Stocks gained three days and declined two days last week, but overall managed to post a gain for the week. Crude oil stayed above $30 all week, as far as the benchmark West Texas Intermediate grade was concerned. The political primaries, especially on the Republican side, dominated the news flow. Even as more and more voices are being raised warning that a recession is likely, and the corresponding stock sell off could be 50% or more, the averages just keep on advancing, albeit in a two steps forward, one step backward fashion.

Focusing on the positive, dividends just keep on being paid. Stocks on my lists going ex-dividend this week are:

Pepsico (PEP), 3/2/2016, yield 2.79%.

Roche Holdings LTD (RHHBY), 3/2/2016, yield 3.08%. This is an annual dividend.

Potlatch (PCH), 3/2/2016, yield 5.71%.

Kimberly Clark (KMB), 3/2/2016, yield 2.76%.

CenturyLink (CTL), 3/2/2016, yield 7.10%.

Eaton (ETN), 3/3/2016, yield 3.98%.

Molson Coors (TAP), 3/3/2016, yield 1.89%.

Ventas (VTR), 3/3/2016, yield 5.30%.

Hercules Technology Growth Capital (HTGC), 3/3/2016, yield 11.60%.

Ensco (ESV), 3/3/2016, yield .51%. ESV bowed to the inevitable and reduced the dividend to 1 cent.

Iron Mountain (IRM), 3/3/2016, yield 6.48%.

Yields on BDCs reflect that, for now at least, payouts are continuing even as the share prices have declined substantially, as investors fear a storm is coming and these “less than blue chip” firms will be hard hit. REIT yields are also high, reflecting recent price declines reflecting concern over rising interest rates and also a sliding economy.

 One dividend missed in prior weeks was Noble Corp (NE), which went ex-dividend 2/4/2016. NE currently yields 7.30%.

Of 30 names listed last week expected to report earnings, 28 did so as scheduled. See last week’s posting for the names and dates. Rather than repeat here information that is abundantly available elsewhere, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. The two symbols listed last week that did not report were Linn Energy (LINE) and TICC Capital (TICC). Both have rescheduled for this week, as indicated below, along with two other firms scheduled to report:

Linn Energy LLC (LINE), 2/29/2016.

Medtronic (MDT), 3/1/2016. 

Grief (GEF), 3/2/2016.

TICC Capital (TICC), 3/3/2016.

The news cycle for the week ahead will likely be dominated by the “Super Tuesday” primaries, with earnings season all but over, and not much scheduled in the way of economic releases until later in the week. Thursday and Friday will see a number of significant economic news releases, including the key monthly Jobs report from the Department of Labor. As for stocks, other than depressed sectors, there are very few buy opportunities available, based on traditional valuation measures. And the depressed sectors (energy, BDCs, MREITs) are depressed because of a somewhat dim outlook for these sectors. My advice is to hold onto dry powder, be patient, and hold off unless an irresistible opportunity comes along. Even then, go in cautiously and incrementally. Undervalued stocks have a way of becoming even more undervalued, especially after one has just bought in.

JT

Stocks gained ground significantly Tuesday and Wednesday, then declined only slightly the last two trading days of the short week, allowing the market to post a nice advance for the week. As earnings season begins to wind down, it is apparent that most firms are under pressure as far as maintaining earnings, which does not bode well for the immediate future. Still, except for the oil patch, it would be an exaggeration to claim that “the sky is falling”. As for oil and gas producers and related entities, the sky is definitely falling, in huge chunks, as their earnings reports confirmed.

Meanwhile, dividends continue to be paid by most firms on my lists. Upcoming ex-dividend dates this week are as follows:

NextEra Energy (NEE), 2/24/2015, yield 3.04%.

Diebold (DBD), 2/24/2015, yield 4.63%.

American Capital Agency (AGNC), 2/25/2015, yield 13.33%. AGNC pays monthly.

Pan American Silver (PAAS), 2/25/2015, yield 0.52%. PAAS is a play on metals producers rebounding, since it would obviously not be a compelling stock for investors seeking dividend income.

Stag Industrial (STAG), 2/25/2015, yield 8.73%.

Enerplus (ERF), 2/25/2015, yield 8.78%. ERF is a monthly payer.

Northrop Grumman (NOC), 2/25/2015, yield 1.66%.

Prospect Capital (PSEC), 2/25/2015, yield 14.68%. PSEC is a monthly payer.

General Electric (GE), 2/25/2015, yield 3.16%.

