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.

533 thoughts on “Common Stock Chat”

  1. My son sent me this – It’s charting the S&P PE ratio historically over 100 years and also something called the Shiller PE Ratio. I’ve been trying to guess this type of info on the S&P recently but hadn’t really spent much time trying to find the data…. This seems to give some hope that perhaps from an historical point of view at least, we could be entering a decent range to be thinking about when to get out of the bomb shelter and into the streets.

  2. Some M&A deals, and rumors thereof, are popping up in the energy industry.
    – BP made a bid for Archaea LFG, at $26, a ~50% premium
    – Exxon is rumored to be looking at Denbury DEN
    – Berry BRY reported to be “exploring strategic options”
    – Sitio STR and Brigham MNRL last month

    Archaea is off 11% YTD, takeover price not yet reflected.
    Denbury is up 12% YTD, period includes the rumor.
    Berry is up 2% YTD, period includes the rumor.
    Sitio STR up 28% YTD, period includes merger announcement

    Much of the war premium in energy stock prices is gone, although IMHO corporate earnings Y2Y should remain strong, coming off lower prior year hedges and generally higher commodity prices.

    Some energy companies are paying extras that are not reflected in the dividend yields that are published on the big financial sites. E.g., BRY paid 0.62 last quarter (0.06 R + 0.56 X) , but SA shows 0.30 TTM for the whole year and Yahoo shows a 0.24 annual FD.

    Even if you bought at or near the top, BRY would have yielded 15 to 20% in cash dividends. On the other hand, BRY trades with a steep “California discount” and has Coney-Island-Roller-Coaster style stock price volatility.

    If preferred stocks are your idea of Sleep Well At Night stocks, energy stocks will make your teeth chatter at night. So DYODD and caveat emptor.

    Just my opinion.

    Disclosure: long energy

    1. I wish I knew what to do with AGNC. I hate throwing good money after bad. I am almost tempted to take my loss and look for something more stable. Often averaging down hasn’t worked for me.

      1. Look at a long term chart of any mREIT. It will show flat to down. Having learned that the hard way, now I only hold their preferreds.

  3. Con Ed selling its US renewables business for $6.8 billion to a German company with backing from a Middle Eastern oil producing country. ConEd Clean Energy seems to specialize in solar. With the influx of cash, ED is withdrawing its plan to issue more common stock.

    ED yields 3.7%, ED stock is about even on the year.

    Some grumbling in Germany that RWE ought to be investing at home instead of doing M&A.

  4. Hoping everyone is having a great, healthy and memorable weekend. I rarely will post about individual securities in my trusts, LLC or retirement accounts at the risk of being self serving. I have owned a relatively large amount of shares of income security (KRP) Kimbell Royalty since December 2018 after they converted from a K1 to a C Corp. I was buying KRP aggressively again this week as I find their short and medium term extremely interesting and attractive.
    Some interesting facts:
    The company will pay no material amount of federal corporate income taxes from 2021 through 2027 (less than 5% of Kimbell’s estimated pre-tax distributable cash flow for such years)
    Substantially all distributions paid to common unitholders from 2021 to 2025 will not be taxable dividend income 🔥
    Distributions in excess of the amount taxable as dividend income
    Founded on ethics and investment discipline, KRP has grown from a single investment in the Permian Basin to one of the largest owners of minerals and royalties nationwide. KRP’s portfolio includes over 16 million gross acres in 28 states and in every major onshore basin in the continental United States, including ownership in more than 122,000 gross wells with over 46,000 wells in the Permian Basin. We became a publicly-traded company in February 2017, trading on the NYSE under the ticker symbol KRP.
    Kimbell converted to a C-Corp for federal income tax purposes in September 2018. Thus, investors in our common units will receive a 1099-DIV rather than a K-1.

    I urge EVERYONE to do their own deep due diligence and do not buy this security because someone behind an iPad is highlighting it. I may not have your best “interest” in mind and only you know your time frame, risk tolerance, volatility concerns, income needs and are you able to sleep at night comfortably if you start losing money. This security can and will lose money 🫤 In Latin we say Noli me audire, investigationem tuam amicis meis facere
    I’d be glad to answer any questions anyone here might have,
    I am Azure

    1. One question: Do you actually walk around speaking Latin?

      Yes I’m kidding of course – but you’ve made me look up a few of these! hahaha!

      Thank you Azure.

      1. alpha, you truly made me smile 😊 I had to study a language in college and because I was going to law school figured I’d take Latin. It’s an ancient language that few speak or communicate with anymore, but still is important in legal circles. All the very best to you and your family or in Latin Omnia optima tibi et familiae ⭐️

        1. AB,
          Another one I have been in and out of, wish I had stayed in is DMLP
          Was at one time larger than KRP
          DMLP recently started to focus more on NG
          I have a short list with Blackstone minerals, Venom and several others on it.
          Currently I think if your not already in them Or if you are and re-investing dividends your fine.
          You don’t mind if I add that these are going to pay variable rate profit sharing. Based on past quarters profits which are affected by the prices of gas and oil.
          With you on this one, but at a lower buy in. I’d put these on a watch list.

