Apple and HP/SNMX, AA, JNJ/BOUGHT 100 of the ADR NRBAY at $9.36

A 14 year old Pakistani girl, who wrote a blog championing peace, was shot and critically injured by the Taliban as she was leaving school. NBCWorld News In her blog she described the Taliban's oppression in the Swat Valley region of Pakistan.   

SENOMYX (own) announced the approval by the European Union of SNMX's four Savory Flavors and its S2383 Flavor ingredient.  

Barclays initiated coverage of FirstMerit (own) with an overweight and an $18 price target.

Iron Ore rose $3.9 or 3.38% yesterday to close at $119.32 per metric ton.

The Baltic Dry Index closed at 875 yesterday. While this index has recovered some from its 663 low on 9/17/12, it is still considerably below the 3/9/09 level of 2263, let alone the 5000 to 10,000 range prevailing between 10/2007 to 9/2008. This index is published daily and attempts to compute the transport price of major raw materials (e.g. coal, iron ore) by sea, using dry bulk carriers.

After the bell yesterday, Cummins lowered its full year revenue estimate to $17B from $18B and cut its revenue and EBIT for the third quarter, citing weak demand. I have no position. 

The recent warning from the hapless Hewlett-Packard and the correction in Apple's stock have caused a widespread downdraft in technology stocks. The slide in Apple's price is easily the more important event. AAPL closed at $702.1 on 9/19/2011, AAPL Historical Prices. Sometimes, a stock can just go too far too fast. Apple closed at $363.57 on 11/25/11, less than one year ago: AAPL Interactive Chart After hitting an intra-day low of $623.55 yesterday, Apple rebounded to close at $635.85, down -2.32 or -0.36%. There are a number of large mutual funds who are heavy into Apple and whose managers would not like to see a continued price drop. 

The current consensus estimate is for an E.P.S. of $53.45 for the F/Y ending in September 2013 on $194.18B in revenues. AAPL Analyst Estimates Total cash per share was $29.5 as of 6/30/12. 

Goldman Sachs downgraded Johnson & Johnson to sell yesterday. While I do not currently have a position in JNJ, it is hard to understand the rationale for a brokerage sell recommendation, other than for the usual short term trading reasons. The dividend yield is around 3.5%, with a long history of dividend growth, and the forward P/E is $12.51 at a $68.3 price. JNJ Key Statistics A response to the negativity of the GS analyst can be found in today's  Barrons.com.

Yesterday's Close: JNJ: 68.41 -1.03 (-1.48%) 

Home prices in over 100 metropolitan areas hit peak home prices during July, with another 50 cities within 2% of their peak prices, according to a report from Lender Processing Services.

In today's WSJ page, published last night online, I noted a number of owned securities will be going ex dividend on Thursday. This would include the Nuveen closed end funds that pay monthly dividends (NBB and NBD). The CEF ERC, which also pays monthly, goes ex dividend for its ten cent per share dividend (own 550). The bond CEF from Blackrock, PSY, goes ex dividend for its monthly 6.1 cent per share dividend. The CEF AVK goes ex dividend for its monthly 9.39 cent per share dividend. The exchange traded senior bond, HTGZ, issued by the BDC Hercules Technology Growth Capital, goes ex interest for its quarterly distribution (own 200)  

1. ALCOA (own): Alcoa reported adjusted earnings of 3 cents per share for the third quarter on $5.8B in revenues.

After Tax Operating Income (ATOI) for Global Rolled Products =$98M, up 63% year-over-year

ATOI for Engineered Products and Solutions=$160M, up 16% year-over-year

The consensus estimate was for break-even on $5.57B in revenue.

The drags were the "Alumina" segment and the "Primary Metals" segment. Alumina ATOI was down $163M from a year ago to a negative $9 million, while primary metals was a negative $14M with a 17% decline in third party realized price per metric ton. 

In a report published by Davenport & Company and summarized in a Bloomberg article, the Davenport analyst, Lloyd O'Carroll, values Alcoa at $21.72 per share based on a sum of the parts analysis and in part on his long term estimate for aluminum prices. Over the short term, based on the current low price for aluminum, a higher value could be achieved by separating the flat-rolled sheets and engineered products division into a separate company. That strategy previously worked for Alcan that spun off its aluminum sheet business in 2005 (called "Novelis") which was later bought by India's Hindalco Industries, part of the Aditya Birla Group, for $6 billion. Alcan was acquired by Rio Tinto for $38 billion in 2007.   

