JTís DAILY BLOG for Month Of July 2013

Note: All previous month's posts are available in the archives, as noted above. 

All postings for the month are available here, sorted in descending order - i.e. most recent at the top.

All times are Eastern Time - same as the NYSE

1st Posting for Wednesday 07/31/2013 09:00 AM

Stocks popped up at the open Tuesday, then deteriorated all morning long and into the afternoon, after which a modest rally ensued, with the major averages gaining back the lost ground, to close mostly even by the end of the day. Overnight, Asian markets mostly finished in the red, with only Shanghai posting a small gain. European markets are trading similarly at this hour, with only Britain showing a positive result. Several economic readings will be coming out today; the ADP Employment numbers for July, the latest Q2 readings on GDP, Inflation, and Employment Costs, Chicago PMI for July, and last, and these days, probably least, the FOMC announcement from the just-concluded meeting. U.S. futures are positive, with less than an hour to go before the open.

Only one upgrade to report this AM, as ONEOK Partners LP (OKS) was upgraded from Neutral to OutPerform at RW Baird.

Additional earnings reports that came out after the close on Tuesday are as follows:

Kimco Realty (KIM) reported Q2 FFO of $0.35, beating by two cents. Revenue of $246.1M beat by $11.96M.

ONEOK Partners (OKS) reported Q2 EPS of $0.62, beating by six cents.

AmeriGas Partners (APU) reported FQ3 EPS of a minus $0.43. Revenue of $581.7M missed by $61.73M.  APU, already down from dilution because of shares being sold by Energy Transfer Partners (ETP) related to an acquisition by APU from ETP, is likely going to see some more declines today.

This morning, a couple more reports have come out:

Southern Company (SO) reported Q2 EPS of $0.66, missing by two cents. Revenue was $4.25B, up 1.6% Y/Y.

Exelon (EXC) reported Q2 EPS of $0.53, missing by a penny. Adjusted Revenue of $5.88B missed by $0.27B.

With a lot of economic data to come, and a Fed meeting statement this afternoon, today should be an active day on Wall Street.

JT

1st Posting for Tuesday 07/30/2013 09:30 AM

Stocks started off in the red on Monday, and stayed there all day, closing with middling losses on all the major averages. Overnight, Asian markets mostly finished higher, with only India posting a decline. European markets are all trading in the green at this hour. The economic releases scheduled for today are the Case Shiller 20 City Index of Home Prices for May, and the Consumer Confidence reading for July. U.S. futures are positive, pre-open.

Only one analyst action on my stocks to report this AM, as Freeport-McMoran Copper & Gold (FCX) was initiated at OverWeight at JP Morgan.

Well, some but not all earnings expected yesterday came out:

Boardwalk Pipeline (BWP) reportedQ2 EPS of $0.28, missing by three cents. Revenue of $288.7M missed by $14.14M.

Mercury General (MCY) reported Q2 EPS of $0.63, beating by two cents. Revenue of $642.56M missed by $70.84M.

Gladstone Investment (GAIN) reported FQ1 Net Investment Income (NII) of $0.15, in-line.

American Capital Agency (AGNC) reported a comprehensive loss of $2.37, includes $4.61/ share of net income and $6.98 in losses on M2M investments. Net book value was reported as $25.51/ share.  

Still waiting as of Tuesday AM on results from Sanofi (SNY), Safety Insurance Group (SAFT), Annaly Capital Management (NLY), Exterran Partners LP (EXLP), and Barrick Gold (ABX).

Additional earnings out this morning are:

Pfizer (PFE) reported Q2 EPS of $0.56, beating by a penny. Revenue of $12.97B, down 7% Y/Y, beat missed by $40M.

Merck (MRK) reported Q2 EPS of $0.84, beating by a penny. Revenue of $11.0B missed by $0.22B.

Entergy (ETR) reported Q2 EPS of $1.01, missing by three cents. Revenue of $2.74B beat by $0.12B.

Waste Management (WM) reported Q2 EPS of $0.54, missing by a penny. Revenue of $3.53B missed by $0.02B.

NextEra Energy (NEE) reported Q2 EPS of $1.46, beating by eighteen cents. Revenue of $3.8B missed by $0.1 B.

HCP (HCP) reported Q2 FFO of $0.72, missing by a penny. Revenue of $516.3M missed by $2.23M.

Today should be a fairly active day of trade, with numerous earnings reports and a Fed meeting in progress.

JT

1st Posting for Monday 07/29/2013 08:45 AM

After starting off with substantial losses, stocks did well Friday in rallying back to break-even by the close. The Dow Industrials, S & P 500, and NASDAQ actually finished in the green, while the New York Composite and the Russell 2000 (small caps) ended with only minor losses. Overnight, Asian markets mostly finished lower, as Japan declined over 3%, and Shanghai nearly 2%. Only Singapore managed to close in the green, by a tiny increment. European markets are trading in positive territory for the most part at this hour, with only Italy showing a loss. The only economic release scheduled for today is Pending Home Sales for June, due out at 10:00 AM. U.S. futures are negative, indicating the market here will start off on a down note.

Only one of my stocks has received any analyst attention this AM, as MicroSoft (MSFT) was downgraded from OverWeight to Neutral at Atlantic Equities.  

A number of my stocks will be going ex-dividend this week, as presented below, by date:

7/29/2013

Alliant Energy (LNT), yield 3.50%.

