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12/21/2024
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DOW’s dramatic drop continues with a landing 34-36 becoming more likely. 34 has been my deep target. CY is 7.2%
R2S
I’ve been nibbling on DOW at these prices (and yields of ~7%).
The price has dropped ~15% over 20 days and is currently about as low as it’s been in three years.
Why do you think it will drop another $5 ?
Greg-
My targets are Fibonacci projections, not predictions. Sometimes they even work! For DOW I have three projections over different timeframes that land in 34-36 price zone. If price gets there, I will buy. If it doesn’t, oh well. It would be a very small position.
Anyone following BME, Blackrock Health Sciences Trust? With the most recent monthly dividend at 26.2 cents, the CY is 8.5%. I think the stock might go lower.
“BlackRock Health Sciences Trust’s (BME) (the ‘Trust’) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in equity securities of companies engaged in the health sciences and related industries and equity derivatives with exposure to the health sciences industry. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.”
r2s interesting idea ,there is also BMEZ
Both CEF with some or all of the dividends RTC (Return of capital).
FYI, I used to play around with HQH & HQL sponsored by Tekla life sciences which changed the name of the fund last year. The HQH was a one time recommendation by the great Rida. for a 9% return.
This was one of my flip the ex-dividend date stocks. Easy to get burned as they are variable payouts depending on how they do. Look at BMEZ dividend history.
Charles-
BME’s monthly dividend started at 20 cents in 2018, increased to 21.3 cents in 2021, and again to 26.2 cents on Dec 16 for a CY of 8.52%.
BMEZ’s monthly dividend started at 10 cents in 2020 and was 17.8 cents on Dec 16 for a CY of 14.6%. Unlike BME, the dividend amount has been irregular.
The holdings for the two funds are different.
(Rant warning. ) Big Lots a bankrupt discounter looks like it will be liquidated. I do not think stock buybacks “enhance shareholder value” no matter what the experts say. I think dividends do a better job. Or debt reduction. Managements have an uncanny way of buying stock at the top or arranging low ball take unders to benefit option-rich senior executives.
Big Lots failed with $550 million debt. Big Lots was on the 4-40-400 program. Buy $400 million of overpriced stock at $40 instead of paying off debt, then watch your company stock drop to $4 because you can’t pay your debt. Actually, I think it was $500 million of buybacks but that didn’t fit 4-40-400. JMO. DYODD.
Big Lots Sale to Nexus Falls Apart, Plans Going Out of Business
https://finance.yahoo.com/news/big-lots-faces-liquidation-risk-160224348.html
Bear, I agree and wonder where the boards are in these decisions. I can only feel the when there is high debt and business pressures the CEO/mgmt buys back stock for their compensation metrics. But the comp committee knows that, and should prevent it. I did not look if this is the case at Big Lots, but I have seen it too many times, and it is all I can figure. This is basic business. Maybe if you are Bitcoin or some radical startup you can make a different argument, but what MBA needs to think for even a second if you are Big Lots?
Not a pleasant day for stocks. Most of mine down 2 to 5%. Except Cigna (CI) up 6.75%. Don’t yet know why CI was up. Since most stocks were down today will look for possible buy opportunities.
BMTX – If my theory is right, there seems to be a battle going on right now between holders of BMTX who are using it for tax loss harvesting, and those who believe in its upcoming buyout that should close in January…. The total market cap for BMTX at the buyout price is only about $67 mil so this is too small for the big arb to play so there may be a surprisingly large arb spread out there right now for we the lowly…. BMTX is being bot out by at $5 by First Carolina Bank. It’s been trading in a narrow zone around 4.75 for a while now, not creeping up closer to 5 as you would expect and it has made numerous attempts to close the 5.25% spread gap vs the $5 payout over the past few weeks… The shareholder vote on this buy out is slated for Jan 5… Usually shareholder votes are the last cog in the acquisition process so I think it’s safe to say that BMTX should close by the end of January, assuming shareholder approval.. It’s my theory that the selling that’s kept the price at or around this 4.75 level is coming from tax sellers, not from those who betting against the acquisition going thru.
