Common Stock Chat

This page is set up for those that want to chat about various common stocks.

There are no rules–other than the usual–no politics.

426 thoughts on “Common Stock Chat”

  1. Tenneco Acquisition – Interesting development this morning on the TEN acquistion by Appollo https://www.sec.gov/Archives/edgar/data/1024725/000119312522182162/d347838dex991.htm

    They are following through with original plan by tendering for some of the debt necessary to be retired prior to the merger however without mention of the 2 I have been following the 5.375% due 2024 and 5% due 2026… Original language in Proxy https://www.sec.gov/Archives/edgar/data/1024725/000119312522075104/d214101dprem14a.htm#toc214101_104 is,

    “Tenneco has been advised that Parent (and/or one of its affiliates) presently intends to (i) redeem or otherwise repay all of Tenneco’s 5.375% Senior Notes due 2024 and 5.00% Senior Notes due 2026 at the applicable redemption prices set forth in the indentures governing such notes plus accrued and unpaid interest up to the redemption date and (ii) make “change of control offers,” at a price of 101% of the principal amount plus accrued and unpaid interest up to the payment date, for Tenneco’s 7.875% Senior Secured Notes due 2029 and 5.125% Senior Secured Notes due 2029, in each case, in connection with, and conditioned upon the closing of, the Merger.”

    Big jump in price of TEN this morning in response…. assuming they follow thru on the 5.375% due 2024 (Cusip 88037EAJ0), they should be redeemed at 100.896 upon the merger

  2. PPL just bumped its dividend back up about 12.5% after its completion of its transition to a domestic utility. It sold its UK operations then bought a RI utility and reduced leverage. Moody’s upgraded its bond ratings on June 7.

    The new $0.225 dividend is still about half of what it was in 2021. PPL is predicting divvy and earnings growth of 6-8% next 3 years. Current yield is about 3%.

    1. Made a few bucks in the commons after it cratered little while back but haven’t looked closely since. Would be interested if it sank again to mid-20s, would be interested if they have mid/term debt that’s under water. Thanks for the reminder.

  3. Franchise Group FRG / FRGAP is reported as the exclusive bidder for Kohls in the 60 range with the only other remaining bidder in the 50’s. The other bidders dropped out. This is the point in the post where I stop typing and begin Googling for pictures of an alligator eating a python then getting indigestion.

    1. Isn’t Sycamore one of the bidders? If they’re successful, expect to see the company gutted…

      1. Kohls is dealing exclusively with FRG at this point. The exclusivity period is three weeks. Sycamore was a bidder. However, FRG was a higher bidder than Sycamore so Sycamore is out of the bid process for now.

  4. AGCO follows the increasingly popular trend of declaring a special dividend for the quarter. It also bumped its nominal regular quarterly dividend to $0.24 from $0.20.

  5. Tenneco [TEN]
    Is anyone following this cash acquisition by affiliates of Apollo Group [APO]? The all cash deal was announced on Feb 23 with APO to pay $20, a premium of over 100% vs last trades prior to the announcement…. Deal’s supposed to be able to close some time in the second half, but after the immediate response had TEN jump to 19.93, there’s been nothing but a continuous drift downward on TEN to where it sits now at 17.93, That’s more than 10% below APO’s cash bid. TEN published a preliminary Proxy Statement on March 15, so the deal is progressing and yet the stock price languishes at best… Anyone know anything about what’s going on with this deal? If yesterday’s volume was any indicator, there seems to be a buyer’s strike rather than people abandoning ship as volume was very low relative to average volume.. TEN gets $108 mil should APO bail on the deal so you would think APO has incentive to get this done so why the huge arb spread?

    1. The language quoted below in the Preliminary Proxy dated March 15 is what actually piqued my interest in this Tenneco/Apollo deal – HOWEVER, the Preliminary states that “Tenneco Inc. intends to release definitive copies of the proxy statement to stockholders on or about March 28, 2022,” and that still hasn’t happened so there’s an apparent information vacuum surrounding this deal right now – This from p 59, https://www.sec.gov/Archives/edgar/data/1024725/000119312522075104/d214101dprem14a.htm#toc214101_104

      “Tenneco has been advised that Parent (and/or one of its affiliates) presently intends to (i) redeem or otherwise repay all of Tenneco’s 5.375% Senior Notes due 2024 and 5.00% Senior Notes due 2026 at the applicable redemption prices set forth in the indentures governing such notes plus accrued and unpaid interest up to the redemption date and (ii) make “change of control offers,” at a price of 101% of the principal amount plus accrued and unpaid interest up to the payment date, for Tenneco’s 7.875% Senior Secured Notes due 2029 and 5.125% Senior Secured Notes due 2029, in each case, in connection with, and conditioned upon the closing of, the Merger.”

      Focusing in on Tenneco 5.375% senior note due 12/15/24 Cusip # 88037EJ0, there seems to have been no market reaction to either the original proposal or this language as price has been pretty steady, declining as interest rates have gone higher, tracing trades back to Feb. Right now, you can buy this bond BELOW 98 with YTM better than 6.25% for 12/15/24. If Apollo follows thru with this language and the deal closes in the second half and before 12/15/22, it will be called at 100.895… On the downside, it’s rated Caa1/B but if Apollo was confident enough to propose this deal at a 100% premium to the last stock price, then I suspect they must expect Tenneco will be around far longer than the 2 years left to maturity on this one. I’d also guess that the $108 mil TEN would receive if Apollo bails would go a long way to adding to TEN’s shelf life as a company..

      I bot a small amount of the 5.375% but will wait until a definitive Proxy gets published before doing anything else on this idea. Incidentally the actual language in the Agreement and Plan of Merger addressing TEN debt is purposely more vague but imho implies as well that the expectation is that Change of Control provisions will apply to TEN’s debt on a case by case basis.

      Anyone think this is the definition of picking up pennies in front of a steamroller?

  6. Write long-end (1/19/24) in/or just out of the money covered calls on blue chip stocks >20% below their 52-wk highs (C, MMM, CLX, SBUX, QCOM, AMAT, INTC, GLW, JPM, WBA, BEN, IP, LEN, DHI, etc) and earn >10%/yr for the next two years on those positions. If they are exercised you make good $$, and if they are not assigned just write another long-term CC after the 1/19/24 expiration.
    And, if you like to dabble, you can unwind the CC and sell the shares for quick profits where the stock rises (just made 2.2% on MS and 3.4% on IBM today on positions taken within the past 14 days).

  7. Where should we post to talk about a CEF so as to not clutter up the Sand Box? Is this the best place? I’d love to know if anyone follows IHIT……. It’s a target term with 12/1/23 as the term date and 9.835 as target price to be returned…. I just bot today at 8.64… If I figure correctly, if I were to assume no dividends at all and treated this as a zero coupon bond that hits its target upon maturity,, I believe the YTM is in the range of 8.20%. Looking at its holdings they do seem to own issues with maturities matching up pretty well with its term date, so interest rate risk seems to be pretty much off the table, and their holdings seem to all hover around the BBB to BB+ range. So it sounds attractive to me as long as there’s no problem credits existing in their portfolio.. What am I missing???

    1. Well their NAV is currently $9.04 – so no guarantee they can get close to the $9.835 target price in 19 months

      1. Thanks for the input, Mav… I guess I have to look more into what they actually own to see if I can spot any trouble, but what’s changed in a way in the marketplace is that with the severe sell-off in all income issues, now, instead of practically every income issue declining to par as they approach maturity, there’s lots of them that will be appreciating to par, even if we’re only talking about a 19 month timeframe. Given Invesco has made an effort to match up maturities to around their target date, this could be an overlooked positive aspect of the current day price.. BTW, my YTM calculation didn’t even include any dividends and it’s presently paying .044/ month in divvies (darn TDA didn’t adjust my standing bid today for being x-div – grrrrrr), so there’s another built in cushion. I realize the dividend will decline as they approach maturity but still dividends are just added gravy to my beginning assumption… So will look into it a bit more and see how it goes… This is new territory for me but did own one similar to this (EHT) that worked out well on 7/1/21. Not including the March ’20 slide into oblivion, EHT reached the 9.22 level post March debacle and that was when it was about 14 months to maturity. It still ended up paying slightly above the target. Wish I knew what NAV was on the day late April when it was trading at 9.22

        1. The maturity profile doesn’t look anything like you would expect if CEF Connect is correct https://www.cefconnect.com/fund/IHIT

          I had a target date bulletshares fund in the past that came in short of the goal. Not by a lot, but enough to notice, so it can happen, but I think that might be more apples and oranges given the way the funds were set up.

          I wonder too if the leverage doesn’t play a role here. At any rate, IHIT is not just issues maturing in 2023, or even averaging a 2023 maturity. More like 2025-2026 according to CEF Connect where it lists average maturity as 3.81 yrs. But that does not match what they show on their maturity chart with less than 1.2% of holdings maturing in the next 3 yrs and 115% (including leverage) maturing 20-30 yrs out. Someone smarter than me will have to explain that discrepancy! How does that average out to 3.81 years?

          1. Thnx, Scott…. I’ve always thought that cefconnect is nowhere near as accurate as they ought to be as a go-to site, that it’s best to use them as a starting point then investigate the accuracy of their stats independently. I’ve violated my own rule on this one…. Guess I’ve got a long weekend coming up to see what more I can find. I’m going to start by taking a close look at https://www.sec.gov/Archives/edgar/data/1682811/000119312521319630/d249656dncsrs.htm. I think that’s where I got the impression their maturities match up pretty well with their target date.

            1. 2WR – yeah – it really comes down to seeing if you can find more detail on their holdings. I saw the same thing Scott did on CEFConnect – showing a lot of long term holdings

              That is what would worry me with the NAV being where it currently is. The way your thesis of “instead of practically every income issue declining to par as they approach maturity, there’s lots of them that will be appreciating to par, even if we’re only talking about a 19 month timeframe.” comes true is if all those current holdings really mature and are redeemed / sold at or near par in the next 19 months. So its a matter of determining if the CEF connect holding breakdown is accurate or not

              1. Mav – Did you look at that link I included – https://www.sec.gov/Archives/edgar/data/1682811/000119312521319630/d249656dncsrs.htm. That gives a much different view of the anticipated maturities of what they hold vs what you can see on cefconnect….. How they arrive at their anticipated maturities is beyond me and I’ve not yet looked for an answer however I’ll speculate that it has to do with the slicing and dicing that comes with CMBS deals and their specific holdings…. Still lots to learn for me but as per my usual impression of cefconnect, it’s much better to use them as a jumping off place for further in depth DD rather than taking their stats as gospel…
                Would love to hear more if you’re into it…. I’ll share what I find as well…..

                1. Apologies for the length of this but I promised to share – hopefully you get the idea from the summary only if you don’t want to dive into the details. The original final prospectus is found here – https://www.sec.gov/Archives/edgar/data/0001682811/000119312516776492/d125972d497.htm

                  In summary my first impressions on reading more about IHIT is it looks to me to be a conservatively structure, bottom up managed CEF investing in the non-conservative area of CMBS securities for the most part (see p 35). The original underwriters were Morgan Stanley, BofA and Wells Fargo Securities which I consider to be a plus. 4 of the 5 original portfolio managers are still managing this fund, another plus, which implies to me that the original assumptions for this CEF remain in place and are being properly implemented. In general their original limitation was to invest in only securities with “expected maturities” no greater than June 1, 2024 (p. 2). An open question would be to what degree “expected maturities” could possibly end up being extended by rapidly rising interest rates, thus jeopardizing final NAV.

                  Assuming I stay with this investment (I’m not sure how comfortable I am with CMBS investments) and given my assumption of projected YTM being 8.20% assuming a zero coupon bond (it’s actually paying .044/mth right now) and hitting 9.835 at maturity with a purchase price of 8.64, it makes sense to me to DRIP.

                  Here are quotes from the prospectus, with page numbers ID’d that I thought were helpful.

                  p. 1 The Fund will attempt to strike a balance between the two objectives, seeking to provide as high a level of current income as is consistent with the Fund’s overall credit strategy, the declining average maturity of its portfolio strategy and its objective of returning the Original NAV on or about the Termination Date. However, as the Fund approaches the Termination Date, its monthly distributions are likely to decline, and there can be no assurance that the Fund will achieve either of its investment objectives or that the Fund’s investment strategies will be successful.

                  p.2 In seeking to return the Original NAV on or about the Termination Date, the Fund intends to utilize various portfolio and cash flow management techniques, including setting aside a portion of its net investment income, possibly retaining gains and limiting the longest expected maturity of any holding (other than perpetual preferred securities) to no later than June 1, 2024. Perpetual preferred securities are not included in this restriction because they do not typically have a maturity date. As a result, the average maturity of the Fund’s holdings is generally expected to shorten as the Fund approaches its Termination Date, which may reduce interest rate risk over time but which may also reduce amounts otherwise available for distribution to Common Shareholders

                  p. 6 The Fund may invest in debt securities of any duration, and although the Fund will not be managed for duration, given the nature of the Fund’s portfolio, the Fund’s portfolio will likely have an intermediate average duration (initially expected to be approximately six years). “Duration” is a measure of the price volatility of a security as a result of changes in market rates of interest, based on the weighted average timing of a security’s expected principal and interest payments. The weighted average maturity of the Fund’s portfolio is initially expected to be approximately seven years but will decline over time as the Fund approaches the Termination Date.
                  p.6 The Fund will not invest in privately issued debt. For purposes of this limitation, securities issued pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and bank loans are not considered privately issued debt.

                  p. 6 The Fund intends, on or about the Termination Date, to cease its investment operations, liquidate its portfolio (to the extent possible), retire or redeem its leverage facilities, and distribute all its liquidated net assets to Common Shareholders of record. However, if the Board of Trustees determines it is in the best interest of the shareholders to do so, upon provision of at least 60 days’ prior written notice to shareholders, the Fund’s term may be extended, and the Termination Date deferred, for one period of up to six months by a vote of the Board of Trustees

                  p.16 Investments in CMBS are subject to the various risks which relate to the pool of underlying assets in which the CMBS represents an interest. CMBS may be backed by obligations (including certificates of participation in obligations) that are principally collateralized by commercial real estate loans or interests therein on properties having a multi-family or commercial use, such as shopping malls, other retail space, office buildings, industrial or warehouse properties, hotels, nursing homes and senior living centers

                  p.17 CMBS and MBS, including collateralized debt obligations and collateralized mortgage obligations, differ from conventional debt securities because principal is paid back over the life of the security rather than at maturity. CMBS and MBS are subject to prepayment or call risk, which is the risk that a borrower’s payments may be received earlier than expected due to changes in prepayment rates on underlying loans. Faster prepayments often happen when interest rates are falling. As a result, the Fund may reinvest these early payments at lower interest rates, thereby reducing the Fund’s income. CMBS and MBS also are subject to extension risk. An unexpected rise in interest rates could reduce the rate of prepayments and extend the life of the CMBS and MBS, causing the price of the CMBS and MBS and the Fund’s share price to fall and would make the CMBS and MBS more sensitive to interest rate changes

                  p.20 Interest rate risk is the risk that the debt securities in the Fund’s portfolio will decline in value because of increases in market interest rates. Generally, when market interest rates rise, the market value of such securities will fall, and vice versa. As interest rates decline, issuers of debt securities may prepay principal earlier than scheduled, forcing the Fund to reinvest in lower-yielding securities and potentially reducing the Fund’s income. As interest rates increase, slower than expected principal payments may extend the average life of securities, potentially locking in a below-market interest rate and reducing the Fund’s value.
                  p. 33 In seeking to return the Original NAV on or about the Termination Date, the Fund intends to utilize various portfolio and cash flow management techniques, including setting aside a portion of its net investment income, possibly retaining gains and limiting the longest expected maturity of any holding (other than perpetual preferred securities) to no later than June 1, 2024. Perpetual preferred securities are not included in this restriction because they do not typically have a maturity date. “Expected maturity” means the expected return of the majority of the bond’s principal and/or the time when a reasonable investor would expect to have the majority of the principal returned.

                  p.35 The Adviser employs a valuation driven investment approach grounded in a bottom-up investment selection process and a top-down portfolio construction process to derive a portfolio based upon fundamental analysis with an emphasis on liquidity, concentration and relative value (i.e., risk, liquidity and potential return of one investment relative to another). The Adviser will analyze the yield, price, duration, credit spread, prepayment risk and the risk of credit deterioration or default of its current and potential investments on a continuous basis to determine what it believes are the appropriate investments for the Fund. The Adviser’s philosophy is based on fundamental credit, collateral and structural analysis of the underlying investments and utilization of the secondary market for loans to manage risk (i.e., analyzing interest rate and credit risk among investments). Fundamental analysis involves evaluation of the macro-economy, industry, trends, management quality, collateral adequacy, and consistency of corporate cash flows. In constructing the portfolio, the Adviser focuses on liquidity, identification of relative value and continuous monitoring.

