Stocks churned in place last week, with the major averages ending the week about where they began it. Volatility was minimal as well. Several economic readings that came out during the week indicated that the homebuilding and real estate sector was holding up fairly well, and the CPI for April out Friday was no cause for alarm. In short, it was an uneventful week lacking any economic news of significance, and the market reflected that reality.

Stocks on my lists going ex-dividend this week are as follows:

Frontier Communications (FTR), 5/26/2015, yield 8.14%.

NextEra Energy (NEE), 5/27/2015, yield 3.01%.

Molson Coors Brewing (TAP), 5/27/2015, yield 2.21%.

Prospect Capital (PSEC), 5/27/2015, yield 12.37%. PSEC pays monthly.

Enerplus (ERF), 5/27/2015, yield estimate 5.09%. ERF pays $0.05 CAN monthly.

Transocean LTD (RIG), 5/27/2015, yield 2.98%. This is the first payout reflecting an 80% dividend cut, which was widely expected.

McDonalds (MCD), 5/28/2015, yield 3.43%.

Kellogg (K), 5/28/2015, yield 3.08%.

Northrop Grumman (NOC), 5/28/2015, yield 2.00%.

Realty Income (O), 5/28/2015, yield 4.84%. O pays monthly.

Safety Insurance Group (SAFT), 5/28/2015, yield 4.98%.

CenturyLink (CTL), 5/29/2015, yield 6.36%.

The only stock on my lists to report last week was Wal-Mart Stores (WMT), on 5/19/2015. The retailing juggernaut appears to be facing some headwinds at the moment, but the situation is far from dire, and really nothing to be concerned about just now. A soon to be Tier3 stock, BDC Apollo Investment (AINV), also reported on 5/19/2015. While the results were unexciting, the yield (currently 10.34%) certainly is. BDCs are currently “on sale”, as the prospect of higher interest rates has dampened enthusiasm for the group. An excellent article on MarketWatch by author Phillip van Doorn, available HERE, provides a concise summary of BDCs.

Only one stock on my lists, Tier3 speculation Seadrill (SDRL), is due to report this week, on 5/28/2015. The original rationale for SDRL was the high yield, plus a belief that the sell-off was overdone, and that even with a 50% dividend cut, the yield would still be terrific. Well, the sell-off was certainly not over-done, as the stock declined another 50% or more from my “bargain” entry point, and the dividend was eliminated entirely, which also eliminated any rationale for owning the stock. There’s a lesson here to be learned – sometimes those who say “the sky is falling” are right on! I’m holding on to SDRL, which mercifully is a small position, in the belief that the firm will survive and eventually prosper once again. But it won’t be soon, it appears.

Stocks on my lists receiving upgrades / downgrades last week were as follows:

Chevron (CVX) was downgraded to Sell at Goldman, as were several other energy stocks; Linn Energy LLC (LINE), Statoil (STO), and British Petroleum (BP), the latter being a stock not on my lists, but presented here to illustrate the extent to which Goldman has soured on the sector.

Sysco (SYY) was upgraded from Neutral to OutPerform at Credit Suisse.

Crestwood Midstream Partners LP (CMLP) was downgraded from Buy to Neutral at Ladenburg Thalman. The news that Crestwood Equity Partners (NYSE:CEQP) and Crestwood Midstream Partners (NYSE:CMLP) agreed to merge into a single publicly-traded partnership, which will retain the symbol CEQP, was apparently not well received by Ladenburg. CMLP unitholders will receive 2.75 units of CEQP for each CMLP unit they own. CEQP closed Friday at $5.16.

Vodafone Group PLC (VOD) was upgraded from Reduce to Neutral at Nomura, and was downgraded from OutPerform to Neutral at Macquarie. Interesting, both an upgrade and a downgrade the same day, and both ending up at a Neutral rating.

BlackRock Capital Investment (BKCC) was downgraded from Neutral to UnderPerform at BofA/Merrill.

Total S A (TOT) was upgraded from Neutral to OverWeight at JP Morgan. 

Eni SpA (E) was upgraded from UnderWeight to Neutral at JP Morgan.

It seems JP Morgan has a different opinion from Goldman regarding the prospects for major international integrated energy firms.

