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11/22/2024
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FYI – SILA
Here’s an under the radar REIT that just listed. It went through a direct listing so no one really following it yet. .133 dividend paid monthly or about 7% annually… here’s a few articles that lay it out. I bought some yesterday. Low leverage here for a REIT at 3x so plenty of potential to grow without dilutions. Payout ratio in the low 60% and that still gets you the 7% annual divi
https://seekingalpha.com/article/4705284-sila-realty-trust-this-newly-listed-reit-could-be-a-great-portfolio-addition-for-income-seekers
https://seekingalpha.com/article/4706330-sila-realty-trust-almost-7-percent-yield-and-15-percent-appreciation-potential
Picked up a starter position in UPS this morning. Rarest of things to get this at a 5.2% yield. Lets see if it gets to an even more rare yield.
Polaris (PII) with the earnings miss and lowered guidance. This stock was mentioned here earlier this year as a trade and possible long term hold.
https://seekingalpha.com/news/4126624-polaris-non-gaap-eps-of-138-misses-by-088-lowers-sales-and-adj-eps-guidance
That was most likely me, as I posted in this very thread on 4/4/24 I sold PII that day (mid single digit gain, my notes say I sold because of some data released indicated economy slowing down, so no long term hold on that one. If I remember correctly, I was unsure at the time of buying if it was going to be a long term hold, but probably not and stated as such from a question, ironically by you dated 1/31/24), used the proceeds to buy BNL and GTY (up 20% since then).
Thanks for reminding me of this one, turned out rather nice.
Anyone here have LGI (Lazard Total Return CEF). Just raised dividend 42%. This was a post-Covid purchase for me, but have to say, these large dividend increases always feel good at the time, but I always end up selling soon after. Makes me nervous when you know NAV hits will be the norm on a market that doesn’t cooperate with a 10+% yield.
great buy as always PP like your water names whose post helped me! water utes are like CDs ..never heard or followed LGI I wonder if they are raising the dist to keep Saba away to try to close the discount gap. You know how Saba has been going after these even the Blackrock big ones. Hate to be trite if you don’t need the income, nothing wrong w taking a profit. Or maybe sell to your basis since yours is so low and keep an eye on it maybe? very low leverage so you don’t have to worry about that cost eating dist. I see some writing on it on the ‘other site’. Congrats and thanx for your ideas.. oh… At least it is not a ‘penny stock’…omg. Bea
Hi Bea, I guess you never know who is listening when posting ideas and such. Glad to hear your water Utes worked out. Just so you know, maybe I’m not as good at posting all moves; you have given me some good ones as well, BFS-D and just announced EQC-D sale 2 I can think of off the bat. Still holding BTG as well, patiently, lol. I also sold EQC-D after reading your post yesterday.
And today can add AGD (Aberdeen Global) and AOD to those CEFs with crazy new distribution policies. This morning raised distro 70%. AGD another post Covid purchase for me, now likely to be sold sometime soon. Perhaps the discount narrows a bit here shorter term. Unsure if this is the garden variety SABA threat or not, but CEFs seem more interested than anytime I can remember in closing discounts.
After reading further, it kind of looks like AOD is trying to lower discount in order to make it more palatable for FGB (First Trust BDC CEF) to be acquired; as currently FGB has a narrower discount.
— Mark Hulbert has a list of 25 stocks thought to be vulnerable to a crash (a drop of 40% or more over the next two years.) It seems to be a list of stocks that have gone up too fast. The usual suspects plus some unexpected names, like Jackson, Constellation and Vistra. A sell list for value oriented investors or a buy list for momentum investors. Hulbert also includes a discussion of the Crash Index, which shows a large percent of investors think a crash is unlikely. ( I called a top when an analyst claimed Kinder Morgan was an AI stock. What next PepsiCo? Students eating more Doritos while AI is writing their term papers?)
https://www.marketwatch.com/story/nvidia-super-micro-broadcom-and-22-other-stocks-most-likely-to-crash-737a3b40?mod=mw_latestnews
— MarketWatch had a short piece on a contrarian UK hedge fund, Ruffer, that has structured its portfolio around the risks of exploding US debt and persistent inflation, things I worry about. Only a few positions mentioned in MW, so not 100%
– Only about 24% in equities
11% UK, undervalued vs rest of world, new govt coming in.
10% gold / silver miners, undervalued vs physical metal; inflation hedge
3% China, “reputational risk.” LOL
– 12% in US and UK tips, core position to preserve capital vs inflation
– Japanese yen, a hedge against the falling dollar
https://www.marketwatch.com/story/a-portfolio-of-ugly-ducklings-will-have-their-day-says-this-defensive-fund-manager-ce67a379?mod=home-page
I see the risks but I don’t have a strategy yet.