            2. Just skimming through that it looked like things matched up with the target date really well. It would take a little pencil work to see what their final share price should be when they wind down. I am not familiar with how to read these things but some of those holdings seem to be approaching zero. Series 2012-C6, Class XA, IO is one. Not sure what happened with those.

              At least CEF Connect will keep people from bidding up the share price while you investigate everything!

              1. Maybe you’re on to something, Scott . Now if only we can get an SA author to write something while not going any deeper than cefconnect! LOL….. I’m not familiar with how to read these things either, but what do you mean some of the holdings are approaching zero? You saying you’re seeing they’re amortizing their way down to a zero amount due at their anticipated maturity? I suppose that’s possible, but still, this was set up as a target term. They have a 3% turnover rate on their portfolio according to cefconnect (not double checked anywhere yet). You would think that given part of their mandate is to attempt to return 9.835 at maturity, amortizing to zero would have been a part of their initial strategy to reach that goal when they bot this crap, wouldn’t you? They’re obviously not wheelin’ and dealin’ their way to hitting the target if they turnover the portfolio at 3% annual rate, so I’d theorize the real fly in the ointment would only be if they end up owning a troubled credit. Your guess is as good as mine, though…..

                If you’re interested here’s Fitch take on current status of CMBS credits overall https://www.fitchratings.com/research/structured-finance/north-america-cmbs-rating-actions-stabilizing-vintage-deal-level-losses-published-15-04-2022?mkt_tok=NzMyLUNLSC03NjcAAAGDzTHEBAWggE3iopanduplYU0a7dsLTQcMMmQYjQVwonQnVpcopauECu8KRdh1_rNE2QZ_JEdXJid-WzlFVhWqXmZ8lFwKSe-_TY7G21hfpqKtjig

              2. I agree with Scott. Skimming through the document you provided look like things match up with the target date pretty well. Much clearer than CEF Connect.

                That said, since these are primarily mortgage backed securities, and their is no visible public market to look at, it’s beyond my paygrade to see what the final NAV will be when the fund winds down.

                For those holdings that seem to be approaching zero. Series 2012-C6, Class XA, IO is one – those are Interest Only securities. Which is why I believe there is a big disparity between the principal amount and current value. While I have not personally dealt with these type of individual issues, I surmise the principal amount is the face value of the notes. And my guess is they have been sliced and diced – so what this trust has bought is just the right to future interest payments so the principal amount is irrelevant (hence the interest only designation) and that is what the value represents. But again, these are outside of my wheelhouse so that is my best guess on how they are accounting for interest only securities

    2. I owned it in the past, sold when it was at premium, and bought a little more yesterday. As Mav says, I think what you’re missing is that there’s no guarantee they’ll be back at 9.85 NAV when it’s time to cash in…I assume we’ll get whatever the NAV is at time of settling. I bought in hopes that 1) NAV won’t continue to deteriorate (ie, interest rates will level off a bit?) and 2) I’ll still get the difference between today’s price and 12/23’s NAV, or I can sell if/when discount narrows. But if interest rates keep going up??..maybe won’t be a good buy.
      I’m not sure where you saw that their holdings are of short term. According to cefconnect, almost all of their securities are very long term, so there’s still a lot of interest rate risk, if I understand correctly.
      I hope this helps. I generally take much more from this site (especially from knowledgeable, experienced folks like you) than I give.

      1. Thanks, CR. I’m not quite sure how I got the impression that what they own matches up well with term date….. I’m going to have to do more work…. and upon further dd, I’m also seeing that for all practical purposes, this is a CMBS fund. can’t say that gives me the warm fuzzies……… And as far as reaching the 9,835 term target, I’m of the opinion that it’s not really a cavalier hit or miss number. It’s one the manager for reputational reasons ought to be dedicated to hitting…. Sure there’s no guarantee, but it’s by definition the difference between a term fund and a target term one. That being said, I remember looking into a bunch of target term funds a few years back before buying EHT and thinking EHT stood out due to how well they matched up their holdings’ maturities with their term date vs others…. Maybe my first impression back then was right on. I know it included looking into IHIT at the time…. I also note that IHIT has a turnover rate of just 3% per year…

  8. It looks like etrade allocated .290% of the cost of my T shares to my new WBD shares. Is anyone else seeing this?

    1. My allocation was spot-on with the announcements of 24.19%.

      For instance if one owned 2000 shares T then the 2000 T shares yielded 483.8 WBD shares. The 483 WBD shares would be added to the brokerage account plus cash for the fractional share.

  9. AT&T reminder. Today is last day to sell T before spinoff of Warner. Tomorrow T can be sold at lower price as “T WI” but you still get Warner or you can sell Warner as “WBDWV” but keep T. After that you have both T and Warner.

    1. Your timing is incorrect. T will continue to trade as T for a while. The end of the when issued period is subject to the effectiveness of the spinoff so today is not the last day.

      T can be sold as T WD today not WI.
      WBDWV can be sold today as well

      1. I got my info from Motely Fool. Yes T WI is wrong. It’s T WD. I tried T WD on Vanguard and Fidelity and they don’t recognize it. WBDWV is recognized.

        1. Looks like brokers are using different symbols. Fidelity uses T/WD for T WD.
          Livy Investment Research on SA has a good description of what is happening with AT&T but from a look at the comments there is still plenty of confusion.

    2. T (without Warner) and the new Warner Bros Discovery are up nicely today so for now more buying then selling. At 19.50 T dividend is now 4.6%. I assume many made there sell moves in previous weeks.

  10. Just a reminder on placing protective orders:
    I got lazy and placed an immediate sell limit on a purchase of a common stock aftyer buying it. I was not specific enough with my protective order. The stock gapped below my limit on the next open and never came back up. Now it had to come UP to meet by Sell Limit. (SLobs over BLiss).
    I should have used a STOP (trigger) at Market or a Trailing % Stop (trigger) at Market if I really wanted out if it went down. Well it did go down and the rabbit done died, my protection did not work.
    Anyway, it was a sloppy action and I got a sloppy result and still own the security with an 8% lower price. It pays a good div on the 24th March and now I will just wait to collect or manually sell if I choose. Usually, I buy and am willing to hold on conviction, or will not buy, but this volatility can be full of ‘spooky’ action. I always liked Einstein’s idea and use of ‘spooky action’ so I now cop it for describing this market.
    Just a reminder to pay attention and use tools correctly. !! Preserve Capital!

    PS: Tim, Site is performing wonderfully!

  11. REGI – Renewable Energy Group being bought out by Chevron for $61.50 / share. Trading this morning at about $1 under purchase price.

    Obviously the deal can fall apart, but has been approved by both boards of directors.

    I mention this because there is a chance for $1 a share profit in a few months for those looking to park some short term cash.

    1. As you probably know there are some large funds that concentrate 100% on this type of arbitrage, attempting to lock in the spreads such as you describe… MERFX and GABCX are two… Naturally they’ll have more info input than we can ever imagine having on these deals and in the aggregate, they set the spread based on liklihood and timing of the closing…. They can get it wrong, and MERFX did on some big ones last year marking their first down year in ages, but overall, it’s another way to park cash to play in this field… This one gives timing solely as 2nd half of the year so using 6 months as a target, the hope would be to make 3.2% if merger goes thru. Weigh that vs what could happen if the deal collapses (it’s up 38% because of the deal) and it becomes more obvious why there’s a reason to play this game via investing with the pros who invest across the board rather than rolling the dice on a single issue..

      1. I missed out on about $.50 of upside by selling this morning. I already owned it before the announcement and decided to take the cash and run. I have other things in that account I want to buy more of and I was running low on funds 🙂
        And if the deal falls apart and the stock crashes back down, I can just re-buy at probably close to my previous cost basis.
        It closed at $61.41 today, so basically a wash at this point.

  12. I”m looking for baby bonds and preferred issues that pay monthly. I have ARR-C that pays monthly. Any suggestions I can research? Thanks…

  13. LAND and FPI – In light of articles such as this one, I’m surprised these two are not doing better than they are… Seems like a good time to have been an investor in farmland:
    https://www.prnewswire.com/news-releases/farmland-prices-rise-spurred-by-strong-commodity-prices-and-healthy-farm-income-301490564.html

    Farmland prices rise, spurred by strong commodity prices and healthy farm income

    News provided by
    Schrader Real Estate and Auction Company

    Feb 25, 2022, 09:40 ET
    Share this article

    VENICE, Fla., Feb. 25, 2022 /PRNewswire/ — Farmland prices are rising sharply as a result of high yields and strong commodity prices, as well as other factors, according to R.D. Schrader, president of Schrader Real Estate and Auction Company.

    That was his message to landowners who packed a meeting room in Venice, Florida, for the company’s annual State of the Farmer’s Economy Update.

    “A lot of things are falling into place to create one of the most positive land markets in recent years,” said Schrader. “The high yields and strong commodity prices are a powerful combination we haven’t seen in several years. In addition, many investors see the U.S. farmland market as a safe haven.”

    Prices on high quality farmland have risen by up to 24 percent in some parts of the Midwest, Schrader said. “We had auctions in 13 states in 2021, and competition was the strongest we’ve seen in seven or eight years,” he added.

    Steve Slonaker, a farm manager, appraiser and auction manager, pointed to factors creating challenges for those appraising farmland currently. “We’re seeing factors we’ve never seen before, including the use of Midwest farmland for wind and solar leases, pipelines, carbon wells and others. Since we have little or no history on which to base our assessments, this makes the picture more complicated for everyone buying, selling or leasing farmland,” he said.

    He pointed to increased input costs, including recent innovations such as sugar on soybean plants and sulfur on corn and soybeans. However, strong commodity prices point to profitable farm operations despite the higher costs, he said.

  14. GTY bot at $27 yield over 6%. Have followed for a long time and had a standing order a long time ago that never filled at $14. Always watched. Good management and REIT exposure for inflationary markups if necessary.
    Replaced BTI that was taken last Friday at $45 on options assignment for $43.33. Div pays in a month.
    May not be perfect on timing, but spinning plates.

    1. Bot more BTI at $43. Will sell call options when price move up with any momentum (if) on the overallotment til assigned as I move forward.
      Placed puts for more ENB and SHEL to put cash to work. Will take the shares at my strike price.
      All in IRA.

      1. Joel,
        I like your strategy, In the recent past I have sold puts and calls on ENB, PM, MO, PFE, KR, SO, D and XOM to name a few. I really need to get back to doing more of that.

  15. One of my common stock investment strategies has been to rely on hedge fund data to determine potential winner stocks and analyst price target data to determine if a margin of safety exists. (Or if stock is trading 10% below 52 week mid point).

    Unless the pharmacist has changed my Zestril for cannabis some funds must have taken it on the chin in the last 3 months.

    Margin:106.86% UBER Uber Technologies Inc Technology
    Margin:99.22% DOCU Docusign Inc Technology
    Margin:97.00% BBIO BridgeBio Pharma Inc Healthcare
    Margin:93.82% ADPT Adaptive Biotechnologies Corp Healthcare
    Margin:84.01% FB Meta Platforms Inc Communication Services
    Margin:77.88% FATE Fate Therapeutics Inc Healthcare
    Margin:75.32% PTON Peloton Interactive Inc Consumer Cyclical
    Margin:61.31% MELI Mercadolibre Inc Consumer Cyclical
    Margin:53.92% CRM salesforce.com, inc. Technology
    Margin:53.63% PDD Pinduoduo Inc – ADR Consumer Cyclical

    1. micah OK, I’ll admit it… I don’t understand your numbers… What does “Margin:106.86% UBER Uber Technologies Inc Technology” mean for example? Jethro Tull and I, we’re both thick as a brick I guess…

      1. Margin means the difference between Morningstar analyst price target vs actual market price. In December last time I looked all of these figures where negative.

        Obviously analysts are going to need to find pencils or a sharpener after earnings.

        Way to bullish on Technology, biotech, and consumer cyclical companies.

  16. PTEN raising dividend to .16 , if you followed the insiders and bought March of 20 you’re sitting on a 7.5% drilling play yield.

  17. OMF raises dividend 35%
    new payout of 3.80 vs 2.80 to yield 7.6%
    no special dividend announced but a 1B stock buyback
    current PE based on aver hours is around 5

    1. From a current CTL (Lumen) bag holders perspective when the water recedes you see who was swimming naked.

      Company offering debt consolidations is not exactly targeting Chase customers.

      Will keep clutching my CTBB/CTDD shares.

      1. I need to study up on this one. Looks like they are selling off some of their older retail businesses (20 states) to concentrate on hopefully more profitable businesses. I understand that they guided EBITDA down which caused some dividend chatter. (Mgmt did say they are targeting maintaining their divvy at $1.00/share.) Free Cash Flow post looks to be ~1.6 billion. Debt maturities looked okay to me thru 2024 with the next big bump in 2027.

        I am not a fan of the common, but the Trust Preferreds look like what used to be called a “businessman’s risk.” Don’t know if I’d add with the Fed providing new opportunities every day, but not nervous about the asset sale.

        Just my opinion.

        1. Bear

          FWIW, I’m very long the common for LUMN and like the management direction.

        2. I’ve been in and out of LUMN a couple of times in the past year or so. Its a tradable stock and currently oversold. With a 10% yield and going ex-dividend soon, I’m a cautious buyer at these levels.

  18. Utility NEE is down to the low 70’s from the the low 90’s just this month. The more recent drop from the low 80’s over the last 4 days looks related to upper management succession. I think it goes back up to the 80’s so I picked up 500 shares at $71.56. I also sold 10 Feb 18 $70 puts for $1.70. Anybody else selling options for extra income?