It seems to me that the summer doldrums have arrived early this year. The news is as bad as ever, even though the economy doesn’t seem to be getting any worse, and the major stock averages continue to make new highs, which basically translates to mean a lack of opportunity to buy quality (ie, “safe” blue chips) at anything resembling a value price. REITs have mostly recovered their prices, and are no longer selling at bargain prices. Energy, Mining, and BDCs are the sectors presenting the best values right now, but they are all depressed for good reasons – one must tread carefully if poking around in these spaces.

My new article on Partnership Taxation of MLPs has been fairly well-received, with many interesting comments. As is usually the case, I have benefited as well, learning a few things that I didn’t know when I wrote up the article. Frequently, and this applies to all Seeking Alpha articles, not just my own, I can learn as much or more from reading the comments as from reading the original article.

JT    

Stocks slipped a bit in the earlier portion of the week, then surged on Thursday, marking new highs for the blue chip averages, and then tacked on a little more on Friday. So far, the old adage “sell in May and go away” has been a loser. Even as new highs were being reached, volatility has remained quite low. For example, to realize big gains on Thursday, in most cases you had to have been in the stock before the open. The market opened up big and more or less just remained at that level all day.

I have had an article published on Seeking Alpha (SA) for the first time in nearly two years. The article presents a synopsis of how Publicly Traded Partnerships (PTPs) are taxed by the IRS, and presents information that an investor should know before investing in a PTP. As always, go to the main menu selection “Published Articles” for a link to the article. It is free for viewing on Seeking Alpha, although readers are required to register and sign in to SA to have full access to all free content.

Stocks on my lists going ex-dividend this week are as follows. Yield is also presented, per Friday’s closing price.

Main Street Capital (MAIN), 5/18/2015, 6.77%. MAIN is a monthly payer.

MicroSoft (MSFT), 5/19/2015, 2.57%.

Walgreens Boots Alliance (WBA), 5/19/2015, 1.56%. With a sub-2% yield, I will probably “boot” this stock from my list soon.

ConocoPhillips (COP), 5/20/1015, 4.44%.

3M Co (MMM), 5/20/2015, 2.51%.

Diebold (DBD), 5/20/2015, 3.35%.

Pan American Silver (PAAS), 5/20/2015, 1.97%. This silver miner had yielded in the 5% range until this cycle, as a reduction from $0.125 to $0.05 quarterly was announced.

Johnson & Johnson (JNJ), 5/21/2015, 2.93%. JNJ brings to mind an 80’s tune, “the future’s so bright, I gotta wear shades”. Certainly nothing on the horizon that I can see threatens this health-care behemoth.

Earnings season continued to wind down last week, with just four of my stocks reporting; Fifth Street Financial (FSC) and TICC Capital (TICC) on 5/11/2015, Pan American Silver (PAAS) on 5/12/2015, and Cisco Systems (CSCO) on 5/13/2015. Of course, the big news for CSCO was not in the numbers, but rather the news that long-time CEO John Chambers will be stepping down. I predict CSCO shareholders will miss him more than they realize at this moment.

As for earnings next week, there is only one report expected from stocks I track, but it is from a significant player, Wal-Mart Stores (WMT), scheduled to report on 5/19/2015. Additionally, a BDC I own but that is not on my Tier3 list, Apollo Investment (AINV), will report on 5/19/2015 as well. AINV has been a steady payer for many years, and certainly is as reliable as most of the other BDCs on my higher-risk Tier3 list, so I’ll be adding it to Tier3 when I rework my lists, sometime this summer.

With earnings season winding down, the upgrade / downgrade volume has declined as well, but there are always a few of interest:

PennantPark Investment (PNNT) was downgraded from Buy to Neutral at Ladenburg Thalmann.

Cisco Systems (CSCO) was upgraded to OverWeight at PacCrest.

Verizon (VZ) was downgraded from Neutral to UnderPerform at Macquarie.

Phillip Morris (PM) was initiated at Neutral at JP Morgan.

Kimberly Clark (KMB) was upgraded to OverWeight at Barclays.

MicroSoft (MSFT) was upgraded to Buy at Deutsche Bank.

Cisco Systems (CSCO) was downgraded to Neutral at Sterne Agee.

Spectra Energy (SE) was initiated at Buy at Janney Capital.

Spectra Energy Partners LP (SEP) was also initiated at Buy at Janney Capital.

Williams Partners LP (WPZ) was downgraded from OutPerform to Sector Perform at RBC Capital Markets. WPZ went up nearly $10 Wednesday, as it was announced that, similar to Kinder Morgan, the MLP will be acquired by the general partner, Williams Companies (WMB).

