JT’s DAILY (WEEKLY as of 12/9/2013) BLOG for Month Of July 2019
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.
1st Posting for Week Beginning Monday 07/29/2019
Posted Sunday 07/28/2019 08:00 AM
Stocks marked time on Monday, advanced substantially on Tuesday, gave most of it back the next two days, then finished out the week with a modest gain on Friday. The full week’s result was a gain on all the major averages that I follow. The market was influenced by earnings reports, as we are into the height of earnings season, while the tepid Mueller testimony was widely panned, and did nothing to change the poisonous atmosphere in Washington.
The atmosphere regarding upcoming dividends on my stocks, by contrast, is much improved from last week. There are so many that I will list them by ex-dividend date, as follows.
Enterprise Products Partners LP (EPD), yield 5.83%.
Kinder Morgan (KMI), yield 4.86%.
Plains All American Pipeline LP (PAA), yield 5.81%.
Tanger Factory Outlet Centers (SKT), yield 8.52%.
Stag Industrial (STAG), yield 4.77%. This REIT pays monthly.
Omega Healthcare Investors (OHI), yield 7.20%.
AGNC Investment (AGNC), yield 11.16%. This MREIT also pays monthly.
Prospect Capital (PSEC), yield 10.70%. This BDC pays monthly as well.
Enerplus (ERF), yield 1.47%. The one-time high yielding Canadian Trust continues to pay monthly, as it did in the glory days, but these days, at under a penny per share, no one cares.
Alliant Energy (LNT), yield 2.88%.
Hoegh LNG Partners LP (HMLP), yield 9.81%.
Realty Income (O), yield 3.95%. The “Monthly Dividend Company” pays monthly. O is a great company, but the yield reflects that O may be “over-loved” by investors.
Paychex (PAYX), yield 2.90%. Another example of a popular dividend stalwart that is currently bid up to full value, if not more.
Eaton (ETN), yield 8.23%.
Pfizer (PFE), yield 3.37%.
HCP Inc (HCP), yield 4.66%.
Energy Transfer LP (ET), yield 8.23%.
ONEOK (OKE), yield 5.19%. The yield on the new ONEOK C-Corp is about as high as the discontinued ONEOK MLP, without the MLP complications.
Only one of the 15 CEFs I’m tracking goes ex-dividend next week, First Trust Intermediate Preferred and Income Fund (FPF), on 8/1/2019. FPF pays monthly, and yields 7.37%.
Earnings Season continues, with a number of my stocks reporting next week, as the quarterly ritual is now fully underway. Stocks on my lists scheduled to report are listed by date, as follows:
Sanofi (SNY), PotlatchDeltic (PCH), Transocean LTD (RIG).
Altria (MO), Ares Capital (ARCC), Crestwood Equity Partners LP (CEQP), Eaton (ETN), Merck (MRK), Pfizer (PFE), Procter & Gamble (PG), Public Service Enterprise Group (PEG), Digital Realty (DLR), ONEOK (OKE), Stag Industrial (STAG).
Chimera Investment (CIM), Entergy (ETR), Enterprise Products Partners LP (EPD), General Electric (GE), Southern Co (SO), Annaly Capital Management (NLY), Ensco Rowan PLC (ESV), HCP Inc (HCP), Mid-America Apartment Communities (MAA), Park Hotels Resorts (PK), Tanger Factory Outlet Centers (SKT), Welltower (WELL), Williams Companies (WMB).
Buckeye Partners LP (BPL), Consolidated Communications Holdings (CNSL), Exelon (EXC), Iron Mountain (IRM), Kellogg (K), Magellan Midstream Partners LP (MMP), Medical Properties Trust (MPW), Royal Dutch Shell (RDS.B), Verizon (VZ), Alliant Energy (LNT), B&G Foods (BGS), Hercules Capital (HTGC), Noble Corp PLC (NE).
Chevron (CVX), Enbridge (ENB), Exxon Mobil (XOM).
That is quite a line-up. Note that, per my practice, I continue to follow firms I no longer recommend, as long as they continue to exist. The offshore drillers RIG, ESV, and NE will all be reporting next week. Thus far, they have offered nothing since I gave up on them that would lead me to believe I should have given them more time. I don’t expect their next round of earnings reporting to be any better than it has been.
Upgrades/Downgrades on my stocks from last week, as reported by E*Trade, were as follows:
Hershey Co (HSY) was upgraded from Sell to Neutral at UBS.
