: Regional Bank Basket Strategy
KEY is a super regional with 978 branches in 15 states. Its home base is in Cleveland, Ohio.
Dividend: Quarterly at .195 per share ($.78 annually), last raised from $.185 effective for the 2021 third quarter.
Yield at $17.74:
Next Ex Dividend: 8/29/22
Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release
Diluted E.P.S. continuing operations: $.54, up from $.45
Net income from continuing operations = $504M
Net income = $507M
NIM: 2.6%, up from 2.55%
Cash Efficiency Ratio = 59.5%
NPL Ratio: .38%, down from .69%
Charge off ratio = .16%, up from .09%
Coverage Ratio = 296.5% (allowance for loan losses to non-performing loans)
Tangible book value per share: $10.4
ROA = 1.16%
ROE = 16.17%
ROTE = 20.9%
Analyst Reports (available to Schwab customers:
Morningstar (7/21/22): 5 stars with a $26 FV and no moat.
Argus (7/22/22): Buy, revised PT to $26 from $30.
S&P (7/29/22): 3 stars with a 12 month PT of $19.
KEY Realized Gains to Date: $738.95
Of that amount, $439.32 was realized in a 2013 trade. Item # 1. Sold: 140 KEY at $11.8 (7/27/13 Post)
I have positions in other taxable accounts with the largest one in my Fidelity Account.
D. Bought 10 OPBK at $10.71-Schwab account:
Quote: OP Bancorp
52 Week High at $14.86, hit intraday on 2/8/22.
Investment Category: Regional Bank Basket Strategy
OPBK Analyst Estimates | MarketWatch (as of 7/30, the 2022 consensus E.P.S. was $2.29 originating from 2 analysts.) Using that estimate, the P/E at $10.71 is 4.67. The TTM E.P.S. was $2.2.
Last Discussed: Item # 1. Bought 100 OPBK at $10.56 (12/3/21 Post) I still own those sharess.
Dividend: Quarterly at $.12 per share, raised from $.10 effective for the 2022 third quarter payment.
Yield at $10.71 = 4.48%
Next Ex Dividend: 8/10/22
Last Earnings Report (Q/E 6/30/22): The report was released the day after my purchase.
E.P.S. = $.54, up from $.42
Estimate at $.553 per Fidelity
NIM = 4.21%, up from 3.98%.
Efficiency Ratio = 47.07%
NPL Ratio = .15%
Charge off ratio = Net recovery of .01%
Coverage ratio = 813% (allowances for loan losses as a percentage of non-performing loans)
ROA = 1.79%
ROE = 20.29%
E. Bought 10 HBAN at $13.06- Vanguard Taxable Account:
Quote: Huntington Bancshares Inc. (HBAN)
HBAN is a super regional bank holding company.
52 week high: $17.79, hit intraday on 1/18/22
Trend: Bear Market
Investment Category: Regional Bank Basket Strategy
Last Buy Discussions: Item # 2.C. Added to HBAN-Bought 2 at $7.4; 1 at $7.27; 1 at $6.96; 10 at $7.92 (5/30/20 Post); Item # 3.D. Added to HBAN-Bought 10 at $11.6; 10 at $11; 5 at $9.5; 5 at $8.4; 2 at $7.5 (3/28/20 Post)
Dividend: Quarterly at $.155 per share ($.62 annually)
HBAN Dividend History | Nasdaq
Yield at $13.06: 4.75%, rounded up.
Next Ex Dividend Date: 9/16/22
Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release
GAAP E.P.S. = $.35
Non-GAAP E.P.S. at $.36
NIM: 3.15%, up from 2.66% in the 2021 second quarter and 2.88% in the 2022 first quarter.
Efficiency Ratio = 57.3%
NPL Ratio = .57%, down from .88% in the 2021 second quarter
Charge off ratio = .03%, down from .28%
Coverage Ratio = 330% (allowance for credit losses as a percentage of nonperforming loans)
Analyst Reports (available to Schwab customers):
Morningstar (7/21/22): 4 stars with a FV of $16 and narrow moat.
S & P (7/30/22): 4 stars with a 12 month PT of $15
Argus (7/28/22): Buy with a 12 month PT of $15, raised from Hold.
Other Taxable Account Positions: Prices as of 7/29/22 close.
Fidelity: 60 shares with an average cost of $9.22 per share (cash option for dividends since 2020):
I can reduce the AC to $5.49 by selling my highest cost 20 shares. My consider to sell price for those shares is currently >$15. At $15, the profit on those 20 shares would be $74.