McDonalds (MCD), 2/26/2015, yield 3.04%.

Realty Income (O), 2/26/2015, yield 3.94%. O pays monthly.

Safety Insurance Group (SAFT), 2/26/2015, yield 4.89%.

A couple of dividends missed from prior weeks are Buckeye Partners LP (BPL), 2/19/2015, yield 7.97%, and NuStar Energy (NS), 2/4/2015, yield 12.76%. I can miss reporting a dividend if it is not announced very far in advance, since I only scan for upcoming dividends once a week. Most firms announce far in advance, trying to get as much “mileage” as possible out of their payouts, as far as favorable publicity is concerned, giving investors a reason to buy the stock.  

Of 16 names listed last week expected to report earnings, 15 did so as scheduled. See last week’s posting for the names and dates. Rather than repeat here information that is abundantly available elsewhere, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. The exception was Linn Energy LLC (LINE), which is now scheduled to report on 2/25/2015.

As for this week, 30 firms on my lists, including LINE, are scheduled to report, as follows, by date:

2/22/2015

Alliant Energy (LNT), ONEOK Partners LP (OKS).

2/23/2015

Crestwood Equity Partners LP (CEQP), JM Smucker (SJM).

2/24/2015

Ares Capital (ARCC), Memorial Production Partners LP (MEMP), Annaly Capital Management (NLY), Energy Transfer Equity LP (ETE), Energy Transfer Partners LP,

Ensco PLC (ESV), Legacy Reserves LP (LGCY), Martin Midstream Partners LP (MMLP), Transocean Partners LLC (RIGP), Triangle Capital (TCAP), Westar Energy (WR), TICC Capital (TICC), Solar Capital (SLRC), Transocean (RIG).

2/25/2015

Archrock Partners LP (APLP), Consolidated Communications (CNSL), Iron Mountain (IRM), Linn Energy LLC (LINE), Seadrill (SDRL), Winstream Holdings (WIN), Digital Realty (DLR), Hercules Technology Growth Capital (HTGC), Main Street Capital (MAIN), STAG Industrial (STAG), Kraft Heinz (KHC).

2/26/2015

Breitburn Energy Partners LP (BBEP).

Upgrades / downgrades out last week on stocks I follow were as follows:

Nestle S A (NSRGY) was downgraded from Buy to Hold at Jeffries.

Realty Income (O) was downgraded from Hold to Sell at Wunderlich. This had to be based on valuation. The popular “monthly dividend company” has been bid up to stratospheric levels.

Ventas (VTR) was downgraded from Buy to Hold at Stifel.

Royal Dutch Shell (RDS.A, RDS.B) was resumed at Buy at BofA/Merrill.

Total S A (TOT) was resumed at OutPerform at Raymond James.

Procter & Gamble (PG) was upgraded from Neutral to Buy at Sterne Agee CRT.

Kayne Anderson Energy Development (KED) was downgraded from Buy to Neutral at Ladenburg Thalman.

Welltower (HCN) was upgraded from UnderPerform to Neutral at Hilliard Lyons. Entergy (ETR) was downgraded from OverWeight to Equal Weight at Barclays.

BlackRock Capital Investment (BKCC) was downgraded from OutPerform to Market Perform at Keefe Bruyette.

Fifth Street Financial (FSC) was downgraded from OutPerform to Market Perform at Wells Fargo.

Calumet Specialty Products Partners LP (CLMT) was downgraded from OutPerform to Neutral at Credit Suisse.

Duke Energy (DUK) was downgraded from OverWeight to Neutral at JP Morgan.

Martin Midstream Partners LP (MMLP) was downgraded from Buy to UnderPerform at BofA/Merrill.

Archrock Partners LP (APLP) was downgraded from Buy to Neutral at  BofA/Merrill.

Energy Transfer Equity LP (ETE) was downgraded from Buy to Neutral at BofA/Merrill.

Eaton (ETN) was downgraded from Buy to Hold at Standpoint Research.

Breitburn Energy Partners LP (BBEP) was downgraded from Market Perform to UnderPerform at Wells Fargo.

Legacy Reserves LP was downgraded from Market Perform to UnderPerform at Wells Fargo.

Linn Energy LLC was downgraded from Market Perform to UnderPerform at Wells Fargo.

Memorial Production Partners LP (MEMP) was downgraded from Market Perform to UnderPerform at Wells Fargo.