Intel (INTC) was initiated at UnderWeight at Atlantic Equities.
Digital Realty (DLR) was downgraded from OutPerform to Market Perform at Cowen.
Intel (INTC) was initiated at Hold at The Benchmark Co.
Darden Restaurants (DRI) was initiated at OverWeight at KeyBanc.
Kimberly Clark (KMB) was upgraded from UnderWeight to Neutral at Atlantic Equities.
Medical Properties Trust (MPW) was upgraded from Hold to Buy at Stifel.
Coca Cola (KO) was reiterated at Buy at Bank of America.
AT&T (T) was upgraded from UnderPerform to Neutral at Credit Suisse.
Freeport-McMoRan (FCX) was upgraded from UnderPerform to Sector Perform at RBC Capital Markets.
United Parcel Service (UPS) was upgraded from Neutral to Buy at Bank of America.
Roche Holdings LTD (RHHBY) was upgraded from Neutral to Buy at UBS.
Hershey Co (HSY) was reiterated at Buy at Bank of America.
Intel (INTC) was reiterated by just about everyone following the stock, after INTC reported. Few changed their minds, apparently, with the ratings ranging widely. INTC was reiterated at Buy at Cascend Securities, Deutsche Bank, Bank of America, SunTrust, and Mizuho. Morgan Stanley reiterated INTC at OverWeight. An UnderPerform rating was reiterated at RBC Capital Markets, Northland Capital, and Wedbush. Baird reiterated INTC at OutPerform. Finally, Citigroup reiterated INTC at Neutral.
Barring major developments on the political or international fronts, the main focus for investors next week will be the FOMC announcement on Wednesday. It is hard to envision a market surge when a rate cut is widely expected. And if the announcement disappoints investors, it will be a “look out below” moment. No one knows what the announcement will be, nor what the market reaction will be. Taking any position in anticipation of the market direction after the announcement is absolutely nothing more than a gamble.
1st Posting for Week Beginning Monday 07/22/2019
Posted Sunday 07/21/2019 09:00 AM
After setting new records the prior week, investors apparently had second thoughts, as stocks failed to advance further last week. Instead, they ended with a minor decline for the week on most of the major indexes. The circus in Washington shows no sign of abating, and the lack of any progress towards solutions to our pressing national problems contributes towards an undercurrent of unease.
My own personal undercurrent of unease is improved by dividends being paid by the stocks I follow. Unfortunately, for the week ahead, only two of the stocks I track will be going ex-dividend.
Blackstone Group (BX), 7/26/2019, yield 4.75%. As noted last week, BX is now a C-Corp, not a PTP (Publicly Traded Partnership).
Senior Housing Properties Trust (SNH), 7/26/2019, yield 7.26%. After a dividend cut and a swoon in the share price to the single digits, SNH is now a Tier4 stock, no longer recommended. The yield is high because of the stock price decline. Unfortunately, the dividend continuing is not a good bet to make.
Two of the fifteen CEFs I track will be going ex-dividend next week. They are both monthly payers.
Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 7/23/2019, 8.41%.
MIiller Howard High Income Equity Fund (HIE), 7/24/2019, 12.21%.
Earnings Season continues to build up steam, and several more of my stocks will be reporting next week, as the quarterly ritual gets under way with 2nd Quarter 2019 results being reported, listed following by date:
Coca Cola (KO), Kimberly Clark (KMB).
AT&T (T), Freeport-McMoRan (FCX), NextEra Energy (NEE), United Parcel Service (UPS).
3M Co (MMM), American Electric Power (AEP), Diebold Nixdorf (DBD), Hershey Co (HSY), Kimco Realty (KIM), Newmont Mining (NEM), Intel (INTC).
Colgate Palmolive (CL), McDonalds (MCD), Ventas (VTR).
Analyst actions on my stocks reported by E*TRADE last week were as follows.
General Electric (GE) was downgraded from Buy to Neutral at UBS. GE is almost a zombie stock these days, another proud name destroyed by arrogant, incompetent management.
McDonalds (MCD) was reiterated at OutPerform at Telsey Advisory Group. Contrasted with GE, the team at McDonalds has to be commended for their success. The lesson here is to not let your personal tastes and opinions (I wouldn’t eat their food unless I was starving) have an outsize influence on your evaluation of a company as an investment, you might miss an attractive opportunity, which MCD was in the 2015-2018 time frame.