Conagra Foods (CAG), yield 2.72%.

Enterprise Products Partners LP (EPD), yield 4.30%.

Kinder Morgan Inc (KMI), yield 4.13%.

Kinder Morgan Energy Partners LP (KMP), yield 6.16%.

Prospect Capital (PSEC), yield 11.91%.

7/30/3013

Realty Income (O), yield 4.57%. O pays monthly.

Paychex (PAYX), yield 3.57%.

7/31/2013

Norfolk Southern (NSC), yield 2.81%.

Plains All American Pipeline (PAA), yield 4.27%.

Williams Partners LP (WPZ), yield 6.56%.

Enerplus (ERF), yield 6.60%. ERF pays $0.09 Canadian monthly per share.

Main Street Capital (MAIN), yield 6.04%. MAIN pays monthly.

8/1/2013

Eaton (ETN), yield 2.47%.

Southern Company (SO), yield 4.48%.

Spectra Energy Partners LP (SEP), yield 4.47%.

ONEOK Energy Partners LP (OKE), yield 5.73%.

Earnings season gets in high gear this week, with a number of stocks I follow reporting, as listed below by date. Reports are expected before market hours on the indicated date, unless otherwise noted.

7/29/2013

Sanofi (SNY),  Boardwalk Pipeline Partners LP (BWP), Mercury General (MCY), Safety Insurance Group (SAFT), Gladstone Investment (GAIN), Annaly Capital Management (NLY), American Capital Agency (AGNC), Exterran Partners LP (EXLP), Barrick Gold (ABX). SNY will be reporting from Paris, likely to be in the wee hours here. No time was specified for SAFT, GAIN, or EXLP. NLY and AGNC are scheduled to report after the market closes.

7/30/2013 

Merck (MRK), NextEra Energy (NEE), Public Service Enterprise Group (PEG), Pfizer (PFE), Waste Management (WM), Ameigas Partners LP (APU), Entergy (ETR), Kimco Realty (KIM), HCP Inc (HCP), ONEOK Partners LP (OKS). APU, KIM, OKS are scheduled to report after market hours.

7/31/2013

Southern Company (SO), Exelon (EXC), Williams Partners LP (WPZ), Solar Capital (SLRC), Martin Midstream Partners LP (MMLP). WPZ and MMLP are scheduled to report after market hours. No time was specified for SLRC.

8/1/2013

ConocoPhillips (COP), Kraft Foods (KRFT), Kellogg (K), Procter & Gamble (PG), Royal Dutch Shell (RDS.B), SCANA (SCG), Exxon Mobil (XOM), ENI S P A (E), Enterprise Products Partners LP (EPD), Magellan Midstream Partners LP (MMP), Blackrock Kelso (BKCC). KRFT is set to report after the market close. RDS.B will be reporting from Europe, and will likely come out in the wee hours. Ditto for E. No time was specified for BKCC.

8/2/2013

Chevron (CVX), Eaton (ETN), Alliant Energy (LNT), Buckeye Partners LP (BPL), TICC Capital (TICC). TICC is scheduled to report after the close.

With this week seeing the peak of earnings season, it should make for a more interesting week than usual.

JT

1st Posting for Friday 07/26/2013 09:00 AM

After a shaky start, stocks managed to end the day Thursday with modest gains. Overnight, Asian markets posted losses in Japan, Shanghai, and India, ended with a modest gain in Hong Kong, and flat in Singapore. European markets are trading mixed at this hour, with Britain, Germany, and Italy down, France and Spain up. U.S. futures are negative. The only economic release for today is the final July University of Michigan Sentiment Reading, due out at 9:55 AM.

None of my stocks have received any upgrades / downgrades so far today.

Additional earnings reports that have come out since my last posting are:

Just before the open yesterday, Realty Income (O) reported Q2 FFO of $0.61, beating by two cents. Revenue of $184.3M was in-line.

A few more reports came out this morning:

Newmont Mining (NEM) reported Q2 EPS of a minus $0.10. Revenue of $2B missed by $0.08B.

Digital Realty Trust (DLR) reported Q2 FFO of $1.19, beating by a penny. Revenue of $363.5M missed by $2.81M.

Ventas (VTR) reported Q2 FFO of $1.03, beating by a penny.

Time to publish. If this day sees a sell off like the futures are indicating, I may buy something.  I have even more cash after selling my position in ONEOK (OKE) yesterday, after a $9 run up in one day. That doesnít happen often, but when it does, take the money and run.

JT

1st Posting for Thursday 07/25/2013 09:00 AM

Stocks posted modest declines Wednesday on most of the major averages, with only the NASDAQ eking out a tiny gain. Overnight, Asian markets posted losses on all major bourses, and European markets are doing the same, as the European market day crosses the half way mark. U.S. futures are indicating the market here will begin on a down note. With a few exceptions, such as Facebook last night, earnings have been uninspiring, with revenues consistently coming in below expectations. Economic releases coming out today are the Weekly Claims for Unemployment and June Durable Orders.

None of my stocks have received any upgrades / downgrades so far today.

One earnings report that I missed yesterday was General Dynamics (GD), which reported Q2 EPS of $1.81, beating by nineteen cents. Revenue of $7.9B beat by $0.17B.

This morning, we have a few more reports:

Unilever (UL) reported H2 net profit was up13% to Ä2.7B; sales were up 0.4% to Ä25.5B, underlying sales were up 5%, and finally, core EPS was up 0.4% to Ä0.76.