JMO. DYODD.
Run around 50% VTI. Not because I have any insight other than betting against America has been a fools errand for 100years.
Bear, thanks as always. The title analyst these days is a little suspect. Today bloggers like to call themselves analysts. Mr. H has been around a long time, doesn’t make him right 100% of the time. People can worry about a lot of things and fear what might happen. Better to face the fear, ask what can happen and try to plan for it.
Sold all my water companies, SJW, YORW, ARTNA, and WTRG. Didn’t intend on a short term trade, but temporarily moving in a different direction. Not many liked my water picks but after a bit of an initial downturn and a few more purchases at cheaper prices (especially for SJW) managed to get 13-15% gains in ~4-5 months, WTRG roughly 20%. Will be re-entering at some point though.
Hey PP,
Send us an alert when you go long again on water. I, for one, am keen on the industry but haven’t been watching close
.
YH, I’d love to get back in them by the end of this yr. Just needed the cash to stalk some other opportunities. By all accounts I should be long now. But will certainly post when I’m back in. I think many get wound up on the small yields, but I buy for capital gains and a steady ship in turbulent times.
Costco announced increased membership fees with increased benefit caps. Sales increased. I noticed this past quarter the ads were targeted to appliance/electronics. It seems like yesterday, I entered this stock and now have a 130% gain. Momentum seems this will soon be a $1 thousand stock. Love my Costco and Walmart!
Entered into regional banks and Schwab during the CA banking crisis. Schwab gain of 39% and regionals 29%. (No dividend included in gains.) I only wish I had added AMEX to it. Next time the world is ending I will add AMEX.
WBA keeps quarterly dividend at 25 cents per share.
Up 4.36% today and still at current price WBA is paying 9+%.
Bought more of BMY today. This balances my first tranche that I am underwater with. Company has a high payout ratio compared to FCF and heavy on debt, Also has several patents expiring. Good or bad, it is moving more towards cancer drugs but old school when it should be looking at NK treatments or other treatments based off 21st century medicine. Been around long enough, almost 140 years should be able to steer the ship to a safe harbor.
Charles, if what you’re pointing out are the reasons you’ve used to want to buy more, then you’re more of a contrarian than I thought…. a contrarian contrary to your own self beliefs it seems… Haha…I’m bored…….
2WR One was to give others a quick synopsis of the good and bad but no ugly. Second, this is my idea of a company that has had its stock price beaten down for good reason, but there’s a lot of potential with a company that stays with what it knows. I normally have no interest in a common stock as most money managers and investors are placing bets on growth stocks and the prices and yield or lack there of reflect the interest the crowd has in them. This is my idea of risk. Getting in on a company that has a chance to turn itself around while it’s still has decent earnings, good cash flow, and a well known brand. They just need to take care of the issues I mentioned.
I sure hope you weren’t taking me seriously, Charles….. I was sort of laughing at myself because I had to re-read what you wrote as it didn’t seem your points agreed with your decision to buy… I was just being silly and probably shouldn’t have posted
No, you got me laughing. I went into detail because I sometimes don’t make my ideas clear and I sometimes think out loud. Also I know what it’s like to be new to the group here and I wanted to explain my thoughts behind my decision to buy.
This type of company is not my specialty from a lifetime of being in the building business or a related business.
Example: hindsight is wonderful. A opportunity I missed and knew better was when WY cut it’s dividend and changed to a REIT. I have it on watch and hope if we have a recession or rates higher for longer it gives me an opportunity to buy a well run company. By the same experience, I will say I have no interest in MMM.
Why? Because I know it hasn’t kept up with product innovation and there are better products and manufacturers out there. Of course I have been out of the business of adhesives and finishes for 10 years. But talking to people in the trades when I recommend a European manufacturer it’s now well known.
As an always late-to -the-party value-oriented gambler with a small budget, I prefer to buy a fistful of lottery tickets on tonight’s Pick-5 instead of bidding on E-bay for yesterday’s winning ticket on Ozempic or Wevovy .
BMY has a nice 2024 pipeline. JMO. DYODD.
My guess for the BMY low 36-38, nearby. If BMY maintains the 60 cent dividend, at 40 the yield is 6%. If you believe the dividend won’t be cut, it should support the price.
