Some Earnings of Note for Income Investors

A couple companies have announced earnings for the quarter ending 9/30/2019.

Insurer National General Holdings (NGHC) which has 3 preferred issues and 1 baby bond outstanding released earnings today and they can be seen here. This company is controlled by the Karfunkels (of AmTrust Financial fame).

Financial services firm B Riley (RILY) announced huge revenue and earnings today. The numbers look great, but there is little detail/explanation of the increases. The press release can be seen here.

12 thoughts on “Some Earnings of Note for Income Investors”

  1. B.Riley is also giving the common shareholders (insiders) included a nice big special dividend …nice to know where the cash from the new bond issues goes.

  2. Oh I’m not saying anyone else needs to do so lol. I just have a rule I try to stick with. If management has a dubious track record then drop em. Like enron world com weatherford Chesapeake amtrust maiden etc. The debacle that is am trust and maiden was so severe I don’t care if they cone all the way back to par. I don’t buy these to be cutting edge speculator. I do so for people who want to sleep well at night.

    The other thing I’m cautious about is cross ownership interest. Who owns who, who controls who. I dislike hidden controls. And…. I’m pretty sure I’m out of nat Gen but will look.

  3. I’ll have to check if I have any exposure left to nat gen…and purge it all!!!!

    1. IYP, would you explain why you would consider taking such drastic action on what appears to be a fairly neutral earnings report by National General? It seems like an over reaction to me.

      1. A few days ago, when someone at asked a question on NGHC notes and preferreds, I made a lengthy post, describing my take on the Karfunkel enterprise history, their “glories when Michael the founder was alive, bragging that he nearly bankrupted his hedge fund managers, who shorted the Amtrust stocks and … Fast Forward, after his death in October 2018, his son in law Zyskind was faced with “revenge’ from the foes PLUS numerous SA writers including one professor, trashing Amtrust stocks. NGHC is managed by Michael’s son and historically always the strongest of the 3 (the weakest one, Maiden Holdings (MH-A, B, C) the British collaborator who never really knew how to make money except through Amtrust, dividends suspended for a little over a year (last ex date 8/30/2018. Someone at Silicon VERY QUICKLY made a POST , basically saying that he had NGHC preferreds and/or notes and he is very happy with it. PERIOD! There was one quarter where the junior Karfunkel, the son CEO of NGHC had some minor loss, pricing the Cat insurance policy too cheap, ditto on the CA auto policies. I believe that he has learned his lesson. One former employee complained and made comment on SA in an article trashing the AmTrust, the Company does not treat its empoyees well, except for insiders (relatives of Karfunkels or Zyskind). I have 935 shares of NGHCZ bought at IPO or thereabouts back in 2015, the 7.625% note plus 500 shares of NGHCN, preferreds bought above par in 2015. I have not added or sold any of these because the market negative sentiments, no matter how unfair or unjustified for whatever the cause. In contrast, Navio Maritime, which the witch CEO attempted TWICE to trash its preferred shareholders, still have SA writers recommending BUY when her second effort failed. There has ZERO positive article by any of the SA writer on any of the Karfunkels. LOL. It has been a long standing practice for companies pushing the numbers from one quarter to another. I suppose if you got enemies, this could be problematic. Insurance reserve is also a witchcraft. The actuaries for Long Term Care insurance, grossly under estimated, made GE to sell off the entire divisin and Unum (a German held company) issuer of UNMA, SP IG rated, had some stupid lawsuit on this or some others. Now I see someone at Silicon warning on Edison International, issuer of Southern CA Edison. Commons lost a little over 10%. I continue to hold. BTW, HFRO-A came back in value very nicely. Presumably safe SLMNP down for reasons I do not fully understand. Sold off 5 shares to decrease exposure. One just never know for sure IMHO. That is how I ended up with so many different positions.

        1. Let me simplify for you.

          Buyer beware. Skull and crossbones. All the signs of manipulation and outright f word.

        2. Thanks for commenting John… its always interesting to hear the backstory/underlying reasons why investors dislike or have particular bias against a company. Frankly, I’d be more concerned about that second dip NGHC preferred stocks took in February, than any sins the father of the CEO may have committed.

          1. I believe the second dip for NGHC in Feb was due to the AFSI delisting. That has turned out to be a nothing burger so far. I’m long the AFSI babies and NGHC preferreds. Like Father Like Son not always true.

            1. I believe that Maiden Holdings were the sacrificial lamb, told to buy shares from Amtrust. Of course, with stupid Zyskind ordering some Israelian private eye to retaliate against the enemi(es) and got caught. The FBI was brought in. It was just a total disaster, where I should have sold out (AMtrust preferreds). Nonetheless, Amtrust has so far kept its words “will pay as long as it is able to pay the debt to the banks.” Ambest rating also does not hurt to keep them honest IMHO. The Karfenkel family, including the widows own essentially all the shares.

              1. John, I think the August rating from AM was their “swan song rating” as it was then withdrawn. The subsidiary companies that individuals have to deal with are regulated by state regulators. But do not know much about how the do nothing holding company from which the preferreds reside from will be analyzed going forward.
                Admittedly, I am having a bit of fun playing the Amtrust baby bonds recently in small doses. Flipped AFFS for a quick 50 cent gain (the 7.25% issue) and then used proceeds to buy the 7.5% notes at a cheaper price around $20 than I sold the 7.25% for.

          2. I have started subscribing to Knight Kiplinger’s Income Investing, in addition to Kiplinger Letters. When I see someone at Silicon mentioned, I take more heed, realizing that I did not really follow Kiplinger, missing opportunity of some small cap eREIT (no Mall). The latest issue suggests FUN, which is also on Rida Morwa’s. With Rida, one does not really know. He can be foolishly risky at times. Yet, his CODI-B works.
            I picked up only 50 shares yesterday. Closed down 3%. This morning it went down some more. One of the things I learned from Rida, early traders are typically retail action. The big boys and gals do not come to the scene until about 2 hours later. So true. I picked up some UTG this morning for my daughter. It went down despite 10 year US T down. I have to hand it to Kiplinger on FITBO, a IG rated 5% financial. I bought it a few days ago, paid $25.53 kicking myself not participating in the IPO (then IPO can be tricky like I paid way too much $25.14 for CGF-E ditto for PRIF-E). FITBO went up above $26 as Kiplinger predicted. I do not believe that Kiplinger is an accomplished investor. I have to hand it to him, he has lots of COMMON SENSE and keen sense of detecting the trend.
            Wall Street has no patience at all. PEI came out with a Earnings. Unexpected lots of bankruptcies from Forever 21. Decent progress. Funny thing is: PEI-D is in the black, the higher coupon PEI-C in the red. This is the power of Rida’s MACHINE. Many of his followers DO NOT do any DD and follow him literally, if Rida say buy more, they will drink the Koolie!
            Same ex div date. Mall commons never work. I have made enough mistakes to learn this bitter lesson. One can never estimate where the bottom is. Currently I will stay away from all fossil fuel oil/gas. Except perhaps MMP (I probably should have added some position there). BEP (Brookfield renewable, wind and sun) seems okay, probably with some buy back from this giant private equity. However must do some DD first, even the Saudis are selling their reserve.

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