Yesterday's Close: AA: 9.13 +0.01 (+0.11%)

2. Bought 100 of Nordea Bank (NRBAY) at $9.355 Yesterday (The $500 to $1,000 Flyers Basket Strategy)(see disclaimer): Nordea Bank is a large European bank operating primarily in Denmark, Finland, Norway, and Sweden. Some branches are in Russia, the three Baltic countries and Poland. Nordea operations | Nordea.com 

Third quarter earnings were scheduled to be released on 10/24. 

As of 10/9/12, the  consensus E.P.S. estimate for 2012 was €.75 and €.81 for 2013. Nordea Bank AB (NRBAY.PK) Analysts At yesterday's exchange rates the 2013 estimate would equate to about USD $1.04. 

Nordea's ordinary shares are priced in Swedish Krone. The ADR's are available on the pink sheet exchange in the U.S. where shares are purchased in USDs. NRBAY Nordea Bank AB To know whether the ADR shares are being priced correctly, I need to know the closing price on the Stockholm exchange and then convert that price from Swedish Krone into U.S. Dollars: 

1 ADR=1 Ordinary Share

Yesterday's Close Home Market-Ordinary Shares: NDA-SEK.ST: 62.95 -0.40 (-0.63%) 

Priced in Swedish Krone

62.95 Swedish Krone (SEK) = USD $9.394 (As of 10/9/12)

Chart 2000 to date for Ordinary Shares: NORDEA BANK (NDA-SEK.ST) Interactive Chart

Long Term Chart of SEK/USD Currency Conversion

Link to Facts and Figures for Nordea as of 6/30/12: Facts and figures | Nordea.com (1400 branches; Core Tier 1 Capital of 11.8%; total assets €708.8B; return on equity 12.5%.

Link to Second Quarter Report: ‎nordea.com/Q2_2012.pdf (E.P.S. €.21 up from €.18 in the 2011 2nd quarter)

Dividend Yield: About 2.9% at a total cost of $9.36, based on last annual payment made in April. Stock will generally go ex dividend in late March.

Yesterday's Close: NRBAY: 9.47 -0.08 (-0.84%)
NRBAY Historical Prices

The shares also trade in Euros at the OMX-Helsinki, closing at €7.29 yesterday. NDA1V:Helsinki Stock Quote - Nordea Bank AB 

Observations and Sample of Recent Trades: FDUS, GNL, METPRA, PRPFX, SGP:AU

Economy: 

The government reported that retail sales, seasonally adjusted, increased .2% in November compared to October and were up 4.2% over November 2017. Retail Sales.pdf

Markit reported that the December flash estimate for its U.S. Services Business Activity Index fell to an 11 month low at 53.4

Empire State factory index slumps in December - MarketWatch

The stocks of public companies that are U.S. centric and economically sensitive are in bear markets. Regional bank stocks and BDCs are two of those sectors. The signal being sent is that a recession is likely within 12 months. Stock investors frequently end up forecasting recessions that do not happen in the expected time frame. 

Junk bond investors are not confirming that signal IMO. 

The junk bond ETF JNK has underperformed a similar duration treasury ETF since 10/1/18, but JNK's current yield and spread to comparable duration treasuries are not consistent with the recession forecast imbedded in BDCs price performance over the same period. 

SPDR Bloomberg Barclays High Yield Bond ETF Stock Chart 

U.S. junk bond spread over Treasuries narrows to post-crisis low | Reuters (10/4/18)

ICE BofAML US High Yield Master II Option-Adjusted Spread | FRED | St. Louis Fed

I would consequently regard the economic signals sent by economically sensitive stocks and junk bonds as inconsistent. 

The junk bonds owned by the JNK fund are generally publicly traded in the bond market. While I do not have a count, most of them are senior unsecured bonds and do have credit ratings.  

