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DHC - Bought at $1.86. Already own some of there exchange traded debt - DHCNL.
The more I look at DHC the more I am intrigued with the common shares that just hit a all time lows. I love find a value trap that appears to have a catalyst for breaking to the upside. I already own the exchange traded senior unsub debt - DHCNL. DHCNL yields 9% here.
A couple things in the last conference call;
Q:
And then as it relates to the $1.5 billion in cash and the $1 billion callable this June, can you elaborate on the thought process there, whether it pay it all down, pay down half and refinance half, where is management thinking about taking that?"
A:
We definitely expect to prepay some portion of the nine and three quarter notes, but as you said we do need to be thoughtful and we need to continue to assess our investments and liquidity. The key thing for us is to make sure that we're investing in the portfolio and positioning ourselves to grow earnings so we can get a more normal dividend in place."
So the have $1.5 bil in cash (just sold another 10% piece of a building for another $108mil) They have 9.75% notes that can now be called in as of June. Paying any of this down will save interest expense.
Q:
I think last year, maybe it was in the first quarter, I forget, you issued some debt and I think that interest rate was maybe in the 4s, given what's going on with interest rates now, if you had to refinance some of that debt, how much higher do you think the interest rate might be?"
A:
You're right; we were below 4.5 on that last issuance. Interest rates have come up a bit, but to be honest, I haven't been as focused on where we would issue debt. We're really – we're sitting on $1.5 billion of cash. When we look at our total debt, net debt to gross assets is just 25%. So we're not really looking to issue more debt right now. The key is again focusing on the performance of the portfolio and getting EBITDA back up to where it should be."
So, not even thinking of borrowing more money here. I have to think that they pay down a big chuck of the 9.75%. That will have more cash falling to the bottomline. I looked at institutional ownership. No outright run for the exits. https://fintel.io/so/us/dhc
I think the industry they are in has growth potential. Senior living looks to be bottoming out. Not sure how much inflation/recession weighs on that. But overall, I think DHC is a worth a speculative trade with a 2 year time horizon. Positive debt reduction in this next report may be catalyst for better performance. I don't see a whole lot of downside risk here. They appear to be well capitalized. No near term debt risk. $250 mil dues in 2024. The $billion 9.75% due in 2025. Then no senior notes due to 2028.
Investor presentation:
https://s24.q4cdn.com/823398264/files/doc_presentations/2022/05/DHC-Q1'22-Investor-Presentation.pdf
https://www.sec.gov/ix?doc=/Archives/edgar/data/1075415/000107541522000018/dhc-20220331.htm
That was a telling and interesting exchange. I have a good size position in pipelines. Most in ET and WES, and speculative smaller position in SMLP.
It was disappointing to see Biden cancel Keystone XL on several levels. I think 100 miles had already been completed. The lost jobs and the fact that they had approval under another administration to proceed. And of course the shortages we see now. I now they ask US taxpayers to provide funds for other countries to construct pipelines is very disturbing.
I think WES and ET are attractive at these levels.
I
CEQP-P Long at 9.12. Yields 9.22%
Crestwood Equity Partners LP, 9.25% Cumulative Preferred Units, not redeemable at the issuer's option at any time, and with no stated maturity. Cumulative distributions of 9.25% per annum ($0.8444 per annum or $0.2111 per quarter)
https://www.quantumonline.com/search.cfm?tickersymbol=CEQP-&sopt=symbol
IVR- Long at 9.79. Really beaten up mREIT after reverse split. I usually don't like reverse splits, but sometimes many others don't either so the selling can get over done. Down 45% since the June 6th split. Book value at April 30, 2022 was about $18.00. So selling for 54% of book as last reported. Earning per share available for distribution was $1.20 per share. (btw, all number split adjusted)
I looked at institutional activity and it looks pretty good.
https://fintel.io/so/us/ivr
Three insider buys in May but all relatively small.
Earnings presentation.
https://static.seekingalpha.com/uploads/sa_presentations/13/83013/original.pdf
Been paying a dividend of 90 cents a share per quarter for the last year. $3.60 a year and the stock selling here at $9.71 as I type. This is what they said on the last conference call.
CIM-A Bought at 21.16 .Yields 9.45%. The B and C series preferreds are fixed to floating. The A's fixed at 8% here and are callable. CIM would be smart here to call these in and issue a new series that is fixed to floating. Most mReits have moved to fixed to flaoting. for example, here are the terms for the 7.75% C's;
I have been researching and getting in to insurance/annuity companies. What do you think?
Most pay dividends and selling for less than book. They have re-occuring revenues and higher interest rates should lead to higher investment income. For mortgage insurers persistency is rising. I find JXN interesting. Spin-off from PRU-UK. I like GNW's spinoff - ACT. They are just now starting to pay dividends. And I like GNW for much the same reasons. And GNW now has a buyback in place and a commitment to return capital. BHF is also interesting. No divy but they buy back a hell of a lot of shares. LNC also intrigues me down here. No position but it has fallen far enough now that I may buy some.
Energy I like CHK. Got in after BK and have a nice gain. I sell calls around the position, and great dividneds!