United Parcel (UPS) was upgraded from Neutral to Buy at Goldman.

Going back to my posting for the week beginning 2/9/2015, the merger of the “old” WPZ with Access Midstream Partners LP (ACMP), to create the “new” WPZ, left me with .86 of a unit of the new WPZ for each unit held of the old WPZ, trading at about the same price and yield as the old WPZ. That worked out to a near 14% loss. I was expecting a one-time make-up dividend that never came. Somehow, as I read of the great new business entity thus formed, I had to wonder, how do I recover that loss? I suppose the answer came last week, as it was announced that WMB will acquire WPZ, which resulted in a big price gain for WPZ, putting my original investment in WPZ in the green once again, although not by much. I was about to sell, but then the WPZ price dropped as the initial euphoria wore off, so I’m just going to hold, and let my WPZ units be exchanged for shares of WMB. That’s probably the better long term play here. I’m more of a “take the money and run” investor when a windfall occurs, but my ardor cools when it is only a break-even proposition to begin with, and down a couple of bucks from where it was an hour or two earlier as well.

Other than the WMB/WPZ deal, and CSCO chief Chambers departing, it was a quiet week. Nothing major is on the horizon next week, at least as far as we know. But as for what we don’t know, there very well may be something brewing. Stay tuned.

JT

Stocks fluctuated last week, with the down days outpacing the up days until Friday, when a well-received Jobs report triggered a substantial rally, rescuing the week, which ended up being positive on all the major averages. Oil prices gained through mid-week, as WTI closed above $60 Tuesday and Wednesday, then declined slightly to end the week just below that threshold. All things considered, the markets held up well through an earnings season that had been expected to be much worse than it turned out.

A number of the stocks I track will be going ex-dividend this week, as tallied below, by date. The current yield percentage is also indicated.

5/11/2015 

Spectra Energy (SE), 4.00%.

Exxon Mobil (XOM), 3.28%.

5/12/2015 

Boardwalk Pipeline Partners LP (BWP), 2.39%.

Entergy (ETR), 4.35%.

5/13/2015 

Emerson Electric (EMR), 3.20%.

GlaxoSmithKline PLC (GSK), 5.59%.

Royal Dutch Shell PLC (RDS.B), 5.79%.

J M Smucker Co (SJM), 2.21%.

Exelon (EXC), 3.65%.

Spectra Partners LP (SEP), 4.55%.

Fifth Street Finance (FSC), 10.32%. This BDC pays monthly.

5/14/2015 

Southern Co (SO), 4.92%.

United Parcel Service (UPS), 2.91%.

Hercules Technology Growth Capital (HTGC), 9.63%.

5/15/2015 

Chevron (CVX), 3.94%.

Eni S p  A (E), 6.80%. E pays twice a year. This will be the first 2015 payout. The payment will be initially in Euros. Even with a 20% haircut from foreign tax withholding, the yield is still attractive. This will be the first dividend I have received from E since 2012. Frankly, the 20% withholding may be even more these days, I haven’t checked it recently. One thing I’m pretty sure of, it isn’t less than 20%.

Gladstone Investment (GAIN), 10.07%. I have held Gladstone Capital (GLAD), a sister company, since 2007. The stock price of GLAD is down somewhat since then, but I have been pleasantly surprised by the uninterrupted payout from GLAD, even throughout the 2008 crisis. Both stocks yield over 10%. I finally bought some of GAIN last month. If it pays out as consistently as GLAD has paid, it will be a good investment. Just be aware that BDCs are not like investing in super-safe blue chips. That’s why the yields are 10% plus.   

Before moving on to earnings, I must note that I somehow missed a couple of my stocks going ex-dividend from last week. Buckeye Partners LP (BPL) went ex-dividend on 5/7/2015, yielding 5.78%. Exterran Partners LP (EXLP) went ex-dividend on 5/7/2015 also, and it currently yields 8.60%.

Now, as for earnings, the week just ended saw a number of my stocks reporting. To reiterate my reporting policy, I will only note stocks that reported, and when. Instead of repeating information abundantly available elsewhere, I refer readers wanting specifics to other resources. Details are available from the firm’s websites, the financial press, brokerage websites, or from the site I consider the most convenient, Seeking Alpha (http://seekingalpha.com), which frequently makes available transcripts of earnings conference calls, along with other summations and articles. Stocks reporting, by date, were:

5/4/2015

Sysco (SYY), Amerigas Partners LP (APU), Boardwalk Pipeline Partners LP (BWP), Ares Capital (ARCC).