We have a bifurcated market at this time, with tremendous bargains available in energy MLPs, contract drillers, precious metals miners, BDCs, and mortgage REITs IFF (IFF is short for if and only if) things turn around for these depressed sectors before wholesale bankruptcies occur. For oil and gas explorers and producers, oil prices must recover. For precious metal miners, gold, silver, and copper prices must recover. For BDCs and mortgage REITs, the economy must not fall off a cliff. Top quality blue chips, on the other hand, are priced to the moon in many if not most cases. One example is Realty Income (O), a REIT that is extremely popular with dividend seekers. O is now bid up so high that some sell recommendations have come out in spite of the exemplary record O has posted over the last ten years or longer. This is not a good time to buy for the risk-averse. Better to await better values on quality names.

JT

Stocks declined Monday through Thursday last week, but a rally on Friday recovered over half of the decline of the previous four days. As for crude oil, WTI dropped to the lowest close yet seen, under $27, before joining stocks on Friday by advancing back up to $29.

The next batch of stocks on my lists going ex-dividend this week are as follows, with the ex-dividend date and current yield as indicated:

Chevron (CVX), 2/16/2015, 5.16%.

MicroSoft (MSFT), 2/16/2015, 2.90%.

Statoil (STO), 2/16/2015, 5.78%.

Walgreen Boots Alliance (WBA), 2/16/2015, 1.91%.

Boardwalk Pipeline Partners (BWP), 2/16/2015, 3.68%.

Gladstone Investment (GAIN), 2/16/2015, 11.61%. GAIN pays monthly.

GlaxoSmithKline (GSK), 2/17/2015, 6.11%. Also, per E*Trade, a special dividend of $0.5822 will also be paid, with the same ex-dividend date.

Royal Dutch Shell (RDS.B), 2/17/2015, 8.82%.

United Parcel Service (UPS), 2/18/2015, 3.78%.

Main Street Capital (MAIN), 2/18/2015, 8.00%. MAIN is a monthly payer.

Johnson & Johnson (JNJ), 2/19/2015, 2.95%.

Of 22 names listed last week expected to report earnings, 21 did so as scheduled. See last week’s posting for the names and dates. Rather than repeat here information that is abundantly available elsewhere, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. The exception was MFA Financial (MFA), which is now scheduled to report on 2/17/2015.

As for this week, 16 firms on my lists, including MFA, are scheduled to report, as follows, by date:

02/17/2016

Dr Pepper Snapple (DPS), Williams Partners LP (WPZ), Calumet Specialty Products Partners LP (CLMT), Linn Energy LLC (LINE), Newmont Mining (NEM), MFA Financial (MFA).

02/18/2016

SCANA (SCG), Wal-Mart (WMT), Waste Management (WM), Entergy (ETR), Welltower (HCN), National Health Investors (NHI), Duke Energy (DUK), Pan American Silver (PAAS).

02/19/2016

Public Service Enterprise Group (PEG), Enerplus (ERF).

Upgrades / downgrades out last week on stocks I follow were as follows:

Spectra Energy (SE) was initiated at Hold at Deutsche Bank.

Spectra Energy Partners LP (SEP) was initiated at Buy at Deutsche Bank.

SCANA (SCG) was initiated at Neutral at Mizuho.

Energy Transfer Equity LP (ETE) and Energy Transfer Partners LP (ETP) were both downgraded from OutPerform to Neutral at Robert W Baird.

ONEOK Partners LP (OKS) was downgraded from Neutral to UnderPerform at Robert W Baird.

Plains All American Pipeline LP (PAA) was downgraded from OutPerform to UnderPerform at Robert W Baird.

Cisco Systems (CSCO) was upgraded from UnderPerform to Neutral at Macquarie.

Cisco Systems (CSCO) was downgraded to Buy at Goldman. The prior rating was not given, but it must have been Strong Buy or Top Pick or something similar.

Plains All American Pipeline LP (PAA) was downgraded from Buy to Neutral at BofA/Merrill.

Medley Capital (MCC) was downgraded to Neutral at Ladenburg Thalman.

Apollo Investment (AINV) was downgraded from Neutral to Sell at Citigroup.

Fifth Street Financial (FSC) was downgraded from OverWeight to Neutral at JP Morgan.

Medley Capital (MCC) was downgraded from Buy to Hold at Jeffries, to Market Perform at FBR Capital, and to Neutral at Citigroup.

Coca Cola (KO) was upgraded from Sell to Hold at Societe Generale.