    1. One worry here is that utilities are bought for income so when interest rates rise their share price tends to behave a bit like a bond.

      But I played the utility options big after Covid hit and right up to the middle of last year. I figured if the lights went out then it didn’t matter where I put my money because the only currency would be bullets and alcohol.

      Right now I have a bad option play on MU going. I did great last year, but had a rocky end of the year and start to this year.

    2. NEE was bid up to the moon during the renewable frenzy.

      Long term prudent investors have been taking a few chips off the table.

      Reversion to the mean is one of the crewl forces of markets.

  19. Pypl – paypal wow this is getting cheap. @ $152 22% return @ $137 24% return. S&P500 typical 10% return.

    Do not know if this is the bottom but will open a small starter position tomorrow.

    1. What are you talking about? 22% return from where? If the stock price goes back up? I don’t understand what you are basing returns off of.

      1. Isn’t is obvious, Mark? If you just assume the stock will go up 22%, then you have an expected return of 22%!

      2. IRR using previous company history of cash flow growth predicted 10yrs into the future vs present stock price.

  20. HASI is down 8.5% today!
    Any news?

    HASI has been described on SA as a hybrid mREIT / BDC that finances renewable energy projects.

    1. HASI’s been in a tailspin for the last month or so losing almost 30%, so it’s just another day for HASI today….. just one of those way overbought in the greenie revolution stocks that now seems to be coming back down to earth….I’ve been following it, but not buying it……

    2. Greg–wow that one has been hammered down since Novembers high in the 64.00 area. Don’t know what is up.

  21. RILY down 9% today…. Anyone see any news???????? All I see is maybe in sympathy with Goldman Sachs worse than expected earnings out today

    1. And RILY continues down- had a feeling it might- could still go down to fill that gap-up around 65. Might add to yesterday’s buy- have done well trading this and gathering those big specials.

      1. Well- it blew thru the 65 this morning, a just over 64 ! Seems to be turning up
        for an hr in the 66+ range.
        Still no real neg news-

    2. Riley is buying m & a firm Focal Point for 175 million, which is less than 1/3 Riley’s quarterly revenue. Riley oversold? Still up a Hair from 6 months ago. Nibbling here.

      1. So far RILY has blown through its 200 day moving average and its 50 week moving average in this sharp sell off. If it closes the week below $68.64 there’s more room to go before reaching the 20 month moving average at $54.66.

        1. Again I need that crystal ball. RILY was below $50 last January so yes there is still room for it to drop. Notes are doing ok. RILYO only dropped dividend amount at ex-dividend Jan 12 and is up since then.

        2. Looks like it might get to that 54 at this rate. Since SA has put a limiter on the articles I can read this month(?), I wonder if anyone is writing or discussing this.
          Down about a 1/3 from the high and no news ??

            1. Here’s another one hard to fathom: CUBI, Customer’s Bank. It’s supposed to report earnings today and the estimated earnings they’re to report for the quarter is 2.85/share….. That’s for the quarter…. It’s down to 59 right now, down from its high in January of 76.10.

        3. So RILY bounced nicely off its 20 month moving average, briefly reaching $53.86 on Jan 28th before quickly moving higher. I was able to capture part of that move for a double digit gain, but sold my shares on declining volume to the upside. The stock looks tradable for quite some time as it moves to close above its 50 week moving average of $68.62 while also trying to stay above its declining 20 day moving average of $63.23.

          1. CW, I don’t pay as much attention to charting probably as perhaps I should. I think it’s pretty clear that it works to a degree if for no other reason than people believing it does thereby making it self fulfilling. That being said, did you really mean to say “20 month moving average?” If so what’s the magic baked into a 20 month time period and where do you see a chart that would show that???? Questions of ignorance on my part, not criticism.

            1. No, there’s nothing magic about the 20 month moving average, that was just the next likely technical support level for RILY after the 200 day and 50 week moving averages failed to support the stock price.

              Every brokerage has online charting/technical analysis software, so it should be pretty easy for you to set up a chart for RILY with the standard 20, 50, and 200 interval moving averages included. Then just switch between daily, weekly, and monthly views to make note the levels .

              Of course there is much more to charting than just watching the moving averages, but my experience has been that when a stock makes a sharp move, these basic technical levels often become goalposts that need to be reached before sustainable price reversal can occur.

              1. Thanks, CW…. It’s ironic how I never even think to use the resources like what you are suggesting at either of my 2 online brokers….. I will give it a try to see what Fidelity or TDA can provide… Like I said, to me charting’s capabilities come solely from people belief in them as being magical…. That’s not necessarily anything bad, it means it’s something that must be kept in mind because others keep it in mind and act on it… but to be a Negative Nancy about charting – you just describe the strangeness of it when you essentially said, Ooops, the 20 day average didn’t work in identifying a bottom, the 50 didn’t work identifying a bottom, but look how accurate the 200 day indicator was in identifying a bottom. So it works because you (you collectively not your personally) end up finding one that worked once the others didn’t…. Again, not being critical… it’d be fun to have a face to face discussion about charting to learn more.

                1. Frankly some folks take it to voodoo levels. Combined with a person who can talk out of both sides of their mouth they can spin a tale that is correct no matter which way the market goes. It is the modern day equivalent of getting your palm read or a tarot card reading. Some of the basics are so well known they often do cause reactions right up until they don’t which is often. Gamblers never mention those ones.

                2. To put this conversation into context, I was responding to posters who were considering buying RILY when it was trading in the 70s and falling. My observation that it looked like the stock was heading to the 20 month moving average proved correct…a savings of over 20% just by waiting.

                  I guess whats missing here is any input from you as to an alternative trading strategy, preferably one that is predictive in nature. If you have something besides auguring financial statements, please enlighten us.

  22. My Top Stocks for 2022 –

    EOG EOG Resources Inc Energy

    Everyday WTI is above $45 the printing press goes Brrrr.. Shareholder friendly dividend raises and special dividend returning cash to share holders.

    MS Morgan Stanley Financial
    MKTX MarketAxess Holdings Inc. Financial

    Thesis is simple large dividend raises supported by cash flows. Two extremely powerful forces for stock appreciation.

    BMY Bristol-Myers Squibb Co Healthcare
    GILD Gilead Sciences, Inc. Healthcare

    Beaten up drug manufactures that have growing cash flows and dividend raises. These could potentially continue to trade flat.

    LHX L3Harris Technologies Inc Industrials

    Shares many traits with LMT.

    Z Zillow Real Estate

    Recent closing of the iBuyer platform has caused market to re-rate company. Overall my take was they de-risked removing capital/people intense process from the company that put them at odds with their primary clients relators.

    CMCSA Comcast Corporation Communications

    Streaming wars are ongoing with recent disposal of assets by AT&T industry is re-rating remaining competition potentially causing a buying opportunity.

    BAH Booz Allen Hamilton Holding Corporation Technology
    CTSH Cognizant Technology Solutions Corp Technology
    ACN Accenture Plc Technology

    Contractors make the IT business go round. With businesses choosing to explore cloud and cloud like technologies these providers will become part of their ongoing expenses.

    KLIC Kulicke and Soffa Industries Inc. Technology

    Thesis resolves around ongoing chip shortage. Supplier of fab products within the Asian area which is growing with government supplied support.

    COIN Coinbase Global Inc Technology

    Thesis is simple revenue resolves around trades. Trades occur due to volatility. No greater volatility occurs anywhere else than digital coin assets. Trade costs are unregulated.

    BLL Ball Corporation Consumer Discretionary

    Stable container business with space aspirations. New cheap reusable rocket technology will enable more space missions creating a demand for their mission capabilities. (Aggressive buy backs and dividend raises are a secondary value proposition)

    Personal account long term positions (BLL, ACN, CMCSA, MKTX, Z, CHTR)

    Arbitrage Plays:

    LBRDK – Holds Charter shares that are undervalued. Merger with Charter to release value.

    AMBC – Mortgage insurance provider that has an outstanding claim since 2008. Claim award worth 3x asset value of entire company. Will cause immediate accreditation. (recent development is court date booked. As it’s an in person court date this could get pushed to next year due to covid).

    1. I’ve had my eye on COIN. COIN (Coinbase Global, Inc) is an interesting company. It’s up over 5% today as NYC Mayor says he is converting his paycheck into crypto coins via Coinbase. Seems that the crypto fans think the mayor is a crypto expert. If it makes sense or not there is potential with COIN as long as cryptocurrencies remain volatile so COIN can collect there fees and as long as competition doesn’t get too bad.

  23. Franchise Group has a qualified 7.5% preferred FRGAP, trading above par at ~7% or so. The underlying common FRG has recently been rallying, up on a big dividend increase (+67%) , upped guidance and a projected 1/3 cut in debt by 2022 year end. Yielding about 4% forward even after its recent 10% one day jump. DYODD.

    1. Thanks Bear, took a look, think the opportunity in the commons may have left the station. In FRGAP since IPO and holding.

  24. DCRC a SPAC is going public today with its first acquisition of Solid Power.
    New symbol will be SLDP partnered with SK of Korea who is currently supplying Ford with EV batteries
    Both Ford and BMW are invested in SLDP

  25. FIZZ has announced a $3 special dividend. Stock is trading around $51-52.

    I bought puts at $50 and sold calls at $55 to fund most of the cost of the puts, and bought the stock to grab the dividend. Very rare to have a guaranteed profit regardless of what the stock price does. And another benefit is that while the special dividend will go to people who own FIZZ as of the 13th, it won’t be paid until early next year, so you get the expenses of the options you buy this year, vs the income from the dividend next year.

    You might be able to buy it clean without the options and come out better, but I am not familiar enough with the beverage business and you never know when the market will tank so I took the guarantee and just made it a larger position. Not bad for only having to hold the position a week.

    1. Sometimes options get adjusted down after a special dividend. Might that be the case here?

          1. Looks like I have learned something which — is odd since I had this same technique work out with no adjustment just last month with another company.

            Will the adjustment come after the announcement (which has passed) or after holders become eligible to be paid on the 13th?

            Judging by my purchase prices I might still come out OK, just have to do a little more trading if I want to maximize my return.

            1. It depends on the amount of the dividend, they are not always adjusted. I have played that game as well very successfully. I do now know the rules of when they adjust vs not. I used to do that with OKE, option expiration would be on ex-div date and it was easy money. I stopped as it took too much to find.

              That large of a div will probably be adjusted.

  26. Judging by the price action Friday its obvious to me my purchase doesn’t qualify since it doesn’t settle until after the 12/6/21 cut-off date. I like BSA too. With the likelyhood of a call in place its been holding up very well in this volatile market and assuming it is called there’s already 20 cents of accrued dividend so we’ll make a few steak dinners.

  27. Does anybody follow BSIG???? I don’t understand why it’s down 8% today to 27.75 when they have a tender going on for 42% of the outstanding shares that expires at 5 PM on Monday…. The tender is at 31.50. Anyone got a clue what’s going on? I own BSA but not BSIG.

    1. I took a “gambling” position @ 27.13. Analysts predict 2021 eps of 1.36 and 2.19 for 2022. The large increase is evidently due to the buyback. So, at 27.13 BSIG sells at a 12 1/2 forward PE – cheap. I’ll have this on a short leash. I’m encouraged that it closed above my purchase price and was over 27.60 in afterhour trading. Seems BSIG is overall “in favor” so I think its a fair bet it gets close to the tender price again.

      1. Thanks for your thoughts, Joel H – out of curiosity do you know whether or not you qualify to tender the shares you bot or do they not qualify for tender because they settle after the cutoff date? If they do not qualify, maybe that explains the large drop… and yes, I see where BSIG’s price pre-announcement was just about where it is now, so that does make sense.. RE: BSA- with its BA1/BB+ ratings (QOL has not updated) and 2031 maturity, it seems cheap at $25 especially given BSIG in the last CC implied they will announce a call sometime after the completion of the stock tender and before the end of the year.

    2. 2wh – another thought on BSIG. Seems to me that the very large buyback might be the first step in taking the company private? If it is, buying at 27.00 is a slam dunk. Your thoughts appreciated.

      1. GRj- you might appreciate my thoughts, but my expertise on a matter like this is pretty much meaningless, cause me no gots…. Having said that, yours is an interesting and logical thought given how they’re downsizing so drastically…. Your thought could also be confirmed by their expected call of BSA subsequent to the tender for BSIG. There is language in the BSA prospectus that would require them to make an offer to purchase BSA at 25.25 in a change of control event which includes “the consummation of a so-called “going private/Rule 13e-3 Transaction” that results in any of the effects described in paragraph (a)(3)(ii) of Rule 13e-3 under the Exchange Act (or any successor provision).” I have no idea what Rule 13e-3 actually is, but no reason to suspect going private doesn’t mean going private in the sense of tripping off this requirement… So using proceeds from the sales that are funding the tender to also call BSA in anticipation of going private does make sense as a precursor….

  28. HOOD
    Anyone watching this? Been steadily going down hitting lower lows for days/weeks on end now.

    What’s really interesting is Cathie Wood has been buying daily non-stop. At first in the $7M-10M range. But recently as HOOD crashed through the $30 handle into the $20’s; she is now buying in $20M/$25M daily chunks for at least two days straight.

    Remember when no one wanted TWTR, SNAP, etc. and the stocks plunged into what appeared to be oblivion? At some point we could see a similar setup with HOOD if it gets low enough.

  29. T
    Year-end selling pressure can some times present opportunity. Just wondering if anyone has AT&T on their nibble list soon? Clearly folks are extremely frustrated with the still lack of dividend visibility post spinoff. I don’t see any alarming trades with AT&T bonds.

  30. BSIG – Is anyone following the tender offer Brightsphere is doing for their own shares???? They are having a fixed price tender for up to 41.2% of their outstanding shares at $31.50. I noticed because they’ve also said “We also expect to fully deploy our excess capital in this fourth quarter which will likely involve paying down $125 million of our retail notes [aka BSA] and repurchasing more than $1 billion of our shares which will collectively generate significant earnings accretion while reducing leverage, The tender is somewhat complicated by the fact that in sense 25% of the shares they are going to buy are guaranteed to be tendered by Paulson & Co who owns 25% of the outstanding… With this tender ending on Dec 6, BSIG is still closed today 30.40….. Is that an opportunity or am I missing something? Buy BSIG and tender….. Worst case is you end up with shares after proration if any that should benefit greatly from the accretive effects of the tender itself….. Win win???

    https://ir.bsig.com/investor-relations/news/news-details/2021/BrightSphere-Announces-Fixed-Price-Tender-Offer/default.aspx

    BTW, the quote is from the quarterly CC

    1. The question is what does the stock do once the tender offer is over? Does it fall back, or soar ahead? The only formula I can find for offering a fair price on a tender says that those who hold the stock after the offer will come out ahead given this particular tender price. But if you look at the option pricing, everyone is betting it falls back some afterwards.

      I have zero experience at this so I looked at how to hedge my bets with option plays and they all come out about break even.

      I made money on the XLRN acquisition, but not a lot because I overbought downside protection thinking if the deal fell through the potential gain was worth more than than if it went through — but in either case I was guaranteed to make money. So I ate into my profits a little with two downside options for each 100 upside shares. Can’t complain. But I don’t see an equivalent play here from just a quick look. I will have to think about it some more.