For First Carolina Bank, this is a strategic purchase. It’s not something they are going to walk away from.. I’ve followed this ever since BMTX was spun out of CUBI and nepotistic CEO, the lovely Luvleen Sidhu, ran it into the ground… The deposits generated by BMTX’s business are substantial (something like $500 mil I think) and for technical reasons, they were transferred to 1st Carolina from CUBI I think if I remember correctly, some time this year… Those deposits mean that not only is BMTX more valuable to 1st Carolina than to others, but they also give 1st Carolina an inside look at how to maximize their returns from acquiring BMTX – and thankfully that has included NOT having Luvleen continue with the company….. So it’s my gut feel only, but I am betting this deal will go thru and easily be completed by end of Jan….. I bot some today at 4.72. At 4.75 if you assume “maturity” to be 1/31/25 and $5 = par at maturity., your annualized YTC comes in at about 49% if purchased tomorrow at $4.75….. On the downside if this deal does not go thru, BMTX was trading around 3.35 before the deal was announced and they did report a lousy quarter in between.
Scary…….
I have a Desktop icon for 52 week Highs/Lows on NYSE.
Yesterday’s 155 52 week Lows reads like a Who’s Who of American companies.
MANY well-known names.
Scary
Westie-
I’m calling it the blessed and the cursed. Blessed stocks look like NVDA, AVGO and TSLA. Cursed like DOW and PFE (but bless their yields). A very strange market. I think blessed companies have lots of cash (paying a nice yield) and cashflow, and are not stressed by rising long rates. The cursed, OTOH, may have debt burdens that worsen with rising long rates.
No matter what, some of the freshly printed money coming out of Treasury and into bank accounts will end up in financial assets.
WBA is up about 20% today on buyout news from Private Equity firm
as a long suffering holder , this looks like my chance to exit with a much smaller loss than I had ; anyone have any thoughts on this , i’de like to hear you ;
I bought WBA in June when there was a large drop from over $16 but sold when I felt it wasn’t going to recover. After the jump today it is still under $11. If I still owned it I would sell. They are closing over 1000 stores. The local store by me is always busy but that not true of many around the country and online pharmacies are a problem for them.
Ted, I don’t own but a couple years back I played the merger buyout of Riteaid and had losses. Look at retail history on buyouts. K-mart, Sears, J.C Penny, etc. almost all ended in grief for the P.E investors except of course the ones getting paid to arrange the deals.
Update: DOW making new lows for the selloff that started in 2022. My deep target is still 34. I also see 41 as a possibility. At the current price of 42.33 the CY is 6.6% with a dividend of 70 cents
Worth a closer look. I’ll add to my watch list. I’d like to see them paying down their debt.
Can’t tell you when to buy it, but I know anytime it’s mentioned as a takeover in FT Alphaville , it’s been a sell. That blog is often used to pump and dump
I realize sometimes earnings numbers are nuanced and the subtleties go over my head. That said, the 6.6% yield is based on a distribution of $2.80 but the earnings are listed as only $1.50 on yahoo. I’d be reluctant to act.
Regarding my comment from 11/21
“I watch ASML; don’t own. My guess is that it put in the low at 645.45 yesterday.”
If ASML were to trend down below the current low, the pattern projects to 502. I don’t see anything in markets to make that remotely likely unless ASML warns or disappoints.
I think this is better to be posted here. I really like NEE-T convertibles right now. I will enjoy the 7.6% yield and I have been building a position in the retirement accounts of the common for years now but started to buy the convertible lately. Seems like a good play to me. If it keeps going lower I will just buy a bit more and more. I like utilities that appear to be able to grow over the long term. This is a buy and hold and completely forget about until 20 years later.
FYI, Many Blackrock CEFs have rather significantly increased their monthly distro payouts (starting with the Dec distro). Some off the top of my head; BOE, BGR, BCX, BME, BDJ, CII. Range from ~10-40% increases.
and rolling tender offer at 98% nav. I’ve played several of them and generally like them
Oneok OKE is scooping up the rest of EnLink ENLC. OKE also acquired Magellan and Medallion. OKE is what I call a midstream or pipeline company. (I have been criticized for incorrectly describing these types of companies, but “Hydrocarbon Gathering, Processing and Transportation System” is too long to type. )
Whatever you call them, OKE which is up 67% year to date and other midstream companies have had a nice run year to date. KMI +62.1%, WMB +71.5%, TRGP +138.66%, So much so, that OKE, KMI, WMB and TRGP have appeared on a list of the 10 most overbought S&P-500 stockst. If a 70 RSI – Relative Strength Index – rating is overbought, then 80 is very overbought. These 4 are in the 80’s.