Roche Holdings (RHHBY) reported H1 net profit was up 39.4% to 5.94B Swiss francs ($6.34B), broadly in line with forecasts, and sales were up 4%, to 23.3B francs.

Statoil (STO) reported Q2 net profit dropped to 4.3B kroner from 26.4B kroner last year. Adjusted net profit was down 2% to 11.3B kroner vs consensus of 11.7B kroner. Sales were down 26% to 148.3B kroner.

American Electric Power (AEP) reported Q2 EPS of $0.73, missing by a penny.  Revenue was $3.6B, missing by $0.09B.

Colgate-Palmolive (CL) reported Q2 EPS of $0.70, in-line. Revenue of $4.35B missed by $0.04B.

Raytheon (RTN) reported Q2 EPS of $1.64, beating by $0.33. Revenue of $6.12B, up 2.1% Y/Y, beat by $0.32B.

3M (MMM) reported Q2 EPS of $1.71, in-line. Revenue was $7.75B, up 2.9% Y/Y, missing by $0.02B.

It will be interesting to see if any bargains come available after some of these reports. Certainly not for defense stocks, which all have surprised to the upside.

JT

1st Posting for Wednesday 07/24/2013 09:45 AM

U.S. markets ended with mixed results Tuesday, as the Dow Industrials and the New York Composite posted small gains, while the S & P 500, the NASDAQ, and the Russell 2000 small caps all posted small losses. Overnight, Asian markets posted mixed results, with Japan, Shanghai, and India down, Hong Kong and Singapore up. European markets are all trading in the green at this hour. U.S. futures are positive, and indeed have just now opened with modest gains to start the session.  

Three of my stocks received upgrades / downgrades this AM:

Nucor (NUE) was downgraded from Buy to Hold at Argus.

Norfolk Southern (NSC) was downgraded from Neutral to UnderPerform at BofA/Merrill.

United Parcel Service (UPS) was initiated at OutPerform by Credit Suisse.

Earnings reported after the bell Tuesday were:

Norfolk Southern (NSC) reported Q2 EPS of $1.46, missing by three cents. Revenue was $2.8B, missing by $0.05B.

AT&T (T) reported Q2 EPS of $0.67, missing by a penny. Revenue was $32.1B, up 1.6% Y/Y, beating by $0.29B.

Then, this morning, more reports have come out:

Potlatch (PCH) reported Q2 EPS of $0.47, beating by seventeen cents. Revenue of $133.2M missed by $2.75M.

PepsiCo (PEP) reported Q2 EPS of $1.31, beating by twelve cents. Revenue of $16.8B beat by $0.01B.

Northrop Grumman (NOC) reported Q2 EPS of $2.05, beating by $0.34.

Dr Pepper Snapple (DPS) reported Q2 EPS of $0.84, in-line. Revenue of $1.61B missed by $0.04B.

Reynolds American (RAI) reported Q2 EPS of $0.84, beating by a penny. Revenue was $2.18B, up 0.1% Y/Y, missing by $0.01B.

GlaxoSmithKline (GSK) reported Q2 EPS of £0.26p. Revenue was £6.61B.

Penn Virginia (PVR) reported Q2 EPS of -$0.21. Revenue of $273.5M missed by $7.12M. This was not a good report. PVR will take a hit today after that report.

It is past time to close this posting and get to work.

JT

1st Posting for Tuesday 07/23/2013 09:15 AM

Stocks started off the week Monday with gains, but just barely. Asian markets, by contrast, posted strong gains, as Chinese officials stated that growth of less than 7% would ďnot be toleratedĒ. European markets are likewise trading to the upside. U.S. futures are positive.

I only have one upgrade / downgrade to report thisAM, as Barrick Gold (ABX) was upgraded from UnderPerform to Neutral at Macquarie.

More earnings that have come out this morning on my stocks are:

Altria (MO) reported Q2 EPS of $0.62, missing by one cent. Revenue was $4.5B, missing by $0.12B.

United Parcel Service (UPS) reported Q2 EPS of $1.13, in-line. Revenue of $13.51B, up 1.2% Y/Y, missed by $0.08B.

Freeport-McMoRan (FCX) reported Q2 EPS of $0.49, beating by four cents. Revenue of $4.29B beat by $0.01B.

The summer doldrums will soon be upon us, as August is fast approaching. The usual earnings drill seems to be working once again Ė lower the bar, then comfortably meet or exceed it. While a market pullback does not seem imminent, many notables have pointed out numerous signs of a market top in todayís conditions. My cash levels are higher than they have been for many months, so I guess Iím ready if it happens. Right now, Iím just marking time, awaiting opportunities.

JT

1st Posting for Monday 07/22/2013 09:00 AM

Stocks finished out another week of gains with a lackluster session Friday, with the major averages ending just above or below the starting levels for the day. Overnight, Asian markets all ended with modest gains. European markets are trading mixed at this hour, above or below the flat line by modest margins. Italy leads the gainers with a .62% advance. U.S. futures are flat with a positive bias, as a huge week of earnings reporting is set to begin. Existing Home Sales for June, due out at 10:00 AM, is the only economic release scheduled for today. No upgrades / downgrades have come out so far today on any of my stocks.

None of my stocks have ex-dividend dates this week, unless I missed one. But, there will be a deluge of earnings reports coming out. Reports expected, by day, are tallied below. All reports will be before market hours on the specified day, unless otherwise noted.