JNK Credit Quality Breakdown

The loans owned by BDCs are issued by private companies and those will be unrated by the credit agencies.  BDCs do own senior secured loans that may place the BDC in a better bankruptcy recovery position than the senior unsecured debt owned by junk bond funds. That is a general statement and would require a company specific analysis to know whether a particular secured loan is better than a rated unsecured junk bond. The weightings of first and second lien loans owned by BDCs do have a wide variance among them. 

We do know that the VanEck Vectors BDC Income ETF currently provides about twice the yield of JNK which does not appear consistent with the types of investments owned by those two funds. And there is no shortage of BDC stocks now that provide over 12% yields.   

BIZD - VanEck Vectors BDC Income ETF 

The main difference between BIZD and JNK at the moment is that the Bond Ghouls set the junk bond prices while panicky individual investors largely set BDC stock prices. 

+++++++

Markets and Market Commentary: 

Stock investors, you have now been warned for the last time - MarketWatch

Pimco advises investors to keep their ‘powder dry’ ahead of synchronized global slowdown - MarketWatch 

Most of my brokerage cash is in the Vanguard Prime Money Market fund. 

Another way that I keep "powder dry" is by having a constant stream of both maturing bonds and CDs and cash flow from interest and dividend payments. I can then aggregate those amounts and redeploy based on my assessments of the risk-reward balance for particular securities and asset classes on a continuing basis. 

JPMorgan, BofA Detect Hints of a U.S. Recession Looming in 2019 - Bloomberg JPM estimates a 35% chance of a recession next year, up from 16% in March. 

Goldman Sachs: Get defensive for 2019 as recession fears rise

When recession fear talk spreads, the fear can contribute to causing a recession as businesses become more cautious and reduce their hiring and expenditures and consumers tighten their belts some.   

More than half of S&P 500 stocks are now in a bear market - MarketWatch

The S&P 500’s lower low warns that the worst is yet to come - MarketWatch

Jeffrey Gundlach says the S&P 500 is headed to new lows: 'Pretty sure this is a bear market'

Goldman says U.S.-China not likely to reach trade deal by March and more tariffs are coming

Here’s more evidence that stocks are now facing a bear market - MarketWatch

U.S. banks quietly pull back from riskiest loans amid recession fears | Reuters

Boeing raises its dividend 20%, boosts buyback plan to $20 billion


++++

Tidbits: AT & T, CBGD

TCG BDC, Inc. (CBGD) Declares Special Dividend of $0.20 per Share | TCG BDC, Inc.

AT&T Increases Quarterly Dividend 2 Percent (as expected) 

Goldman downgrades Walgreens' stock to rare 'sell,' shares fall (12/14/18) I own 4 Walgreens 2.7% SU bonds maturing on 11/18/19: Bond Detail. I also own 2 Walgreens 3.3% SU bonds maturing on 11/18/21 discussed in Item # 2.C below. Bond Detail 

I sold during a bond rally last year 2 Walgreens 3.45% SU bonds maturing on 6/1/26.  

2017 Walgreens 2026 SU Bonds +$34.04

Item # 1.C. Sold 2 WBA 3.45% SU Bonds at 100.727 (7/12/17 Post)-Item # 1.D. Bought 2 Walgreens 3.45% SU Bonds Maturing in 2026 at a TC of 98.925(5/17/17 Post); 2026 Bond Detail

I have not owned the common stock in several years. Walgreens Boots Alliance Inc. (WBA) 

+++++

S & P 500 Actual and Forecasted GAAP and NON-GAAP Earnings as of 12/13/18: 

This data is taken from S & P's website: S&P 500® - S&P Dow Jones Indices

Click "Additional Information Tab" and then "Index Earnings". The download will be into Excel. If that software is not on your computer, nothing will be downloaded. 

As Reported = GAAP
Operating Earnings = Non-GAAP

For the 12 months ending 6/30/18, the GAAP earnings were $125.48 and non-GAAP earnings were $140.37.  

For the 12 months ending on 12/31/19, the GAAP forecast is currently at $157.47  with the non-GAAP at $173.49. I view the future forecasts as overly optimistic which is almost always the case for future estimates. 