Some picks from a hedge fund that sees things differently. Claims you can pay too much even for a great business with a great balance sheet. They are shying away from the highly concentrated S&P 500: even without Nvdia, 9 big mega caps make up 35% of the SnP index. Of interest to value investors, they like unpopular sectors like healthcare, banking and utilities. Of further interest, they like some less popular names: Walgreen and Dominion.
“Big tech is not the haven some claim, so it’s time to raise cash, says this hedge fund ”
https://www.marketwatch.com/story/big-tech-is-not-the-haven-some-claim-so-its-time-to-raise-cash-says-this-hedge-fund-900c538d?mod=home-page
Disclosure: I look at D from time to time: high divvy, but a lackluster performer with a lot not to like: no-cred management, dividend cutter, costly on going projects, debt load, assets sales to pay debt.
Disclosure: have been seriously looking at juicing my returns with Nvidia, a can’t lose, sure thing with ~250 billion of free cash flow coming to shareholders for at least 3 more years according to Marketwatch. Based on my market timing skills, I am calling a top in Nvidia. Still, NVDA is up 155% YTD. Maybe if I only held it for a few weeks…
JMO. DYODD.
“Claims you can pay too much even for a great business with a great balance sheet.” What a quaint, old fashioned theory……….It’s different this time. All you need is a Roaring Kitty in your corner or someone who can use “AI” 20 times in a single sentence.
Well, I’m not complaining that the AI Tulip Maniacs are claiming that utilities and MLP’s are AI buys. Was getting tired waiting for the 6 – 2024 rate cuts.
EIC…I own EICC preferred…I have done a fair amount of reading about EIC but am alittle uncertain about the risk level of EIC…Can anyone give me their thoughts about risk….medium or high?…any help is good help….happy 4th to everyone…we have a lot to be thankful for…freedom is not free..101st Airborne…
good articles from several authors on Seeking Alpha
Lower tranche of CLOs is always a risk during a meltdown such as in 2008. Coverage here seems adequate for normal times and analysts don’t seem particularly alarmed. Price stability suggests investors don’t panic either. But housing market is slowly turning down, and two new issues in rapid succession may be a concern.
I bought some so I can try trading between EICB and EICC.Those swaps are only worth a couple extra nickels but it’s a reliable nickel.
I kind of avoid these CLO and related but I know w proper due diligence many hold..so no opinion, I will say apparently foreign buyers including a huge JP bank are buying a lot more. Guess it all depends on what is in your ‘tranche’ as we saw w GFC 2008-9. Personally I don’t think this is the time to reach for much yield. Interesting these banks getting clobbered on bond/govt debt holdings. Of course Japan would be the ‘guiltiest’ of the yield reach. Saw this on bloomie and yahoo.. Bea https://finance.yahoo.com/news/norinchukin-sell-63-billion-sovereign-124008692.html
Risk? I think it depends on who you’re asking. Posters here range from active traders and opportunistic traders, others with various buy/sell strategies to some long hold and B&H investors.
I’m in the long hold camp and care mostly about credit risk. I prefer $25 stocks and parents that have been battle tested and shown good resilience. I know the day will come when my stocks will take steep dives. If they continue to pay 6-8% throughout the turmoil, I’ll be happy, even if my MtM sucks. My job is to know when to raise cash and when to be fully invested.
In the case of EIC, I want to know how well managed the company is, for surely one day the bears will come for Goldilocks. If there’s trouble brewing in corporate debt markets, these folks would be the first to know.
hi Craig –
You are referencing the Eagle Point Income fund vs the Eagle Point Credit fund. Key words are income vs credit.
Personally I have an allocation the the Term Preferred of the Credit fund.
The income fund invests primarily in the lower tier of CLO debt.
The credit fund invests primarily in CLO equity which is the bottom tranche.
Debt is Sr to Equity.
If one thinks of a CLO as a virtual bank, then the rough analogy is that CLO Equity could be compared to Bank Common Stock and CLO Debt could be compared to bonds and notes issued by banks.
You can also invest in AAA rated and BBB rated CLO debt via ETFs. JAAA and JBBB are such ETFs.
These CLOs are fundamentally *different* from the various mortgage based CDO/CMOs etc from GFC. These CLOs are based on Sr Secured Syndicated Bank Loans which are made to below investment grade corporations. There are no asset based loans (auto, mortgage, credit card, student loan etc) in CLOs based on syndicated Sr Secured bank loans. These loans are the top of the capital stack (sr to sr unsecured debt). These loans float with SOFR.
There are funds and ETFs which also invest in bank loans.
I would suggest that you look at the following video pasted below from Eagle Point which has been posted on this site many times before and is highly insructive.