7/22/2013

Kimberly Clark (KMB), McDonalds (MCD), RPM International (RPM), Kayne Anderson Energy (KED). No time specified for KED.

7/23/2013

Altria (MO), AT&T (T), United Parcel Service (UPS), Norfolk Southern (NSC), Freeport-McMoran (FCX). Both T and NSC will report after the close.

7/24/2013

General Dynamics (GD), Northrop Grumman (NOC), Pepsico (PEP), Dr Pepper Snapple (DPS), Potlatch (PCH), PVR Partners LP (PVR), Reynolds American (RAI).

7/25/2013

American Electric Power (AEP), Colgate Palmolive (CL), 3M (MMM), Realty Income (O), Raytheon (RTN), Statoil (STO), Newmont Mining (NEM). No U.S. time specified for STO, which will be delivered in Norway. NEM will be after the close.

7/26/2013

Digital Realty (DLR), NuStar Energy LP (NS), Total SA (TOT), Ventas (VTR). No U.S. time specified for TOT, which will be delivered in France.

The three stocks on my lists scheduled to report today have done so:

RPM International (RPM) reported FQ4 EPS of $0.72, beating by five cents. Revenue of $1.17B, up 6.3% Y/Y, missed by $0.01B.

Kimberly-Clark (KMB) reported Q2 EPS of $1.41, beating by two cents. Revenue of $5.26B missed by $0.08B.

McDonalds (MCD) reported Q2 EPS of $1.38, missing by two cents. Revenue of $7.1B was in-line. The company issued cautious guidance, which has depressed the shares in pre-market trading.

Most stocks are out of buy range. I will be watching to see if perhaps an earnings or guidance disappointment will generate enough of a drop to consider buying. One can only hope. The only real risk with a top quality stock is paying too much.

JT

1st Posting for Friday 07/19/2013 09:15 AM

Stocks tacked on another day of gains Thursday, setting new highs intraday. A better than expected report of Weekly Claims for Unemployment, followed by a better than expected Philadelphia Business Outlook Survey, contributed to the positive mood. Overnight, Asian markets ended down in Japan, Shanghai, and Singapore, and slightly positive in Hong Kong and India. European markets are trading in the red at this hour in Britain, France, Germany, and Spain, while positive in Italy. U.S. futures are negative. There are no economic releases scheduled for today. Misses reported yesterday by Google and MicroSoft have dampened the mood.

Three upgrades / downgrades that have come out this AM on my stocks are:

MicroSoft (MSFT) was downgraded from OutPerform to Market Perform at Cowen.

MSFT was also downgraded from OutPerform to Market Perform at Raymond James.

Breitburn Energy Partners LP (BBEP) was upgraded from Market Perform to OutPerform at Raymond James.

Several of my stocks reported yesterday. First, before the open::

Philip Morris International (PM) reported Q2 EPS of $1.30, missing by eleven cents.  Revenue of $7.9B missed by $0.32B.

.Verizon (VZ) reported Q2 EPS of $0.73, beating by a penny. Revenue of $29.79B missed by $0.04B.

Nucor (NUE) reported Q2 EPS of $0.27, missing by three cents. Revenue of $4.67B, up 3% Y/Y, beat by $0.02B.

Then, after the close:

Microsoft (MSFT) reported FQ4 EPS of $0.66, missing by nine cents. Revenue of $19.9B, up 10% Y/Y, still missed by $830M.

Finally, today before the open, General Electric (GE) reported Q2 EPS of $0.36, beating by a penny. Revenue of $35.1B missed by $0.48B.

I got ahead of myself yesterday in my commentary on Molson Coors (TAP). Option expiration Friday is today, so all of my musings apply to today, not yesterday. Thatís one problem with being retired, all the days run together. In fact, I frequently have to think about it to know what year it is, much less what day.

JT

1st Posting for Thursday 07/18/2013 09:00 AM

Stocks managed to shake off the disappointing numbers on housing Wednesday, posting modest gains on the major averages. Bernankeís testimony before Congress probably helped, as the Fed Chairman reiterated that Fed actions would be driven by the data, not by a predetermined schedule. And the data is, if anything, deteriorating of late.

Overnight, Asian stocks ended mixed, with Japan, India, and Singapore up, Hong Kong and Shanghai down. European markets are all trading in the green at this hour. U.S. futures are flat, as we await the Weekly Claims for Unemployment data.

I have noticed three upgrades / downgrades on my stocks this AM:

Exelon (EXC) was upgraded from Hold to Buy at Drexel-Hamilton.

Merck (MRK) was downgraded from OutPerform to Market Perform at BMO Capital.

Health Care REIT (HCN) was initiated at Neutral by Citigroup.

Several of my stocks reported yesterday:

Novartis (NVS) reported Wednesday morning that Q2 adjusted earnings was down 2%  to $3.23B vs consensus of $3.22B; that EPS was down 4% to $1.30 vs $1.34 expected; and that net sales increased 1% to $14.49B vs $14.31B projected.

Intel (INTC) reported after the close Wednesday that Q2 EPS was $0.39, missing by a penny. Revenue was $12.81B, down 5.2% Y/Y, missing by $90M. Continuing weakness in the PC market was blamed for the revenue miss.

Also after the close Wednesday, Kinder Morgan Energy Partners LP (KMP) reported Q2 EPS of $0.49. Revenue of $3.01B beat by $0.31B. KMP also announced a 1.5% distribution increase, now to be $1.32 per unit. The yield will be just over 6%.