For example, in a July 2016 Instablog, I compared the actual and forecasted number for 2015. This is an excerpt from that blog:  

Update For Portfolio Positioning And Management As Of 7/24/16 - South Gent | Seeking Alpha

The S & P 500 closed yesterday at 2,546. Using the forward estimated 2019 GAAP earnings, the SPX P/E would be 16.16. The forward estimated 2019 P/E using the NON-GAAP forward estimates is 14.68.

+++++

Portfolio Management: 

The focus continues to be preservation of capital + cash flow generation. The following snapshots show the cash flow received last Monday in my Fidelity taxable account and further illustrates the capital preservation objective: 

The bonds referenced in the preceding snapshots are investment grade. 

It is important to me that both a bond or FDIC insured CD promise to make interest and  principal payments on certain dates. For as long as the FDIC and the bond issuers remain solvent, I am assured of receiving a guaranteed return on my investment that can be calculated precisely when the investment is made.  

Of the bonds listed, three make monthly interest payments: two bonds issued by the National Rural Utilities and one by GS (1 bond).  

There are two CDs that make monthly interest payments in these snapshots: Bridgewater (1 CD) and MB Financial (2).  

I also received $4K in redemption proceeds. 

A constant flow of proceeds from maturing securities allows me to redirect those funds into the same or different asset classes depending on my assessment of the then current risk/reward taking into account my investment objectives. Another reason is to mitigate interest rate risk that exists for as long as interest rates are rising.  

There are only three common stocks included in those snapshots and all are high dividend payers: Apple Hospitality (AAPL), Global Net Lease (GNL) and Terraform Power (TERP). I own AAPL in three other accounts and TERP in one other account. 

GNL and AAPL are equity REITs that make monthly dividend payments. The GNL purchase is discussed in Item # 1.B. below.  

+++++++

Fidelity's Persistent Mispricing of Tennessee Municipal Bonds: 

In the account section of my brokerage account, a value is assigned to bonds that do not reflect their true market value. Brokers use a third party to price the bonds. Whatever criteria is used by those third party services, the result is a systematic undervaluation of virtually all bonds that I own. 

Pricing for municipal bonds is generally far worse than corporate bonds. 

For example, I own the Knoxville Tennessee Electric 3% maturing on 7/1/2039 in my Fidelity account, priced today at 88.006 in my account section. The par value price would be 100 (pricing is at 1/10th of the actual $1K per bond par value)

Anyone who sold that bond at 88 would need to have a guardian appointed to handle their financial affairs. 

The security for this bond is the electric revenue for Knoxville's electric service. Tennessee is a public power state. My electric service is provided by the Nashville Electric Service, and TVA generates and transmits the power to municipally owned distribution systems or to customer owned distribution cooperatives.  

This bond pays tax exempt interest. The 20 year treasury bond closed yesterday at a 2.96% yield or below the tax free yield of this bond when bought at its par value of 100. 

So, you may be thinking that this municipal bond is rated at best BBB or lower to deserve that 88 price. The bond is rated AA+ by S & P which rates U.S. government debt at the same level. S&P Affirms U.S. Rating, Sees Last Minute Debt Fixes Continuing - Bloomberg If S & P is rating both the municipal bond and U.S. treasuries correctly, then the municipal bond price would need to be over 100 rather than 88 given its tax free interest payments.   

+++++

Trump:

That was awkward — at world’s biggest climate conference, U.S. promotes fossil fuels

It is a tribute to Donald Trump to note that he is 72 old and has managed so far to avoid criminal prosecution for his misdeeds.  

Federal prosecutors probing Trump inauguration spending -WSJ

Russians interacted with at least 14 Trump associates during the campaign and transition

Maybe Donald is draining the swamp some that he created, but more swamp creatures are likely to emerge as replacements. Zinke to leave Interior amid scandals - POLITICO; Trump's Interior Chief Zinke to Step Down Amid Ethics Probes 

++

Just More Trump Fraud and Dishonest Dealings: 

As the Trumps Dodged Taxes, Their Tenants Paid a Price; Trump family tax schemes artificially inflated New York rents: NYT - Vox; Here’s a Name to Remember: All County Building Supply & Maintenance 

According to this article, the Trumps set up a phony corporation called All County Building Supply & Maintenance that was owned by Donald, his three siblings and a cousin. 