Sentiment: while the 6% divvies are gone, I prefer the midstreams as a hold over the E&P’s – “drill baby drill” plus Ukraine settlement plus weak China plus the Saudi spigot equals “drop, baby, drop” for crude oil prices. FWIW, the new spinoff, South Bow SOBO was a speculative add for an expected ~8% divvy. JMO. DYODD.
SOBO is speculative as it was spun off with a lot of debt from the mother ship. They need to reduce the debt. I read something about taking 2 year time line to do so. Without a 100%, take or pay customer contracts this leaves them open to reduced income when customers cancel or ask for reduced rates. In some cases if a customer goes bk they can ask for the court to void existing contracts.
I haven’t researched them enough to tell if the percentage of non fixed contracts could affect their ability to service debt let alone pay it down and also continue to pay the current dividend. This is not taking into account if demand goes down or UAE increases production and causes marginal basins SOBO services to cap or lower production due to higher costs compared to foreign producers.
These are starting points for those who want to DYODD
They have a lengthy investor presentation for the spin-off on the website which covers some of those questions. As I see it, the dividend will be flat for several years while they pay down their high debt with their cash flow. Initially, they will not be earning enough to cover the divvy. They got decent ratings on their stable cash flow.
Not for those who want dividend growth. For those who want to take a chance on an ~8% yield versus a “safe” 4% after the recent price run up. For a middle road: a higher yield at 6%, with debt issues but less perceived risk as an established company with an operating history, ENB may be worth a look.
No one is talking about it or even thinking about it, but the usual “fixes” for debt are refi or PE. With a small market cap of $7.5B, a high debt load, and stable cash flow, SOBO could eventually be a target for PE. For example, last month, Blackstone was out shopping for part of the Equitrans / MVP pipeline.
Exclusive: Blackstone in talks to buy US pipeline stakes from EQT for $3.5 billion, sources say
https://www.reuters.com/markets/deals/blackstone-talks-buy-us-pipeline-stakes-eqt-35-billion-sources-say-2024-10-25/
JMO. DYODD.
Bear, good suggestions, but as you note there have been better prices for entry. I opened a starter position on GBNXF around 16.20
They are growing and called some debt early by refinancing at a lower rate and extending maturity out 5yrs. Not sure if I will keep or add, 7.2% YOC
As an experiment on May 28 using Schwab slices I bought $5 each of 20 S&P 500 stocks with dividend reinvestment. 19 stocks had very long-term histories of outperformance. One was speculative: MRNA. 16 stocks are in the Nasdaq 100. I’m comparing performance to five reference etfs. I added a new line “19 slices” so I can see the status w/o Moderna.
Now, after 25 weeks:
SPY +13.0%
QQQ +10.5%
IBIT +44.9% (Bitcoin)
TLT +0.9%
PFFA +11.4%
20 slices +10.7%
19 slices +15.2% (ex-MRNA)
Here are all 20 stocks. The differences have gotten interesting.
NFLX +38.9%
BKNG + 37.7%
ISRG +36.1%
NVDA +27.8%
AXP +27.4%
AVGO +23.0%
AJG +21.8%
AAPL +20.1%
COST +19.3%
UNH +17.8%
META +17.3%
CPRT +16.7%
AMZN +9.2%
LIN +6.1%
ROST +4.0%
MSFT -2.4%
GOOGL -6.1%
LLY -7.0%
AMD -17.4%
MRNA -74.6%
Checking among the original candidates, the only one I regret skipping is TRGP (my favorite pipeline company), which 2x outperformed all the others.
The JBPP (Justin Bank Preferred Portfolio) is up +12.7% since 5/28. A little better than PFFA and a little worse than SPY. No complaints here. Plus current yield is about 6.3% at today’s price. Much higher than SPY.
Obviously higher on the original purchase price.
Tex-
Is 12.7% for JBPP the total return? My number for PFFA includes dividend reinvestment.