5/5/2015

Emerson Electric (EMR), Kellogg (K), Westar Energy (WR), Digital Realty (DLR), HCP Inc (HCP), Magellan Midstream Partners LP (MMP), ONEOK Partners LP (OKS), Safety Insurance Group (SAFT), Solar Capital (SLRC), MFA Financial (MFA), CenturyLink (CTL), Frontier Communications (FTR), Breitburn Energy Partners LP (BBEP), Exterran Partners LP (EXLP).

5/6/2015

Energy Transfer Equity LP (ETE), Energy Transfer Partners LP (ETP), Kinco Realty (KIM), Plains All American Pipeline LP (PAA), Spectra Energy (SE), Spectra Energy Partners LP (SEP), Legacy Reserves LP (LGCY), Prospect Capital (PSEC), Triangle Capital (TCAP), PennantPark Investment (PNNT), Annaly Capital (NLY), Calumet Specialty Products Partners LP (CLMT), Crestwood Midstream Partners LP (CMLP), Memorial Production Partners LP (MEMP), Transocean (RIG).

5/7/2015

National Health Investors (NHI), Molson Coors (TAP), Hercules Technology Growth Capital (HTGC), Main Street Capital (MAIN), Consolidated Communications (CNSL), Windstream Holdings (WIN), Medical Properties Trust (MPW).

5/8/2015

Health Care REIT (HCN), Enerplus (ERF).

Earnings season is mostly done, with just a few stragglers left to report. From my lists, Fifth Street Capital (FSC), TICC Capital (TICC), and Pan American Silver (PAAS) are due to report on 5/11/2015, and Cisco Systems (CSCO) on 5/13/2015.

The analysts continued to rate stocks last week. Picks and pans regarding my stocks were as follows:

Buckeye Partners LP (BPL) was upgraded from Hold to Buy at Stifel Nicolaus.

Stateoil (STO) was upgraded from Sell to Hold at Societe Generale.

Transocean Partners LLC (RIGP) was downgraded from Buy to Neutral at Citigroup. RIGP would be an excellent case study subject for a mis-timed launch of an LP, having been initiated just before the huge oil price drop of 2014.

Eaton (ETN) was upgraded from Neutral to OverWeight at JP Morgan.

J M Smucker Co (SJM) was downgraded from OutPerform to Market Perform at Bernstein.

Ares Capital (ARCC) was downgraded from Buy to Hold at BB&T Capital Markets.

Breitburn Energy Partners LP (BBEP) was upgraded from Sell to Hold at Wunderlich.

Phillip Morris (PM) was upgraded from UnderPerform to OutPerform at Credit Agricole.

Vodafone Group PLC (VOD) was upgraded from Neutral to OutPerform at Exane BNP Paribas.

Amerigas Partners LP (APU) was downgraded from Buy to Neutral at UBS.

Memorial Production Partners LP (MEMP) was downgraded from Strong Buy to merely OutPerform at Raymond James. It seems strange to see a new rating of OutPerform being categorized as a downgrade.

Frontier Communications (FTR) was upgraded from Neutral to OutPerform at Macquarie. It also seems strange to see this doomed rural telecom being upgraded, although I must admit FTR has survived and kept paying out a dividend much longer than I would have expected a few years ago.

PennantPark Investment (PNNT) was upgraded to OutPerform at FBR Capital.

Phillip Morris (PM) was upgraded to Neutral at Goldman.

Crestwood Midstream Partners LP (CMLP) was downgraded to Neutral at Hillard Lyons.

Consolidated Communications (CNSL) was upgraded to Buy at Drexel Hamilton.

Note that the upgrade/downgrade “from” level is not always provided by my resource. If available, I will indicate it.