Conoco Phillips (COP) was downgraded to Peer Perform at Wolf Research.

HCP Inc (HCP) was downgraded from Hold to Sell at Stifel.

Cisco Systems (CSCO) was upgraded from Hold to Buy at Jeffries.

Apollo Investmnt (AINV) was downgraded from Market OutPerform to Market Perform at JMP Securities.

ConAgra Foods (CAG) was upgraded from Neutral to Buy at BofA/Merrill.

Legacy Reserves LP (LGCY) was downgraded from Buy to Neutral at Ladenburg Thalman.

Linn Energy (LINE) was downgraded from Neutral to Sell at Citigroup.

Memorial Production Partners LP (MEMP) was downgraded from Buy to Neutral at Ladenburg Thalman.

Today (Monday) is a market holiday, as we revere our favorite presidents of times past, perhaps even more so considering what we have now, and enjoy a respite from the madness of the markets. Tomorrow, however, it will be “game on” once again. The financial press is replete with articles of market declines ahead, the slowing economy, crushing debts and deficits, both personal and national, and so on. The old axiom of journalism of  “if it bleeds, it leads” is on full display. The key to survival in times like these is to own the strongest of the strong, and avoid the rest. In my world, that means avoid all stocks other than my Tier1 list, and even on that list, limit energy holdings to no more than 10% to 15% of the portfolio.  I only wish I had done so. Of course, if energy stocks continue to decline, I will likely be in compliance soon.

JT

First, a quick recap of what this Facebook Page and my web site (www.optimumstockinvesting.com) is all about. It is to present a comprehensive approach to investing in stocks. I have an identified subset of stocks I follow, categorized into four lists, or tiers. I originally decreed that the number of stocks followed would be capped at 100, but currently the total is 132. Tier1 stocks are the safest, strongest firms, the least likely to cut their dividends or go bankrupt. Tier1 yields are usually in the low single digits. Tier2 stocks are less safe, with risk factors that Tier1 stocks do not have, and while dividend cuts may occur, the firms are unlikely to go bankrupt, barring a severe economic downturn, or more likely, disastrous management decisions, such as an ill-advised acquisition. For example, MLPs are by definition in this category, as they have a built-in risk factor of an adverse change in the tax code. Tier3 stocks are either high-yield or high potential for capital gains, and can do very well if the economy remains strong or the fundamentals change for the better in their sector. Included here are BDCs, MREITs, rural telecoms, metals miners, and less substantial MLPs. Obviously, if hard times strike, these firms will cut or eliminate their dividends, and may go bankrupt. Tier4 stocks are the “walking dead”, stocks previously on the other lists, but now their dividends are absent or reduced, and bankruptcy is a real possibility. I have given up on these firms, but I will continue to track them as an exercise in masochism, as long as they continue to hang on. There is even a remote chance they may recover and get back to at least my Tier3 list.

My web site explains the approach I follow in detail, and contains a wealth of information and resources. My approach is based on the value investing approach outlined by Ben Graham in his classic works, updated a bit for the modern era, with just a hint of a trader’s mindset incorporated. The key take-away I want viewers to gain from my creation is an understanding of the risks inherent in stocks, as well as the rewards, and the need for caution and diversification, and most of all, the realization that ANYTHING can happen, nothing is 100% safe or guaranteed!

Now, back to my regularly scheduled presentation.    

Stocks gyrated as usual last week, finishing slightly behind where they were at the close of the prior week. Crude oil (WTI) managed to hold above $30 most of the time during the period, closing Friday at $31. A suspect Monthly Jobs Report released on Friday did not impress the market, in spite of rosy headline numbers, as evidenced by a hefty decline of all the major stock averages. Analysts digging deeper into the report found much to question, as several incongruities were found. Plus, the unemployment rate as calculated has always dismissed workers who are not actively seeking jobs, thus not counting the long-term unemployed who have given up on ever finding a job. Another knock on the rosy numbers is that underemployed individuals, those only working part time or well under their capabilities (i.e. college educated baristas, etc.) are counted by the government as fully employed. 

Meanwhile, dividends are still being paid regularly by quality firms, and even in some cases by less than stellar quality names. Stocks on my lists going ex-dividend this week are as follows, by ex-dividend date:

02/08/2016

Amerigas Partners LP (APU), yield 9.48%.

American Electric Power (AEP), yield 3.60%.

02/09/2016

Entergy (ETR), yield 4.70%.