Personally, I think term preferred stock in a well run CLO *equity* fund along with an allocation to a good bank loan open ended fund is the best way to take credit risk in this market, and I am overweight. This is just my opinion and many on this site will disagree.
I would not invest even $0.01 until I watched and understood this video:
https://www.capitalallocators.com/podcast/empty-rooms-masterclass-on-clos-at-eagle-point-credit-management/
NYCB is doing a 3-1 reverse split.
so this ratio from the NYCBprU will adjust accordingly.
a warrant to purchase 1.4036 shares of common stock of NYCB at any time
prior to May 7, 2051. The warrant exercise price will initially be $50.
Justin, I don’t own the common but have the NYCB prU. I am trying to understand if Flagstar has any corporate guarantee with respect to NYCB prU.
I have emailed IR but no response.
If Azure was still posting, I could ask him as he stated he is good friends with NYCB management and was stopping by to visit; the next week the price collapsed.
I have posted before that there are many on here that I trust and most certainly you are in that group!
It couldn’t. Flagstar was acquired LONG after the bonus Units were issued by the holding company parent.
TNTowanda I own a small amount of the U. I don’t think they would have left the common still paying 1 cent if they intended to suspend the payments on the U. But I really don’t know anything. Ab was kind enough to stop by a couple weeks ago and post about something else. He has said before when it comes to information that he is privy to and is not available publicly he will not share. I respect that.
Hope nobody holding Walgreens (WBA). Stock down ~25% this morning. They announced some store closings. I think lack of any kind of an effective deterrent to theft has really killed this company along with some dillwad moves by previous mgmt. I use to own it but was one of my sells (along with CVS) when cities announced they were going to let thieves go.
If you own net lease REITs, you might be a “Walgreen owner ” even though you think you’re not. Pumpers like the Buy Buy I’m The Big REIT Guy on The Other Website pitch net lease REITs as safe investments with “investment grade” portfolios. Drugstore leases were once a prized asset class. IMHO, its a good practice to look at a REIT’s portfolio composition before you invest. You might be surprised. (Expecting a TOWS article – “but not all the stores will close at once. So buy buy buy”)
(OT – Also, do read the tiny little footnotes in the REIT press releases. One REIT claims every quarter in a footnote that some of its non-investment grade properties are actually investment grade because a non-guaranteeing parent is highly rated. Much money has been lost in things like “moral obligation” bonds. )
Just being my usual over-cautious self here. Painful personal disclosure: Took a Buy Buy Buy recommendation – My money went Bye Bye Bye
JMO. DYODD.
Let’s see if it’s an over reaction. Gambled a small amount of WBA at $11.76. Dividend is over 8% now. They cut the dividend this year from $.48 to $.25. They may do it again. Closing losing stores make sense. Will watch carefully.
Not having the time to properly manage portfolio, I did notice over the last 24 hours my inbox is full of NNN offerings for Walgreens. One advertised as taking any offer. A good friend made great fortune developing for Walgreens in the SE. A friend of my son’s graduated MI top honors went to work in Chicago. He was very disappointed. Said his boss when in the office would spend all his time in the gym. He was sent to Switzerland to negotiate drug cost with apparently another affiliate so games had to be played where he was not allowed to talk to the affiliate, etc. I know this isn’t analytical data but thus far in my life, I have acted on information and it has served me well. I avoided Walgreens and will continue to do so. I bought NIVIDIA because my sons liked their gaming chips. 🙂 I bought Costco because one son did an analysis on it and to encourage him I bought. These returns are spectacular. I think most of us have a Kevin Bacon circle of advisors.
I bought 2000 shares of NVDA and still hold them. Oh wait, that was 25 years ago and sold them for a small gain. Those shares would only be worth a couple $MM today. Yikes.
Apparently Bosch the German appliance co is considering a bid for Whirlpool, I think? Charles mentioned he owned it. I don’t see how this would get through Antitrust although Haier, LG, Electrolux are big players too. Not too familiar w this space myself.
Been looking at Molson Coors,, TAP symbol, come down a lot, I have Ambev now. I don’t usually play in the consumer sector but it seems there is some value popping up. General Mills (GIS) has even got a 3.5% yield these days.
Bea
Bea, was walking through HD last weekend and it happened I walked through the appliance dept. Saw a bright red refrigerator kinda retro looking and it was a brand I had never seen before called Galantz. Sounds French! Turns out another Chinese brand. Looked them up and Google said they have been around since 1978 and now worldwide. Know the things I like about it?