All County Building was ostensibly a purchasing agent for Fred Trump's buildings, but Fred Trump and his executives continued to perform all of the purchasing activities. 

The vendors received their checks from All County and then All County would be reimbursed by the Trump Apartment buildings with an extra 20% to 50% added in the reimbursement. 

"Because All County performed no real work, the transfer of money through the corporation was essentially a gift that evaded the 55 percent tax in place at the time, tax experts told The Times."

More importantly from my perspective, the phony transactions allowed the Trump Apartments, which were rent controlled, to jack up the rents based on the phony costs, hurting the middle class families who lived in them. 

Here Are the Trump Projects Where Ivanka and Her Dad Misled Buyers— ProPublica

Ivanka and Donald Trump Jr. Were Close to Being Charged With Felony Fraud— ProPublica

As it closes, Trump Foundation accused of 'shocking' illegalities | MSNBC; A.G. Underwood Announces Stipulation Dissolving Trump Foundation Under Judicial Supervision, With AG Review Of Recipient Charities  | New York State Attorney General


+++

The Republicans and Insurance Coverage for Pre-Existing Conditions:

The republicans have done everything possible to repeal and gut Obamacare including the consumer protection provisions and the coverage for pre-existing conditions.

Their latest salvo involved a constitutional challenge filed by 20 republican controlled states. 

Those republican controlled states filed the lawsuit challenging the constitutionality of Obamacare in a federal district court that is probably the most likely one to rule in their favor. The judge selected by the republicans was federal district court judge Reed O’Connor who presides in Forth Worth, Texas.  

As expected, Judge O'Connor, a republican, came through for the republicans and held that the main provisions of Obamacare, including the one protecting those with pre-existing conditions, were unconstitutional. 

I found O'Connor's reasoning to be less than convincing, ridiculous is a better word, but there is no reason to go into that here.  (see e.g.Legal experts rip judge’s rationale for declaring Obamacare law invalid - The Washington Post Opinion | What the Lawless Obamacare Ruling Means - The New York Times; The ruling finding the Affordable Care Act unconstitutional is raw judicial activism and impossible to defend - The Washington Post) While he is called a "conservative" by the media, O'Connor is just another radical reactionary who are being appointed in droves by republican presidents.  

The Trump Administration is not defending the law and is instead agreeing with the republican states that filed this constitutional challenge. 

Since the 20 republican controlled states and the Trump administration are on the same side, several Democrat controlled states intervened to defend against this latest republican attack on pre-existing insurance coverage and consumer protection provisions. Those intervenors will appeal to the Fifth Circuit Court of Appeals. The case may end up back in the Supreme Court. 

It is important to note that Josh Hawley, who defeated the democrat incumbent in Missouri, signed the complaint challenging the constitutionality on behalf of Missouri. During his campaign, Hawley claimed that he would protect coverage for pre-existing conditions that he sought to eliminate with his court challenge. Republicans Are Suddenly Running Ads on Pre-existing Conditions. But How Accurate Are They? - The New York Times  

The republicans who engaged in these fraudulent promises about continuing affordable insurance for those with pre-existing conditions point to a House resolution that insurance protection for pre-existing conditions should remain as proof of their sincerity on this issue.  H.Res.1066 - 115th Congress (2017-2018): Expressing the sense of the House of Representatives that protections for individuals with pre-existing conditions should be retained in law regardless of further amendments to, or the repeal of, the Patient Protection and Affordable Care Act. | Congress.gov | Library of Congress The resolution has not even passed the House (just buried in a referral to a committee) and would not have the force of law even if it did pass the House. 

If O'Connor's decision stands as is, about 17 million Americans will lose health insurance coverage including those who acquired their insurance through the Medicaid expansion and those who are receiving assistance through subsidies.  Donald called this "Great News":  

The republican alternative only contained an illusion about protecting those with pre-existing conditions. They gave with one hand and then took it away elsewhere in their bill as I discussed in a previous post. Pre-existing conditions: Does any GOP proposal match the ACA? | PolitiFact      

++++++

1.  Equity REIT Common and Preferred Stock Basket Strategy:

A. Bought 400 SGP:AU at AUD$3.69 (A$6 commission at IB):

Quote: Stockland (Australia: Sydney)

Website: Welcome to Stockland

This brings me up to 1000 shares and reduces my average total cost per share to A$4.07. 