Exxon Mobil (XOM), yield 3.66%.

02/10/2016

Fifth Street Financial (FSC), yield 12.54%. FSC pays monthly.

Spectra Energy Partners LP (SEP), yield 5.49%.

Spectra Energy (SE), yield 5.53%.

JM Smucker Co (SJM), yield 2.13%.

Exelon (EXC), yield 3.84%.

Emerson Electric (EMR), yield 4.05%.

3M Co (MMM), yield 2.89%.

Duke Energy (DUK), yield 4.20%. DUK is a utility I will be adding to my Tier1 list.

02/11/2016

Southern Company (SO), yield 4.48%.

Conoco Phillips (COP), yield 2.83%. That is, of course, the new yield following a just announced dividend cut. The reduction would not be so hard to digest if management had not just recently reiterated that maintaining the dividend was a top priority. Unbelievably, they reiterated those words in the conference call, even as the cut was being announced. I actually expected a 2016 cut, if oil prices remain at current levels or worse, but not so soon. My complaint is that management had to know this was possible, even if no decision had been made, so why come out so forcefully that “maintaining the dividend is our top priority” just one quarter ago?

Of 25 names listed last week expected to report earnings, 23 did so as scheduled. See last week’s posting for the names and dates. Rather than repeat here information that is abundantly available elsewhere, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. The two symbols listed last week that did not report were Prospect Capital (PSEC), now scheduled for 2/9/2016, and Kayne Anderson Energy Development (KED) which is actually a closed-end fund focused on high yielding energy companies. The Kayne Anderson fund family, which includes KED, released annual reports on fund performances on 1/29/2016.

As for this week, 22 firms on my lists, including PSEC, are scheduled to report, as follows, by date:

02/08/2016

Boardwalk Pipeline Partners LP (BWP), Plains All American Pipeline LP (PAA).

02/09/2016

Apollo Investment (AINV), Coca Cola (KO), HCP Inc. (HCP), Medley Capital (MCC),  Fifth Street Financial (FSC), Sanofi (SNY), Prospect Capital (PSEC).

02/10/2016

Medical Properties Trust (MPW), CenturyLink (CTL), Cisco Systems (CSCO), Realty Income (O).

02/11/2016

Diebold (DBD), Kellogg (K), MFA Financial (MFA), PepsiCo (PEP), Reynolds American (RAI), Molson Coors (TAP), Total SA (TOT).

02/12/2016

Ventas (VTR), Buckeye Partners LP (BPL).

Upgrades / downgrades out last week on stocks I follow were as follows:

Northrop Grumman (NOC) was upgraded from Neutral to Buy at BofA/Merrill.

Microsoft (MSFT) was downgraded to Neutral at Hilliard Lyons.

Duke Energy (DUK) was downgraded from OutPerform to Market Perform at Wells Fargo.

Sysco (SYY) was downgraded from Equal Weight to UnderWeight at Morgan Stanley.

Realty Income (O) was upgraded from UnderWeight to Equal Weight at Morgan Stanley.

Total S A (TOT) was downgraded from Buy to Hold at Liberum.

Phillip Morris (PM) was initiated at Hold at Berenburg.

Freeport-McMoran (FCX) was downgraded from Buy to Hold at Argus.

Intel (INTC) was upgraded from Sell to Neutral at Goldman.

Procter & Gamble (PG) was initiated at Hold at GMP Securities.

Walgreen Boots Alliance (WBA) was initiated at Neutral at Atlantic Equities.

AT&T (T) was initiated at Buy at DA Davidson.

Verizon (VZ) was initiated at Neutral at DA Davidson.

Conoco Phillips (COP) from Buy to Hold at Societe Generale.

Linn Energy LLC (LINE) was downgraded from Hold to Sell at Stifel Nicolaus.

Coca Cola (KO) was upgraded to Buy at UBS, and to Neutral at Susquehanna.

Linn Energy LLC (LINE) was downgraded from Neutral to Sell at Ladenburg Thalmann.

Linn Energy LLC (LINE) was downgraded from Market Perform to UnderPerform at Raymond James.

Magellan Midstream Partners LP (MMP) was downgraded from OutPerform to Neutral at Credit Suisse.

Sysco (SYY) was upgraded from Hold to Buy at Argus.

Conoco Phillips (COP) was downgraded from Sector OutPerform to Sector Perform at Scotia Howard Weil.