The look, the price, no bells and whistles with features that add to the cost and the chances of a repair bill and finally consumer reports people saying it’s reliable. Our tired old WHR frig broke 2 yrs ago and I went looking for a replacement. All the major brands WHR , LG, Samsung, etc, were thousands of dollars, had electronics out of the wazoo and numerous consumer reports of failures and dissatisfaction. Luckily I found a good appliance repair guy and a part off E-bay and had the old one fixed still going strong now for 34 yrs.
Would I buy another WHR refrigerator? maybe. Do I own the stock yes.
Whirlpool also owns Kitchen Aid, Amana, Maytag, Magic Chef and a few others.
That may explain my confusion about the house:
Amana is my fridge, not the oven, the oven is Maytag not the clothes washer, the clothes washer is Samsung not the TV, or Whirlpool, which is the dishwasher.
Bea, sidenote, we have a Bosch dishwasher. It is amazing and easily the best one we’ve ever had. probably a $200 premium for it over other brands but well worth it in my opinion.
VIA buyout went through and can’t say I remember ever seeing this before in a take private of common shares, “each Dissenting Share was canceled and converted into the right to receive payment of such amounts that are payable in accordance with Section 262 of the DGCL and have no right to receive the Merger Consideration, unless and until such shareholder loses, waives or withdraws its rights as a dissenting shareholder” Seems genius on the companies part.
maybe good news for VIA but bad news for similar investors of every other such company knowing there is precedent for this.
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. After four weeks here’s how it looks.
SPY +2.6%
QQQ +4.6%
IBIT -6.2% (Bitcoin)
TLT +3.2%
PFFA +0.9%
slices +3.7%
Among the slices
Best:
AVGO +17.5%
NVDA +14%
LLY +9.7%
AAPL +7.9%
ISRG +7.5%
Worst:
MRNA -17.7%
UNH -4.5%
AMD -3.8%
AXP -3.0%
CPRT +1.0%
Have had a roughly 10 year experiment running. Bought 2 ETFs 50% each in a new taxable account.
TQQQ – 3x leveraged nasdaq – $10,000 worth
BND – Total Bond Index – $10,000 worth
Results so far. Turned $20,000 into $135,600.
If I invested everything into just S&P500 outcome would of been $62,372.
Luckily I was not paying attention to this account at all as I suffered multiple 50%+ drawdowns. While during this same period S&P suffered only ~30% drawdowns.
Thanks to all for thoughts. My instinct was to decline but now I have others affirmation which gives me full confidence.
My stocks this year have returned more than I imagined. Even when I discount 20% loss; the returns remain above expectations.
I use this fact to remind and verify to simply stay in the market. One can never time it. The year began with posters having “bad feelings, “hurricane coming, etc. What a lesson for staying in the market.
This should be under ETF. A local financial advisor called me this week about exact topic as in this article.
https://www.wsj.com/finance/investing/retirees-boomer-candy-investing-fund-62454210?st=rup7cz8s9hbb9l4&reflink=article_email_share
Appreciate any thoughts or knowledge on these funds. My instinct is to turn down but instinct isn’t analysis. TIA
Covered call funds have been around for a long time especially in the CEF fund space. In my mind just putting a new ETF wrapper on an old idea.
If you are desperate for current income. Would recommend these funds as they typically yield 8%+.
Long term your performance will lag the general market. As you will not be able to take advantage of any of the market rips in capital gains. As capital gains will be taxed more efficiently than income.
You want to be asset rich and cash poor.
Obviously not in the ETF wrapper, but this approach to marketing funds, has been around for decades…. I know. I’ve tried them and they never work as advertised…. In fact, it came up at the Schwab dinner I attended a few weeks ago…. They sort of called the funds such as 80/50 funds or 50/20 etc., funds, meaning marketed as being able to capture 80% of the upside while protecting you from 50% of the downside of whatever market they’re targeting and so on. TNT, you know me well enough to guess this kind of thing would appeal to me…. Financially, I’m lucky enough to not have to keep up with the stock market to maintain my lifestyle, have no qualms whatsoever in underperforming it if I can see greater protection to the downside than I’m limiting myself on the upside…. I’ve tried it with mutual funds, I’ve tried it with individual fund managers, I’ve tried it with the local farmer who gives me stock tips on tech stocks… It never works…. As soon as the market declines, there you are figuring out you have a fund that captured way more of the downside than they said they would… over and over and over again… So my experience has been you end up giving up a percentage of upside for a soon to be broken promise of downside protection…. Heck I can do that myself… In fact, I’m pretty good at it…… Oh yes I know, it’s different this time….. It’s wrapped in an ETF envelope…. uh huh, yup, sign me up (again).