    2. Yeah, I own a lot of this, too. But way more of EPD. BTW, Randa owns over 700 million of the common units of EPD in various entities. That’s good enough for my paltry (in comparison) lot.

      I am camroc. 😉


      1. Camroc, I was extremely close with Dan Duncan the founder of EPD and had Dan on my investment radio show a couple times and have incredible stories about and with him. He was one of the finest people I have ever met and I miss him terribly (passed in 2010). I do not own EPD because of it having a K1 and I’ve promised my accountant I wouldn’t buy anymore securities that throw off a K1. Be Well, A

        1. Would you perhaps be the person that strongly recommended I-bonds back in 2000-2001 when they still had a 2-3% fixed rate component? If so, I’d like to say thanks.

    3. AB
      I too have been interested in the royalty trust area but have thought that
      DMLP had greater flexibility in terms of making additional buys. As such have tended to favor it. In terms of total returns, the San Juan Trust has done very well. I do not understand it that well and there is very little coverage of the sector. Can you suggest any reading on Royalty Trusts which one might do? George Fisher on SA has done a couple of pieces which I found insightful. He thinks highly of DMLP. Thanks again for raising the topic. SC

      1. sc4, thank you for your reply and questions. Like you, I rarely see many analysts do write ups on the royalty trust sector of the market. Sadly, DMLP throws off a K1, so I do it follow it. San Juan Basin Royalty Trust (SJT) is about 1/3 of the size of (KRP) and when I tried to do the research on SJT, found very little information that I could be confined my buying it.
        Here is a list of all the K1 reporters and hopefully that will help you and others.
        Wishing you all the very best for profitable investing, A

        1. AB
          Thank you for your timely reply and the suggestions which are appreciated.
          I use an accountant to do my taxes and generally look at the quality of the firm and their management and if it looks good then I do not worry about the K-l. That is just my approach.
          I agree that it is nearly impossible to get much data on the San Juan Trust.As a result, I have a small holding and cross my fingers. It has a high yield and that makes up for it in a way. I looked at the total returns for both KRP and DMLP and overall it looks like DMLP has had slightly better total returns as well as offering a higher yield.As such, I think I will stick with DMLP. Their payout is dependent on oil and gas prices but I tend to think that the increasing world demand for LNG is likely to support DMLP. Mind you the flow of information from DMLP is not anything to write home about.It would be nice if they communicated a bit more .

          1. sc4, thank you for your reply and we are hopefully all here to help each other. I will just point you to 2 statements from Kimbell:
            1) The company will pay no material amount of federal corporate income taxes from 2021 through 2027 (less than 5% of Kimbell’s estimated pre-tax distributable cash flow for such years)
            2) Substantially all distributions paid to common unitholders from 2021 to 2025 will not be taxable dividend income 🔥
            In Latin we say, tu es magister vitae tuae
            I am Azure

    4. I literally haven’t looked at this space in well over 5 years but back then, I was interested in Canadian ATUSF. It seems to be similar to KRP and DMLP both in market cap and what they do… have you ever looked at it? A quick chart comparison using yahoo indicates ATUSF has well underperformed both KRP and DMLP YTD, but has outperformed KRP on a 5 year chart but not DMLP. Just curious if you know this one.

    5. Azure, you have been reading my mind! I had been planning on doing a post on oil/gas, primarily royalty trusts. The thesis being that the day is coming to add an allocation to them because of upcoming shortages in oil/gas. A bit of background first. We have maintained a small allocation to oil/gas for a long time in many portfolios. For over a decade it was dead money and returned nothing. We looked stupid for owning them. This year, the sector woke from its slumber and has been a good place to be. That said, my primary case is that we will have a worldwide recession which will lower demand AND prices on the sector. If that occurs it would be the best time to re-allocate to the sector as demand will increase when the world comes out of the recession. IMO, stated differently prices in the sector will go lower before they go higher.

      I think this year has convinced unbiased observers the world needs more carbon fuel sources BEFORE the big conversion to renewables. Even before the Russia/Ukraine war, oil/gas prices were headed higher. Amazing that when you price oil at NEGATIVE $37/barrel, it discourages producers in the sector. And yes, oil literally traded at that price on April 20, 2020. For a variety of reasons, many now realize there has been underinvestment in the sector for a while and is trying to catch up.

      If you buy into this thesis, there are several different ways to play this sector. You can buy “integrated” companies, producers in various sizes, pipelines, royalty trusts etc. The best current independent analyst with recommendation that I know is Dan Steffens, he publishes several different portfolios depending on your goals. The best I analyst I knew on royalty trusts was Kurt Wulff @, but he retired a few years ago. You can still see all of his publications and glean some useful information. Here is his last report on royalty trust that is worthwhile reading IMO if for no other reason to understand his evaluation methodology.