Previous Round-Trips: Item # 1 Sold 500 SGP:AU at A$4.4 (10/30/17 (profit snapshot = AUD$63); Item # 2 Sold 500 SGP:AU at AUD$4.71(5/11/17 Post) (profit snapshot = AUD$99)

Trading Profits to Date: AUD$162 

Dividends: Semi-Annually

Dividend Yield: 7.18% at A$3.69 based on 2018 full year at A$.265 per share, up from A$.255 paid in 2017

The company is currently targeting a A$.276 distribution for the current fiscal year which would raise the yield to 7.48% at A$3.69. 

Distribution and Dividends

Last Ex Dividend Date:  6/28/18

Stockland Interactive Charts: The shares started to slid from A$4.3+ in mid-August for no particular reason that I could discern. 

Even though I owned 600 shares prior to this 400 share purchase, and I was aware of receiving both semi-annual dividend payments on that lot, I have not been paying much attention to this position. 

After noticing the share price, I read the most recent reports and noted that the A$3.69 market price was significantly below the A$4.18 tangible book value per share as of 6/30/18.  

The last earnings report looked okay so I averaged down with a 400 share buy.   

Outlook: Stockland well positioned to deliver sustainably into the future 1Q19 Market Update

Last Earnings Report: Q/E 6/30/18 (also end of fiscal year)

B.  Bought 50 GNL at $20.13 and 10 at $19.47-Used Commission Free Trades: 

The 50 shares were bought before the monthly ex dividend date. The 10 share lot was bought on the ex dividend date. 

Closing Price Yesterday: GNL $18.76 +$0.29 1.57% 

Quote: Global Net Lease (GNL)

Website: Global Net Lease

GNL SEC Filings

2017 Annual Report

Management: External

Summary of Management Compensation and Terms:

"At September 30, 2018 the Company's portfolio consisted of 336 net lease properties located in seven countries and comprises 26.2 million rentable square feet leased to 106 tenants across 42 industries." 

"99.5% leased with a remaining weighted-average lease term of 8.6 years"

"92% of portfolio rent with contractual rent increases based on square footage"

"53% U.S. and 47% Europe (based on annualized straight-line rent)"

"55% Office, 36% Industrial / Distribution and 9% Retail (based on an annualized straight-line rent)"

Recent Share Offerings: 

Global Net Lease, Inc. Announces Pricing of Offering of Common Stock (11/28/18 Press Release)("underwritten public offering of 4,000,000 shares of common stock at a public offering price of $20.20 per share. In addition, GNL has granted the underwriters a 30-day option to purchase 600,000 additional shares of common stock."); Prospectus

There was a decline on my day of purchase due to a share offering. 

The company is IMO engaged in too many stock offerings. The prior offering was just 3 months prior to the last one. 

"On August 20, 2018, GNL completed the issuance and sale of 4,600,000 shares of common stock (including 600,000 shares issued and sold pursuant to the underwriters' exercise of their option to purchase additional shares in full) in an underwritten public offering at a price per share of $20.65. The gross proceeds from the offering were $95 million."

Global Net Lease, Inc. Announces Pricing of Offering of Common Stock (8/16/18 Press Release)

Dividend: Monthly at $0.1775 per share (annualized rate of $2.13 per share)

Global Net Lease, Inc. Announces Common Stock Dividend for Fourth Quarter 2018

Dividend Yield at $20.02 Total Cost Per Share: 10.64%

Last Ex Dividend Date: 12/12/18

Global Net Lease, Inc. (GNL) Dividend Date & History - Nasdaq

Current Position: 60 Shares

Maximum Position: 150 Shares 

Purchase Restriction: Small Ball Rule 

Last Earnings Report: Q/E 9/30/18

Global Net Lease Announces Operating Results For Third Quarter 2018

Cash Flow Calculations: 

Other News: 