My speculative long term lotto play is ALIN-B shares. ALIN (private equity held) is profitable. Much debt coming due in 2024, but if they chew through that debt perhaps we can see the preferreds getting paid a dividend again plus those in arrears. Less than 1% of port, and I have been in and out with trading gains on part.
RILY I like basically because their insiders buy tons of stock at market and shareholder friendly as to dividends.
And picked up some exchange traded debt yesterday. PBI-B and QVCC. BWSN recently as well.
The more I look in to WHLR the more pissed I am with CDR's management that they really think they can stick the preferreds with them and profit from it. I haven't decided how much I want to bet on the preferreds before the June 22nd hearing. I had 5% of port in then but sold over half when shares rose over 14.
TWTR - WTF! Bad timing in this one.
TWTR - Bought some at the close at $45.00. Looking to do covered call in am. If I can sell the June 45's for $3.00 that is a 7% return on my funds at risk if taken out at $45.00. I am thinking that Musk's offer of $54 will had some support here soon.
With NYSE breath flat today, and VIX taking a nice dip, we may get an up day tomorrow.
FB - Back in at 198.60.
UPST - Bought a hundred shares for speculation at 31.00 before the open. Selling seems to be really over done. I need to research more, but their story is interesting and I like the growth.
FB- Sold this am for 9.7%gain.
Bought SQQQ after the close last night.
ALIN-B , Sold about a third of my position today for a small 5% loss. My highest cost basis shares. Remaining shares have lower cost basis and unrealized gains.
Sold about 10% of my CDR- C preferreds for 50+% gain. Just after the PPS went on a free fall. Not sure what is up on that. Low volume sell-off.
ALIN-B up 75%. On 3x average volume but that is still just 20,000 shares.
hmm...
GNW - Sold half of my buy last night at 3.94 for 4.5% gain. Fairly large buy of 20K shares. Way overweight and needed to trim. Saw little downside risk. I was hoping for 20 cents but will settle for 17 on half.
GNW - GNW announces $350mil buy back!
18% of market cap!
Earnings out tomorrow.
Added a bunch in after hours. Surprised no bump.
Just bought Genworth Finl, Inc. 6.5% 06/15/2034 at 89.60 bonds.
YTM of 7.84. Current yield of 7.25%. Looking at historical chart these bonds were trading for about 100 in February. Hard for me to put a finger on why the weakness since. Higher 10 year treasury rates?
RILY - Ouch! Did not like last nights earnings report. Sold most at the open and took my loss. Kept a small position. Insiders bought heavy last quarter. What do they know?
RILY - Added at 53.84. Slowly building to full position of 5% of port.
FB- closed out my position last night on the ramp up. Actually added more shares before the close so it ended up being a good trade.
Re-evaluated this am and bought back in at my original small position size at 199.90. I think there is major macro headwinds ahead so treading lightly with growth stocks.
ACT - Announced today their first quarterly dividend. 14 cents. Of course I would have liked to see a larger dividend. I am happy they started this quarter, and not next. And I figured it would take the year to see what the total dividend would be. ACT hanging on to more cash is no problem for me as GNW owns 81.6% of ACT. Would have liked to see more so GNW could pay down debt faster, but the 14 cents is not a surprise due to macro headwinds and the press release sounds like they are still evaluating. I expect to see more with a special dividend at year end.
" "Returning capital to shareholders, balanced with our growth and risk management priorities, remains a key commitment for Enact as we look to drive shareholder value through time. We believe the initiation of a quarterly dividend reflects meaningful progress towards that goal and we continue to evaluate the most appropriate amount of total capital to return to shareholders for the remainder of 2022. Our ultimate view will be shaped by our capital prioritization framework: supporting our existing policyholders, growing our mortgage insurance business, funding attractive new business opportunities and returning capital to shareholders. Our total return of capital will also be based on our view of the prevailing and prospective macro-economic conditions, regulatory landscape and business performance."
Link to 8K
http://archive.fast-edgar.com/20220428/AQ22M22CR222V2Z2222R22YZI5GFE2Y2A242/
Aargh! Should have waited to buy FB after seeing GOOGL report. I thought bad news was priced in to both as cheap as they have gotten. FB has a RSI (5) of 18. Oversold.
It was a joke to Godfather. Big deal was being made about my business partner's son having possible "inside" business knowledge about Lehman as he was employed my Marsal and Alveraz. He had none. That firm is huge and no knowledge what was going on at Lehman. He left them probably about two years ago now. I heard that he now works for Lehman's new up and running LAMCO unit to start a cyrpto banking operation with the $50 bil in NOL cash.
FB - Still holding these shares at 214.19 for a loss. Now selling for close to 15 times earnings. Looks cheap. Doubled up, but still less than 2% of portfolio.
Added at 181.58.
Earnings tomorrow.
FBRTpE - Preferreds for FBRT. Yielding 8.5% here. Added some.