The week ahead will start off lightly, as far as economic releases are concerned. But, later in the week, Retail Sales, Import / Export Prices, PPI, and Industrial Production readings for April will provide an update on the state of the economy. There is no doubt that stock prices are somewhat extended for most sectors, with the ongoing debate being whether a pullback is in store, or rather that the advance will continue, or at least hold steady. A corollary ongoing debate concerns the direction of oil prices, with near-term levels predicted for WTI ranging from the $30s to the $70s, with pundits on both sides of the argument expressing equally firm convictions as to the anticipated near-term low or high. One wishes there was a consensus one way or the other on both the overall market direction and oil prices, so the contrarian bet to make would be obvious. But no such majority opinion exists, as far as I can observe. Certainly, safe, mega-cap blue chips are mostly fully priced. Sectors beaten down are the agreed upon high risk categories, BDCs and Mortgage REITs, and of course energy stocks. Property REITs and utilities are also off their highs, as the prospect of even the tiniest increase in interest rates is deemed a faint possibility in the months just ahead. I am mostly holding off on new bets, choosing to maintain some “dry powder”, although I will admit to going in further on a number of out-of-favor groups in recent months, mainly out of frustration with valuations in the “safer” stock groups. I have gone in on selected precious metals miners, BDCs, Mortgage REITs, and second tier energy production MLPs, several of which I actually bought at the lows. That would be LINE, LGCY, and BBEP. I have made some speculative bets, no doubt. If a 2008 style crash occurs soon, I will certainly regret taking on some of these risky positions. But if not, it will be hard to lose much, having bought at the lows, and I may end up with some nice gains. Either way, my speculations are limited and somewhat spread out, so I don’t get too worked up when occasional bad news hits. That’s how I like to play the game; try to actually win, not just settle for mediocrity.       

JT

Stocks lost ground the final days of April, but did manage a gain over the entire month. The first trading day of May on Friday then ended on a positive note, possibly as a relief rally considering earnings have not been as weak as had been feared, so far at least. But it is too early to heave a sigh of relief. We are still right at the peak of earnings season, with many more reports yet to come.

Moving on to this week’s stocks going ex-dividend, they are listed below by date, with the current yield indicated:

05/04/2015

Memorial Production Partners LP (MEMP), 12.31%.

05/05/2015

Intel (INTC), 2.87%.

Williams Partners (WPZ), 6.78%.

05/06/2015

American Electric Power (AEP), 3.72%.

Pfizer (PFE), 3.29%.

Sanofi (SNY), 3.15%. This is an annual dividend. Buy before the ex-dividend if you want any payment to come your way this year.

Wal-Mart Stores (WMT), 2.49%.

Energy Transfer Equity LP (ETE), 2.88%.

Energy Transfer Partners LP (ETP), 6.90%.

Norfolk Southern (NSC), 2.29%.

Martin Midstream Partners LP (MMLP), 8.55%.

NuStar Energy LP (NS), 6.57%.

Crestwood Midstream Partners LP (CMLP), 10.27%.

05/07/2015

Amerigas Partners LP (APU), 7.55%.

HCP Inc (HCP), 5.57%.

Breitburn Energy Partners LP (BBEP), 7.57%. BBEP pays monthly.

Linn Energy LLC (LINE), 8.97%. LINE also pays monthly.

05/08/2015

Health Care REIT (HCN), 4.57%.

Before moving on to earnings, I must note that I somehow missed an ex-dividend from last week, as Noble Corp (NE) went ex-dividend on 4/30/2015. NE yields 8.58%, and thus far has not reduced the dividend since the oil price crashed, even though the stock price has declined by 50% since September 2013.

Now, as for earnings, the week just ended saw a number of my stocks reporting. To reiterate my reporting policy, I will only note stocks that reported, and when. Instead of repeating information abundantly available elsewhere, I refer readers wanting specifics to other resources. Details are available from the firm’s websites, the financial press, brokerage websites, or from the site I consider the most convenient, Seeking Alpha (http://seekingalpha.com), which frequently makes available transcripts of earnings conference calls, along with other summations and articles. Stocks reporting, by date, were:

04/27/2015

American Capital Agency (AGNC). I had erroneously stated that Unilever (UL) would be reporting, but in fact UL reported on 04/16/2015.

04/28/2015

Kraft Foods (KRFT), Merck (MRK), Pfizer (PFE), United Parcel (UPS), Entergy (ETR), Total S A (TOT).

04/29/2015

Eaton (ETN), General Dynamics (GD), NextEra Energy (NEE), Northrop Grumman (NOC), Realty Income (O), Southern Company (SO), Waste Management (WM), Exelon (EXC), Norfolk Southern (NSC), Williams Partners (WPZ), Linn Energy LLC (LINE), Martin Midstream Partners LP (MMLP), Ensco PLC (ESV), Noble Corp (NE). MFA Financial (MFA) was expected to report, but has now delayed to 05/04/2015.