  31. Southwest Gas (SWX). Icahn has offered to purchase shares for $75 and SWX management is against it. Stock is currently under $70 and my cost is in the $50’s. It sounds like Icahn can do better and he is fed up with mgt. Of course if I sell, I’m out but maybe that’s not a bad thing.

    Any words of wisdom would be appreciated.

    1. Kitti – Since I’m only here to help, I offer up these sage words of wisdom from Capt. Beefheart: “A carrot is as close as a rabbit gets to a diamond.” 😉

      1. Kitti – I bought IEP (Icahn Enterprises) about 6 months ago as I figure Icahn (or his son who is likely to take over eventually) have more savvy than I do and privy to a lot more information.

    2. Its pretty much impossible to find 5% IG (BBB+) on the street. Would ride it till you get taken out.

    1. Yuck… Just your imagery, let alone the content in the article, makes me gag. It reminds me of that part of rush night for my fraternity in the 60’s that I feared the most….2 or 3 pledges were to be put in a toilet room (not a full bathroom – just a toilet and sink with room for one person), door closed, each with a cigar not to be let out of the room until the cigars were butts… I could handle everything else planned for the night, but I absolutely dreaded even the thought of doing that one… Fortunately, I was out of town with the track team that night and never had to go thru rush… I never would have made it.. lol

  32. Anybody else involved with RIV’s rights offering???? I’m hearing shares showing up in broker accounts as early as 2 days ago at some firms, Has anyone had their shares alotted yet? I own RIV at TDA and so far, nothing except an isolated line identifying the awarded shares by a number.

  33. Looking at OHI, Omega Healthcare Investors Inc. Trading at a 52 week low, yielding over 9.3%, 6.82 B Market. and makes $$$. I owned some shares years ago and sold. Have not followed the company in a long time. Anyone care to share their thoughts?

    1. David, suggest you do a deep dive on OHI before buying. I owned it in the past, but sold all shares this summer. Covid issues have caused occupancy rates to drop to approximately 75%, several operators have stopped making payments, dividend not increased in 2021 (ended 18 year dividend increase streak). Unless things improve it will be difficult to maintain the current dividend and a reduction becomes a concern.

    2. Like Medical Properties Trust, Inc. (MPW) much better wait until trading above 5.59% yield.

    3. David — I agree with LarryL, the company has troubling issues: Guardian Healthcare makes up 3.7% of OHI’s portfolio, and has stopped paying rent; Agemo is 5.5% of the portfolio and didnt pay rent from August through October; Gulf Coast Healthcare, 3% of OHI’s total rent, hasn’t paid rent since June and has filed for bankruptcy. Verify that info for yourself but I’m avoiding this one right now.

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  35. Does anyone here have thoughts on FIS or FISV? Both look attractive to me after their recent price drops. Now that IPLDP and every other reasonably attractive preferred I own got called, I guess I’m being forced to add more commons. Thanks!

    1. Recent sell off in card / payment processors has occurred over the last month. Target price provided by Morningstar. Analyst Upside guestimates provided by yahoo finance.

      FISV Fiserv Inc Target: $119.00 Discount: 16.85% Analyst Upside: 31.75%
      FIS Fidelity National Information Servcs Target: $142.00 Discount: 22.76% Analyst Upside: 32.01%
      GPN Global Payments Inc Target: $179.00 Discount: 35.82% Analyst Upside: 52.43%
      V Visa Inc Target: $215.00 Discount: 1.27% Analyst Upside: 30.44%
      MA Mastercard Inc Target: $337.00 Discount: -6.74% Analyst Upside: 21.61%

  36. Major XLRN shareholder is not tendering shares for the buyout. They hold about 7% of the shares. >50% is needed to close the deal.

    I bought when it was back closer to $170 and bought a Put at the same time in case the deal does not go through. The outcome seems binary here with either the deal going through at the offer price of $180, in which case I make a little even after the option cost, or the Put protects me on the low end and I will make a lot if I can dump the shares before they bottom. There is a lot of room there for it to fall back to $120 or so. But I don’t expect it to go all the way if there is still hope of a deal on different terms.

    Anyone see a better way to play this?

    1. Noticed ORI popped c. 9% today, some of us were discussing it when they paid a special dividend recently. Pretty impressive.

      1. I made money around the special dividend time with the stock, dividend and some option plays. I still own my shares, but got caught carrying some covered calls when it popped today so I will not get the whole “pop” if it stays up until the strike date.

        Not complaining though. I have made very good money on ORI this year.

  37. DOW has hit a 5% Dividend Yield with the sell off today to 56. There is concern of natural gas supplies may hurt earnings. Seems like a good initial entry point. It goes ex-dividend 11/29.

  38. I own a full position in Verizon, and am happy with the 4.7% dividend ($2.56 per year). Recently added to my position with the common dropped to $52.16. Trying to determine if I will add more as the price continues to drop–currently at $51.05. But concerned as to why the price is dropping. Anyone have any insight as why the price has dropped approximately 6.5% in recent weeks. Target price is in the $56 range.

    1. Vz is a solid mature operation that is low growth ~1%. At $53-54 you should expect 15% return. It’s not a name I would expect anybody to pay up for given its predictable low growth.

      Not of high interest in an equity portfolio.

      1. If I expected a 15% return, I would consider the stock to be of very high interest in an equity portfolio.

        Micahc….given that you have little interest in an expected 15% equity return…what return do you expect from the S&P 500?

        1. S&P500 long term return has been ~10%. I’m expecting zero or negative real return on the S&P500 for the next year. Inside the 500 components are always bargains to be had.

          For equity I’m looking for 20-30% return rates as you are exposed to the highest amount of risk.

          For instance I really like (ATVI) Activision Blizzard, Inc. but at $65 based upon current 6% growth I will only receive 13% return (bit better than market). So I would need further discount of $48 (18% return) to purchase.

      2. Most of the investors on this website are looking for stable income. I have a portfolio mix of a variety of investment types, the vast majority of which provide a steady, recurring dividend (BB, preferreds, CEF’s, equity, MLP). A low growth, high quality stock (i.e. Vz), with a 4-5% dividend meets my criteria for investment. My target annual dividend return is 6 to 7%. As a retiree, I am not looking to hit 15% home runs. But, very satisfied with singles and doubles.

      1. Sold the rest at 11.65…could go higher, but market is weak. Should be some go replacement candidates.

  39. Z= Zillow
    One more week in NYC and we are driving back to FL.
    We were looking for a broker to cut his commission on our co-op sale.
    So, me and the missus spoke to my brother and his “Eccentric Genius” kid.
    The Genius said “Zillow will replace R.E Brokers in the future”
    Then my wifes ear perked up. Should I buy it now? Everyone answered “YES”.
    Does Genius own Z, yes at 30 something, Then my brother eviscerated his wife for letting Z go to the 200’s and not sell her shares.
    So my bitter half picked up 100 shares at 89.20 yesterday.
    What do you say?
    Is Zillow going to be replacing RE Brokers?
    Me, being cautious, hope to buy 500 shares on the next big drop in the market.

    1. You may be on to something there Newman. I get the sense the real estate industry is undergoing a sea change. It first became noticeable when I was working as marketing manager for Sotheby’s Real Estate brokerage in Santa Fe back in the ’90s. It appears to have snowballed since then. Why hassle with RE agents when Zillow, Redfin, Offerpad, et. al. will make competitive, as-is purchase offers with very little negotiation in a short time frame? Simply based on the innate laziness of humans in general it seems like a sure-fire business model to me.

      1. mikeo:
        Yeah, every high margin service is targeted by technology.
        Who remembers Travel Agents?
        It will take 10 years or more till 75% of brokers are no longer needed.
        In my case, our co-op is worth maybe 475, but with broker fees and co-op fees we would be losing 10-12%. Ouch.
        Intuit is another disruptor that disrupted bookkeeping and tax software.
        Electric cars and their components are obviously the future too.
        Good luck.

      2. Wall Street Journal had a good article on Sept. 20 about realtors fighting to protect their fees. I haven’t used a realtor in years to buy or sell. I use Redfin for my searches to buy and a real estate attorney for the contracts. If I’m buying and they’ve built in a partial commission the buyer has to pay (yes, that’s a thing now) I take that money as cash back from seller at closing or I don’t make the deal. You’d be amazed at home many realtors refuse to show you a home — or go to contract — unless you have a broker. (There’s a way around that, too). Realtors are obsolete. You can do your own research and hire an attorney for less than a grand and save a ton of money and hassle.

    2. The way Z butchers the description of my house and the inability to get it straighten out with them, I sure hope not….They identify 3 separate houses as being located on my 10 acres. They’re almost as bad as the appraiser (sorry, Tim) who couldn’t even properly identify my house’s nearest cross road or which side of the Tennessee River we’re on…And how you call a French Country house a Cape Cod is beyond me. So much for my copper gutters too – they’re vinyl now according to the appraiser and the slate roof is composite shingles. I could go on but it’s all off topic venting..

      1. Buyer beware, might be Zillow that my son and his wife just got scammed on. Person listed a rental that they said that they had to move out of state due to a job transfer, but wanted to keep the house as a rental. They went and looked and it was vacant and they got excited at seeing it as rentals are scarce around here. Person asked for a first, last and deposit to be sent to them and they would arrange to send the keys. Wife went to the bank to get the cashier’s check.
        Only thing that saved them from a unhappy ending was teller refused to do it. After hearing wife’s story the teller said she just lost about $2000 00 in similar scam. They contacted Zillow to get fake ad taken down don’t know if they ever did

    3. Zillow just started a home buying service in 2021. Why don’t you get them to buy your NYC co-op?

    4. Two things I noticed about Zillow, at least in the area I live. 1. The estimated home values on my block are highly inaccurate. My neighborhood has houses small to large, very different styles, age and condition. A difficult task for a computer to analyze. 2. To buy one of the houses up for sale you are directed to a Real Estate agent in most cases. In my town at the moment 53 Zillow sales are through agents while 3 are sell by owner. So for now most sellers here prefer the convenience of using an agent. Typical of our culture now – convenience rules.
      Also there are other services that do the same thing Zillow does like Homes.com, Trulia.com, Realtor.com and others.

    5. RE market is typically very illiquid with some homes only getting bids every 90-100 days. With the introduction of iBuyer platforms (Zillow, Redfin, Offerpad) act as market makers providing liquidity. This creates a marketplace to bring in the flippers, agents, and eyeballs but it does not make profits with sub 2-3% margins.

      Marketplace is tantamount to creating network effects (think facebook) bringing in advertisers (marketing), data selling, and bolt on acquisitions or cross selling (think instant mortgages) creates future flywheel effects.

      Underlying this trend has been private equity which has been mopping up inventory and warehousing it since 2008. (American Homes for Rent, etc, etc)

      Larger network effects generate larger profits while keeping the maintenance capital flat to down (software companies do not require higher maintenance costs as computers and automation perform the work of new employee).

      Bullish Zillow.

    6. Be careful on Zillow. They own a ton of houses in a bunch of overpriced markets that they are taking a pretty good loss on when they eventually sell them.

  40. I picked up some shares of food branding giant Conagra (CAG) near the close yesterday ahead of their earnings announcement tomorrow morning. The current yield is 3.65% and the stock goes ex-div Oct 29th. The company raised its dividend last quarter and is expected to report good results. I’m playing the bounce up from earnings with the possibility of collecting a dividend payment if the momentum lasts and the market cooperates.

  41. I see my FPI preferred shares are now converted to common as per the redemption notice (208 common per 100 pref)
    Now question is do I keep common as inflation hedge (ie. higher farmland values) or look for another pref . Will likely do a little of both. Always remembered as a young banker a European farmer telling me that he only invested in farmland – reason being – Hitler’s tanks rolled thru his country and destroyed everything but at the end of the war farmland was still there.

  42. Good days for Williams WMB. It paid its quarterly part of 6.2% last week and today it is up 5%. News has been good recently but I don’t see anything regarding today’s jump in price

  43. IEP – 16% yield. What uniquely jumps out on this one is that Icahn owns 95% of the float and he takes his distribution in stock; so cash-wise, they have more than enough to cover the other 5%.

    If you look at technicals; thought I’d add some context:
    Stock price though interestingly telling a potential different story as it hovers near 52 week lows.

    Stock had two double tops in $77 handle; one in 2018 and one in 2019.

    The stock made a double bottom; one in 2016 and one in 2017 that lead to a big run. The current test here of the 52 week low could effectively be a double bottom being completed.

  44. Dutch Bros Coffee (BROS) opened at $32.50 this morning after being priced at $23. Its currently trading near $38. I tried placing a pre-market order with Merrill at $23 but didn’t get filled…their IPO club is small and I’m not even on the guest list.

    1. Step right up and pay 10 million per location. Even if they double in size next year that is 5 mil per! Starbucks is only approx 4 mil in 2020. Insanity. Wait 12 months and buy bros for 10.

    2. Citadel West: Not sure what they put in their coffee, but one opened up near me (Calif. coast) and the lines of cars are really long still. There is a Starbucks across the street with about 1/4 of the business. Lost on me though, I like Peet’s Coffee and sticking to it 🙂

      1. Dutch Bros sells a lot of energy drinks as well as coffee, and their drive thru business model has popular appeal. Their stock has energy as well, up 18%+ today alone.

        Peet’s is a good brand and it trades on the Amsterdam exchange.

  45. PCF – High Income Securities Fund announced Rights Offering – https://finance.yahoo.com/news/high-income-securities-fund-announces-174900885.html dated Sept 10th

    I suppose this should be in the CEF category but since it looks as though there hasn’t been a post there in 2 years, I’ll give a try here instead – anyone involved in this one??? They just announced the terms on a previously announced Rights Offering The rights are non-transferable and the ratio is 1 right for each share owned…. That means if all rights are executed the fund will double in size AND the day after the rights offering closes, they’ll essentially could have a fund that will be 50% in cash…. Owning the rights give you the ability to put in for an unlimited amount of additional shares if available from others not executing theirs. And if that’s not enough to cover all the demand, well, no problem, PCF has the right to issue up to 200% more shares above what”s offered in the RO….

    PCF is a Bulldog Investors, Phil Goldstein, managed fund… They do SPE as well…. Right now, PCF is trading at about a 6.50% PREMIUM to NAV. The subscription price for the shares to be issued will be equal to the LESSER [emphasis added] of 95% of (1) the net asset value per share (“NAV”) on the trading day after the Expiration Date or (2) the volume weighted average market price per share for the three consecutive trading days ending on the trading day after the Expiration Date, provided, however that such amount shall not be less than 85% of the NAV as of the close on the trading day after the Expiration Date.

    My question is shouldn’t PCF, in reaction to the RO trade down from here dramatically? When the RO has the potential to make the fund 50% cash when the post offering NAV is calculated, how can this one stay trading at such a high premium to NAV? They do offer a high managed income dividend that gets recalculated annually at end of the year based on its then NAV, but that’s going to be happening shortly after the rights offering closes (October 22) so the fund is almost guaranteed to have a high percentage of cash as part of its NAV…..

    I’m surprised the price held up today…. I feel like I have a full position on PCF right now, so I sold about half of what I own to make room for shares I expect to buy back thru the rights offering…. We’ll see how that works out…. In the meantime, I’ll lose 2 dividends of .078/share I think (maybe 3?) for the time I’ll be out – Any opinions anyone???