      For income seekers like most III’ers seem to be, royalty trusts have the highest payout rates but you must understand how they work. In general you are buying a fixed amount of oil/gas in the ground and they are NOT adding additional areas/leases. So the long term value of them is ZERO after they have extracted all of the profitable oil/gas from those leases. They are a depleting asset. The question is how much they will payout BEFORE the assets are gone. Stated differently, you SHOULD not blindly buy any of them without doing more due diligence.

      1. Tex
        Thank you for the summery above which is quite helpful. Your point about
        the ability to add land once a trust closes is as you suggest very important and separates the wheat from the chaff. DMLP among others is allowed to
        add property and has continued to do this. That is one of the reasons that it remains very interesting. George Fisher posting on SA has written several pieces on DMLP and a couple of other trusts. They are all fairly old now but if someone wants to upgrade their understanding, some of his pieces were helpful to me. I don’t mean to promote him but he is a very clear sighted analyst. All the best. SC

      2. Tex, I use to follow and try and communicate with Kurt Wulff @, he would be very hot and cold with me. He was a guest on my old investment radio show (his analysis was amazing) and then sadly he stop answering my emails. I wanted to get him on as a paid guest every month. I believe Kurt was and is brilliant, but sadly he just faded out. Most every oil/gas investment manager and institutional energy investor I knew subscribed to his newsletter.
        All the very best, A

      3. Tex, This is how to teach a kid to invest too.
        Holding a segment which is beat down and beat down for awhile IS a good bet. Here’s my simpleton approach with maybe a bit of common sense. I developed this idea from wondering why john Templeton was so successful.
        – Take your example of Oilys above. It got beat down and hard.
        – Everyone still operates on Oil.
        – Historically, Oil has been very volatile and responded back, although under varying circumstances like war, underinvestment in supply, embargoes, etc..
        – Thought when it was beat down,” If I buy a sliver here and just hold, and as income builds up and it phases down again then I buy another sliver, etc four or five times. Let inevitability catch up with you. John T was no genius, he just use probability. Just look at long term charts and choose where you would have LIKED to get in (a spike bottom), usually there is a waiting period until the chart begins to jump (a heartbeat) AND there is a resting phase to make a decision AFTER a big debacle (a retracement) , wait for the smoke to clear.
        -Rationale: I am no genius or an oracle. When will the price go up? I do NOT know, but that produce is still vital to the world (IE: gas and NG)
        – IF at some point the price goes up to my average price. I am at breakeven. Maybe I have collected some income/divs.
        – I see on the very long term charts that there has been a spike every five years or so, SO my spike is approaching although I do not know when. Patience, ignore media.
        – When it goes up I need to make real trading decisions and use rote tools to place phased trailing stops, begin to phase out with sliver sales or manage selling call options to allow the position to work for ME and eventually get called at a profit (MANAGE OPTIONS key phrase).
        – Dullards way of choosing stocks and sectors EXACTLY like Templeton did with emerging and global markets. Value has meaning.
        -Now that I am retired, it’s harder. I can only do this with a much smaller portion of total, since my INVESTMENTS (not speculations) are my $employee$ making my money. It IS easy when you are in your 20s, 30s and 40s!
        -This is so easy and simplistic, every young person should be doing this with small amounts in a ROTH, while they are allowed to. It can be managed on a quarterly basis.
        -Right Now?: Is this a consideration with PMs?…sideways to down for three years, Euro div aristocrats? Income securities? Emerging Market bonds? Not anything is REALLY cheap right now (except EMB), so just wait, go fly a kite today.
        I remember taking my entire bank account $7,000 and putting it in after the 87 flash crash, I was 29. It felt like a hail-mary.
        Signed, Simpleton Templeton Thirdwitt.

      4. I have been an investor in DMLP since 2006. Personally, I prefer the MLP approach to the royalties sector due to the tax advantages and will not hold it in a IRA account. DMLP has expanded its production footprint about 4 times since I started buying, each time through issuing units. Company has no debt, will not take on debt, and does not generate UBTI.

        I just found this site and this is my first post. Look forward to reading more

        1. Hello George, I think I learned about DMLP through your articles over on SA.
          Welcome to this site

      5. SJT wold not be my first choice of a royalty trust. Background on it is that it produces about 90% gas. It is rare in that it is legacy deep wells vertical drilled, not the shallow horizontal fracked wells so has a longer production life. ConocoPhillips sold it in 2017 to Hilcorp who took over and continued reworking the wells by fracking them. It is a monthly dividend payout, but the way the trust is written all expenses have to be paid before trustees are paid.
        No additional acreage can be added to the trust. It is doing well now with the cost of NG and NG liquids are high.

  5. Any thoughts on IHIT? Term CEF that matures in 14 months. Price on 9/29 = $8.02, NAV about $8.70, and inception NAV $9.82. From CEF Connect, invested primarily in BBB bonds. Maturity breakdown is about 12% in 10-15 yrs and 115% in 20-30 yrs, which I assume are T-Notes yielding about 3+%.