04/30/2015

ConocoPhillips (COP), Colgate Palmolive (CL), Alliant Energy (LNT), Royal Dutch Shell (RDS.B), SCANA (SCG), Statoil (STO), ExxonMobil (XOM), Diebold (DBD), Enterprise Products Partners LP (EPD), BlackRock Capital Investment (BKCC).

05/01/2015

Chevron (CVX), Public Service Enterprise Group (PEG), Buckeye Partners LP (BPL).

As noted, earnings haven’t been all that bad this quarter, even for energy firms. It will be interesting to see if this theme continues, as the following stocks report this week:

05/04/2015

Boardwalk Pipeline Partners LP (BWP), Sysco (SYY), Amerigas Partners LP (APU), Ares Capital (ARCC), MFA Financial (MFA).

05/05/2015

Emerson Electric (EMR), Kellogg (K), Westar Energy (WR), Digital Realty (DLR), HCP Inc (HCP), Magellan Midstream Partners LP (MMP), ONEOK Partners LP (OKS), Plains All American Pipeline LP (PAA), Solar Capital (SLRC), CenturyLink (CTL), Frontier Communications (FTR), BreitBurn Energy Partners LP (BBEP), Exterran Partners LP (EXLP).

05/06/2015

Energy Transfer Equity Partners LP (ETE), Energy Transfer Partners LP (ETP), Kimco Realty (KIM), Spectra Energy (SE), Spectra Energy Partners LP (SEP), Legacy Reserves LP (LGCY), Prospect Capital (PSEC), Triangle Capital (TCAP), PennantPark Investment (PNNT), Annaly Capital (NLY), Calumet Specialty Products Partners LP (CLMT), Crestwood Midstream Partners LP (CMLP), Memorial Production Partners LP (MEMP), Transocean LTD (RIG).

05/07/2015

National Health Investors (NHI), Safety Insurance Group (SAFT), Hercules Technology Growth Capital (HTGC), Main Street Capital (MAIN), Consolidated Communications (CNSL), Windstream Holdings (WIN), Medical Properties Trust (MPW).

05/08/2015

Health Care REIT (HCN), Enerplus (ERF).

Upgrades / downgrades of note last week were as follows:

Seadrill Limited (SDRL) was downgraded from Neutral to Sell at Citigroup, and from Market Perform to UnderPerform at Wells Fargo. SDRL continues to be the perfect example of the risks of a temporary high-yielder with excess debt, with no diversification, totally dependent upon favorable commodity pricing for oil. They guessed wrong when they guessed that oil prices would not decline, and demand for their rigs would continue to be strong. And I, along with others, guessed wrong when I surmised that the yield would still be outstanding, even with a 50% cut. That might have been a reasonable wager, but the bet went down the tubes when a 100% cut occurred.

Newmont Mining (NEM) was, surprisingly, upgraded from Neutral to OutPerform at Credit Suisse.

Procter & Gamble (PG) was downgraded from OutPerform to UnderPerform at Credit Agricole, and also was downgraded to UnderPerform at Wells Fargo. It must be time to buy, which I did, below $80, the first time that low of a price has been available in a long while.

Crestwood Midstream Partners LP (CMLP) was downgraded from OverWeight to Neutral at JP Morgan.

Freeport-McMoran (FCX) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

Windstream Holdings was upgraded from Neutral to Buy at Nomura.

Newmont Mining (NEM) was, again surprisingly, upgraded from UnderPerform to Neutral at BofA/Merrill.  I believed NEM would be a survivor when I bought in at what I thought was a low price, but with the drastic dividend cut, I don’t see it as a buy, other than a play on a gold price recovery, which will likely come along sometime, but who knows when?

Entergy (ETR) was downgraded to Market Perform at BMO Capital.  

Procter & Gamble (PG) was downgraded from Buy to Hold at Societe Generale.

Unilever (UL) was upgraded at First Global, according to Benzinga, but upgraded to what? That information was missing. Benzinga is the source for analyst actions available from MarketWatch.

Vodafone (VOD) was upgraded from Hold to Buy at Berenberg.

Pfizer (PFE) was downgraded from Buy to Neutral at Citigroup.

Energy Transfer Partners LP (ETP) was resumed at OverWeight at JP Morgan, and upgraded from Market Perform to OutPerform at Raymond James.

Raymond James also upgraded the general partner for ETP, Energy Transfer Equity LP (ETE), from OutPerform to Strong Buy. ETE is also an MLP, even though it is the general partner for ETP, in this strange business relationship. 