Schwab Account: 10 shares with a $7.56 AC per share:
HBAN Realized Gains to Date: $1,018.67
Some Sell Discussions: Item # 3.C. Pared HBAN - Sold Highest Cost 10 Shares at $16.22 (2/24/22 Post); Item #1.A. Pared HBAN in Fidelity Account- Sold 50 at $14.6 and 20 at $15 and Item #1.B. Sold 4 HBAN in Vanguard Account at $14.6 (1/31/21 Post); Item # 5.B Sold 51+ HBAN at $14.5 (9/28/19 Post)(profit snapshot = $52.58); Item # 5.A. Sold 104+ HBAN at $14.65 and 102+ at $14.57 (8/17/19 Post)(profit snapshots = $142.62); Item # 3.A. Sold 100 HBAN at $16.12 (2/3/18 Post)(profit snapshot = $254.75); Sold 50 HBAN at $9.53 (10/17/14 Post)(profit snapshot = $275.68); Item # 3 Sold 90 HBAN at $5.83 (9/29/2010 Post)(lots bought at $4.27 and $3.7)
F. Bought 3 CFG at $37.34-Schwab Account:
Quote: Citizens Financial Group Inc. (CFG)
52 week high: $57, hit intraday on 1/18/22.
Investment Category: Regional Bank Basket Strategy
CFG Analyst Estimates | MarketWatch (As of 8/1/22, the average E.P.S. estimate for 2022 was $4.26; $5.08 in 2023 and $5.04 in 2023)
Average cost per share this account: $37.71 (10 shares)
Using the average E.P.S. estimate for 2023, currently at $5.08, the P/E at $37.71 is 7.42.
Dividend: Quarterly at $.42 per share ($1.68 annually), last raised from $.39 effective for the 2022 third quarter payment.
Yield at AC = 4.455%
Last Ex Dividend Date: 8/1/22 (owned all as of)
Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release
GAAP E.P.S. = $.67
Non-GAAP at $1.14 with underlying net income of $595M.
The integration related expenses relate to the recently closed acquisition of Investors Bancorp, which I owned. Item # 3.I. CFG Completes the Acquisition of Investors Bancorp (ISBC) (4/14/22 Post) In my Fidelity account, I received $1.46 per share in cash +.297 CFG share for each ISBC share, with the fractional shares liquidated into cash.
NIM = 3.04%, up from 2.71% in the 2021 second quarter and 2.75% in the 2022 first quarter
Underlying efficiency ratio = 58%
NPL Ratio = .54%, down from .64%
Charge off ratio = .13%, down from .25%
Coverage ratio = 256%
Underlying return on tangible equity = 15.5%
Loan-to-Deposit Ratio = 87.2%
Total Capital Ratio = 12.3%
As a result of recent acquisitions, I would classify CFG as a super regional.
Analyst Reports (available to Schwab customers):
S&P (7/26/22): 4 stars with a 12 month PT of $44
Credit Suisse (7/19/22): Neutral with a 12 month PT of $42, reduced from $45.
Argus (7/20/22): Buy with a 12 month PT of $53, reduced from $60.
G. Bought 2 BAX at $59.55; 1 at $58.71; 2 at $58.23:
On 7/28/22, BAX declined $7.30, or 10.93%, to close at $59.5. This was in response to the earnings report. The decline was sufficient to start a placeholder position and then add to it after the stock declines further. Supply chain problems and higher input costs caused Baxter to lower forward E.P.S. and revenue guidance.
Baxter International Inc. Analyst Estimates-MarketWatch
Baxter International Stock Split History
Average cost per share = $58.85 (5 shares)
Dividend: Quarterly at $.29 per share ($1.16 annually), last raised from $.28 effective for the 2022 third quarter payment.
Yield at AC = 1.97%
Next Ex Dividend: 9/1/22
Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release
GAAP E.P.S. at $.50
Non-GAAP E.P.S. at $.87
Adjustments relate to Baxter's acquisition of Hill-Rom Holdings in December 2021, including intangible asset amortization, a non-cash accounting expense. Baxter Completes Acquisition of Hillrom, Creating ~$15 Billion Global Medtech Leader; Baxter to Acquire Hillrom, Expanding Connected Care and Medical Innovation Globally
Gross Margin contracted 10 basis points to 38.8%.
Revenues by product category:
2022 Forecast:
Third Quarter adjusted E.P.S. guidance cut to $.79-$.83 with the consensus then at $1.09.
Lowered 2022 adjusted E.P.S. guidance to $3.6 to $3.7 from $4.12-$4.2.
While these changes justifiably caused a price reset, the price reset provided me with a satisfactory entry point. I will probably add in 1 or 2 share lots provided each subsequent purchase is at the lowest price in the chain.
Analyst Reports (available to Schwab customers):
Morningstar (7/28/22): 4 stars with a $85 FV, cut from $90, and narrow moat.
S&P (7/20/22): 3 stars with a 12 month PT of $60, lowered from $78
Other recent Reports: The following PT reductions occurred in response to the last earnings report. I do not have access to these analyst reports.
JPM PT to $70 from $78, maintains overweight
MS PT to $72 from $86, maintains overweight
Citigroup PT to $74 from $82, maintains buy rating.
Raymond James PT to $66 from $85, reiterates outperform rating.
Deutsche PT to $69 from $99, maintains buy rating.