    First saw it here about 3 months ago and picked up a small amount. Considering buying more given the 8% discount and the 14 months to maturity. I doubt they will return the inception NAV. They recently dropped their monthly div. to $0.035 (5.2% annual; $0.49 in 14 months), and the NAV has remained fairly flat since June, so they could return the NAV if they continue paying divs for a gain of ($8.70 – $8.02 + $0.49)/$8.02 = 14.5% in 14 months.
    Anyone have better estimates? Thanks in advance.

    1. I’m still in IHIT in a small way… What was interesting is how their actual projected maturities on their holdings matched up with the anticipated maturity even though it doesn’t appear to if you only look on cefconnect. Problem is I suspect that their anticipated maturities were based on anticipated prepayment amounts which probably slowed down dramatically with the huge zoom up in interest rates… That probably kills their ability to approach the original target NAV. Still I agree the discount to current NAV still makes IHIT an interesting play…. Dividend reduction is what happens normally with these term target kind of funds as they approach their targett dates, so I doubt that’s any unexpected negative… Also, although I don’t remember exactly, I suppose they have an ability to extend their final liquidation date by 6 months like so many of these do so you have to keep that in mind…. I think we’ll be OK but no home run

    2. G2c,
      How can management handle a maturity in 14 mos and then liquidate (and at what price) with 115% in 20-30 year positions, let alone the 10-15 year segment? Seems like a plane crash.
      MUST have a BIG hedge or flying on a crystal ball doctrine of there WILL be a huge long term rate reversion to the down side?
      Look much deeper, dyodd, at first glance and using your info it disconnects.
      I think these funds can extend their maturities (and advisor fees) by vote of the Board? Look around.

  6. Provident + Lakeland. This morning. 7.15 AM
    Lakeland, 0.8319 shares of Provident
    18% premium

  7. Insurance and re-insurance are likely to be topics of conversation after Hurricane Ian strikes. It’s already been a busy year in Florida P&C. There was talk of ratings downgrades in the early Summer which caused a crisis. By June, several small private carriers were in liquidation, with others cutting back their Florida book. Citizens picked up some of their policies.

    (Citizens, publicly chartered, wears a number of hats. It has a large surplus right now and a lot of reinsurance, about $13.4 billion of claims paying ability. It is sometimes called the insurer of last resort. )

    There are a lot of moving parts in this industry, even discounting the upcoming storms, If you have a position in the insurers or the re’s, IMHO now’s the time to review you holdings.

    Disclosure: long.

    Just my opinion.

    1. Updating: Florida regulators want to put another Florida insurer, FedNat, into receivership — the second time for FedNat (the insurance company) and the 6th Florida insurer to fail this year. An earlier rehab effort failed. FedNat( its publicly traded holding company) is off 16 pct today, trading in the pennies. It was a 26 dollar stock three years ago.

      I believe they had tried diversifying away from Florida only to catch bad weather events in Texas and Louisiana. A ratings loss in April added to their problems.

      From ABC News / Tampa

      “The order, dated Sept. 21, states, “FedNat was deemed insolvent on September 14, 2022, because it is unable to pay its debts at they become due in the normal course of business.”

      “Once a judge signs off on the order, policyholders will have 30 days to find a new insurance company. However, because this is taking place during a named storm, homeowners may have to wait to get a new policy. ”

      While the state Insurance Guaranty Association will likely step in to assist the policyholders, it is not a good situation for anyone until the regulators sort it out. FIGA surcharges all policyholders to pay its claims costs.

      IMHO, there are more dominoes to fall and Ian may well blow them over.

      Just my opinion.

    1. Also might want to keep an eye on LYB, yielding c 6.5% at 72 or so. Fwiw, still way too early to enter, just my opinion.

  8. Tenneco gains after report banks slated to start debt sale for Apollo deal next month

    I wonder whether or not this might actually delay the announced conditional call notice on the two TEN notes due 2024 and 2026 “If either the Merger Condition or the Financing Condition is not satisfied or waived, Tenneco MAY ELECT to rescind the notice of redemption and terminate the redemption and return any tendered Notes of such series to the holders thereof. If the Redemption Date is extended or the redemption is terminated, the Company will provide notice to holders of the Notes no later than 5:00 p.m. New York time on the business day immediately preceding the Redemption Date (or the new Redemption Date based on any extension).” Hopefully not, however there seems to be incentive for them to do so as the premium call price goes away on 12/15

    1. Those two floats are trading as if they are going to get called. Without that merger, I would imagine discount to par would be much greater.