Darden Restaurants (DRI) was downgraded from Buy to Hold at Maxim Group. Another example like MCD, I disdained DRI because the formula restaurant sector is massively overbuilt, and I could not visualize DRI in the same time frame (2015-2018) being as successful as it has been. One take-away for both MCD and DRI is, never bet against the tendency of Americans to make terrible financial and nutritional choices when it comes to food.
Freeport-McMoRan (FCX) was upgraded from UnderWeight to Equal Weight at Barclays.
Wheaton Precious Metals (WPM) was upgraded from Equal to OverWeight at Barclays.
Hershey Co (HSY) was upgraded from Sell to Neutral at Goldman.
Energy Transfer LP (ET), Plains All American Pipeline LP (PAA), and Enterprise Products Partners LP (EPD) were all three initiated at OverWeight at Piper Jaffrey, and NGL Energy Partners LP (NGL) was initiated at Neutral by Piper.
Exxon Mobil (XOM) was downgraded from OutPerform to Sector Perform at RBC Capital Markets.
Phillip Morris (PM) was upgraded from Equal Weight to OverWeight at Barclays.
Public Service Enterprise Group (PEG) was downgraded from Buy to Neutral at Bank of America.
Enbridge (ENB) was initiated at Neutral at Goldman.
As we enter into the “dog days of summer”, it is definitely heating up in Washington DC, as far as our dysfunctional government is concerned. If things get too far out of control, it could affect the markets, although after the last couple of years, it would take something major occurring. There is no shortage of commentary forecasting a recession or worse, which is of course the Democrat’s fervent hope. The Fed has signaled that they are no longer on course for a return to “normalcy”, while many pundits say the Fed’s ability to affect the economy in a downturn will be minimal, since we never returned to normal interest rates. With stocks priced for perfection in many cases, buying now is a formula for losing money if the oft-predicted stock sell-off occurs soon, as many predict. I am locking in some gains by selling deep in-the-money call options on winning positions. If the stock declines significantly to a level less than the call price, I will have much of what I would have had if I sold today, and I will still have the stock. If the stock stays where it is, the stock will be called away at expiration, and I will be break about even, when you consider the stock sale proceeds plus the option sale proceeds. Only if the stock advances will I be worse off, at least in my mind. That is because even though I will actually have the same result as if the stock stayed where it was when I sold the option, it will feel like a loss, because I will not get the benefit of the stock rise after I sold the option. If you think a stock is not likely to rise further, and you have a gain that you don’t want to give back, and you really don’t want to sell it right now, a deep in-the-money option strategy is tailor-made for the situation. One benefit of active portfolio management is you don’t let gains evaporate when it appears storm clouds are forming, like now.
<![endif]> 1st Posting for Week Beginning Monday 07/15/2019
Posted Sunday 07/14/2019 08:00 AM
Last week started off with a couple of down days, as several ongoing concerns on the minds of investors continued to dampen spirits. But that all changed on Wednesday, as Fed Chairman Powell addressed Congress, indicating a substantially more accommodating posture would likely be adopted by the Fed going forward. Forget about interest rates continuing towards “normalcy”, that goal has definitely been put aside, and if the Fed makes any changes in the near-term, it will be in the opposite direction. The market responded with a roar, and by the end of the week the blue chip indexes were setting new records.
With prices at nosebleed levels, yields are certainly not setting new records, but even so, high-yielding dividend stocks are still the only game in town for investors seeking income. Stocks on my lists going ex-dividend next week are as listed.
Horizon Technology Finance (HRZN), 7/17/2019, yield 9.92%. HRZN is a monthly payer.
Colgate Palmolive (CL), 7/17/2019, yield 2.33%.
Main Street Capital (MAIN), 7/17/2019, yield 5.88%. MAIN pays monthly.
Procter & Gamble (PG), 7/18/2019, yield 2.61%.
Gladstone Investment (GAIN), 7/17/2019, yield 2.33%. GAIN is a monthly payer.
Six of the fifteen CEFs I track will be going ex-dividend next week. All of these are monthly payers.
Cohen & Steers MLP Income & Energy Opportunity Fund (MIE), 7/16/2019, yield 9.45%.
Cohen & Steers Quality Income Realty Fund (RQI), 7/16/2019, yield 6.81%.