    1. Great plan. rights offerings are a way for the fund manager to shore up or grow the NAV but are often dilutive.

      Expect a share price decline after dust settles.

      Would say it’s also a warning sign if done too often in the case nhf or riv.

      1. Micahc:

        Seeing many rights offerings in the closed end fund space lately. Looks like closed end fund managers want their piece of the pie by increasing fund sizes and generating higher management fees, no matter how much it hurts current shareholders.

        I owned one (ticker FINS) from Angel Oak that was a great little fund that mostly invested in community bank debt that paid a 7%+ yield.

        FINS recently announced a dilutive rights offering and the fund’s price has already been hit by 7% in a week. Sold much of it before the hit. If it is a quality CEF, they usually bounce back after all the dust settles.

        1. They are broadening their charter to include a wide range of investable options also. Possible manager overreach just when the game is already a spec? More bang for the leverage?? See their site/announcement.

  46. I rarely venture into the IPO market, but the upcoming public offering of Dutch Bros Coffee has gotten me excited. As Peter Lynch famously said ‘invest in what you know’, and this Oregon based company has got great products, great service, an easily expandable drive-thru business model, and legions of hard core fans (known as the Dutch Mafia). Their offering date is Sept. 15th and they will trade under the symbol BROS on the NYSE.

    https://www.oregonlive.com/business/2021/09/dutch-bros-sets-date-for-ipo-poised-to-be-oregons-biggest.html

    1. Their coffee isn’t very good, but the drones out here love the Dutch regardless. Kind of a Ben n Jerry’s thing before they got sold. They have a small drive up model like the really old In n’ Outs that had no dine in service. This is really annoying because the cars stack up and block access to the street and other stores. The land lots they operate on are too small for the number of cars that are waiting. It causes traffic problems and angry drivers.

      This isn’t the first coffee place around here to go public. The other one that had WAY better coffee was Coffee People. They went banko after going public. The founders still have a coffee shop in NE and still still sell the Black Tiger coffee. They make a milkshake with the Black Tiger beans that is soooo good.

      The other coffee franchises have been popular were Seattle’s Best that got bought by Starbucks. Another local yokel coffee company, Boyds, was recently sold to some conglomerate (terrible coffee).

      1. Lines of cars waiting to get served at Dutch Bros is a fairly common sight in the Portland metro area. They must be doing something right because they have a huge base of loyal customers, and the drive thru model seems to be quite popular.

        1. CW:

          Not to go too far off the topic of investing, but I will never underestimate the devotion of the citizenship to lousy coffee. Starbucks, Dutch Bros, Dunkin Donuts, etc. is all crap.

          I switched to an organic roaster many years ago that has dedicated his life to finding organically-grown beans in all parts of the world that support small family farms. Sells his product at very competitive prices. Check it out…incredible coffee.

          http://www.deansbeans.com

          1. Rob…with all the extra stuff people put in their coffee nowadays I’m not sure the quality of the coffee even matters. But those added flavors and toppings turn a $1 dollar beverage into a $5 dollar beverage, so as an investor I’m not complaining. Dutch Bros has 13 locations currently in Las Vegas, and I’d expect that number to grow after they go public.

              1. Dutch Bros coffee is ok…my wife likes their flavored teas and chais. I’m not their best demographic (too old, too cheap) but I like their business model.

                1. Ha ha. Yeah, I’m too cheap too. You can buy Seattle’s Best and brew it yourself for $3.98 for 12/oz bag. It’ll last a week and I drink the stuff every day.

                  Sisters Coffee from Eastern Oregon sells their product at Grocery Outlet for $5/lb when they have it in. They make an excellent product, but retail is over $10 lb!

                  Selling coffee is BRUTAL in the NW. Many many many competitors with high quality product. There is a Bikini Barista right down the street from me. It’s kind of a Hooters of coffee, but I have never went or lOOked. Well maybe a quick lOOk. Ha ha.

                  Franchises from around here haven’t done so well going public. I mentioned Coffee People, but another favorite was Macheesmo Mouse. This was a Chipotle style fast food that was ten years ahead of it’s time. Lines out the door every time I went for lunch, but alas they want BANKO as well.

    2. I love Dutch Brothers, discovered first at a kiosk in a parking lot near my motel in Eugene some 20+ years ago. I am eternally grateful to Dutch Bros. for cluing me in on how to make good coffee at home. (I grew up on diner coffee.)

      My home brewing has been in crisis since Seattle’s Best Decaf Organic Twilight disappeared after the merger, with Whole Foods decaf Sumatra whole bean a current favorite. No more Starbucks, too burny. Seattle’s Best Portside 3 and Cafe Bustelo, with its Cuban / Miami flair, are my budget choices. When I sample, I cut with chicory if a coffee is so so.

      FWIW, I found some really good coffee in Portland around ’92, heard of an IPO and got the prospectus. It popped and I skipped thinking they’d drop. And so I missed Starbucks.

      For a more sublime experience, I use Celestial Seasonings decaf Green Tea softened with a delicate White tea, but this is a coffee post, isn’t it?

      1. BearNJ:

        Forget about those decafs you are consuming. Very harsh chemicals used to create those products.

        Dean’s Beans does it the right way. Their decafs are incredibly robust.
        Remember, drink deep!

        Decaf Coffees at Dean’s Beans:
        A note on Natural Water-Process Decaffeination.

        Instead of using harsh chemicals to remove the caffeine from the coffee beans, our coffee is decaffeinated simply using water, in a gentle eco-friendly process called the Natural Water Process. The beans are soaked in hot water for a designated period of time, and the caffeine leaches out.

        Then the solution is passed through a carbon filter that catches the caffeine particles, but leaves the water, oils, and flavors to be reabsorbed into the beans. You are left with a 99.9% caffeine free bean, without sacrificing great taste or adding unneeded chemicals to the environment and your body!

        1. Thanks for the link. I may take a bite if only because I missed Starbucks.
          A few observations. Nothing really alarming.

          – This is a kiosk-type retail business so it may be difficult to increase same-store sales. There is just so much demand for coffee to go in a trade area.

          — Over half their sales are in the 9 am to 4 pm time slot, which surprised me. Customer demographics: 72% age 16-35; 67% female.

          — A lot of DB’s growth seems to be coming from adding new stores.

          — Same store sales held up well in 2020, but can they hold on to that business post-pandemic. i.e., if you’re going to DB because its outdoors and safe like the bank drive up window what happens when the local Starbucks / bagel shop / pancake house opens up indoors full blast.

          — Coffee prices are volatile and currently up. Price / margin issues.

          — Their decaf is whole bean, making them a virtuous company.

          – – Adding stores in more densely populated states may be difficult. Nothing drives the local zoning board crazy like traffic stacking.

          — Mostly franchised, 264 to 200, but moving to company owned. Pretty weird looking numbers because of this, apples to oranges. More revenue out of the owned stores, but franchised stores look more profitable. (Owned stores have overhead. Franchise stores produce franchise fees. ) Franchisees are required to buy official supplies, like napkins and cups, a potential area for future disputes.

          — Company owned stores leased rather than owned,

          — Offering is dilutive, existing shareholders are in at ~$2.50, new buyers are in at ~19. They paid out a $200 million pre-IPO dividend and expect to get $140-190 million from the IPO. Nice work if you can get it, IMHO.

          — Multiple classes of stock. One has to swim through the family business verbiage to find this: “Our Sponsor is a leading private equity firm focused exclusively on the branded consumer sector.” And will own a chunk of our stock after the IPO.

          — Like every retailer, much talk about “Our people are our business.” There was one college kid in the kiosk I visited long ago. I suspect he’s long gone. IMHO, employee turnover is a big problem in retail. Great service is not unique to big chains with training programs. FWIW, the local bagel shop knows my order too. Sometimes they tease me by having my order ready on the counter before I park.

          Just my opinion.

          1. Thank you for confirming what I had thought. This is literally Coffee People 2.0. I found some articles about Coffee People when they thought they were going to be #2 behind Starbucks and they actually had GOOD A** coffee.

            “Jim and Patty Roberts founded Coffee People in 1983 in an old house on Westover Street in Northwest Portland—it was Coffee Man for 8 years before that—living upstairs above the cafe they founded.

            At its peak, Coffee People had more than 40 locations in town, serving up Black Tiger shakes and Velvet Hammer mochas, going public in 1996 with the goal of being No. 2 to Starbucks. But the business crumbled instead, and they were forced to sell.”

            “The Robertses sold their caffeine kingdom in 1997, after nearly 20 years of stoking Portland’s java junkies with Black Tiger Espresso and Jimbo’s Hippie Cookies. They made their coffee strong and kept their business mantra simple: “Good coffee. No backtalk.”

            At the top of their game, they were minority owners of 40 Coffee People stores and Motor Mokas in the Portland area. In their quest to become No. 2 to Starbucks, the Robertses went public with their company in 1996 (after a local offering in 1995), then expanded to Denver, Chicago and southern California. According to Jim, the empire collapsed when “business just didn’t ramp up fast enough.”

            https://www.wweek.com/restaurants/2016/06/16/one-of-the-oldest-names-in-portland-coffee-is-closing-all-locations-this-month/

            https://www.wweek.com/portland/article-1514-return-of-the-coffee-people.html

    1. Me like ENB and their staggered reset prefs. Then USD denominated CN prefs (four) are all below par and yielding well until reset, the V issue resets right after the midterm elections, 01-23, as a spec on a higher reset rate from today? Either way let it ride or called?
      The options stay cheap though. They have managed thru some recent issues well.
      Take a look at their foray into European wind. They are NOT thinking or a small start, but using their large scale expertise on large scale projects. Euro energy costs are already high. My niece in Italy will not even roast a turkey or run the dryer because of energy costs. That leaves a lot more room to compete with new, long lived wholesale projects. It nicks many green checkboxes too.
      I think 9 billion people are going to want electrons, even if it is just to get to their wallets,

      1. Joes, A – which are these CN Preferreds you mention for ENB? Are these Canadian preferreds? If so, what is tax implication for US taxpayers?

        I only see ENBA a fix to float 6.375% coup that is first callable Apr 2023.

  47. Any thoughts on QPFF American Century Quality Preferred ETF? Actively managed, 4.8% SEC yield, about seven months old but only 540,000 shares issued, low trading volume and only $22 million in investments. You can see the dilemma…is this ETF going to survive or be closed down eventually for lack of interest? Top ten holdings are reasonably good but like any ETF contains some holdings I wouldn’t personally buy. As an income investor this would be a buy and hold for me.
    Current share price is $41.69

    1. Preferred market typically has large mispricing which can be captured by an active manager more effectively. (FFC/FLC/PFD) One of the best managers has been Flaherty & Crumrine.

      ETF/Index wrapper is about purchasing the lowest fee. (PFFD)

      Own none of these products.

      1. I agree with micahc. FLC is my largest holding in both my trust account and my Roth Ira. It has a long history of being well managed. It is currently selling at a premium (+3%). But, current price is the lowest it has been in the last 3 months. FFC is pretty much a mirror image of FLC.

    2. On the plus side QPFF has a decent expense ratio (.32%), and holds a number of issues not readily available to retail investors. However, the ETF was just launched in 2021 and doesn’t have a market selloff track record to examine. If your objective is income, I’d say there are other choices including some term dated new issues.

      1. Richard, I like the research you have done here. Find out how much of that Dividend is return of capitol. If they are not able to invest the capitol to make the dividend then its basically the snake eating its tail.
        The capitol goes down then the dividend gets reduced. read some of the older articles by Stanford Chemist over on SA

  48. FAT Brands decides to buy Twin Peaks. This sports bar restaurant is much better known for its scantily-clad waitresses that all look like models instead of its “scratch-made food and signature beers.”

    Anyway, looks like $50 million more FATBP 8.25% preferred is going to be issued to close this deal. FAT seems to consistently issue new shares of this preferred – they treat it like a never-ending bank account.

    https://seekingalpha.com/news/3735930-fat-brands-to-buy-twin-peaks-restaurant-chain-for-300-million

  49. Hurricane Ida has affected the oil industry in the gulf causing major production shut downs, Any monkey throwing darts can pick a company that may profit from this.
    But considering Holly Frontier’s refineries are located farther inland they will not be affected. HEP
    Course 2 edged sword, higher crude prices affect margin but people need fuel and are willing to pay higher prices

  50. Clear Secure, Inc. (YOU) – re-opening speculative vaccine passports.

    No high conviction investment thesis developed.

    Government has an overwhelming need to put a vaccine passport system in place forcing the hand of the fence sitters and anti-vaxers.

    1. The government has an overwhelming need to fulfill its totalitarian agenda/mission.

      I think ticker (YOU) should focus on their work related to picking out the bad apples scurrying through the airports or deployments of buses in the cover of darkness, but that would counter the narrative and likely harm their eligibility for NIH grants.

  51. FEYE (software)and OSCR(health insurance) re: Insider buys
    I mentioned FEYE on 8-11 after an insider buy at 16.92.
    I made a bit and got out. FEYE dropped down again.
    Then more Insider buy on 8-20 at 16.94. I bought at 17.27 and got out near 18.00.
    Now there’s another insider buy on 8-27 at 18.64.
    I may sit this one out.
    The one that got away is OSCR. Huge insider buys ($7 million dollars worth) on the 24th. It had closed at 12.40 the day before but opened at 13.10 and didn’t move much higher.
    Another buy was filed 8-27 for $6 million
    Joshua Kushner was a big buyer,
    Something is in the wind.
    Insidercow.com is where I get the info.
    I hope to buy OSCR pre market Monday.

    1. Newman, you might be making something on OSCR but I read past articles on SA and what I read didn’t sound good. It had backers like Google and Fidelity management Research etc. But I wonder if the lockup period for the original investors and employees ends or has ended.

    2. OSCR – If the largest (UNH/ANTM) most efficient operators are experiencing mid single digit operating margins. Technology does not fix industry profitability.

      Easier money riding the CVS price rollercoaster.

      1. In reply to Charles M. and micahc,
        I rarely get into due diligence on these companies.
        The Insider Buyer (officers only) knows more than we do.
        The buyer expects to be rewarded at a later time.
        My posting of Insider buys is to let you guys watch how I trade.
        Picking the wrong Insider Buy would upset me.
        But, I have my filters set up to determine candidates.

        1. I just bought 400 shs of each stock
          OSCR 14.60 and FEYE 18.80.
          I don’t like my buy in price, but it’s done.

        2. thank you Newman for your postings and continuing to post. Good luck to everyone this week

  52. GPN – global payments network

    Recently has had a fall from grace after ripping the cover off the earnings ball.

    Questions remain can the company grow revenue/cash flow without issuing debt and shares like it was 1999. Even in the ever crowded automatic payments marketplace.

    With an extremely high 20%+ long term growth rate you will be betting on this road runner out accelerating Wile E Coyote of the debt market.

    I’ve always like plumb crazy purple adding to my existing position.

  53. Redbox “IPO”
    Completely flying under the radar here but Redbox is going public again imminently via SPAC merger. You can buy in now at trust value “par” for $10 under ticker SGAM.

    Apparently they also launched Redbox TV with a whole bunch of streaming content that is retro programming and new.

    1. Theta…the only reference I’ve found to Redbox at SA shows its ticker will be RDBX. Does owning the spac SGAM give you rights to purchase Redbox at IPO?