      1. You don’t mean “floats” do you? I don’t believe either one is a floating rate bond… Yes this one’s now kind of scary to be holding imho, but I am still…. After the acquisition was announced neither one of the bonds reacted in the marketplace for weeks so unlike the stock, you could buy them with no premium to the deal. I chose to buy the ’24 even though the ’26 offered better leverage to a successful buyout… My assumption was that if Apollo had enough input to want to bid twice the going rate for the stock, then they certainly had enough confidence in the company that it could last at least two years even if the merger didn’t happen, especially since they’d collect a windfall of something like $108 Mil if Apollo walked…

        Fidelity actually announced the call to holders so that’s a good sign… What’s confusing right now is that Tenneco/Apollo just announced a financing effort for this deal that doesn’t even commence until 4 days after the announced call date for the bonds []. That’s confusing when you read the conditions that could possibly, but not necessarily have them reset the announced conditional call date….. It’s going to be a scary two weeks on this one for sure, especially given the size of the financing they hope to pull off….. This ain’t the best credit issue to be holding in a recession but hopefully it’ll work out one way or another – called or to maturity…… I’ve got a modest but meaningful position.

        1. 2whiteroses – Right, floats just in the sense of issue or specific series of bonds not in the sense or connotating a floating rate. I have had Tenneco bonds for a long time now and for some odd reason, out of all the junk I have, never worried too much about them. And ironically you’d have every reason to since they run on super thin margins off gigantic revenues but insane debt to cash ratio etc.

          Some years ago now Apollo seemed to be frequently buying all of my junky company/bonds out. Every other month, they were doing a levered buyout. Wow I remember Hexion, Berry Plastics, Rio Tinto and some others. I miss those days profusely. A decade or so ago, Apollo was a beast. I think at one point they had secured loans in the >$10B range and was just scooping up companies left and right. Good times! Some great memories.

          1. In my bachelor days I traded in art. At the time all I could afford was limited addition signed prints. I thought I was buying one of 500 or of a thousand. Around that time it came out as a big scandal that well known artists were releasing limited series in Europe, Japan, and America so instead of 500 it was actually 1500 or 2000 or more. The market collapsed.
            I know for major companies like say BP or EXXON there are ADR’s which are backed by shares of stock. But why is a bank like VLYP going overseas to Israel to sell debt?

            1. Charles M. Definitely key to have outside interests and pursuits vs. just markets; that sign prints collection sounds like allot of fun.

              This might not add any insight on your question for VLYP but rather the genesis of it in the first place but I do believe at one point VLYP was just gobbling up smaller companies consistently. ((Other than fixed income, I do heavily track and dabble in merger arbs, so VLYP was always showing up on my radar.)) I’m pretty sure quite awhile ago they at some point acquired Bank Leumi USA from Bank Leumi, Israel physically based in Israel for partial cash/stock deal.

  9. Figured I would post this as there is never much common stock chat here.
    While I am still being cautious, I have continued to make selective buys and sells. Opportunistic buys in preferreds and started to nibble this past week on a few commons.

    Again, nibble is the key word here. Just establishing a small initial position in some beaten down common stocks that pay decent dividends. These include

    SLF – yielding 5%
    MFC – 6.05%

    Intel – INTC – 5%
    3M – MMM – 5.15%
    Stanley Black & Decker – SWK – 3.8%

    Eastman Chemical – EMN – 3.8%

    Do your own research. These could fall further with a recession here. And I am just nibbling because I could be too early.

    Some of these have their own set of specific issues. But I have always done well buying quality companies when they drop and their dividend yields rise leading to eventual nice capital gains plus the dividends. But patience is required .

    1. In the realm of potentially being too early but also knowing I’ll always be too late to the party and too full of excuses once a rally off the bottom turns into the real thing, what I’ve done on my equity side has been to finally turn on DRIP on most issues after purposely having it turned off when the market was obviously overly frothy…. That will at least accomplish the “nibbling” idea for me anyway…. Holding steady on most of my equity positions has noticeably and painfully hurt my overall performance this year for sure, despite equities being a minor part of my overall..

      1. The 6% is US on MFC. It’s in a rollover IRA so should be no Canadian withholding tax

        You would have to account for the withholding in a regular account (but you would get a tax credit for it at tax time)

      1. Greg,
        One that entered my mind also, but still too early unless I want a few shares to remind me to keep a watch on it.
        Watch the overall cyclicals like WY, WHR, GE, SXYA when they bottom and start to head back up
        I like WY but closer to 20, or WHR closer to 120

        1. Charles,

          I have a significant position in GLW (I’m originally from upstate NY) and have added on the dip. My cost is about where the price is today.

          They are doing lots of good things in multiple market niches and I recommend them.

    2. My list is somewhat different With Microsoft at about 243 today, JPM at about 112 and Taiwan Semiconductor ( which Joe Biden will personally defend in case of attack) at 77…..I still can’t get myself to top off my existing positions in these stocks.

      With non-callable CDs now breaching 4% and after today’s rate hike and forward guidance primed to go higher I’m still of two minds about whether equities even have a place in my portfolio anymore over the next 5 year time period.

      1. 2Wr, Greg and Richard – thanks.

        Yeah to be clear Richard, while these are new positions for me, they are quite small and I sold off some other longer term common stock holdings to buy them. Didn’t want to touch my cash I have built up and increase my common exposure – but instead rotate out of a few other common issues (STOR is one with it’s takeover offer) into these beaten down ones

    3. I’ve been making a few bucks with FREY, rap is it’s an up and comer in large scale electricity storage battery complexes of the future. In and out on a small scale, it’s been moving up lately. Also, got out of LYB when it was still in the 90s, made good money with it past couple of years and it has now fallen to upper 70s, 6% + yield, but way too early to re-enter in my opinion. Good to see a few posts in here lately, sign of the crazy times.