Stocks have basically gyrated up and down the last couple of weeks, going nowhere. Crude oil has performed similarly, stabilizing just above $30. The question now is whether a bottom is forming, or is this just a pause before the next leg down? I don’t know the answer, nor does anyone else. Recall the famous saying, sometimes attributed to Yogi Berra, “predictions is difficult, especially about the future”.  Rather than guessing, I’ll just hold back plenty of “dry powder” and make a move when presented with an opportunity, all the while being prudent, never going “all in”, and always keeping the famous saying in mind.

JT

Stocks overall gained last week, as down days on Monday and Wednesday were outweighed by up days on Tuesday, Thursday, and especially Friday. Still, the month just ended was overall a down month, as numerous concerns weighed on the market. Other than the ever present risk of a geo-political event, the major concern right now is the slowing US and world economy and the impact on earnings. As firms report fourth quarter and full year earnings, modest results, combined with cautionary outlooks and conservative guidance, gives holders a reason to sell.

Unless, of course, their reason for buying stocks was to collect dividends. Firms on my lists scheduled to trade ex-dividend this week are as follows, by date:

02/03/2016

Intel (INTC), yield 3.47%.

Pfizer (PFE), yield 3.97%.

Unilever (UL), yield 3.02%.

Magellan Midstream Partners LP (MMP), yield 4.75%.

Norfolk Southern (NSC), yield 3.37%.

Williams Partners LP (WPZ), yield 15.38%.

Crestwood Equity Partners LP (CEQP), yield 43.10%. I double-checked this, and that yield is correct. In the current oil price environment, I would be surprise if that yield holds up, but for now, apparently so. I own CEQP, I’ll be watching closely when the payment comes into my account.

Martin Midstream Partners LP (MMLP), yield 18.60%. Another MLP high-yielder that is unlikely to maintain the current payout much longer.

Memorial Production Partners LP (MEMP), yield 14.70%. Even with a cut from $.30 to $.10, MEMP pays a double-digit yield. That is because the share price is only $2.73 currently. Again, the payout is at risk in the current energy environment.

02/04/2016

Energy Transfer Equity LP (ETE), yield 12.30%.

Energy Transfer Partners LP (ETP), yield 13.81%.

HCP Inc (HCP), yield 6.57%.

02/05/2016

Archrock Partners LP (APLP), yield 22.70%. Same comment as CEQP, above, applies here.

Welltower (HCN), yield 5.46%.

02/08/2016

American Electric Power (AEP), yield 3.77%.

Amerigas Partners LP (APU), yield 9.81%. This propane distributor is probably one of the safest buys in the MLP space, having been dragged down by the MLP sell-off, even though it is in a different market than most other MLPs.

Earnings season has begun once again. All of the firms on my lists scheduled to report last week did so as scheduled. See last week’s post for a list of the companies reporting, by date. As for earnings details, see the firm’s websites, news articles in the financial press, or Seeking Alpha.

The week upcoming has even more reports scheduled, as shown following, by date:

02/01/2016

American Capital Agency (AGNC), Kayne Anderson Energy Development (KED), Amerigas Partners LP (APU), Sysco (SYY).

02/02/2016

Emerson Electric (EMR), Pfizer (PFE), United Parcel Service (UPS), Exxon Mobil (XOM), Kimco Realty (KIM), Prospect Capital (PSEC).

02/03/2016

Eaton (ETN), GlaxoSmithKline (GSK), Merck (MRK), Southern Company (SO), Exelon (EXC), Spectra Energy (SE), Spectra Energy Partners LP (SEP), Gladstone Investment (GAIN), PennantPark Investment (PNNT), Noble Corp PLC (NE), Mid-America Apartment Communities (MAA).

02/04/2016

ConocoPhillips (COP), Phillip Morris (PM), Statoil (STO), Magellan Midstream Partners LP (MMP).

The volume of upgrades / downgrades always increases as earnings season gets under way, as firms report their results and analysts re-evaluate the firms’ prospects going forward. Activity for my stocks for the week just ended are as follows:

ONEOK Partners LP (OKS) was downgraded from OutPerform to Neutral at Robert W Baird.

Intel (INTC) was upgraded from Neutral to OutPerform at Macquarie.

Diebold (DBD) was upgraded from Neutral to Buy at Northcoast.

Crestwood Equity Partners LP (CEQP) was downgraded from OutPerform to Neutral at Robert W Baird.

MFA Financial (MFA) was upgraded from Neutral to OverWeight at JP Morgan.