Finally on Wednesday, Kinder Morgan Inc (KMI) reported Q2 EPS of $0.27, missing by six cents. Revenue of $3.38B, however, beat by $0.24B. KMI announced a 5.3% increase in the quarterly dividend, now to be $0.40 per share. Ex-dividend date will be July 29.

I had considered adding to my position in ConocoPhillips (COP) yesterday, before the ex-dividend date of 7/18/2013, but with a nearly $6 run-up since my first buy, I just couldnít force myself to buy in at that price. In fact, nearly all quality stocks are out of buy range currently. All loaded with cash and nothing to buy. I swear I will wait it out, I know a sell-off is coming, I just donít know when.

Today my call option on Molson Coors (TAP) will expire in the money, meaning the shares will be sold at the $45 strike, on a day when the market price is over $50. It sounds bad, but when you consider I sold calls against my TAP shares three times, for cumulatively, more than the forfeited gain, it works out OK. With TAP now yielding under 3%, and a dividend just received a couple of weeks ago, I can part company with TAP with no ill feelings. I will say that TAP surprised me with the stock price gain of recent weeks, after going nowhere for a couple of years. Obviously, I would not have sold a $45 strike call for $2.25 if I had known TAP would soon break out over $50. But when you sell calls, you need to know this can happen, and be prepared to accept the consequences.

JT

1st Posting for Wednesday 07/17/2013 09:15 AM

Stocks posted modest losses on Tuesday, for no real reason other than that the market cannot go up every day. Overnight, Asian markets ended mixed, with Japan, Hong Kong, and India up, Shanghai and Singapore down. European markets are all trading in the green at this hour. The main economic release of the day has already come out, as Housing Starts and Building Permits for June were a bit less than expected. Bernanke will be speaking on Capital Hill today. U.S. futures are positive at the moment, with less than half an hour to go to the open.

A number of upgrades / downgrades have come out on my stocks this AM:

McDonalds (MCD) was downgraded from Buy to Neutral at Janney Capital.

Paychex (PAYX) was initiated at Hold by Argus.

Pan American Silver (PAAS) was downgraded from Buy to Hold at Canaccord.

Linn Energy (LINE) was upgraded from Neutral to Buy at Goldman.

Johnson & Johnson (JNJ) was downgraded from Buy to Hold at Deutsche Bank.

Unilever (UN, UL) was downgraded from Neutral to UnderPerform at Credit Suisse.

A couple of notable earnings from yesterday were:

Yesterday Johnson & Johnson (JNJ) reported Q2 EPS of $1.48, beating by nine cents.  Revenue of $17.88B beat by $0.17B.

Also yesterday, Coca Cola (KO) reported Q2 EPS of $0.63, in-line. Revenue was $12.75B, missing by $0.22B. KO shares slumped modestly yesterday, but still managed to stay above $40.

I lost my Procter & Gamble (PG) shares via assignment this morning, meaning not only did I sell at $3 under the market, I lost the dividend that current holders secured by holding the stock through today, the ex-dividend date. Still, with a nice gain on the stock, even at the assignment price, a lot of earlier dividends credited, and the retained option premium, I came out well, even under this worst case scenario. Just remember, when I sold the option with a strike of $77.50, the stock was at a new high above $74, and I reasoned (incorrectly) that there was no way PG would go much above the strike. As I have always said, donít sell the call if letting the stock go at the option strike will cause you distress.

JT

1st Posting for Tuesday 07/16/2013 09:40 AM

Stocks managed to eke out modest gains on Monday, which was one of the lowest volatility days I have ever seen, with no TICK readings above plus 750, nor below a minus 750. Overnight, Asian markets mostly posted gains, with India and Singapore lagging, posting declines. European markets are all trading in the red so far today. U.S. futures are flat. The CPI for June was released at 8:30 AM, coming in at 0.5% vs 0.3% expected. Core CPI came in at 0.2%, as expected. Industrial Production and Capacity Utilization will be released at 9:15 AM.

Upgrades / downgrades of note this AM are:

Darden Restaurants (DRI) was initiated at Buy at Stifel.

McDonalds (MCD) was initiated at Hold by Stifel.

Total SA (TOT) was upgraded from Market Perform to OutPerform at Raymond James.

ENI S.p.A. (E) was downgraded from OutPerform to Market Perform by Raymond James.

Exterran Partners LP (EXLP) was initiated at UnderPerform by Credit Suisse.

NuStar Energy LP (NS) was initiated at UnderPerform by Credit Suisse.

Breitburn Energy LP (BBEP) was initiated at Neutral at Credit Suisse.

Kinder Morgan Energy Partners LP (KMP) was upgraded from Neutral to OutPerform at Credit Suisse.

The trading day has already started, with stocks starting off in the red. Time to publish and get back to work!

JT

1st Posting for Monday 07/15/2013 09:15 AM

Stocks finished in positive territory Friday, just barely, although an end of day surge was required to accomplish the feat. Still, it was a consistent finish for a week of gains, which actually saw the Dow Industrials and the S & P 500 indexes make new highs. Overnight, Asian markets all finished with gains, led by Shanghai, up .96%. European markets are likewise mostly in the green at this hour, with Spain being the only laggard. U.S. futures are positive, even after a disappointing data release on Retail Sales for June. A separate release on manufacturing in the New York area, the Empire Manufacturing Index, exceeded expectations.