  10. Robinhood now publishes an index of its customers’ favorite stocks. The Robinhood Investor Index is weighted by sentiment or “conviction”, the percent of a stock held in an investor portfolio. The biggest surprise for me is that RH customers prefer large caps, 75% of index.

    Robinhood gets in the news a lot. It caters to a younger demographic, RH investors average 31 years. 50% are first timers. It has 15 million active-monthly traders and 22 million accounts as of March.

    I couldn’t readily locate the actual top 100 list, but was able to find the top ten stocks. Here’s how the RH index picks did YTD, according to IBD data.

    AMC Enter (AMC) -62.4%
    NIO (NIO) -31.3%
    Ford Motor (F) -25.2%
    Walt Disney (DIS) -24.9%
    GameStop (GME) -21.2%
    Microsoft (MSFT) -20.7% (AMZN) -18.2%

    SPY -17.71% (for reference)

    Tesla (TSLA) -13.6%
    Apple (AAPL) -8.0%
    AMC Enter Pref (APE) -4.5%

    Just my opinion.

  11. Sitio Royalties STR and Brigham Minerals MNRL are reported to be merging, with Sitio controlling slightly more than half of the combined entity. We’ll see how the market views this deal in a few hours. Neither stock has a particularly large following.

    Sitio was Falcon Minerals before its complicated merger with Desert Peak Minerals earlier this year. Falcon was IMHO unusual in that it had a shareholder friendly variable dividend policy of paying out an actual spendable cash dividend. (Disclosure: I use FLMN/STR dividends to hedge the cost of my 4WD fill-ups. This may not work for your investing program.)

    Both Sitio and Brigham have been doing acquisitions this year. With oil prices bouncy recently, it remains to be seen how well the combined entity does. STR has returned 22% YTD: MNRL, 34%.


    Just my opinion.

    1. >We’ll see how the market views this deal in a few hours.

      This was announced yesterday before the market open.

    1. ORI is a Sock Drawer investment for me. The regular dividend at $0.92 per year equates to approximately 3.8%. The special dividend in Sept 2021 was $1.50. ORI issued a $1.00 special dividend in Jan, 2021, Sept 2019 and Jan 2018. This brings the recent total dividend to the range of 8%. Additionally, I look for a selling opportunity for ORI at $26.+ and look for a buying opportunity below $24. For what it is worth, Jim Cramer believes ORI is a candidate to be bought out.

      1. thumbs up to Original D& Larry L, just bought a small position 250 shares @24.17 in my Ira with intent to move to my regular taxable account with a in kind distribution of some of my RMD after first of the year perfect for that strategy. Thanks guys, its now in my sock drawer also. picked up $315 steak in process

      2. I picked up ORI in late 2020 when I heard about the special dividend paid in January 2021, thanks I’m pretty sure to someone mentioning it on this board. Have held since, no regrets.

        Larry, what’s your definition of ‘Sock Drawer’? For me it means ‘set and forget’, sort of synonymous to SWAN. But your $26 sell point isn’t that far off…

        1. Bur, Sock Drawer and SWAN are one and the same to me. I do not worry about ORI, but I monitor all of my investments. ORI does not move above $26.00 very often. But, when it does, I typically sell and look for a entry point below $24.00. I have enjoyed a lot of filets and single malt scotch off this stock in the last 2-1/2 years.

    2. When I saw this this morning, OD, it made me wonder whether or not I should post news on WTM, another insurer, that came out today….. They announced a Dutch Auction worth $500 mil for their own shares today…. That could be for up to 12-14% of their outstanding shares.. Set range is $1250-1400 with auction ending Sept 20 and price closed last Friday at $1305. Given I have no clue how best to play this, I didn’t mention it, but WTM closed today at $1347.66. To me, it seems like a very shareholder friendly move… WTM is one of those under the radar companies frequently compared to Berkshire and is usually bunched with MKL and Y when being compared to others….. very quiet company, conservatively run… I’ve owned since 2014 and will probably do nothing…

      1. Hi 2WR, can’t comment really, it’s too complicated for me. I tend to play in a pretty small area within the markets where I kind of sort of know what I’m doing and occasionally get lucky. Btw, I am just about done selling out of the last of my K-1 holdings, positions I opened years ago before I understood what UBTI meant. Live and learn. Thanks for all your detailed and informative posts.