FBRT -
Franklin BSP Realty Trust, Inc., a real estate finance company, originates, acquires, and manages a portfolio of commercial real estate debt secured by properties located in the United States. The company also originates conduit loans; and invests in commercial real estate securities, as well as owns real estate acquired through foreclosure and deed in lieu of foreclosure, and purchased for investment. In addition, it invests in commercial real estate debt investments, which includes first mortgage loans, mezzanine loans, bridge loans, and other loans related to commercial real estate. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Benefit Street Partners Realty Trust, Inc. Franklin BSP Realty Trust, Inc. was incorporated in 2012 and is headquartered in New York, New York.
>>Bot ALIN-A and ALIN-B preferreds. Special situation and risky. Divindends suspended. <<
Sold the A's at 3.82 and bought an equal amount of B's. at 4.05.
A's are 7.25% and the B's at 8.50$. As of today the B's have about $2.12 in accrued dividends, and the A's $1.81. If they ever start paying div's again, at a 8% yield the B's will be worth $26.50, and the A's at 22.62. Well worth swapping them out for the 22 cent difference for this risky and very speculative trade. ALIN is profitable and should do well being energy related shipping. Altera Infrastructure is privately held. 1% of portfolio.
KNTK - sold half for 19% gain.
DHCNL has dropped even lower. Averaged down here. Bought DHCNL here at 17.54. This is exchange traded senior unsecured unsubordinated debt for DHC. Selling here at 25% of book I feel fairly comfortable holding. Yields 8.9% here.
GNW - Added and now over weight of over 5% of port. Higher interest rates should be good for GNW and ACT. Insurance companies basically in the past past had premiums revenues balance with claims, and made their money on investing the reserves. JP Morgan analyst says that a strong labor market and rising home prices should create a beneficial credit market environment for private mortgage insurers.
And they upgraded mortgage insurer ESNT to overweight. ESNT, by the way is sitting at 52 week lows. The mortgage insurers have been pulled down with other consumer finance firms. NMIH has broken support. ACT should be announcing a regular dividend policy in the next few months, if not at this next quarterly report on May 4th.
BHF - Brighthouse gets upgraded to Equal Weight at Wells Fargo on rising rates
https://seekingalpha.com/news/3822613-brighthouse-gets-upgraded-to-equal-weight-at-wells-fargo-on-rising-rates
"The analyst also increased her EPS estimates to reflect better alternative results in Q1 2022, higher interest rates, and higher accretion on buyback estimates. For 2022, Greenspan raised her estimate for Brighthouse's (BHF) EPS for 2022 to $14.90 from prior estimate of $14.10, for 2023 to $16.00 from $15.40, and keeps estimate for 2024 unchanged at $17.55."
Let that sink in. They could earn 90% of their market cap in 3 years!
From that last conference call:
Thank you ,Jimzin. I do my best to help the little people.
>>How can our dividends be distributed to higher classes of debtors when their status is closed?<<
The CTs hold a claim against LBHI. All those debtors listed are affiliates of LBHI and have no barring on the CTs. Distributions are being made to higher classes of creditors in the LBHI case, not affiliated debtors.
NatGas up over $6. Crude over $100. Gasoline selling for $4-5 per gallon. 10 year treasury now over 2.5%. How does this not weigh on the economy going forward? I saw retailers up strong yesterday. I would think higher gasoline prices would weigh on discretionary spending.
TSLA - Sold a Jan 23 $2200 call for an even $50.
WES - One of my larger holdings. I have owned for a while and have a $12.40 cost basis. Just added some 24.81 and sold May 20 $25.00 calls for $1.00.
I will get the dividend in addition that should go ex-div late this month. Current div is .327, but they have mentioned raising to .50.
NEW SA article out.
https://seekingalpha.com/article/4499676-western-midstream-stock-important-holding-portfolio
TSLA - You can sell a Jan 23 $2475 call here for $35.00.
What kind of insanity would have to strike for TSLA to become the 2nd largest company in the world with a market cap of over $2.5trillion in just 9 months? 117% higher price per share than where it is now. Larger that MSFT, Saudi Aramco, GOOGL, AMZN. In fact, bigger that 3 Berkshire Hathaway's combined! BRK is the 7th largest company in the world. TSLA is now 6th.
TSLA - Stopped out for 6.12% gain.
TSLA - Upon further consideration. I think I going to be closing out my TSLA short call position today. That, or I will drop my stop loss down to breakeven. I am concerned about the hype around a stock split. I haven't decided yet.
Update: Typed this out earlier before market open but failed to send.
With the nas weakness this am. I reduced my stop loss to a small profit.
TSLA - Sometimes in a fit of insanity I sell TSLA calls. Last year I sold 2 January 2022 $1700 calls for $110.00. They expired worthless for a $22,000 gain.
Yesterday I sold 1 January 2023 $1650 call for $98. I put a $130 stop loss on it. So, TSLA has to trade above $1748 by next January expiration for me to lose money. Or if I get stopped out, I will re-assess if it gets close.
So what is TSLA's market cap at $1748? $1.8 trillion.
AMZN current market cap is $1.66 T
GOOGL at $1.84T
I have a hard time seeing TSLA having a higher market cap than AMZN, and just a little under GOOGL's.