Yes, the 12.7% for JBPP is the total return. There are 49 prefs/babys in JBPP. 40 of them have automatic dividend reinvestment. The other 9 do not, so cash builds up slowly in the money market fund. With dripping, the share count has increased on the 40. The largest share gain is TFINP which is 1.135 shares. The median dripped issue has 1.0999 shares, close enough to 10% share growth since the May 2023 inception. The current cash balance is $10.55, so eventually we will have enough to buy one more share of something.
JBPP is off its highs just like most preferreds are. The increase in US Treasury 10 year rates is NOT welcome for pref total returns. If UST10 continues upward, preferreds will correspondingly continue to suffer.
PFFA uses 20% to 30% leverage, unlike JBPP which is not leveraged. So PFFA should outperform in rising markets and underperform in falling markets. Plus they are taking a 0.8% management fee which we are not. If we did, the 0.8% would go to Justin since is the father of the portfolio.
I watch ASML; don’t own. My guess is that it put in the low at 645.45 yesterday.
I’m watching this one too.
2 Surging Dividends to Buy for Trump 2.0 (Ranked!)
https://contrarianoutlook.com/2-surging-dividends-to-buy-for-trump-2-0-ranked/
Full disclosure: I am long both stocks being referenced and am friendly with the author. Kindly, do your own deep due diligence because people behind computers may or may not have your best “interest” in mind when they make recommendations or post like I am.
I truly think a champion is defined not by their wins, but by how they can recover when they fall.
Your online friend, Azure
Ab, since I was a kid I liked to play with dinosaurs. Most of the refiners are on blue light special. P/R is the price to return on investment.
( ok I made that one up)
Can you guess which refiner I am referring to?
AY – https://www.sec.gov/Archives/edgar/data/1601072/000114036124046926/ef20038387_6k.htm
AY acquisition @ $22 to be completed on 12/12…. Dividend of $.2225 approved for payment on 12/12 to holders of record 11/29 –
On November 14, 2024, the Board of Directors of Atlantica approved a dividend of $0.2225 per share. Based upon the scheduled completion of the Transaction on December 12, 2024, the dividend is expected to be paid on December 12, 2024, to shareholders of record as of November 29, 2024.
At 24.83 the CY for PFE is 6.8%. Bot tiny. Deep target 19.
Looks like the RFK Jr. fear trade is heating up.
Big pharma lobbyist makes a phone call…
“Senator, my client has concerns about the nominee for HHS secretary. Now, I don’t want to sound alarmist, but my client and, as I hear, others in the industry are preparing for some serious belt-tightening.”
DOW at 45 CY 6.2% with longstanding 70 cent div. Took small starter.
Deep target 34. Not a prediction. I don’t know where it’s going.
Thanks, I have not thought about Dow for a long time. I will take a look. Looks like an out of favor value play. Appears to have some cross-currents: weakness in China export markets (and soon perhaps tariffs to worry about), a high stable divvy with a high payout ratio.
Wall Street sees good times ahead for banks based on anticipated regulatory changes, interest rate conditions, and potential mergers and acquisitions that could improve financial performance. Here’s the Readers Digest Condensed Books version of recent bank recommendations from analysts at Citi, UBS and BofA, along with a brief explanation of their reasons:
1. **Capital One (COF)**: Expected to benefit from improved prospects for its pending acquisition of Discover Financial, which analysts believe will gain regulatory approval.
2. **PNC Financial Services (PNC)**: Seen as a strong beneficiary of favorable interest rate conditions stemming from potential fiscal stimulus under the new administration.
3. **Huntington Bancshares (HBAN)**: Likely to benefit from higher short-term rates, which can enhance net interest income.
4. **State Street (STT)**: Positioned to gain from a favorable interest rate environment in the aftermath of the election.
5. **JPMorgan Chase (JPM)**: Anticipated to benefit from relaxed regulations and more lenient Basel III endgame rules as part of a potential regulatory rollback.
6. **Bank of America (BAC)**: Considered a beneficiary of less stringent regulatory scrutiny and an improved economic outlook.
7. **Wells Fargo (WFC)**: Expected to see a clearer path toward regulatory resolution, which could improve its operational standing in the market.
8. **Goldman Sachs (GS)**: Anticipated to benefit from lighter regulations impacting its operations positively.