H. Bought 8 CUT at $32.88:
Quote: Invesco MSCI Global Timber ETF Overview
Sponsor's website: Invesco MSCI Global Timber ETF
Average cost per share = $33.75 (10 shares)
Dividends: Annually at a variable rate, paid in December
Last annual dividend = $.581 per share
Yield at $33.75: 1.72% (assumes last annual payment)
Top 10 Holdings as of 7/29/22:
This ETF will own users of timber derived products, such as packaging companies (e.g. Amcor and Packaging Corporation of America).
The highest weighting is in Avery Dennison, whose primary businesses are labels and tags. AVY SEC Filed Earnings Report for the Q/E 7/2/22 My largest realized gain in AVY was in 2009:
 |
| 50 Shares +$457.46 |
Among the top 10 holdings, I have positions in AMCR (over 100 shares) and IP (see Item # 2.I. below). I also own a few shares in PotlatchDeltic Corp. (PCH) and a company PCH is in the the process of acquiring CatchMark Timber Trust Inc. (CTT).
Morningstar: Currently rated 4 stars.
I. Bought 2 IP at $42.61:
Quote: International Paper Co.
IP Analyst Estimates-MarketWatch
Last Discussed: Item # 1.K. Added to IP - Bought 1 at $46.63; 2 at $45.33 (1/20/22 Post); Item # 2.E. Bought 2 IP at $49.27 (11/18/21 Post)(last substantive discussion)
Average cost per share this account: $47.63 (10+ shares)
Dividend: Quarterly at $.463 ($1.852 annually), reduced from $.512 to reflect the Sylvamo Corp. (SLYM) spinoff. I would not call this a dividend cut.
Yield at AC = 3.89%
Next Ex Dividend: 8/12/22
Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release
GAAP E.P.S. = $1.38
Non-GAAP E.P.S. = $1.24
Consensus at $1.076 per Fidelity
Revenues up 13% Y-O-Y
Free Cash Flow = $204M
Revenues by Business Segment:
Analyst Reports (available to Schwab customers):
Morningstar (7/28/22): 4 stars with a $52 FV with no moat.
Credit Suisse (7/28/22): Neutral with a 12 month PT of $55. Analyst notes acute cost pressures (energy and chemicals), largely offset by price increases and lower maintenance cost.
S&P (7/31/22): 3 stars with a 12 month PT of $52
Argus (5/13/22): Buy with a $57 PT
Goal: Dividend payments + Exit in the $50 to $55 range.
J. Eliminated Remaining 14 shares of MAXN at $18.25:
Quote: Maxeon Solar Technologies Ltd.
Profit Snapshot: $32.75
MAXN closed at $11.36 on 7/27/22. The rally since that close was due to this news. Schumer-Manchin reconciliation bill: Climate change provisions While every Republican Senator will of course vote against spending money for this purpose, Manchin was a critical vote necessary to pass the bill through the budget reconciliation process. One more problematic Democrat Senator, Kyrsten Sinema (D-AZ), is needed to pass the bill with VP Harris casting the tie breaking vote. Manchin to Sinema: Believe in this bill - POLITICO
Website: Maxeon Solar Technologies
"Headquartered in Singapore, Maxeon designs and manufactures Maxeon® and SunPower® brand solar panels, and has sales operations in more than 100 countries, operating under the SunPower brand in certain countries outside the United States. The Company is a leader in solar innovation with access to over 1,000 patents and two best-in-class solar panel product lines. Maxeon products span the global rooftop and solar power plant markets through a network of more than 1,400 trusted partners and distributors."
MAXN Analyst Estimates | MarketWatch
MAXN SEC Filings (foreign company)
2 year Financial Results: Losses are accelerating at high and unsustainable levels
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Last Loss Report (F/Q Ending 4/3/22): SEC Filed Press Release
Net loss of $33.359M.
Supply chain problems have added to the losses.
Investment Category: Blackjack Hand, part of the Lottery Ticket Basket Strategy. In prior discussions, I noted that this company will be posting losses for years to come but has some speculative potential long term. Over the very long term, MAXN will hopefully become successful before humans are burned to a crisp through a collective worldwide failure to deal with climate change. I suspect that nothing meaningful will ever be done, however, given the entrenched opposition (e.g. republicans in the U.S.) who have and will exercise the power to stop any and all meaningful steps.
Last Buy Discussion: Item # 1.I. Added to Lotto MAXN-Bought 1 at $12.68; 1 at $10.82 (1/7/22 Post)
Last Sell Discussions: Item # 1.M. Eliminated MAXN in Fidelity Taxable-Sold 8 at $22.75 (11/11/21 Post)(profit snapshot for 25 shares = $68.01); Item # 1.E. Pared MAXN in Vanguard Account-Sold 3 at $19.4 (10/21/21 Post); Item # 1.F. Eliminated MAXN in Schwab Taxable Account-Sold 15 at $18.75 (10/21/21 Post)(profit snapshot = $26.09); Item # 2.C. Pared MAXN in 3 Taxable Accounts by Selling Highest Cost Lots-2 at $20.1; 5 at $20.38; 10 at $20.6 (9/9/21 Post)(profit snapshot = $10.07)
When and if the MAXN price tanks again, and for my own amusement, I will play another blackjack hand. I suspect it will more of a "when" than an "if".
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.