CBRE Clarion Global Real Estate Income Fund (IGR), 7/18/2019, yield 7.78%.
Miller Howard High Income Equity Fund (HIE), 7/24/2019, yield 12.29%.
Gabelli Utility Trust (GUT), 7/16/2019, yield 8.39%.
Gabelli Dividend & Income Trust (GDV), 7/16/2019, yield 5.97%.
It is that time of the year again, earnings season. Several of my stocks will be reporting next week, as the quarterly ritual gets under way with 2nd Quarter 2019 results being reported.
Johnson & Johnson (JNJ), 7/16/2019.
Kraft Heinz (KHC), 7/17/2019. KHC holders could sure use a positive report, but they probably won’t get one.
Crown Castle International (CCI), 7/17/2019.
Kinder Morgan (KMI), 7/17/2019.
Blackstone Group (BX), 7/18/2019. BX switched from being a Publicly Traded Partnership to a C-Corp effective July 1, 2019, so it is now Blackstone Group Inc., instead of Blackstone Group LP. The stated purpose was to encourage more investors to get into the stock. What I will be looking at is the dividend and the yield. The last one was $0.37, with a yield of 7.1%. It is likely to be reduced, with the tax benefits of the MLP structure no longer available.
Novartis (NVS), 7/18/2019.
Nucor (NUE), 7/18/2019.
Phillip Morris (PM), 7/18/2019.
Analyst actions on my stocks reported by E*TRADE last week were as follows.
Verizon (VZ) was downgraded from Buy to Neutral at Citigroup.
Total S A (TOT) was upgraded from Neutral to OutPerform at Credit Suisse.
Iron Mountain (IRM) was initiated at OutPerform at Wells Fargo.
United Parcel Service (UPS) was initiated at Buy at Goldman.
Pepsico (PEP) was reiterated at Buy at Bank of America.
Freeport-McMoRan (FCX) was upgraded from Hold to Buy at Deutsche Bank.
Spirit Realty Capital (SRC) was upgraded from Equal Weight to OverWeight at Morgan Stanley.
Iron Mountain was downgraded from Neutral to UnderPerform at Bank of America.
Brookfield Renewable Partners LP (BEP) was initiated at OverWeight at Barclays.
MicroSoft (MSFT) was initiated at OutPerform at Cowen.
WalMart (WMT) was initiated at Buy at Goldman.
Altria (MO) was upgraded from Neutral to Buy at Goldman. This is hard to figure, although the decline of the stock from the mid-$70’s in early 2017 to under $50, and the 6.5%, yield might be the reason.
Johnson & Johnson (JNJ) was initiated at OutPerform at Credit Suisse.
3M Co (MMM) was reiterated at Neutral at UBS.
Most quality stocks are extended in price, with formerly high-yielding blue chips like Colgate Palmolive (CL) and Procter & Gamble (PG) now under 3%. Even most REITs and utilities are under 5%, and the highest quality names in these sectors are frequently under 4%. The safest yields over 5% available today are Closed End Funds (CEFs), which are getting a lot more attention these days from yield-starved investors such as myself. As for the Fed, the rate cut expectations are sky-high. If the expected reduction does not happen, the recent gains and more will likely be given back. If that happens, perhaps the yields on some quality names will improve.
1st Posting for Week Beginning Monday 07/08/2019
Posted Sunday 07/07/2019 09:00 AM
Stocks actually gained ground over the holiday week, with only a minor setback on Friday, as the market reacted negatively to the good news reflected in the monthly Jobs report. Thus we witness the perverse reaction of the market to the much better than expected employment numbers, as we enter the twilight zone whereby “good news is bad news”. The explanation is that market watchers had expected a Fed rate cut sooner rather than later, as the economy had seemed to be deteriorating. Until Friday, that is, when a much better than expected report gives the Fed cover to do nothing, and now no rate cut is in the offing anytime soon.
Stocks announcing dividends is always good news, no matter how you view it, at least in my book. Stocks on my lists going ex-dividend next week are as listed.
Verizon (VZ), 7/9/2019, yield 4.15%.
AT&T (T), 7/9/2019, yield 6.00%.
Darden Restaurants (DRI), 7/9/2019, yield 2.89%.
General Mills (GIS), 7/9/2019, yield 3.61%.
Mid America Apartment Communities (MAA), 7/12/2019, yield 3.16%.