“Calamos’s S&P 500 Structured Alt Protection ETF, …is designed to match the S&P 500’s return over one year, with gains capped at 9.8%. In exchange, investors who hold for the full outcome period are protected from capital losses entirely. ”
Before you jump in, read the above sentence over several times, while whispering the words “CD” and “Treasury Bill” to yourself. IMHO, you can probably structure one of these yourself. Banks used to offer similar “structured products” long ago. They looked like powerful black magic until I took an options course. (Think: 90% CD + 10% long dated options) I am a no-go on the Calamos product.
JEPI is mentioned. It is a popular ETF fund which uses a covered call-type strategy* but if I remember correctly it does not guarantee return of principal (even though a number of commenters on TOWS think it does, confusing high income with a floor on principal) . *Technically JEPI uses a Secret Sauce whose ingredient is Exchange Linked Notes.
There are several of these covered call type ETF funds out there which use varying techniques to generate income and sometimes hedge risk. Likewise CEFs that use option strategies. (I have one that covers the Cubes.) I’ll probably add one or another of the ETFs.
Risks with options strategies include loss of the upside, inability to quickly recover from a market drop and gradual erosion of capital if poorly executed. JMO. DYODD.
“Calamos’s S&P 500 Structured Alt Protection ETF, …is designed to match the S&P 500’s return over one year, with gains capped at 9.8%. In exchange, investors who hold for the full outcome period are protected from capital losses entirely. ”
Before you jump in, read the above sentence over several times, while whispering the words “CD” and “Treasury Bill” to yourself.
—-
Agreed. What’s so great about a 0% floor and a 9.8% cap? I mean, cash pays 5.0-5.5% if you look for a good bank and that’s FDIC insured. If you really want somewhere between 0% and 10% instead of a guaranteed 5.25%, stick your cash in the bank account and then at the end of the year, go to Vegas and bet however much you want on black and you’ll get roughly double or nothing to overlay on top.
Unimpressed, but nearly all these “yield” gimmick products are marketing strategies for raising AUM with a good psychological pitch and not investment strategies with a sound underpinning for outperformance on a risk-adjusted basis.
Does anybody have any go-to covered call plays they like? I saw a comment on another post about covered calls on BDCs.
Anyone like using this strategy at all with their portfolios? Just looking for opinions.
Anyone following the merger of MFIC and the other 2 CEF of Apollo ? be interested in your take on it.
RIG ( Transocean ) ….. recent prx fade with July Crude levels stable in the range of $75.50 – $77.50 ….. June 14 level $78.50.
Current RIG at $5.17. June 13 Close at $5.41 .
Any thoughts appreciated. Jim
KRP – If anyone has been following this since AzureBlue brought it to light here; two days of pullback. Dividend calc’s off the price of NG and Oil from prior Qtr.
Shep, I follow it. They have already said that at next conference call they will release 2nd qtr earnings.
Even with good oil prices Dec to March and higher production you have to remember they purchased additional oil rights from another company using stock. This means you have to share the profits with a larger group. Also they took a larger share of earnings to pay down debt. I assume to be ready for the next deal and to survive any downturn in the oil business. Because of that I estimated back of the napkin .44 to .46 per share. I was in the ballpark by a couple cents.
You follow futures you will have seen that for the second qtr. Oil dropped below 80 and went to low 70’s and eyeball I would guess an average about 75.00 they have said they can maintain production at same levels as 1st qtr.
My wild guess is your going to see the same return or less if held to the next payout. If you ask me to back up my estimate all I can say is ask a golfer or a race car driver to give you a technical analysis of the odds of them winning the next game or race they’re in.
That’s my two cents and I have been known to be wrong before.
well this could go in Canadian chat but since you guys are talking oil/ng/royalty and drilling, I’ll put it here. If you have an IRA/Roth a name to research is Freehold Royalties. I say IRA because it is a PFIC so in a taxable you will get a forms headache. FRHLF otc, liquid enough. Been building a position around US$10/a little less. Not a big holding but again the Bea Juicing Cash and moving a little out of cash when I can strategy. (Still 46% SGOV).