Upgrades / downgrades thus far today, as far as my stocks are concerned, are:

United Parcel Service (UPS) was downgraded from OverWeight to Neutral at JP Morgan.

United Parcel Service (UPS) was also downgraded by Raymond James, from Strong Buy to OutPerform.

Yet another downgrade on UPS was handed out by BBT, from Buy to Hold.

Newmont Mining (NEM) was downgraded from OutPerform to Market Perform at BMO Capital.

Several of my stocks will be going ex-dividend this week:

Procter & Gamble (PG), 7/17/2013, yield 2.95%.

Gladstone Investment (GAIN), 7/17/13, yield 8.05%. Note that GAIN pays monthly.

ConocoPhillips (COP), 7/18/2013, yield 4.26%.

Main Street Capital (MAIN), 7/18/2013. This is a special dividend of $0.20 being paid in addition to the regular, monthly dividend of $0.155, which has as its next ex-dividend date 7/31/2013. Not counting the special dividend, MAINís ongoing yield is 6.25%.

Colgate Palmolive (CL), 7/19/2013, yield 2.30%.

Earnings season gets under way in earnest this week, with the following stocks on my lists scheduled to report:

Johnson & Johnson (JNJ), 7/16/2013, before market hours.

Coca Cola (KO), 7/16/2013, before market hours.

Intel (INTC), 7/17/2013, after market hours.

Novartis AG (NVS), 7/17/2013, before market hours.

Kinder Morgan Energy Partners LP (KMP), 7/17/2013, after market hours.

Kinder Morgan Inc (KMI), 7/17/2013. No time specified, but presumably will be simultaneous with KMP, above.

MicroSoft (MSFT), 7/18/2013, after market hours.

Philip Morris (PM), 7/18/2013, before market hours.

Verizon (VZ), 7/18/2013, before market hours.

Nucor (NUE), 7/18/2013, before market hours.

General Electric (GE), 7/18/2013, before market hours.

This week will see resolution of two covered call option positions I have held for some time, Procter & Gamble (PG) at $77.50 and Molson Coors (TAP) at $45.00. In both cases I will be selling substantially under the market, barring a severe market swoon, settling for a smaller gain and a somewhat anemic option premium, barely $1.00 in the case of PG, and $2.50 in the case of TAP. Yet, when I sold the calls, those prices were above the current market, and it did not seem likely that the stocks would exceed the strikes before expiration. While I hate to let the stocks go, especially for less than the market, the now anemic yields, considering the inflated prices, give me some consolation that Iím not giving up much income. I will adhere to my covered call rules.  First, if exercise has not occurred by expiration Friday, the stock is trading at or above the strike, and I can buy back the option for break-even or better, I will do so, assuming I donít want to get rid of the shares. Next, if the option has intrinsic value substantially above the price at which it was sold, I will let exercise happen, take the profit on both the option and the stock, and seek a new opportunity for the proceeds. The stocks will remain on my buy lists, and if a buy opportunity sufficiently attractive turns up later on, I will re-establish my position, assuming I donít have other, more enticing opportunities. Thus, I am never totally committed to a given stock Ė there is always a price where I would be a buyer, and also a price where I would be a seller.

JT

1st Posting for Friday 07/12/2013 09:00 AM

As the futures had indicated, Thursday was an up day for stocks, with the Dow Industrials posting a triple-digit gain, and the other major averages performing similarly. Overnight, Asian markets ended mixed, with Japan and India up, Hong Kong, Shanghai, and Singapore down. European markets are likewise trading mixed, with Britain, Germany, and France up, Spain and Italy down. The major economic release of the day has come out, as Producer Prices in June increased at a higher pace than expected, driven by energy prices. U.S. futures are slightly negative.

Only two upgrades / downgrades have come out this AM on my stocks:

Eaton (ETN) was initiated at Buy at Argus.

Pfizer (PFE) was downgraded from Buy to Hold at Jeffries.

Barring an unlikely sell off of gargantuan proportions, stocks are set to end the week with gains. Also, gold has recovered a small proportion of the recent decline, and the miners are up off of the lows reached last week. All my potential buy opportunities have long since evaporated, so I will just wait for the next down time to buy. Right now, Iím more primed to sell, if a sell target or two is approached.

JT

1st Posting for Thursday 07/11/2013 09:00 AM

Stocks went nowhere Wednesday, as all of the major averages ended up about where they began on the day. Overnight, Asian markets staged strong rallies on all bourses, led by Shanghai, up over 3%. While not as strong, European markets are mostly in positive territory at this hour. U.S. futures are strongly positive, indicating stocks will start the day on the upside. The Weekly Initial Claims for Unemployment came in at 360K, a bit above the 345K expected. Import and Export Prices for June came in lower, but not by as much as expected. The reason for the good cheer seems to be that Bernanke was only kidding about ďtaperingĒ, or perhaps was just misunderstood. At least, that is the gist of a headline article on MarketWatch this AM.

Several upgrades / downgrades of interest have come out this AM:

Norfolk Southern (NSC) was initiated at Buy at Buckingham.

United Parcel Service (UPS) was initiated at Buy at Buckingham.

American Capital Agency (AGNC) was downgraded from OverWeight to EqualWeight.

MFA Mortgage (MFA) was upgraded from Equal Weight to OverWeight by Evercore.