Global Net Lease Provides Update on Third Quarter Acquisition Activity

Operating Expenses and Tenant Reimbursements: 10-Q for the Q/E 9/30/18 at page 46

2. Short Term Bond/CD Ladder Basket Strategy:

A. Bought 3 Six Month Treasury Bills Maturing on 6/6/19 (at auction): 
IR=  2.562%

Auction Results: 

B. Bought 2 Kroger 3.3% SU Bonds Maturing on 1/15/21: 

I have 4 Kroger bonds maturing on 1/15/19. I am redeploying 1/2 of the expected proceeds into this 1/15/21 maturity. At the current time, I have only $7K in maturing bonds during January 2021 including this Kroger 2 bond purchase.  

Finra Page: Bond Detail (prospectus linked)

Issuer:  Kroger Co. (KR)
KR Analyst Estimates
Kroger Reports Second Quarter 2018 Results (Q/E ENDING 8/18)
Kroger Reports Third Quarter 2018 Results

Credit Ratings: 

Bought at a Total Cost of 99.389
YTM at TC Then at  3.602%
Current Yield at TC = 3.32%

C. Bought 2 Walgreens 3.3% SU Bonds Maturing on 11/18/21: 

FINRA Page: Bond Detail (prospectus linked)

Issuer: Walgreens Boots Alliance Inc. (WBA) 
WBA Analyst Estimates 
Walgreens Boots Alliance Reports Fiscal Year 2018 Results 

WBA Annual Report for the F/Y Ending 8/31/18 (debt listed and discussed starting at page 79)

Credit Ratings: 

Fitch Affirms Walgreens Boots Alliance at 'BBB'; Outlook Stable (10/12/18)

Bought at a Total Cost of  98.9 (with a $1 per bond commission)
YTM at Total Cost Then at 3.697%
Current Yield at TC = 3.3367%

I compared the bond prices at Vanguard and Fidelity before entering this order. 

Vanguard 6 available (2 minimum order) at 98.863

Fidelity 6 available (2 minimum order) at 98

It is clear to me that both brokers were quoting the lot offered by the same seller. I do not know whether Vanguard was juicing the ask price by .863 or whether Vanguard was using an intermediary that juiced the ask price by that amount. Vanguard would also charge $2 more in commission to buy a 2 bond lot. I would have been charged $10.63 more to place this order through Vanguard. This is one reason why I use several brokers. 

I also own 4 Walgreens 2.7% SU bonds that mature in November 2019: Bond Detail

3. Bought 50 METPRA at $22.58 ($1 IB COMMISSION):

QUOTE: MetLife Inc. Floating Rate Non-Cumulative Preferred Series A.

Category: Advantages and Disadvantages of Equity Preferred Floating Rate Securities

Security Description:
Prospectus
Coupon: Greater of 4% or 1% above the 3 month Libor Rate
Par Value: $25
Issuer: MetLife Inc. (MET)
Optional Call: At par value plus accrued and unpaid dividends-anytime now at issuer's option 

STOPPER CLAUSE: Yes

Alternative Rate Mechanism:

Last Ex Dividend: 11/29/18 (shortly after purchase of first 50 share lot)

This security is still paying its minimum coupon rate of 4%. Since I first bought this security, the 1% spread over the 3 month Libor rate has not been greater than the 4% minimum coupon. 

Maximum Position: 100 shares (will consider averaging down in the $17 to $19 range)

Trading Profits to Date: $1,909.14

Links to Prior Trades:

Item # 1 Sold 100 METPRA at $24.95 (7/9/12 Post)(profit snapshot = $1,283.99)

Item # 1 Sold 50 METPRA at $23.27 in Regular IRA-Total Cost Per Share $13.26 (9/13/11 Post)(profit snapshot = $492.52)

Item # 1 Pared METPRA Sold 50 at $18.3 (8/31/2009 Post)(profit snapshot = $117.97)

There was one round-trip in 2009 that was apparently not discussed here:

2009 METPRA 50 Shares +$14.72

This type of security provides some problematic inflation protection through the Libor float while at the same time addressing the abnormally low interest rate scenario through the minimum coupon of 4%.  