This longtime royco is well diversified w low cost production areas to draw royalties off and potential as well given the prolific drilling in its areas- mostly Permian and Canada where more oil is flowing west to the Pacific now helping differentials to WTI etc. Yield right now is about 8% pays C$.09/mo or about .73/yr US total well covered thru WTI50 and low ng/ngl assumptions, weighted to liquids etc. I like the US/CA diversification in so many fields and w so many top o/ng players too. Latest presentation for starters for folks.. https://freeholdroyalties.com/wp-content/uploads/2024/05/FRU-Investor-Presentation-Q1-v2.pdf
Anyway just another name to throw out there if folks want to see if it fits for them or not. I have a decent weighting to energy/o/ng/lng now in the Roth w shareholder friendly slow grower non-Wildcatter o/ng co’s and include Freehold in my mix. fyi/DYODD. Bea
I dug up this downgrade flag for KRP by an Bank of America analyst. So that might be why the stock dropped so steeply. here is the reference I found:
https://markets.businessinsider.com/news/stocks/downgrade-to-sell-challenges-ahead-for-kimbell-royalty-partners-amid-aggressive-m-a-and-unfavorable-industry-dynamics-1033480468
You should be able to Google “downgrade” and “KRP” together and find this summary article… it is what I did.
Thanks. Good analysis of the risks to royalty companies – wider spacing of wells, deeper drilling, revenue dependent on operators trying to conserve cash – likely applicable to other royalty companies as well.
FPI – Anybody see any news on FPI? It’s up 5% with a lot of the upside happening pre-market… Anybody see anything?
NVDA – i’ve done my research and I can safely say that NVDA will not top out until it reaches a market cap of $140 Trillion and at that time, “AI” will be the only word left in the human vocabulary. You have until tomorrow before this will occur…
2white – It’s a slow day for NVDA, only up $100BB in market cap. Maybe the Fed can really get this going in the afternoon. LOL!
I was listening today to CNBC when Stephen Weiss (he of the just buy treasuries in January and missed the entire market gains); stated he just bought NVIDIA. Ha. I owned NVIDIA years before it was ever mentioned on CNBC which was in 2022 or 2021! My basis will never be harmed. I dollar average slowly. I am repeating myself but USA great companies have great stocks. Yes, I expect the market to decline 20% then rise again. My investing is for wealth. I will never leave this market and my estate will not either. Not a genius or highly intelligent, rather fortunate to be a citizen.
Regional Banks. Article from Bloomberg. It aligns with my thoughts regarding MFH. Much money will be lost but it will not be the southeastern regional banks. Equity will get wiped out. Banks that had good underwriting would have kept LTV reasonable. The Starwoods and such didn’t use bank financing (or at least not the southern regional banks). I am up nicely on these and as soon as another “sky is falling” day occurs I will be a buyer.
I enjoy the post that list banks with large CRE exposure. But to truly analyze one has to understand the portfolio, LTV and recourse amounts.
https://www.bloomberg.com/news/features/2024-06-06/real-estate-investors-face-crisis-as-big-wall-street-deals-unravel?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTcxODA1MzY2MSwiZXhwIjoxNzE4NjU4NDYxLCJhcnRpY2xlSWQiOiJTRU9BNEtUMEcxS1cwMCIsImJjb25uZWN0SWQiOiJESU5NVldFNE81R1BPMDRCSFFGTUtKS0pUMUlMTklIRiJ9.KJpLcmO0ltnP13oMLOPBT-MJOw3iyk35y-hegiMEccc?sref=3yhq6DEX
Related to Gray TV is its competitor Scripps. Todd Weschler continues to misfire for Berkshire. He has done the Sirius, Paramount, and Scripps trade.
https://www.barrons.com/articles/berkshire-hathaway-scripps-stock-price-1677d4e0
If I find time, I may look at the bonds. Being in front of Berkshire would be a hoot (but not if default).
I expect to see Todd have consequences for these trades. Thank goodness, Warren is still around to watch the performance of these folks
If you are looking for international diversification and have a longer term investing horizon (I am not a “buy the dip and flip” investor), you might want to look at Bladex BLX, a Latin American based trade bank. Do your research – it is not a typical bank, more of a bank to bank operation.
BLX has had ups and downs. Ups now, up +20% YTD and +46% YTY. Downs, usually when it embarks on new business segments (which it is doing now) then walks into a recession. Forward yield is about 6.8%, just increased. They cut in 2020. No foreign tax withholding concerns if I remember correctly.