      1. no, purchasing SGAM is the equivalent of owning RDBX shares when/if the merger is complete. Read up on SPACs to get an idea of how the mechanics work.

      2. Citadel – Upon merger completion / post-SPAC if you held an existing position in SGAM beforehand, the symbol will change to RDBX in your account. Same concept/logistics as to when you buy a newly issued preferred via OTC and then it gets listed shortly down the road under a different symbol.

        1. Theta, I see backers in the spac are LionsGate and Legendary Entertainment, and Thunder road films. All good production companies in the film business. A Lot Better than Chicken Soup for the Soul. Last picture they were part of had Bruce Willis and even with him it was a stinker.
          Used to rent a lot from Redbox but their content went downhill, always a bunch of slasher and horror flicks for rent,. Think of them as the Papa John’s or Papa Murphy’s of the rental business. Lot of discounts and 2 for 1 to get you to rent. Might be good for a quick flip, but I see its already dropped a couple times below IPO price in trading

  54. Started a position on Friday for BABA (alibaba) which is the Amazon of China after its precipitous drop. High regulatory risk exists as recent drop caused by new rules introduced just this week. This company firmly belongs in the high risk bucket as another 15-30% drop is not unthinkable.

    Have wanted to own Alibaba for a very long time its very hard to find companies with 30% annualized growth rates trading at over 25%+ return rates

    In my view it was inevitable for the industry to become regulated to protect consumers. Worst case scenario is nationalization. Reasons against it would kill the Chinese growth narrative (American dream equivalent) and the source of national pride it feeds.

    Instead of a single stock risk you can buy the industry under ETF KWEB.

    Not advice to buy or sell just my personal opinion own shares in BABA.

      1. Provided an employee an advance. She admittedly went long TSLA 700 calls.

        Box or Buggatti.

  55. CIO common is up ~ 30% in the after hours, based on news they are selling a large holding. They have one preferred outstanding CIO-A which is callable on 10/4/21. I assume this large infusion of cash increases the odds the preferred is called then. Possible action if you own the common and/or preferred. The preferred is trading with a negative yield to first call. If you owned it @ today’s close of 25.76, you would receive about 25.41, thus lose about 35 cents a share. Since the first infusion of cash does not occur until December, the preferred might not be called until then in which case it trades at close to break even. We do not own the common or preferred, but if we did I would be hitting the sell button ASAP.

    News release:

    City Office REIT, Inc. (NYSE: CIO) (“City Office” or the “Company”) announced today that it has entered into definitive agreements to sell all of its holdings in the Sorrento Mesa submarket of San Diego for $576 million. The transactions are expected to generate net proceeds, after estimated closing and transaction costs, of approximately $546 million, which equates to $12.38 per common share. The properties to be sold are unencumbered by debt.

    The sales will be completed pursuant to two separate agreements. The northern portion of the portfolio is scheduled to close in December 2021 for $395 million. The southern portion of the portfolio is scheduled to close in February 2023 for $181 million. City Office has the ability to accelerate either closing date to align with redeployment opportunities. Both sales are subject to customary closing conditions.

    1. On second thought, I just bought a few shares of the common. CIO claims their NAV is ~ 24.00, which if correct, it is a screaming buy @ 16.80-17.00. I am betting it will op higher Monday morning.

  56. NTDOY/NTDOF – Nintendo has no debt. As no one is in front of the common would equate it as a bond equivalent. Recent earnings show a post covid slowdown in hardware/software purchases. Given return to previous 5yr trend growth 6-7% with 1.5% buyback this is looking cheaper than BABA levels.

    Even when you take all alternative revenue streams and just zero them out to simplify it still looks grossly cheap. Is the market expecting a gaming winter post covid.

    Will be initiating a position and forgetting about it for 10yrs.

    1. Interesting idea. Any idea what happened on Tuesday? Single-day crater, then right back to where it had been (week chart looks like a gap-tooth smile).

      1. On Aug. 5 Nintendo released Q3 earnings which fell by 7% vs Q2. Dividend is variable based on 33% of consolidated operating profit of the six-month period by the total number of outstanding shares.

        So you have 2 things hitting at once but a 14% drop on an already inexpensive stock due to 7% Q on Q revenue decline seems excessive.

        Management also provided conservative guidance that revenue post covid would contract.

        In comparing market competitors that have debt:
        Nintendo 12 P/E
        Activision Blizzard (ATVI) 28.33 P/E
        Take-Two Interactive Software, Inc. (TTWO) 31.50 P/E
        Electronic Arts Inc. (EA) 34.28 P/E
        Tencent Holdings Limited (TCEHY) 21.46 P/E

        My conundrum Nintendo either is more cyclical than a chemical producers and riskier than Chinese companies or their competitors are priced for perfection.

        1. Household name that I have never looked at. One is the ADR I gather and the other an OTC ticker. Is one better than other and what accounts for the price difference?

          Thanks.

            1. At TDA, the ADR shares show a dividend. The ordinary do not. Does one pay and the other does not, or is that just an oversight on TDA?

              Generally speaking, is one share class better than the other? I have watched Vestas Wind Systems (VWSYF / VWDRY) for a long time and they have a similar setup, although both show a dividend. ADR shares play at a slight discount to the ordinary and dividend is less.

              1. How could the ADR pay a dividend if the underlying shares do not? It is a flow through security after the depository takes its cut. Liquidity, taxation etc are all considerations when choosing one over the other

                1. Good question mcg. Fidelity and TDA both show the last dividend paid on the ordinary shares back in 2018.

                  I guess I need to do a little more research. Nintendo.com does not have an investor relations page and Nintendo Japan is written in Japanese….

                    1. I have traded this many times over the years but recently stopped out and locked profits in low/mid $70’s on Nintendo. Couple quick caveats:

                      *Dividend is paid once a year and who knows what it will effectively be. So the current 4.34% I see populating on many platforms is not something by any means to factor into taking a position.

                      *This stock historically is a classical cyclical/predictable beast. I trade this in the same manner as I do say coffee. $55ish handle has a good amount of support hence why it got a nice bounce recently. Next strong support stop is $50.80ish and from there you would need a giant gap fill through entire $40s with $41 being the floor there.

                      Kudos to OP for a timely thread where many folks were pounding the table this stock was going to $100. However the charts and money flows told a much different story. Even ARK got this one right and was dumping millions of shares all through $70’s.

  57. ORI will pay a $1.50 special dividend in October, paid $1 last year IIRC. Record date is 9/15. Presently yields c. 3.5%, trading under recent highs.

    1. D, have owned ORI for a long time and it has proven a good, reliable dividend issue. Love those special dividends. Paid on 10/6.

      1. I’ve also been in and out over time in an IRA, thought of taking profits on half after ex-div end of the month but will hold for the special.
        Also opened a position in a non-qualified acct. last year when it dipped under $15, waiting till it hits cap gains status.
        Been making a little money trading TGT and WHR lately, if anybody has any suggestions.

    2. ORI has paid out $4.50 in special dividends since 2018. Including a total of $2.50 in 2021 CY. In April/May 2020 the price dropped as $14+ and has risen to $25.+ A SOCK drawer stock for me.

    3. I have been in and out of ORI for decades – mostly in. Great investment. I recently (as in this morning) exited above $26 (seemed wildly overvalued), but will be back in again.

    4. Thanks for this heads up.

      I bought some for the dividend, plus I sold calls on it thinking it would go down after the ex-dividend date and made about $0.30 extra per share that way. Would have potentially made more, but they were exercised early.

      Well over 7% from holding a couple of weeks is a decent score right now, so thanks again for the actionable info!

  58. FEYE
    Fireeye insider bought $439,868 worth of stock
    Filing was today at 5 PM and appeared at 7:09 PM on Fido.
    It closed at 17.64 today
    I haven’t played IB in a while so I bought a few hundred shares at 17.87 3 minutes ago.
    I don’t know the company’s products
    But it’s good to play these again. I am 8 out of 10 in gains when buying it right,
    GoodLuck

    1. FEYE,
      I just sold all.
      A steak dinner for 2
      But then, QOL emailed me for a donation.
      So, now it’s a steak dinner for 1.
      Being cautious, I only bought half what I would normally buy.

  59. Did anyone else trade the HOOD IPO?

    I picked some up at $38 and sold September $70 strike covered calls for $15 when it was going crazy. If I want to roll those to 2023 I can pick up another $13-$14/share if things open like they closed last week.

    I haven’t had a score this good since after the market tanked and we got to ride the elevator back up.

  60. NEWT – I wonder what this would mean to the notes? NEWT looking to convert to a bank holding company…. If it loses its BDC status, does that mean the preferreds no longer have the mandated coverage required for BDC preferreds???

    Newtek Business Services Corp. Signs Agreement to Acquire National Bank of New York City

    Acquisition will be Discussed during a Shareholder Conference Call Tuesday, August 3, 2021 at 7:30 am ET

    BOCA RATON, Fla., Aug. 02, 2021 (GLOBE NEWSWIRE) — Newtek Business Services Corp., (Nasdaq: NEWT), an internally managed business development company (“BDC”), today announced that it entered into an agreement to acquire National Bank of New York City (“NBNYC” or the “Bank”), a nationally chartered bank with approximately $204 million in total assets and $36.5 million in tier 1 capital (each as of June 30, 2021; does not reflect the impact of pre-closing dividends to selling NBNYC shareholders) for $20 million in cash (the “Acquisition”). The agreement requires that NBNYC have $20 million of tangible common equity as of the closing date of the Acquisition. The Acquisition is part of a plan to reposition Newtek as a bank holding company, and is subject to the approval of, among others, federal banking regulators and the U.S. Small Business Administration (SBA), and Newtek shareholders to withdraw Newtek’s election as a BDC. Upon shareholder and regulatory approvals, and other closing conditions, Newtek will become a bank holding company that will elect financial holding company (FHC) status. Newtek anticipates the Acquisition to close in approximately six to twelve months.

    https://finance.yahoo.com/news/newtek-business-services-corp-signs-200500811.html

    1. Sorry – I meant NOTES, not preferreds.

      The obligation of the Company to consummate the Stock Purchase is further subject to additional conditions, including (a) NBNYC’s tangible common equity equaling or exceeding $20,000,000, (b) NBNYC’s equity-to-debt ratio as of the Closing equaling or exceeding 10%, (c) there having been no material adverse effect with respect to NBNYC since December 31, 2020, (d) the written resignation of all of the directors of NBNYC if requested by the Company, (e) the Company’s having obtained shareholder approval to withdraw its election as a business development company under the Investment Company Act of 1940, as amended, (f) the Company’s having completed a refinancing of its outstanding notes, including the elimination of any provisions relating to the Company’s election to be treated as a business development company under the Investment Company Act of 1940, as amended

  61. BMTX – Has anyone who acquired BMTX shares as a spinoff from CUBI successfully had the restricted status of their shares removed by your broker??? If so, which broker???? Both Fidelity and TDAmerica have so far refused to lift the restriction despite my confirmation from BMTX’ CFO and from their transfer agent, Continental Stock Transfer & Trust, that the restriction was removed on July 1. My phone calls to both Fidelity and TDA have so far amounted to nothing and even though I have given them the direct contact info at Continental, I cannot get either to tell me definitively that they have been in touch with her directly as Continental has requested they do.

    If this continues, is this an issue for FINRA? Surely there must be SOP for this to happen for all clients collectively at a broker all at once, yes? How can some brokers release the restricted shares while others have not?

  62. I’ve seen recommendation here of Pembina pipeline; their acquisition of inter line is being terminated. Pba up today.

    1. Pembina gets a termination fee equal to 65 cents/share.

      Beyond that, incredibly short sighted of the market. Pembina is close to a table pounding buy but requires patience. Most long lead time businesses do.

      In the short run the market is a voting machine. In the long run it’s a weighing machine. Graham said it in 1934 and it’s still true.

      1. Not interested in a pile of BipBamBum in a stock exchange for IPL at their inflated market prices. Money for nuthin’ and the cashflow for free.
        Remember poison pills?
        PS: Hold that PBA and other big CN oil is low priced too! Spin the wheel Vanna and take the prize.

        1. IPL management incredibly bad as they turned down a buy out years ago for a lot more than $20, just blew $350MM by gambling and with Heartland took on too much debt which lead to being bought out. I have both Pembina and BAM and at least with BAM much better management will wring out a lot more profits from IPL assets. CDN energy companies coming out with quarterly results over next few weeks and should be very positive news for most.

          1. I am sympathetic to IPL. The fickle finger of fate was unkind to them. Had I been their financial advisor I would have urged them to they lay off some part of the Heartland risk. It was a big fish to swallow.

            BAM can get blood from a stone. IPL is low hanging fruit in their eyes. They turned a bankrupt Brazilian utility into the foundation for an empire.

            Stay tuned. They are eyeing Pembina for the future.

            1. Bob I know you follow hockey so you will get my analogy. When I was working for a bank in the early 1990’s in rural southwest Ontario (outside of Sarnia) there was a common joke at the local farmer’s coffee shop that if the “Hunter brothers” were looking at bidding on a local farm you might as well put your cheque book away. Mark & Dale were both still playing in the NHL and their off season was spent farming their many many acres of cashcrop land around Lambton County. In this case BAM is the Hunter Brothers when it comes to any potential sale of a company in Canada.

  63. OMF declares $3.50 special dividend
    on top of the regular .7 dividend

    they announce these every 1st an 3rd quarter

  64. BMTX – For those who may have acquired BMTX shares via having owned CUBI and receiving them when it was spun off via SPAC, IR has told me that the trading restrictions were removed a/o July 1… The trouble is both Fidelity and TDA don’t seem to know it yet… I will try to get the ball rolling today..

    here’s IR’s response:

    “The restriction was lifted on July 1st.  You should be able to trade or transfer your shares freely.  If you have any issues I would start with your broker, and direct them to Continental as our transfer agent (Continental Shareholder Services, at cstmail@continentalstock.com, has been prepped for assisting, or if ready to transfer, you can reach out to Continental’s Transfer Department directly at transfer@continentalstock.com.)

     

     

    Bob Ramsey
    Chief Financial Officer

    BM Technologies, Inc. (NYSE: BMTX)

    ____________________________________________

     

    m571.236.8851

    rramsey@bmtx.com

    bmtx.com

    1. As a follow-up, I am getting nowhere with both Fidelity and TDAmeritrade in getting this restriction lifted on BMTX. I have given them both the information necessary, but apparently I have not found the right person at either place…. If anyone else can find a way, I have been given this information from BMT transfer agent as to whom the brokers need to contact:

      “If Fidelity and/or TDAmeritrade have questions on the process they can contact our Transfer Department directly at Transfer@continentalstock.com or myself and we will be happy to assist them in retrieving the shares held in their firm’s name.