4. Income Generation-BDCs:

A. Bought 50 FDUS at $13.87 and 30 at $12.63:

Quote: Fidus Investment Corp.
Company Website: Fidus
SEC FILINGS

Closing Price Yesterday:  FDUS $12.64 -0.01 -0.08% 

Chart: 

Last Substantive Discussion: Item # 1.C. Bought 50 Fidus at $14.43-Used Commission Free Trade (6/14/18 Post)

FDUS 1 Year Chart: Bear Market Trend Since early September 2018 (standard for BDCs) 

Regular Dividend: Quarterly at $.39 per share ($1.56 annually per share)

Special Dividend: $.04 per share

Last Ex -Dividend: 12/6/18  (after 50 share purchase and before 30 share purchase)

Both the regular and special dividend were ex dividend on 12/6 with a 12/21 payment date. FDUS has made a number of special dividend payments: Fidus Investment Corporation (FDUS) Dividend Date & History - Nasdaq

Dividend Yield:  11.23%  (excludes special dividends)

Dividend Yield with Special Dividend: 11.52% (assumes one 4 cent annually)

Dividend Reinvestment: Yes

Average Total Cost Per Share = $13.89

Current Position: 130 shares + Shares purchased with dividends

Maximum Position: 200 shares (raised from 100 shares due to price decline)

Discount to Net Asset Value at $13.89 = -15.36% Using 9/30/18 value

Last Earnings Report: Q/E 9/30/18

Fidus Investment Corporation Announces Third Quarter 2018 Financial Results 

Net Asset Value Per Share = $16.41 as of 9/30/18

"The weighted average yield on debt investments was 12.6% as of September 30, 2018."

"As of September 30, 2018, the fair value of our investment portfolio totaled $668.5 million and consisted of 65 active portfolio companies and one portfolio company that has sold its underlying operations."

"As of September 30, 2018, five debt investments bore interest at a variable rate, which represented $44.8 million of our portfolio on a fair value basis, and the remainder of our debt portfolio was comprised of fixed rate investments."

"As of September 30, 2018, we had debt investments in two portfolio companies on non-accrual status, which had an aggregate cost and fair value of $22.0 million and $9.1 million, respectively."

The two non-accruals are Restaurant Finance and K2 Industrial Services with the later being added to non-accrual status in the third quarter. 

Fidus Investment's (FDUS) CEO Ed Ross on Q3 2018 Results - Earnings Call Transcript | Seeking Alpha

10-Q for the Q/E 9/30/18 (investments listed starting at page 7)

10-K for 2017: (risk summary starts at page 33 and ends at page 59).  

Historical Net Asset Value Per Share (highly unusual increase since IPO): 

9/30/18:  $16.41
3/30/18   $16.28
12/31/17  $16.05
12/31/16  $15.76 
12/31/15  $15.17
12/31/14  $15.16
12/31/13  $15.35
12/21/12  $15.32
IPO at $15 June 2011

5. Intermediate Term Bond/CD Ladder Basket Strategy: 

A. Bought 1 Vodafone 2.5% SU Bond Maturing on 9/26/22:

I now own 2 bonds. 

FINRA Page: Bond Detail (prospectus linked)

Issuer: Vodafone Group PLC ADR (VOD)
VOD Analyst Estimates 
Investors

Credit Ratings:  

I view the YTM as high for that credit ratings which suggests IMO that the Bond Ghouls are rating the credit one notch lower. The issue is probably related to the pending acquisition of Liberty Global's cable businesses in the Czech Republic, Germany, Hungary and Romania. 

Fitch Affirms Vodafone at 'BBB+'/Stable on Announced Liberty Global Transaction

Bought at a Total Cost of 95.094
YTM at TC Then at 3.896%
Current Yield at TC = 2.629% 

6. ADDED $100 to PRPFX at $36.4 and $100 at $35.75: 

Quote Permanent Portfolio I Class: Overview 

Sponsor's Website: The Permanent Portfolio Family of Funds

I added these amounts after the annual dividend was paid: 

Last Discussed: Item # 4.C. (10/28/18 Post);  Item # 2.B. (12/21/17 Post)

Last SEC Filed Shareholder Report

Trading Profits to Date: $898.7

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.