If the day turns out to be as strong as the futures suggest, I may sell a couple of holdings that I have been trying to unload, without success thus far.

JT

1st Posting for Wednesday 07/10/2013 10:00 AM

Stocks managed further gains on Tuesday, as the market seems to want to go up regardless of the news or anything else. Overnight, Asian markets ended mixed, with Japan and India down, Shanghai, Hong Kong, and Singapore up. European markets are universally down at this hour, with about an hour to go in the European trading day. U.S. stocks have opened with mixed results in the early going.

A few upgrades / downgrades of interest have come out this morning:

Pan American Silver (PAAS) was downgraded from Sector Perform to UnderPerform at CIBC.

Freeport-McMoran Copper & Gold (FCX) was initiated at OutPerform at Credit Suisse.

Digital Realty Trust (DLR) was upgraded from Sector Perform to OutPerform at RBC Capital.

Norfolk Southern (NSC) was downgraded from Buy to Hold at Deutsche Bank.

A number of articles on gold, silver, and the mining sector have come out recently, with the gist being that these beaten-down players may have bottomed, or perhaps not, but at any rate recovery is a long way off. I will admit I went in too early, and certainly the dividends are at risk, if not the companies. But, eventually, the sector will rise again. Thatís my story and Iím sticking to it.

JT

1st Posting for Tuesday 07/09/2013 09:00 AM

Stocks sold off after a big surge at the open Monday, but still managed to finish the day with decent gains. Overnight, Asian markets ended well into the green, led by Japan, which gained 2.58%. European markets are mixed, but biased towards the positive, with Britain, Germany, and France positive, while Italy and Spain are showing modest declines, as the European market day is about 75% completed.

Only one of my stocks received a new analyst rating this morning, as Barrick Gold (ABX) was downgraded from Buy to Hold at Steifel. 

A few additional thoughts on Linn Energy (LINE) after still more research. As noted, the stock on Friday threatened to drop into the teens by midday, then buyers swooped in, pushing the issue up above $24 for a time, before settling down a little below that mark. The recovery in LINE continued yesterday, as LINE spent most of the day above $26, before dropping late in the day to just above $25. A recap that came out yesterday from Roger Conrad, a noted guru on utilities and MLPs, pointed out that with the SEC investigation introducing uncertainty into the situation, and the collapse of the stock price since the announcement several months ago of plans to acquire Berry Petroleum casting doubt on whether that event will occur, LINE is a sell. If the Berry deal falls through, LINE will be hard-pressed to maintain the current distribution, much less increase it. LINE likely isnít going bust anytime soon, but as the reality comes into focus, further share price declines are very likely, especially if the payout is cut. My take is that LINE in the teens would be a viable speculation, but above $25, not so much. I plan to sit this one out unless another big drop comes along. If so, I will re-evaluate LINE, and maybe risk a small amount.

JT

1st Posting for Monday 07/08/2013 08:30 AM

After dipping early, stocks recovered Friday to end the week with a pretty decent rally, with the major averages posting gains in the 1% range. Overnight, Asian markets started off on the week with declines across the board, led by Shanghai, down 2.45%. European markets are a mirror image at this point in the European trading day, up across the board, led by Germany, up 2.43%. U.S. futures are positive, with about an hour to go before the open.

A few of my stocks received upgrades / downgrades this morning:

Breitburn Energy Partners LP (BBEP) was upgraded from Neutral to OutPerform at Robert W. Baird.

American Capital Agency (AGNC) was downgraded from Buy to Hold at Wunderlich.

Intel (INTC) was downgraded from Equal Weight to UnderWeight at Evercore.

Linn Energy LP (LINE) was upgraded from Neutral to Buy at BofAMerrill.

Emerson Electric (EMR) was initiated at OutPerform at CLSA.

Several of my stocks will be going ex-dividend this week:

General Mills (GIS), 7/08/2013, yield 3.10%.

AT&T (T), 7/08/2013, yield 5.02%.

Verizon (VZ), 7/08/2013, yield 4.02%.

Darden Restaurants (DRI), 7/08/2013, yield 4.29%.

Linn Energy LLC (LINE), 7/08/2013, yield 12.36%.

RPM International (RPM), 7/10/2013, yield 2.75%.

Kayne Anderson Energy (KED), 7/10/2013, yield 6.83%.

MFA Financial (MFA), 7/10/2013, yield10.77%.

Fifth Street Finance (FSC), 7/11/2013, yield 10.88%. FSC pays monthly.

Consolidated Communications (CNSL), 7/11/2013, yield 8.71%.

Freeport-McMoran Copper & Gold (FCX), 7/11/2013, yield 4.57%. Note that the yield does not count the special dividend of $1.00 per share, which was just paid out on July 1st.

None of my stocks are scheduled to report this week. But just wait a week, and the quarterly deluge will begin. 

Well, time for a LINE update. As noted in my last post, I bought Thursday, and then watched in disgust as the price drop continued into the morning Friday. Having some errands to run, I impulsively entered a sell limit order before I signed off, to take me out at a price just above my average price paid, at that point over $3.50 above where LINE was trading, with the outlook being that the damn thing was probably going to continue on down some more. Lo and behold, when I signed back on to recap the day after the close, LINE had recovered, up over $4.00, and the order had executed. I didnít know whether to laugh or to cry, but I guess I canít complain about breaking even on a speculation that was looking like a quick, nasty loss was going to be handed down. I obviously missed the dividend by selling, but who knows what LINE is going to do now. I may re-enter if it drops again. LINE is a rank speculation at this point, and the dividend is anything but guaranteed. Still, if LINE can prove the naysayers wrong, it could make for a great pickup at $20 or less.     