9. **Citigroup (C)**: Viewed as the most discounted bank stock, likely to benefit significantly from a softening of Basel III rules.
10. **Ally Financial (ALLY)**: Forecasted to gain from improved interest rate dynamics and regulatory conditions post-election.
11. **KeyCorp (KEY)**: Identified as a strong beneficiary of anticipated economic growth and a favorable rate environment.
12. **Citizens Financial Group (CFG)**: Expected to gain from higher short-term interest rates, enhancing its profitability.
13. **Synchrony Financial (SYF)**: Likely to benefit from the retention of higher credit card late fees, which is expected under new leadership at the Consumer Financial Protection Bureau.
14. **Bread Financial Holdings (BFH)**: Also expected to gain from the same regulatory changes benefiting credit card issuers.
Quite a list. Might as well buy an ETF like KRE or KBE to avoid single stock risk from surprise equity capital raises, hidden amend-pretend CRE risks and lingering mark-to-market bond losses. I didn’t check for preferred issues of these banks so DYODD. JMO.
Bot a little SouthBow SOBO nyse, in the RothIRA yest. at 23.25, will pay .50US div, Keystone Pipeline among other assets in this levered up but strong cash flowing Canadian TC Energy spinoff. No 15% CA w/holding tax withheld in the IRAs. I expect? it to sit around between 23-25/6 or so for a while and would want to see progress on plan to reduce debt from cash flow. DYODD. Bea
Good pick. About 8.5% yield, which is about 7.2% net yield for US investors in a taxable account after Canadian taxes. JMO. DYODD.
WOW! ADM cancels conference call. Intending to amend results after finding more accounting errors. Stock down over $4.00 and double the volume.
I bought a little more. I’m a bit under water but even if the earnings are 4, I don’t particularly care.
I turned it over once this year already and can wait and do it again.
will probably average down again eventually.
Among the 19 big cap stocks I bought $5 each of on May 28, the second worst performer is MSFT at -4.4%. Until MSFT gets some giddy-up, I think there’s a big fat question mark hanging over the stock market.
Ford at Tuesday Close = $10.41 . . . obvious hit per the recent Qtr #’s.
I have been an adder on the fade for a long term item, not a possible flip.
Some reasonable parts in the qtr release, and maintain of .15c qtr divi.
Not a tout, just thought would be worth views of the common stk pros here.
Thanks, Jim
Added to British Petroleum (BP) this morning, actually doubled an originally very small position. Still only hold a quarter of a full position on this one, lots left to buy over time.
yes added some positioning to my energy as well, PP.
I put SOBO on watch for possible add, we’ll see, the ‘conservative tolled pipe’ of oil/Keystone from TRP..debt a little high no maturities till 2027, ‘deleveraging’ a priority’..type thing. We’ll see. w/b about US.50/q approx 8% yield would hold in my RothIRA where div no w/h tax 15%.
DYODD glta/ Bea https://cdn.prod.website-files.com/660c776204e3cec73ea12e3b/66eda02ed36da6c580a74851_sb-Corporation-Virtual-Corporate-Update-2.pdf
SOBO is bouncing around and for now can be had cheaply on some days since some people are selling after the spin off. JMO. DYODD.
Continued to add to Harrow. Almost a 200% gain. This company has the industry watching. My hope is a buyout. Also have the debt. Considering selling the debt and applying to common. Nashville is a small town in many ways, the healthcare industry is prominent. Folks I trust believe in this company. Reviewing the SEC filings for 6 months, it just get better.
Also added to Kinetik. Raised their dividend. I especially like their pipeline which I think the market undervalues. It is at capacity. Again, hoping for a buyout.
Have another speculative buy out which I may post later. Want to spend more time analyzing.
Email dings all day with 52 week highs on stocks. Difficult to add at these prices unless I believe in the story. I haven’t added to NVIDIA recently. Not because I doubt the company, but I have enough to let it run.
There was a wonderful article today in WSJ Intelligent Investor. An individual is his/her own worst enemy when investing. I have made unbelievable returns in large part buying while most folks were screaming recession. Difficult and anxiety inducing for me to do so. As the article states, investors must tune out the masses and invest based upon one’s strategy.