  12. I have a question about a Dutch Auction tender offer. SuRo capital (SSSS) is offering to buy up to 2MM common shares at a price between $6 and $7. Current shares are at about $6.50. They say their last NAV was $9 and change.
    They say this offer is beneficial to shareholders BECAUSE they are trading at a discount to NAV. (I have other questions related to that statement, but won’t complicate this post with those at this time)
    My main question is: Why do the tender offer when they could just buy them on the open market – share repurchase? I get that buying 2 million shares in short order will have an effect on the share price, but it has been trading at this level for a while – with an average volume of 250K, so they could accomplish this within a matter of weeks without affecting the share price significantly.
    Also, they talk about adding value and increasing liquidity for their shareholders by doing the tender offer. They obviously state that they think their shares are undervalued compared to NAV, so how do I see that “added value” by tendering?
    What am I missing? I feel like this is more like pulling the rug out from under me than “adding value”. I have a pretty small position (125 shares) and do not plan to tender. I am just trying to get a better understanding of the methodology.

    1. Mark – I’m kind of curious as to why you consider this having the rug pulled our from under you? As you stated, you don’t have to do anything nor does anyone else, so in a way, it seems as though what SSSS is doing is offering a fair way for weak hands to be eliminated by offering to purchase thru a mechanism that will treat all potential sellers equally while also being accretive to those who choose not to sell…. My initial reaction is that it’s a good thing all around should they actually find enough shareholders willing to sell… Their price assumptions based on the current going price certainly don’t seem to provide much incentive to participate…..

      1. Well, I guess the pricing is what seemed like the rug pulled out. With the range of 6-7 and currently trading at $6.50 ish, and not knowing what the final buyout will be, if I was inclined to sell, I feel like I’d get a better offer on the open market. Maybe they’ll be generous and tender closer to the $7 mark, but my cynical nature makes me think it will be closer to $6.

        I need to do a deeper dive into this company, but so far have been a bit underwhelmed. I will keep my common and small number of BB’s as place holders to remind me to do more research. With a share price at a 50% discount to NAV, it doesn’t instill a lot of confidence.

        In the meantime, thanks for your thoughts.

    2. I wasn’t aware of SuRo modified dutch action. I also don’t understand the offer of $6 to $7 when that is the recent price range. The only advantage I see is buying without pushing the price above $7. Any experts out there understand the strategy?

    3. I wasn’t aware of the SuRo modified dutch action in the $6 to $7 range. I see can it would work as a buy without forcing the price above $7. I not familiar enough with this to confidently understand its purpose.

  13. Walmart WMT reportedly just struck a deal with Paramount PARA to add its streaming services to WMT’s subscription service. PARA bested Disney and NBC Universal.

    IMHO, a decent match. WMT needed to do a little something to help its subscription service other than keep its price below the Big A. PARA could use a little boost in its fight with the other streaming services. PARA pays a 3.7% divvy. WMT 2.2%

    If nothing else, the match-up will result in an endless stream of woulda-coulda-shoulda articles from the stock message board pundits.

    Disclosure: Watched Midway twice last week. Regular Perry Mason watcher. Free is a good price and, being a boomer from the DuMont B+W TV era, ads are okay with me.

  14. Marathon Oil MRO Earnings Call transcript, 8/4/22
    “…returning cash to shareholders…remains our top priority…”

    “And the variable dividend idea is something we — it’s a tool in the toolkit. But given what I have said about how compelling share repurchases are to us right now, it’s going to just be on the back bench.”

    “Here they talked of cash returns.
    Here it was they lit the flame.
    Here they sang about tomorrow.
    And tomorrow never came.”

    1. Continue for Sinema?

      Oh my constituents forgive me
      That your buybacks now are gone
      “Carried Interest” can’t be spoken
      But the tax goes on and on

      Nothing like discouraging capital efficiency. Now instead of good stock returns driven by buybacks when prices are low, they want the companies’ stock price to languish while they waste their money on higher taxes, higher wages, hoarding cash for questionable M&A, etc. stakeholder capitalism sounds bankrupt to me.


        Blackstone would like to extend a sincere token of thanks to the Senator.

        Seriously though folks.
        Apollo, Blackstone, KRR — buy these suckers on any big pullbacks and thank me later.

        Private equity is going to have a field day with this one.

        1. She must have “friends” on the street, that do her “favors”, making her a “street” walker

  15. Equitrans ETRN is trading up sharply after hours as the business press discovers what was obvious to any observer – ETRN’s stalled Mountain Valley pipeline is a likely beneficiary of new legislation coming out of Washington.

    ETRN yields about 7.5% and has gone up 8% in the last 5 days. I understand its a C-Corp, which some may prefer.

    Although the MV pipeline is nicely positioned, the project seems to have had delays and cost overruns. One of its partners took a large write off, $800 million. Also there was a report in Feb 2022 of adverse state decisions, North Carolina and Virginia, which federally greased skids may not overcome. There is a cash payment in lieu of fee relief that may reflected in upcoming deferred revenue guidance.

    FWIW, I’m not advocating ETRN. (I follow other companies.) Juicy dividend, but DYODD and caveat emptor.

  16. Looks like this bear market rally is running into some resistance right at the S&P 500 4,000 level. I was hoping that if it could get above the 4,000 level it might make a run at 4,200. That might be wishful thinking. With many traders keeping a weary eye on the deteriorating Chinese economy, chances are not many people are willing to take long positions ahead of the weekend not wanting to guess what the unpredictable Chinese government might do. I cashed out of all but one of my common stock positions and have been adding, in small batches, to my short term prefs and BBs. What else could I do?