JT

1st Posting for Friday 07/05/2013 08:30 AM

Stocks managed to eke out modest gains on the major averages Wednesday, as a shortened session exhibited low volume and minimal volatility. Overnight, Asian markets posted gains, with Japan up 2%, and Shanghai not far behind at 1.89%. European markets are mostly trading in the red at this hour, with only Britain holding on to a small gain. The Monthly Payroll Data for June will be released shortly. U. S. futures are positive just ahead of the release.

None of my stocks have received any upgrades / downgrades so far this morning.

The jobs numbers are coming out as I write, with the early headline indicating 195K jobs added in June, which by todayís standards would be considered a strong number.  

One exception to the low volatility Wednesday was Linn Energy (LINE), an energy- production MLP that has declined from the low forties to the low twenties since last fall, with the move down accelerating greatly on Tuesday and Wednesday of this week.  Questions have been raised regarding Lineís distributable cash flow (DCF) and the sustainability of the dividend by a recent article in Barrons, and also from comments made by a noted hedge fund manager. The firm added to the uncertainty when it disclosed Wednesday that the SEC was looking into some of the firmís accounting practices. I had owned LINE long ago, but sold when it got too pricey, after which it proceeded to get even more pricey. Now that it has come down, I bought back in, taking advantage of the fall. I will be adding LINE to my Tier3 list of high-yield, high-risk stocks. I either made a great buy or a dumb move trying to catch a falling knife, but itís hard for me to see LINE as being on the same level as WorldCom or Enron, even if some of what is alleged is true. I believe this is a case of over-reaction to a raft of bad news and negative articles. Time will tell.  

JT

1st Posting for Wednesday 07/03/2013 09:15 AM

Stocks meandered through an up and down session Tuesday, finally coming to rest on the down side, but only by modest margins on the major averages. Overnight, Asian markets posted losses, and European markets are trading down as Portugal is in the news, under financial duress. U.S. futures are down, but not as much as earlier. Early readings on employment ahead of the Friday jobs numbers, from ADP and the Weekly Claims for Unemployment, were slightly better than expected. The ISM Services Index for June will be out at 10:00 AM.

Only one of my stocks was tagged by the analysts this morning, as Amerigas Partners LP (APU) was initiated into coverage at UnderPerform by Credit Suisse.

Today will be a shortened session, with the NYSE closing at 1:00 PM New York time. The July 4th holiday is usually a slow week for stocks, and this year will likely follow that precedent.

JT

1st Posting for Tuesday 07/02/2013 09:15 AM

Stocks began the month Monday with decent gains on the major averages, although the gains ended up being less than they started out to be, as the market, dare I say, tapered off as the day wore on. Overnight, Asian markets ended mixed, with Japan, Shanghai, and Singapore up, Hong Kong and India down. European markets are all trading in the red at this hour. U.S. futures are flat, after being positive earlier. The only economic release today is of Factory Orders for May.

Several of my stocks received upgrades / downgrades this morning:

Newmont Mining (NEM) was downgraded from Hold to UnderPerform at Jeffries.

Barrck Gold (ABX) was downgraded from Buy to Hold at Jeffries.

Hercules Technology Growth Capital (HTGC) was downgraded from Buy to Neutral at Janney Capital.

QR Energy (QRE) was initiated at OutPerform at Credit Suisse.

Pfizer (PFE) was downgraded from Hold to Sell at Standpoint Research.

At this point, today is shaping up to be a blah day. Of course, that may change, in either direction.

JT

1st Posting for Monday 07/01/2013 08:45 AM

Four days in a row for triple-digit gains, or even any gains, on the Dow Industrial average was too much to ask for, as the recent rally stalled out on Friday. Instead of another triple-digit gain, the Dow Industrials posted a triple-digit loss. Still, stocks had a better week on the final week of June than they had seen in the earlier weeks of the month.

Overnight, Asian markets mostly finished with gains, with only Singapore putting up a small loss. European markets are universally trading in the green this AM, with the European trading day now past the half way point. U.S. futures are positive, with about an hour to go to the open. The ISM Index for June will be out at 10:00 AM, as will Construction Spending for May.

Two stocks on my lists received downgrades this morning:

3M (MMM) was downgraded from Equal Weight to OverWeight at Morgan Stanley.

Barrick Gold (ABX) was downgraded from Market Perform to UnderPerform at BMO Capital.

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

Cisco Systems (CSCO), 7/1/2013, yield 2.79%.

Raytheon (RTN), 7/1/2013, yield 3.33%.

Kimco Realty (KIM), 7/1/2013, yield 3.92%.

Sysco Corp (SYY), 7/2/2013, yield 3.28%.

Medtronic (MDT), 7/2/2013, yield 2.18%.

Universal (UVV), 7/3/2013, yield 3.46%.

Enerplus (ERF), 7/5/2013, yield 7.3%. ERF pays monthly.

None of my stocks are due to report this week. Earnings season will be upon us in a couple of weeks. It will be interesting to see how earnings are faring in this slow-motion recovery.

As for gold and the mining stocks, they may have both reached at least an interim bottom last week, but the outlook for the next few months is dim. Another leg down could materialize at any time.

JT