Southern Company (SO) was upgraded to Hold at Evercore ISI Group.

Vodafone (VOD) was upgraded to Buy at Jeffries.

Exxon Mobil (XOM) was downgraded from Hold to Sell at Tudor Pickering.

McDonalds (MCD) was upgraded from Hold to Buy at Argus.

Hercules Technology Growth Capital (HTGC) was downgraded from Buy to Neutral at Robert W Baird.

Exelon (EXC) was upgraded from Sell to Buy at Citigroup.

Welltower (HCN) was downgraded to UnderPerform at BMO Capital.

Legacy Reserves LP (LGCY) was downgraded from OutPerform to Market Perform at FBR Capital.

Newmont Mining (NEM) was upgraded from Neutral to Buy at BofA/Merrill.

Merck (MRK) was downgraded from Buy to Neutral at BofA/Merrill.

Kinder Morgan Inc (KMI) was upgraded from Neutral to OutPerform at Credit Suisse, and from Hold to Buy at Stifel.

Pan American Silver (PAAS) was downgraded from OutPerform to Market Perform at FBR Capital.

Seadrill (SDRL) was downgraded from OverWeight to Equal Weight at Morgan Stanley.

Norfolk Southern (NSC) was upgraded from Market UnderPerform to Market Perform at Avondale, and downgraded from Buy to Neutral at Buckingham Research.

NextEra (NEE) was upgraded from Neutral to OutPerform at Robert W Baird.

Darden Resaurants (DRI) was downgraded from Market Perform to UnderPerform at Raymond James.

Ensco (ESV) was downgraded from Buy to Hold at Citigroup.

Prospect Capital (PSEC) was initiated at Neutral at National Securities.

There are definitely some bargains available in the energy sector. The problem is separating the value stocks from the value traps. The fact is, nearly all will be value traps if oil prices remain at the January lows or worse for an extended period. The key here is how low will oil prices go, and for how long, and if they recover from today’s levels, at what level will they stabilize? If I knew the answers to those questions, I could tell you what to buy and what to avoid. Lacking that information, I would say do not pay anything like a reasonable price for anything other than the strongest of the strong, firms that will almost certainly be able to ride out the oil price collapse, even if it lasts for several years. Examples are Exxon Mobil (XOM), Chevron (CVX), and Enterprise Products Partners LP (EPD), to name my top three. These may not end up being good investments, but you are unlikely to lose all your money with them. At the other end of the scale are the Production MLPs, such as Breitburn Energy Partners LP (BBEP), Linn Energy LLC (LINE), and only slightly less distressed, Memorial Production Partners LP (MEMP), and Legacy Reserves LP (LGCY). Buying these names is like an option on oil prices, in that it may pay off big if oil prices go up before the firms go bust, or it may end up a total loss if not. A host of other names likely fit in-between these two extremes, with more risk than the top quality firms, but less than the “basket cases” with share prices down to “pink sheet” levels. I have holdings at both extremes and most levels in-between. I admit to being nervous, because I am over-exposed to energy, but I am not selling, I am prepared to ride it out and see what happens. But I recognize I am in a speculative position on many of these holdings, and I am prepared to take the losses if that is the way it ends up. That is, I’m not confusing investing with speculating. I know what I’m doing, which positions are which. I recommend you make that distinction as well, before taking advantage of any of today’s bargains.

JT

Stocks stabilized last week, with the major averages posting positive numbers overall for the week. The benchmark for crude oil, West Texas Intermediate, likewise finally stopped declining, and reversed strongly on Friday to close above $30 for the first time in several days. Barring some unforeseen geopolitical event, which is always a possibility, the next major factor for stocks will be fourth quarter earnings, as well as full year results, and any guidance going forward.

There are a few more stocks on my lists going ex-dividend this week than the paltry number posted last week:

Enterprise Products Partners LP (EPD), 1/27/2016, yield 7.40%.

American Capital Agency (AGNC), 1/27/2016, yield 14.97%. AGNC pays monthly.

Plains All American Pipeline LP (PAA), 1/27/2016, yield 14.35%.

Alliant Energy (LNT), 1/27/2016, yield 3.82%.

Stag Industrial (STAG), 1/27/2016, yield 8.57%.

Prospect Capital (PSEC), 1/27/2016, yield 16.69%. PSEC pays monthly.

ConAgra Foods (CAG), 1/27/2016, yield 2.55%.