FWIW – Was going to post this on the REIT Board as a reply to a mention of VTMX, a Mexican REIT but I thought it fit better here as a free standing post. Bladex full name is Banco Latinoamericano de Comercio Exterior, S. A. JMO, DYODD
And in return, thank you for the mention of BLX. I hadn’t heard of them before, and they seem like an interesting way of getting exposure to the region: https://www.bladex.com/en/investors
In the international realm I have been looking at Brazil some, building Ambev the beer/beverage company in BR/LATAM, and an interesting insurance co BB Seguridade BBSEY (flipped this once already and back in at 6.10US). Both have articles and comments on SAlpha and a Brazilian writer has done a nice job outlining the cases on these companies and others. Usually I stick to Canada, Australia, UK for any non US exposure but nibbled here on these two which seem to offer value.
Claudia is a wildcard for biz in MX, the old guard families havent been too happy w the AMLO party but the people are of course.. one thing she is after continuing AMLOs war is on mining companies and new development there..and she is a true greenie environmentalist so who knows. Nothing in MX for me including the miners. All these elections- India, Mexico, S. Africa, UK and of course US..lots to consider! DYODD. Bea
Bear
I’m a big fan of BLX and have a significant long term position. It’s a great way to have exposure to Latin and Central America without the currency risk and I’ve been very happy with the direction the current CEO is taking them.
My other long term Latin American stock is Kimberly Clark (KCDMY). Like Walmex, it’s the mexican subsidiary of a US multinational and I think they’ve run their business very well. With friendshoring, I think Mexican citizens will have more income and be purchasing more of Kimberly Clark’s products. The stripped yield of KCDMY is ~5.8%.
I’ve been listening to this year-old interview with Thomas Majewski of ECC. (Thanks to whoever posted the link here.)
https://www.youtube.com/watch?v=OxivWs5vPTM&t=879s
(I would appreciate any comments correcting my understanding.)
Majewski is impressive. I don’t have the background to follow everything, but I get the general idea. ECC invests in the equity tranche of CLOs, collections of senior junk bonds run by various CLO managers. The manager has the option to HTM making large gains possible on bonds bought at a steep discount to par. Here’s a look under the hood:
https://eaglepointcreditcompany.com/documents/FG/eaglepoint/ir/633372_ECC_Monthly_Portfolio_Update_April_2024.pdf
ECC common pays a huge dividend monthly with a whopping expense ratio of 8.51%. It looks to me to be a great way to invest in junk bonds while letting some very smart people do the vetting. Of course, in a bad economy the share price will get crushed. I bought a little in order to keep an eye on it. The chart suggests a 20% upside. Who knows? Might have topped.
I’ve watched this as well and felt more comfortable with my understanding of how ECC/EIC and others operate.
I’ve had outsized positions in the BB’s and term preferred of OXLC and ECC for many years.
Late last year, I added significantly to small positions in the common of ECC, EIC, and OXLC and will do so again on weakness. They’ve had a nice tick up since I added.
A very leveraged way of investing in HY. remember everybody is ahead in the capital structure and you get wiped out if 6-8% of the obligors default. If you have a portfolio of Hy bonds directly you still get cashflows from the non defaulting ones. I am not saying it is not worth of consideration just that it is not comparable to investing directly in a portfolio of HY loans or bonds if that is what you want.
Also just to clarify when you buy the equity tranche of CLOs that others manage you have no control over the underlying bonds and if you are the manager only limited control since the ratings agencies force them to have a maximum bucket of CCC or lower rated loans as well as industry/concentration limits etc.
rocks2stocks—yes a very helpful video that I posted a month or so ago. Pretty explanatory. I stick to the term preferreds myself–but over long period of time maybe the commons shares will work out.
Europe expected to announce lower rates next week. India elections end this weekend. I am looking to add exposure for both. India has been a wonderful trade so I will watch for a while. IF a dip, I will buy.
Analyzing Gray TV. With political season ad’s beginning in earnest after Labor Day, would expect to see a pop. Gray beat the market estimates last report and traded higher. Now, within a few weeks and no new news it is back to a low. This would be a trade for me; no interest in holding LT.
I looked at the TV stocks some months back on the same theory – expecting a flood of political advertising. I did not pull the trigger. It seems the broadcasters always trip on their own shoelaces (often debt) or the shoelaces of the big online websites stealing away advertising. I will probably look again.
Moth:flame::investor:greed
First thing I noticed was this $1.5 bil 5 yr issue priced on May 23rd at 10.500%…. Senior secured first lien note….Yikes! I know you’ve done well on these kinds of adventures, but a price like that sure raises eyebrows… https://www.sec.gov/Archives/edgar/data/43196/000143774924018143/ex_678973.htm A 144A issue
I haven’t entered the trade on Gray (yet). I want to see the D and R TV budget and then look at local elections in Gray’s market. Scripps is basically same.
I rarely trade, but this would be a trade.