    1. From Barrons:

      Signature Bank Beats Earnings, but Stock Plunges Anyway. Here’s Why.

      By Luisa Beltran
      July 19, 2022 11:33 am ET


      Signature Bank SBNY – reported second-quarter results of $5.26 a diluted share, beating Wall Street expectations by 20 cents. But a drop in total deposits has caused shares to fall 9%.

      Signature (ticker: SBNY) on Tuesday reported second-quarter net income of $339.2 million, or $5.26 diluted earnings per share, compared with $214.5 million, or $3.57 diluted earnings per share, for the same period in 2021. Signature had been expected to produce $5.06 a share, according to analysts polled by FactSet.

      Signature’s stock have plunged 8.8%, to $178.92, in recent trading. The S&P 500 SPX +2.01% was up 1.9%.

      The earnings beat was driven by a lower-than-anticipated provision of $4.2 million for credit losses and stronger fee income of $38 million, according to Stephens analyst Matt Breese.

      However, Signature’s total deposits in the second quarter declined by $5.04 billion to $104.12 billion, driven mainly by a drop in client balances for Signature’s New York banking teams, which decreased by $2.4 billion, and its digital-asset banking team, which also fell by $2.4 billion, the statement said. This resulted in lower cash balances, which dropped by about 45% quarter over quarter, said Breese, adding that the decline was more than expected.

      “Overall, we believe shares could be weak today on deposit flows, higher expenses and a smaller balance sheet,” Breese said in the note. He has an Overweight rating on Signature’s stock and a $415 target price.

      Signature, of New York, is a commercial bank. It was one of the first FDIC-insured banks to launch a blockchain-based digital payments platform. Total assets rose nearly 20%, to $115.97 billion, as of June 30 compared with the same period in 2021. This represents a drop of 2% from Signature’s total assets of $118.45 billion as of Dec. 31.

      On Tuesday, Signature said it would pay a cash dividend of 56 cents a share, payable on or after Aug. 12, to common shareholders of record on July 29. The bank said it would also pay a cash dividend of $12.50 a share, payable on or after Sept. 30, to preferred shareholders of record on Sept. 16.

      Signature’s net interest income rose by 42%, to $649.1 million, in the second quarter. Analysts had expected $641.5 million, according to FactSet.

      1. The SBNY sell-off seems like an extreme over reaction…even the analyst Barron’s quoted has an overweight recommendation and a much higher price target. Unless there is some additional bad news coming out of the earnings call this morning, I’d be a cautious buyer when the dust settles.

        1. I don’t think that is the reason…for example another regional bank that deals in cryptocurrencies Silvergate Capital (SI) , has been on a tear since it reported earnings Tues morning…up double digits for two days straight.

          I think SBNY represents pretty good value here…especially with that fat $12.50 special dividend being paid to record holders in mid-September.

          1. Unless I am confused, that $12.50 is just a 5% coupon. There are 40 depositary shares per preferred share and the depositary shares are what you can buy as SBNYP.

            $12.50/40 gives you $0.3125

    2. I closed a trading position in SBNY on Friday, after buying the selloff that occurred when Signature Bank reported Q2 earnings two weeks ago. Total return ~14%. There may be more meat on this bone, but I’m satisfied to ring up a short term double digit gain in this volatile market.

      I took a similar trading position in NYCB, which has now evolved into a longer term position with a solid 6.3% dividend yield. Fwiw, there are a number of other regional bank stocks that look promising in this rising interest rate environment, including PACW which I currently have a long trade on.

  17. ConAgra (CAG) is expected to report tomorrow. IMHO, It will be a test of the ability of large food companies to pass through some of their rising ingredient costs. To its credit, CAG has been predicting much higher food inflation than others, like, ahem, The Fed. So far CAG has been right. Forecasts are for a +17% YTY earnings increase on a 7% revenue increase.

    Nonetheless, I would not be surprised to see an earnings miss. Based on my vast field research, CAG seems to be lagging Nestle in passing through price increases. My Stouffer lasagna is up 25% at the dollar store while my CAG frozen meals seem to be perpetually on sale at the supermarket.

    CAG pays a 3.5% divvy and is up 5% for the year. Nothing to write home about, but a lot better than the S&P 500 or the fancy ETF I bought. (By way of comparison, KHC pays 4% and is up 8.4% YTD. Nestle lags both.)

    Just my opinion. DYODD.

  18. Tenneco Acquisition – Interesting development this morning on the TEN acquistion by Appollo

    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 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

  19. 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.

  20. 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.

  21. 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.

  22. 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,

      “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?

  23. 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).

  24. 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

          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 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 – 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 –

                  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

              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…

  25. 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.

  26. 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.

  27. 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!

  28. 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.

  29. 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…

  30. 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:

    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.

  31. 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.

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