ONEOK Partners LP (OKS), 1/28/2016, yield 12.44%.

Kinder Morgan (KMI), 1/28/2016, yield 3.60%.

Enerplus (ERF), 1/28/2016, yield 10.38%.

Paychex (PAYX), 1/28/2016, yield 3.55%.

Realty Income (O), 1/28/2016, yield 4.54%. O pays monthly.

Calumet Specialty Products Partners LP (CLMT), 1/29/2016, yield 15.32%.

Earnings reports from last week were generally well received:

Kinder Morgan (KMI) did not report stellar numbers on 1/20/2016, but the revenue was in line with expectations, and overall the market was reassured by the steps the company is taking to deal with the oil crash. The stock gained 21% by the end of the week, albeit from a very depressed level.

Verizon (VZ), reporting on 1/21/2016, beat estimates on earnings and revenue, and also gained after reporting.

General Electric (GE), reporting on 1/22/2016, beat on EPS, but revenue was down slightly Y/Y. The stock dipped Friday in the AM, but rebounded to close flat on the day, and only slightly down on the week. GE has slipped below $30 with the recent market rout, but is laying the foundation for positive results going forward, in my opinion, as well as in the opinion of most pundits.

As always, see the firm’s websites, the financial press, or Seeking Alpha for earnings details.

As for the week ahead, fourth quarter results will be forthcoming for a number of stocks I follow, as indicated following, by date:

1/25/2016

Kimberly Clark (KMB), McDonalds (MCD).

1/26/2016

3M Co (MMM), Johnson & Johnson (JNJ), Potlatch (PCH), Procter & Gamble (PG), AT&T (T).

1/27/2016

General Dynamics (GD), Norfolk Southern (NSC).

1/28/2016

American Electric Power (AEP), Altria (MO), Blackstone Group (BX), Enterprise Products Partners LP (EPD), NextEra Energy (NEE), Nucor (NUE), Northrop Grumman (NOC), Raytheon (RTN), MicroSoft (MSFT).

1/29/2016

Chevron (CVX), Colgate Palmolive (CL), NuStar Energy LP (NS).

Upgrades / downgrades coming out last week on my stocks were as follows:

Procter & Gamble (PG) was upgraded from Hold to Buy at Stifel.

McDonalds (MCD) was upgraded from Hold to Buy at BTIG Research.

Noble PLC (NE) was upgraded from Hold to Buy at Canaccord Genuity.

Fifth Street Financial (FSC) was upgraded from Market Perform to OutPerform at Wells Fargo.

Enterprise Products Partners LP (EPD) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

Plains All American Pipeline (PAA) was upgraded to OverWeight at Morgan Stanley.

Spectra Energy Partners LP (SEP) was upgraded from UnderWeight to Equal Weight at Morgan Stanley.

Emerson Electric (EMR) was upgraded from Hold to Buy at Standpoint Research.

Seadrill (SDRL) was downgraded from Neutral to UnderPerform at BofA/Merrill.

Eaton (ETN) was initiated at Buy at Standpoint Reserch.

Chevron (CVX) was downgraded from OverWeight to Neutral at Simmons.

Roche Holdings LTD (RHHBY) was initiated at OverWeight at Piper Jaffray.

DrPepper Snapple (DPS) was upgraded from UnderPerform to OutPerform at Credit Agricole.

Energy Transfer Partners LP (ETP) was downgraded from OutPerform to Perform at Oppenheimer.

ONEOK Partners LP (OKS) was downgraded from OutPerform to Perform at Oppenheimer.

Walgreen Boots Alliance (WBA) was initiated at Hold at Jeffries.

STAG Industrials (STAG) was initiated at OutPerform at RW Baird.

Mid-America Apartment Properties (MAA) was downgraded from Buy to Neutral at Sun Trust Robinson Humphrey.

The burning question for this week is whether the sell off is over, or was last week just a temporary pause? Certainly, just about anything related to Energy is a screaming bargain just now, unless the oil age is truly over. Even if it takes a long while, say a couple of years, if the past is any indication, the oversupply will eventually end, and oil prices, and related stocks will recover. I’m thinking of adding to my Kinder Morgan (KMI) holdings, and maybe starting a new position in Enterprise Products Partners LP (EPD), probably the strongest, safest MLP out there. I’m also considering buying STAG Industrials (STAG), a REIT that may be underpriced just now. Now may be a good time to buy in, albeit cautiously, committing capital slowly, incrementally.

JT