Total S A (TOT), was downgraded from OutPerform to Market Perform at Bernstein.

Other than earnings, the recent minor recovery in the price of crude oil has been a major catalyst for energy stocks, at least. There are a couple of names that look pretty enticing right now, but the question is whether the recent gains will hold, or whether another swoon is in store for crude oil. ETP and CMLP, neither of which I own, are candidates, and MEMP would be also if I didn’t already own it.  On the other hand, I’m over-exposed to energy as it is, and I will be breaking my sector exposure rule if I go in any deeper on energy. What to do? Stay tuned. On another note, I sold my MicroSoft (MSFT) holding last week, after some soul-searching. The decision was tilted to sell when I considered the current yield, 2.55%, which meant that my gain after holding for only two months would be more than I would receive from four years of dividends. My usual rule is consider selling if the gain exceeds two years’ worth of dividends, unless I really believe the price is going to continue on up. The $4 price gain that occurred after MSFT reported recently put MSFT on my sell radar, and a strong desire to “ring the cash register” after a couple of months of “no sales” finally won the debate. I would certainly buy MSFT back in the $40 to $42 range, which was where I bought it in January and March. One other rule I have is when the market offers you a gift, take it – it doesn’t happen often!

JT

Stocks managed on Monday to mostly recover from the selloff that occurred the previous Friday, then proceeded from that point to gain modestly over the next four trading days. Volatility was negligible all week, as measured by the volatility indexes and the NYSE TICK readings, and confirmed by the barely changed stock averages. The economic news was very light, although homebuilding has definitely slowed a bit, and the feared earnings collapse has thus far not materialized. Oil prices have continued to recover, holding well above $50 for WTI, leading some pundits to conclude the worst of the price crash is over.

More of my stocks will be going ex-dividend this week than in the past several weeks. One stock that I missed from last week was Procter & Gamble (PG), which went ex-dividend 4/23/2015. PG yields 3.27% as of Friday’s closing price of $81, and is very close to being in buy range. The stock has recently fallen out of favor as performance seems to have stalled lately.

Moving on to this week’s stocks going ex-dividend, they are listed below by date, with the current yield indicated:

4/27/2015

Windstream Holdings (WIN), 7.66%.

4/28/2015

Alliant Energy (LNT), 3.47%, ConAgra (CAG), 2.67%, Enterprise Products Partners LP (EPD), 4.43%, Kinder Morgan Inc. (KMI), 4.33%, ONEOK Partners LP (OKS), 7.51%, Prospect Capital (PSEC), 11.68%, American Capital Agency (AGNC), 12.23%, Enerplus (ERF), 4.80%. Note that PSEC, AGNC, and ERF all are monthly payers, with ERF paying $.05 per month Canadian.

4/29/2015

Realty Income (O), 4.61%, Plains All American Pipeline (PAA), and Legacy Reserves LP (LGCY), 10.60%. O and LGCY are both monthly payers.

4/30/2015

Eaton (ETN), 3.21%, Magellan Midstream Partners LP (MMP), 3.49%.

5/01/2015

Calumet Specialty Products Partners LP (CLMT), 9.85%.

Moving on to earnings, the week just ended saw a number of my stocks reporting. To reiterate my reporting policy, I will only note stocks that reported, and when. Instead of repeating information abundantly available elsewhere, I refer readers wanting specifics to other resources. Details are available from the firm’s websites, the financial press, brokerage websites, or from the site I consider the most convenient, Seeking Alpha (http://seekingalpha.com), which frequently makes available transcripts of earnings conference calls, along with other summations and articles. Stocks reporting, by date, were:

4/21/2015

Kimberly Clark (KMB), Verizon (VZ).

4/22/2015

Coca Cola (KO), McDonalds (MCD), AT&T (T), Potlatch (PCH), NuStar Energy LP (NS).

4/23/2015

American Electric Power (AEP), 3M Co (MMM), Altria (MO), MicroSoft (MSFT), Novartis (NVS), Pepsico (PEP), Procter & Gamble (PG), Raytheon (RTN), DrPepper Snapple (DPS), Nucor (NUE), Freeport-McMoran (FCX), Newmont Mining (NEM).

4/24/2015

I missed Ventas (VTR) in last week’s tally of stocks scheduled to report. VTR did report earnings on 4/24/2015.