      Thanks
      Erika

       
      Continental Stock Transfer & Trust

      Erika Young
      Vice President & Account Administrator
                 P: 212.845.3218        M:  646.335.3493
                 E: eyoung@continentalstock.com
                 A: 1 State Street 30th Floor
                      New York, NY 10004-1561
                 W: www.continentalstock.com

      Apologies for the frustration you are experiencing in regards to your shares.  As Mr. Ramsey indicated, upon the Company’s written instruction to Continental the restrictions have been removed.  Upon the removal of the restriction, unrestricted share statements were mailed to EACH of the Participant Level named holders making them aware that the shares were now unrestricted.   In many instances, statements were mailed to the main Brokerage HQ address on file, therefore, your individual Broker’s may not have received it directly.   Unfortunately, I can not speak to the notification process in place at TDAmeritrade or Fidelity, however, other Brokerage Firms have consistently reached out before the lock-up was lifted for updates as well as reached out to us upon receipt of their statement and requested that their shares be moved back through DTCC, for further distribution to their underlying holders.

    1. Not very common for preferred issues. My royalbank, cibc, and sunlife preferreds can drip reinvest into the common stock automatically if you have drip setup on your overall account.

  65. FWIW – I have been trying to buy DENI for about a month now. I had a limit order for $10.81 set to buy. I looked this morning and it was trading at $10.80. No limit order execution so had to do market order at Schwab that filled at $10.80.

  66. From the just too cheap to ignore category:
    I’m buying WHR here at 207. P/E under 10 (!!) and a yield of 2.7%. I like value stocks here, and this is now my favorite.

    1. Bought more WHR today at the same 207 price. Earnings out tomorrow after the close.

          1. Me too. Was watching WHR but didn’t pull the trigger Monday. Took profits on TGT last week but didn’t re-enter on Monday drop – been in and out twice this year for gains. Ditto AB, which actually has a serious dividend. Can’t catch every cab. Added pieces to a couple of banks instead. Keep posting, we are reading.

        1. Exited the remainder this morning with 5% profit. earnings were good, but Mr. Market is fickle.

      1. Nice earnings!. Market yawns AH.

        Whirlpool Corp. late Wednesday reported a 32% increase in quarterly sales and said it was raising its 2021 guidance on continued demand for its kitchen and laundry appliances.

        Whirlpool WHR, +1.91% said it earned $581 million, or $9.15 a share, in the second quarter, compared with $30 million, or 47 cents a share, in the year-ago period. Sales rose to $5.3 billion from $4 billion a year ago.

  67. Got a tiny bit lucky at the casino last night.
    Maybe my luck has changed for the better.
    I’m going to try to press my luck.
    I just bought 600 shares of REVG at 16.19 at 9AM today.
    It’s my usual Insider buy game.
    I better get a Chicken dinner out of this.

    1. Yay, I’m out and I squeezed a steak dinner out of this stock.
      I did look at the company news for 5 minutes and they seem like a rising star.
      A good start for this week.

  68. Got the tip 5 minutes ago
    AEI huge insider buy (possibly a SCAM stock)
    I bought 250 shs at 5.63 a minute ago
    What the hey?
    Let’s see if I get lucky today.
    Looking for a steak dinner for 2-3

    1. I see this on insidercow.com. Big purchase by the CEO two days ago, two smaller purchases yesterday. $4.90 and $5.02.

      Good luck.

      1. I sold half at 5.43 for a$25 loss
        still holding the other 125,
        Chinese stock, say no more.
        Looks like I treated someone else to a Pho soup.
        When it started to go down, I started talking Chinese like words.

        1. All out. A $70 loss for my troubles.
          This was not a desired outcome.
          Boredom got the better of me.
          Well, It’s back to nickel stacking.
          My wife said stop griping, move on and check out Viking River Cruises.

    1. I was able to dump my remaining shares for a profit. Not really a steak dinner but more like a large pizza and a pitcher of beer.

  69. I was just calculating the return for the MSFT acquisition of NUAN. It is pretty impressive so I thought I would pass it on. I doubt any of us can move the market on this one! MSFT is paying $56 cash for NUAN. It is scheduled to close no later than 12/31/2021 per the latest press release (Q2 NUAN earnings). With NUAN trading at 52.9, that is a 10% IRR and a simple 5.8% return. Pretty nice and fairly low risk. I have been parking money in that.

    IMO pretty low risk, but check it out.

    1. NUAN is trading below Microsoft acquisition price. I am purchasing as better return than bank account interest.

  70. HTSC
    My kid said buy it and don’t ask questions.
    I bought 5,000 shares at .16

    I normally am very skeptical.

      1. I know.
        My Investment is 825 or so.
        With the bubble expanding rapidly, What me worry?
        I am the one who did not invest in Tesla pre IPO.
        So, culda wulda shulda could be my epitaph.
        My wife’s would be. “I’m with Stupid>>>>”

        Ironically there are 2 Human White Roses in my office.
        Just happy to be alive and kicking my friend.

      2. 2WR, You can laugh at me now.
        As I’ve mentioned in the past, We have a eccentric genius in our family.
        I was texted at 4:10 PM yesterday to buy CVCN.
        I was told their drug for Alzheimers was superior to Biogens drug.
        It closed at 3.15
        But in extended hours trading it climbed to 3.37 to 3.46 and I was told not to pay more than 3.35. I didn’t pull the trigger.
        Well, lah Dee Dah it’s 4.22 now. Anyways, I wuz only planning to buy 500 shs.
        The company has a stock offering and the officers bought a boatload of it. It may mean they are diluting the shareholders while enhancing their share.
        My family member then said “Wait for the next one they said”
        I feel like the sleeping old man in the 3 stooges pie fight episode who gets hit with a pie and sleeps through it.

        1. Not at you, Newman, with you… I’m still watching HTSC just for kicks to see how you do… loved your story there….

          1. I will not tell you about yesterdays new “missed opportunity”
            I feel like I was visited by what they call a “Cooler” in Las Vegas.

    1. Newman, A couple of steak dinners or HTSC. Rumor has it that too much red meat is bad for you…………..

      1. I still am not doing research on HTSC
        But, I prefer to lose $400-$600 rather than being pointed out as “Poor Dad missed out on the big bucks”
        Every kid needs a parent that has their back unconditionally.
        This was my way of saying. I respect your opinion.

        1. A quick look at the stock does not support a buy. Nickle mining might be a long play for auto batteries. But, with Reddit / Gamestop / AMC, and the fact that I am sitting on a lot of cash, what’s a few hundred dollar gamble.

    2. newman,
      I bot a thin sliver in Organigram with some IRA divs since it was supercheap and BTI had previously plopped funds and board members into it. Of course they are going to buy out the whole company…right? Was able to sell close in calls a few times, but even that can’t catch more than a nickel bid now. It is fun to go onto their site and follow the evolution of this market though after living thru the seventies!

      1. They make THC edibles?
        I don’t have a high opinion on Cannabis stocks.
        Too many Ma and Pot startups.
        TCNNF makes Truelieve Chocolate. Wink Wink
        But even their stock chart is a downer.
        That’s a hard PASS.
        Anyways, I’m here in NYC for 30 days, and already spotted John Bolton in Lenox Hill. (UN is in session) He walked into the Korean shop where I put my order in for Chicken spicy Ramen soup.
        What was the question again?

  71. Looking for “relatively” safe places to earn a decent return I took a look at some merger-arb ideas. Two interesting ones turned up:
    MSFT buying NUAN for $56 cash, currently trading at $53.18 gives a 5.30% return till expected 4th Qtr completion.
    LMT buying AJRD for $51 cash, currently trading at $48.50 gives a 5.00% return till expected 4th Qtr completion.
    Obviously there is always risk deal falls through or is extended, but these two looked attractive to me.

    1. Chris – In this area of pure arbitrage, if looking to participate while minimizing the specific issue risk of trying to pick individual situations on your own, have you looked at funds like MERFX or GABCX who focus specifically on this area? You won’t get 5% but then again, the risks of timing properly and avoiding individual deals falling apart is left in the hands of the pros.

        1. I just looked up MERFX on TDA. Under “trailing total returns”, if I am understanding the information correctly, (I am assuming the “TR” behind S&P 500 means total returns) then an S&P index fund would have vastly outperformed MERFX over all time periods. I think I’d just stash money in VOO or VTSAX or similar. In fact I do have some money there…..

          It seems a tough place to make money, even for the professionals, because once the info becomes public, the market has already reacted and all the arb value is gone. I just saw that with the O / VER merger. Someone’s probably making money on it…. Early investors and VC’s I guess, but even MERFX doesn’t seem to be knocking it out of the ballpark and this is what they do for a living.

          Or, am I missing something?

          1. Mark – Let me ask you a couple of rhetorical questions…. #1, Would you be willing to put your “safe” money into an index fund even though they have outperformed practically every other category of fund over the years? #2. Is there a place in this world for money market funds or alternatives to them? Certainly you won’t find a single money market fund competing performance wise with an S&P Index fund, yet there sure is a whole lot of money sloshing around in them… There must be a raison d’être for trillions hanging out in money market funds even though they too can’t hold up vis a vis your comparison standard.

            The point is MERFX is not designed to be a performance fund… It’s to provide steady, reliable gains that surpass what you can earn in a money market fund or its equivalent.. An Index fund is great and certainly outperforms so many other categories of funds as to be embarrassing to the fund industry as a whole, but still, if the market goes down 20% your Index fund will too… An MERFX will not…. some of we belts and suspenders types like that kind of thing…… The bottom line is a comparison of MERFX to an S&P Index fund is an apples to oranges one… They are not designed to do the same thing. it’s a Safety Joe Fund – https://www.youtube.com/watch?v=_RTScRTFGvY

            1. Very funny…..I’m not sure what I was expecting Safety Joe to be but John Prine wasn’t even under consideration. I noticed he died of the CoronaVirus of all things.
              But back to your rhetorical question two….like many people I have a fair amount of cash sitting in Money Market accounts earning nothing. That I
              ‘m on this blog is also an indicator that I own Preferreds, ETFs, Dividend Paying Stocks, Canadian Rate Resets and Corporate Bonds. But I’m still 40% cash. I do it for safety because there is nothing about America that inspires confidence at any level. But I’m curious….is there any other possible reason that you’ve come across?

    2. Was just looking at the announcement and saw something that concerns me (although I may not properly understand it.

      “As part of the transaction, Aerojet Rocketdyne declared a $5.00 per share pre-closing special dividend to holders of its common shares and convertible senior notes, on an as-converted basis. The special dividend will be paid on March 24, 2021, to holders of record as of March 10, 2021. The payment of this special dividend, unless revoked, will adjust the consideration to be paid by Lockheed Martin to $51.00 per share at closing.”

      Does this mean if the special dividend is paid (which it was), that LMT will adjust their $51 offer? Again – I am probably misinterpreting this but wanted to raise it up.

  72. AGNC the big REIT has been making highs of late and just reported earlier today with a beat making further new highs in AH. It pays dividend monthly and goes ex-divd 4/29 and yields over 8%.

    Took a position in the common via a BuyWrite – this enhances the yield to over 10%. Perhaps a better buy to do this instead of buying its 6.125 or 6.5% coupon preferreds? Aim to keep selling in-the-money calls till assigned, especially around the monthly ex-dividend dates…

    1. mSquare – Seems like a lot of work as you need to write the call several times per mo for like $1-$2ea, with the risk that shares will either be assigned, or even worse, they aren’t assigned, and the underlying share price gradually deteriorates so the CC’s and divies are merely chasing your cost basis. Then you’re in the awkward position of having to write a covered call at a strike that is less than your cost basis for the shares. Furthermore, you’ve probably noticed that the bids tend to evaporate for a strike more than $0.50 above the current share price with the AGNC option chain.

      If you’re looking for 10% from commons in this sector, why not just buy NLY common?

  73. I opened a position recently in VERX. It’s a company that makes sales tax software who IPO’d last year. About half of the Fortune 500 use Vertex’s software. It’s quite an effort to change software providers so it’s rather sticky. Just curious if others here have looked into it.

  74. I recommended VIAC here last year in the mid 20s. It’s now approaching 100. No, I don’t hold it anymore….I sold way too soon. Believe it is roaring because of excitement over the new streaming service….Paramount Plus. I wouldn’t touch the stock here. I’m sure subscriptions are doing very well, but I believe that is due in large part because the service is being heavily discounted or even given away. Checking an entertainment board I frequent confirms this; also that customer service is difficult to reach.

    The tell on this stock will be when the company announces spectacular subscription growth but suspiciously low revenue and earnings.

  75. For those of us who are too stupid to realize that it’s different this time and stocks only move in one direction, here’s an interesting chart of historical P/E ratios for the S&P…… no reason for concern, though, everything’s as rosy as can be… https://www.multpl.com/s-p-500-pe-ratio

    1. I find it interesting, too, that all the wildest gyrations have been in the last 25 years.
      When did MMT / QE become the fashionable monetary theory? When did retail trading become popular? When did the internet really become ‘a thing’?
      Is it natural that the P/E should rise as the money supply increases?
      Should this be used as another gauge for inflation?
      Just thinking out loud.

      1. It’s pretty transparent: It’s a fact that this is a social democratic institutional maneuver, ALL parties and political minds have been complicit since Reagan…corporate is still seen as the method of management and distribution for the mechanism…the plebs just get an occasional check to feed corporate trickle down. Don’t worry, Everything is VERY EASY to manage.
        Since we are in the common stock area, I have had at least ten issues hit high sell limits and/or get called; one in Canada and I am thinking two more there soon. What to do with the cash? I had pivoted toward accenting cash on cash returns with cash covered puts on exhausted quality stocks (TOT, BMY here?) and this is getting tougher off the March lows, will end too and rolling close calls with managing divs on those owned. EPD is going to be interesting here since it goes xdiv Thursday and option expire on Friday….very close on my strike. Really, I DO NOT need the excitement or drama, but am just responding with tools I know. My Roth is crowded. and I DO NOT really like the risk. Seems this is like the 60’s?, grind off the residual debt from WW2 on a new generation, but at a much higher valuation and overall debt level.

      1. My guess is U2 WILL probably be next to sponsor a SPAC – if they haven’t already… lol

  76. Fastly (NYSE:FSLY) has priced $825M of 0% Convertible Senior Notes due 2026 in a private placement. The offering size was increased from $750M.

    The initial conversion rate is 9.7272 common shares per $1,000 principal amount of notes (~$102.80/share).

    FSLY currently trades at $67. Holders must be crazy bullish on this 0% note.

  77. NEE (Nextera) took a pretty big hit yesterday, at one point dropping just below $73. Part of the explanation is that now that the herd is risk on again that there is a sector rotation out of Utilities and into Finance and other areas. And then there is the issue of rising rates.
    I’m wondering if this rotation away from Utilities is a buying opportunity for Income Investors for solid, reasonably “Green” companies like NEE or AEP?

    1. I strictly follow the yields on my utility portfolio. As soon as the price drops enough to create an attractive yield I add. For example when DUK drops so that the yield heads above 4.5% I add. I have yield targets for DUK, SO, PPL, EIX etc.

      1. Don’t forget those higher short term yield convertables if you are cool holding the commons down the road. They are structured leap call options if held for non-trading. I had two snipped off with sell limits at recent highs after a couple divs: SO, D still have the AEP. I think there are a few more? They are being chased too.

  78. Anyone follow CRT, Cross Timbers Royalty Trust? It is purely a holder of oil and gas royalties. I’m thinking if oil and gas keep going up, this would be a direct beneficiary. Thanks!