The pace of reporting will accelerate this week, as earnings season moves into high gear. Reports expected, by date, are:

4/27/2015

Unilever (UL), American Capital Agency (AGNC).

4/28/2015

Kraft Foods (KRFT), Merck (MRK), Pfizer (PFE), United Parcel Service (UPS), Entergy (ETR), Total S A (TOT).

4/29/2015

Eaton (ETN), General Dynamics (GD), NextEra Energy (NEE), Northrop Grumman (NOC), Realty Income (O), Southern Company (SO), Waste Management (WM), Exelon (EXC), Norfolk Southern (NSC), Williams Partners LP (WPZ), MFA Financial (MFA), Linn Energy LLC (LINE), Martin Midstream Partners LP (MMLP), Noble (NE).

4/30/2015

ConocoPhillips (COP), Colgate Palmolive (CL), Alliant Energy (LNT), Royal Dutch Shell (RDS.B), SCANA (SCG), Statoil (STO), ExxonMobil (XOM), Diebold (DBD), Enterprise Products Partners LP (EPD), BlackRock Capital (BKCC), Ensco (ESV).

5/01/2015

Chevron (CVX), Public Service Enterprise Group (PEG), Buckeye Partners LP (BPL).

Last week saw a higher than usual volume of upgrades / downgrades / initiations of coverage on my stocks:

General Mills (GIS) was upgraded from Sell to Neutral at Goldman Sachs.

Colgate Palmolive (CL) was downgraded from Neutral to Sell at Goldman. The downgrade must be because of valuation, CL is performing very well.

Paychex (PAYX) was upgraded from UnderWeight to Neutral at JP Morgan.

Total S A (TOT) was upgraded from Neutral to OutPerform at Credit Suisse.

ConocoPhillips (COP) was downgraded to Hold at Edward Jones, and initiated at Neutral at Nomura.

Sanofi (SNY) was upgraded from Sell to Neutral at Citigroup.

Statoil (STO) was downgraded from Hold to Sell at Deutsche Bank.

American Electric Power (AEP) was initiated at Neutral at Guggenheim.

Southern Company (SO) was initiated at Neutral at Guggenheim.

Exelon (EXC) was initiated at Buy at Guggenheim.

Ensco (ESV) was downgraded to UnderWeight at Morgan Stanley.

Noble (NE) was downgraded to UnderWeight at Morgan Stanley.

Transocean (RIG) was downgraded to UnderWeight at Morgan Stanley.

It appears Morgan Stanley has become bearish on the offshore drilling contractors. Talk about being late with a call. 

Total S A (TOT) was downgraded to Hold at Deutsche Bank.

Royal Dutch Shell (RDS.B) was upgraded from Reduce to Hold at HSBC.

NextEra (NEE) was initiated at Buy at Mizuho.

SCANA (SCG) was initiated at Buy at Mizuho.

Southern Company (SO) was initiated at Buy at Mizuho.

American Electric Power (AEP) was upgraded from Hold to Buy at Deutsche Bank.

MicroSoft (MSFT) was upgraded from Neutral to Buy at Nomura, and from Neutral to OutPerform at Macquarie.

Freeport-McMoran (FSC) was downgraded from Buy to Hold at Clarkson Capital.

Enerplus (ERF) was initiated at Neutral at UBS.

It seems like many if not most of the energy and utility ratings are very late in coming. One could do worse than treating the ratings as contrarian indicators. By the time the last holdouts downgrade energy stocks, it may be time to buy. Now that utilities have had a nice run up, and the buy ratings are coming in, it may be time to sell, or at least hedge. I don’t know if using ratings as contrarian indicators is wise, but based on what I’ve seen over the years, it would seem to be a better bet than using the ratings as actionable indicators according to what they recommend. Of course, one could go on and on about the usefulness or lack thereof of analyst ratings, some of which are truly ridiculous. How about initiating coverage at “Neutral” or “Hold”. It would seem to me that at least at the point of initiating coverage, there should be an opinion registered, pro or con. Otherwise, why initiate coverage? Or what about the “Perform” rating? Perform as compared to what? Analyst reports can be useful to learn about a company and recent history, but are probably not useful for timing buys and sells.

The week ahead will be focused primarily on earnings, as earnings season moves toward the zenith of the period. Thus far, the impact has been minimal. But that may change as more stocks in the challenged energy sector report. Moves either way can present buy / sell opportunities.

JT