    1. Want an interesting view on Am Royalties check out MNRL, decent management and focused on royalty sharing with equity. Best of the bunch in US in my opinion after researching them all. Do not own tho.
      I have owned two CNs royalty companies in my “sock-drawer” only payers for a very long time: FRHLF and PREKF, that are also available on US OTC. The fun part for me recently was that the confidence in their models and management (read: no hot rods) during the last year saw a HUGE price down and some prudent divy adjustment, but they kept paying, boom, boom, boom. I added a scant averaging down in the oil nadir last year. Now they have both reasserted strongly, are way in the green for me and I expect div increases back to their previous payout…or who knows maybe more. Just stayed with the plan. They use a payout ratio which is tied to oil prices realized, true royalties. Worth a look.
      Years ago, the Ontario Pension System tried to buy all of Freehold and that is when I began DD into these companies. Me love this method of their business models which need to be understood.

    2. CRT will benefit more if oil prices rise enough to overcome their share of operational costs (and deficit) in the 75% tier TX & OK acreage. However, I like SBR and DMLP much better. I personally don’t view MNRL as a comp for any of these.

      1. I would love to hear more about why you don’t think MNRL is a comp. I listened to the conf call and have reviewed their materials and bought some. I guess more importantly is your thought on those companies and the royalty play idea. Thanks!

  79. One of the people I follow is Michael Burry, he of Big Short fame. Because of the size of his holding he is required to file 13Fs each quarter. I would describe him as a value-based short/medium term equity trader. He does with equities what I think a lot of people here do with fixed income.

    Interesting, to me, to see what he moves in to and out of each month:

    https://www.sec.gov/Archives/edgar/data/1649339/000156761921003819/xslForm13F_X01/form13fInfoTable.xml

    I especially like the move into CoreCivic, as I did the same both on the debt and the common (through cash secured puts). There are lots of familiar names on the list.

    The inherent limitations on the data are 1) it’s 45 days old when published, so it’s yesterday’s news, and 2) short positions are not disclosed. But still, you can get a lot of insights into the thinking and methodology of a very savvy investor.

    The portfolio is concentrated enough to add some meaningful alpha but diversified enough that he isn’t crushed by one bad call. Like some of the jokers in the hedge fund business. I believe Burry is playing with his own money here.

  80. I was hoping to put this in the UHaul section as another possible alternative investment type vehicle, but that’s closed so this is the closest I can figure to be a near relevant area for this oddity:

    Every now and then I check out The Royalty Exchange just out of curiosity – https://auctions.royaltyexchange.com/overview. I was wondering whether or not anyone here has ever had any real time experience with this? It’s a site where you bid on specified future royalties to come from music or movies publishing or performanc rights, etc… I wonder if one were to win one of these, is it as simple as just sitting back and letting the royalties flow in or does one have to be proactive in marketing what you’ve bot once you’ve bot it in order to be successful… for example, right now you can bid on rights for royalties from The Doobie Bros song, “Black Water.” It’s all’s spelled out in detail, but I wonder if John Q Public, who’s not a music insider, has a prayer of getting treated fairly if he owned any of these type rights? Great cocktail party conversation starter either way though, I suppose…. Can you really be the next Paul McCartney via this route? McCartney probably makes more from the various music rights he owns under his MPL Communications umbrella company than he does from the music he’s making these days.. https://www.mplcommunications.com/

    Here’s the Doobie’s info https://auctions.royaltyexchange.com/auctions/the-doobie-brothers-black-water-more/?origin=overview&filter_value=overview#Overview
    Yeah, I know far far off normal topics, but maybe it’s another UHaul type thing to do in a way….. kind of fun too..

    1. 2wr – I’ve not looked at that website but there are a number of music royalty companies out there some being quite large.

      Check out Round Hill Music Royalty Fund.

      1. Thanks, Bob – I’ll take a look…….. I’m not sure my interest is beyond curiosity but it’s worth investigating… Music is such an interest of mine I might as well check out income stream avenues within…

  81. JMP, Thank You Insider Cow for that.
    Insider Cow is a web site that lists all insider buys and sells.
    I have been playing stocks based on that strategy for many years.
    Alas, I don’t hold for long.
    I just my last shares of JMP 7:57 AM EST at 11.00 . (Bought Feb 2nd)
    SPLP also has steady Insider buys, but I bought preferred instead of common and that was a mistake. I will buy the common today because I see a Cup forming and hope the handle is way higher.

  82. Devon Energy — DVN
    I’ve been on a contrary streak lately, and even though the energy sector has fallen on hard times and is not much loved these days, I think there may be some opportunities here. One such opportunity is Devon Energy. DVN has recently completed it’s merger-of-equals with WPX Energy and the combined company appears to be on solid financial footing. What I like is the fact the company reports they can break even at $33 WTI and with oil trading around the $60/barrel mark DVN has plenty of upside IMO. So much so, they just declared a variable dividend of .19/share on top of the regular, fixed .11/share dividend, both payable 03/31 to share owners as of 3/15.
    Here is a link to a PowerPoint presentation outlining the company’s position and outlook.
    https://s2.q4cdn.com/462548525/files/doc_presentations/2020/DVN-WPX-Strategic-Merger-of-Equals_Presentation_092820.pdf.
    I invite your comments and observations.

    1. DVN has a history of chasing trends and not having the balance sheet to take advantage.

      This has allowed activist investors to take over.

    2. I’ve been in and out of several energy producers over the years, including the shales. I’ve made money on some and lost on others. Seems the totally uncontrollable factor remains OPEC. Despite a lot of discussion of OPEC being dead or nearly so, the Saudis can open or close the spigot at any time and it will affect your investment. With oil over $60 a barrel, it’s just a matter of time before the Saudis begin pumping more. Plus, DVN has had a heck of a run in the last six months.

  83. Any idea why CNIG is dropping so much today. Not a huge amount, but for being bought out a little surprising.

  84. Softbank (SFTBY) is up 8% today. Was it the increase in profits or was it that Softbank and Microsoft was mentioned in the same sentence in a headline? It doesn’t take much in this market to get stocks to pop or drop.
    Softbank invests in and sells new technology companies regularly. Winners exceed losers so It’s worked out in this technology growth market. Surprising to me is that it has a small dividend of about .5%. The CEO, Masayoshi Son, is an interesting guy and aggressive so I took a chance with a small investment that resulted in a 145% gain. At times there is negative press when some of its holding like Weworks has problems but those losses are covered by major profits with other companies. There’s growth potential in the investments it makes and it remains aggressive so I’ll hold and hope for the best. It’s hard to judge the value since they are constantly investing and selling.

  85. The proxy voting instructions I received for one of my holdings allows only a “For” or “Abstain” vote for the slate of Directors. Always in the past, I have been allowed to vote “Against” nominated Directors. I’ve never seen only choices “For” and “Abstain”. This is one time when I really do want to vote against all the directors, so it pisses me off that there’s no “Against” option, and just seems typical of this crowd of criminals.

    Anyone else seen this before?

    1. Do you own enough shares for it to make a difference? If not, I’d worry about something more pressing in my life.

      Also, why continue to hold shares in a firm run by what you discern to be a ‘crowd of criminals?’

      JMO

    2. Many people abstain by not casting a vote at all, and one really can’t know if these individuals are just lazy/indifferent or if they oppose management. If you actually vote “Abstain”, you are clearly opposing the Directors.

    3. camroc, I’ve asked myself the same question and yes it’s past time to exit.

      af, thanks for the thoughts.

      Bob, thanks for the humour.

  86. RSS Feed –

    Just testing…. sorry but haven’t seen anything in past 3 hours…….that seems out of the ordinary.

  87. Thank you all for the wonderful education that you have given me , a lurker, for quite some time. I have been on this website a lot more of late due to the pandemic, so I thought I should come out of the shadows. I wanted to make sure that I was looking at CNIG correctly, since Grid has brought it up recently and since I have made a decent sized purchase. If I were to purchase more today at $23.75, I would receive $24.75 when the deal closes in the 2nd half of 2021, plus any dividends paid during that time, correct? Seems like a no brainer. Is there a likely chance of the deal with Argo Infrastructure not happening? Is there anything else that I am missing? Thanks again to all of you for the great education!

    1. Hey JTS, I bought a bunch of CNIGP which is the 1 preferred to 1.2 common stock convertible at $27.
      That makes the redemption cash in of it worth of $29.70. Im just sitting on mine….Your not missing anything. But these tend to sit where they are at waiting for approval. The market is going to give you a small bone here until merger is complete. However, you are taking the ~30% haircut risk if it doesnt go through…For whatever reason that may come upon.
      CNIG isnt going to retract as the “6 unit team” that owns well over half and is aged (along with Gabelli thrown in) already said yes over a few martini’s. But many unforeseen risks can occur thus why it sits below merger price.
      I can list several easy reasons why this will go through, but the unforeseen and regulatory angst if any, I have no idea which is the key in the end. Plus it could drag out longer than planned which ultimately shaves annual return down also. …. Its now just a modified version of picking up nickels in front of a steam roller… Keep your head up when bending over!

      1. Thanks Grid, that makes sense. I’ll sit tight with what I have and find other opportunities in the meantime.

      2. Grid, concerning CNIGP – when merger completes, does that mean our CNIGP shares get transformed into CNIG common stock at a rate of 1.2 shares for every CNIGP held?

        And if so, would we be able to sell on the open market, or will those shares be changed to those of the merging company?

        1. No, according to filings they get cancelled and pay $29.70. Just like the common gets cancelled at its buyout price (cant remember off top of my head what it is). But they all are getting cancelled as there is nothing to convert too since a private company would be taking it over.

          1. Thanks, so we will be getting cash of $29.70, plus any accrued dividends. Correct?

            Merger is supposed to complete in second half of 2021. I will sit tight on CNIGP until then.

            1. Yes, that is the plan…But… It involves two separate state regulatory agencies and one is NY. I dont know if their wheels are well oiled to move fast now. So these things drag out…Remember Exelon and PEPCO merger and how it dragged on and on and was cancelled and then on again? Oh and the painful part for us both…When we bailed on PEPCO the day before because it wasnt going through and PEPCO was going to drop like a rock?
              We lost our investing testosterone 24 hours before pay dirt and it cost us both a 30% windfall. You have probably got over it, but it still burns my rear.

              1. Wow, PEPCO – you did bring up a long forgotten event. Yes, it was painful at that time, but like you correctly said, I have moved on.

                Sure hope that this merger will go through and be complete as they say.

    2. JTS – Welcome to the wonderful world of low risk merger arbitrage because that’s what you’re looking at re- CNIG. Grid’s mentioned Gabelli on this one and they are big players in the field though from what Grid’s said, I think they were in CNIG before the buyout surfaced… What you’re doing is weighing the odds of the deal closing at 24.75 and/or closing on schedule and then deciding whether or not that’s worth the wait to get that price then or sell today at 23.75. That’s a pretty simple yield to hold date calculation if you throw in a guesstimate for actual closing date. Eyeballing it, I suspect a hold is a pretty good deal, especially with the risks of closing probably being quite low

      BTW, true merger arbitrage would include playing with vehicles that minimize the risks of the deal falling thru.. Simplest example would be when one public company buys another, the arbitrageur would buy the company being bot and sell the shares of the issuer based on complicated proprietary formulae they create…. People like MERFX and GABCX specialize in this and in general, they offer a pretty safe bet for steady but low yields, good places nowadays to use as money market rate alternatives..

    1. I’ve been hitting those points on message boards and the response is hilarious. ‘Take up the pitchforks’ …”you must be a hedge fund guy”. “You must be short”…..psst I’m a long only investor!! Without being able to understand its Institution vs Institution. The tape proves it. Just look at GME biggest shareholder starting with…..FIDELITY. Is fidelity a reddit trader with robinhood trading accounts?

      The stock hit 2.50. It had 4 dollars in losses. **NEWS FLASH** kids download their fortnight games. And they have Amazon walmart and TGT as options too.

  88. So the soundbite of the day, week, month, and year is GME. My thoughts are

    1. Short squeeze has elevated their shares so high as to give them a new shot at shoring up their insolvent balance sheet
    2. The only people hurt were short so who cares
    3. The way margin trading acts work it’s not naked shorts that pushed the short interest over 100%…and see #2
    4. The trading volume in dollars of the top 15 shorts for last 4days exceeds 200 billion, no way is the majority of that retail day trader
    5. Reports that’s it’s all robin hood and retail traders are lying or actually too stupid to know (which is more dangerous!) that’s its institutional vs institutional trading
    6. Doesn’t anybody care to report this fact; there may be 140% short common shares, but offset by 141% long option positions.

    Shorting was first done in year 1602. This is not a new concept, and none care to even report how a cash/margin account/short margin accounts work

  89. I had a few of stocks hit my “buy” level today (keep in mind I’m a buy and hold dividend investor).

    WPC, PFE, EIX, NNN, HIW, BFS

    Not a lot of dry powder at the moment though so simply noting them.

    1. Any reason for liking EIX more than some others? I’m losing PNM this year on a “merger” which is really a buyout since we only get cash. So really looking for some good utilities to put that back into. I voted no on the merger since my purchase yields range from 8-14% so I’m trying not to chase yield to make up the loss but rather hoping to find one raising divs consistently.

      1. My utility watchlist includes D, EVRG, and PNW. I am also looking at VZ. The “California” risk keeps me disinterested in EIX, however the additional risk does appear to be already discounted.
        I strongly believe that the increased usage of EVs is an underappreciated catalyst for the electric utility sector.

      2. RE EIX – Morningstar has a fair value of 69, pays 4.6% and has a 16 year dividend track record so checks a lot of boxes for me. I also own DUK, SO, PNW (also a buy I think).

        There is the wildfire risk of course and I expect that’ s why there is a slight discount.

        1. Bill and af,
          SO has the two year converable SOLN also if you are good holding that Util even after conversion to common as a worst case scenario. Paying about 6.8% for about two years. Decent and fair conversion clause.
          There are a couple other big utils, D/DCUE and I forget the other one, with similar short term converts, but understand the conversion features if the stocks are down at the time of conversion with a conversion to common and that div…if there is one.

          1. Joel – I looked into SOLN as that 6.75% yield and selling sub 50 was enticing. Looking at the charts it appears that the price of the this preferred follows the price of SO very closely. (I ran them side by side). I take this to mean that the value of the shares at conversion is affected by the value of the SO common shares at the same time.

            Am I correct that one is essentially making a bet on the value of SO if you hold this to mandatory conversion? In particular, below that lower limit of $57.20 for SO share price in seems one starts to lose ground in the principle returned to you.

            I am new at mandatory convertibles so this is of interest to me. Thanks for any clarification/guidance you or anyone else can provide.

            1. Bill, You basically got it figured out. These are equity units and ultimately are just a bet on the common stock with a slight yield tease thrown in for playing.
              These typically are “stall tactic” shares issued for company to grow its earnings into some type of recent or near future digestive purchase or capital expense before converting the equity dilution.
              Since you are new to these, remember they will not trade independently like a preferred stock, they are in bed with and tethered largely throughout the process with the common stock.

        2. BillW,
          Having grown up in Southern Cal and now living in the North I have lived through 2 wildfires and talked to many of my customers throughout Northern and Southern Cal.
          Outside the risk of Santa Ana winds I am comfortable holding SCE-PH
          Look at it this way, I have no desire to hold SO because I think of the destruction from hurricanes that happen almost every year now.
          So no different in my view from Calif and the wildfires.