Freeport-McMoRan (FCX), 7/12/2019, yield 1.77%. FCX remains depressed, as copper prices remain likewise.
Five of the fifteen CEFs I track will be going ex-dividend next week. All of these are monthly payers.
BlackRock Debt Strategies Fund (DSU), 7/12/2019, yield 7.64%.
BlackRock Enhanced Equity Dividend Trust (BDJ), 7/12/2019, yield 6.32%.
Nuveen Real Asset Income and Growth Fund (JRI), 7/12/2019, yield 7.52%.
AllianceBernstein Global High Income Fund (AWF), 7/11/2019, yield 6.95%.
BlackRock Energy and Resources Trust (BGR), 7/12/2019, yield 7.90%.
A couple of my stocks will be reporting next week, both of which are on a different quarterly reporting cycle than most stocks.
Pepsico (PEP) will report on 7/9/2019, and Kraft Heinz (KHC) will report on 7/10/2019. KHC will have to report better than expected numbers several quarters in a row to exit the market “doghouse”, as the merger dynamics touted in the merger that created KHC have failed to materialize as predicted.
Analyst ratings updates were practically non-existent last week, as most analysts apparently took the week off. The few I saw were as follows.
Medical Properties Trust (MPW) was upgraded from Hold to Buy at SunTrust. The hospital facility REIT has been on a tear since early in 2018, but had pulled back a little the last two months.
Royal Dutch Shell (RDS.B) was downgraded from OutPerform to Neutral at Exane BNP Paribas. I own the stock, and a slight pullback would be an opportunity to add to my position in this highest yielding oil major.
Merck (MRK) was initiated at Buy at Mizuho. My negative bias towards “Big Pharma” has been well-documented, the miserly yield is not worth the risk, in my opinion. They have been strong for a long time, no doubt, but numerous storm clouds are on the horizon, as I see it.
As noted in my opening comments, last week was mostly just about going through the motions, with minimal action. The one positive surprise, a much better than expected Jobs report, was perversely greeted by the market with a frown, leading to a minor decline, as explained in my opening remarks.
We should be entering into a typically slow time for the markets, the second half of summer. I don’t expect this year to be different, although geopolitical developments could arise to change the narrative. Now is a good time to be considering strategies to deal with a down market, which will be coming along sooner or later. Meanwhile, enjoy the good times while they last.
1st Posting for Week Beginning Monday 07/01/2019
Posted Saturday 06/28/2019 08:00 PM
Stocks did not move much last week, as the major averages ended the week about where they began it, or with slight losses. The expectation is that the holiday week upcoming will produce similar results, with fireworks limited to the type normally experienced on the 4th of July.
Only three stocks on my lists will be going ex-dividend next week, listed as follows.
Kimco Realty (KIM), 7/1/2019, yield 6.09%.
Cisco (CSCO), 7/3/2019, yield 2.51%.
Universal (UVV), 7/5/2019, yield 5.03%.
Only one of the CEFs I track will go ex-dividend next week, First Trust Intermediate Duration Preferred & Income Fund (FPF), 7/1/2019, yield 7.47%.
Another CEF, AllianceBernstein Global High Income Fund (AWF), is expected to go ex-dividend early the following week, but the date has not yet been announced. The fund pays monthly, and the June ex-dividend date was June 6. AWF yields 7.10%.
None of my stocks will be reporting next week.
Ratings changes / reiterations / etc. were as follows last week, per Etrade.
Kellogg (K) was downgraded from Equal Weight to UnderWeight at Consumer Edge Research.
McDonalds (MCD) was initiated at OutPerform at Credit Suisse.
Park Hotels Resorts (PK) was initiated at OverWeight at Capital One.
MicroSoft (MSFT) was reiterated at UnderWeight at Jeffries.
Alliant Energy (LNT) was upgraded from Neutral to Buy at Bank of America.
Williams (WMB) was upgraded from OutPerform to Strong Buy at Raymond James.
Kinder Morgan (KMI) was downgraded from OutPerform to Market Perform at Raymond James.
Proctor & Gamble (PG) was upgraded from Neutral to OverWeight at Stephens.
Darden Restaurants (DRI) was downgraded from OverWeight to Equal Weight at Deutsche Bank.
Nestle S A (NSRGY) was initiated at Hold at HSBC.
Darden Restaurants (DRI) was initiated at Hold at Deutsche Bank.
CenturyLink (CTL) was upgraded from Market Perform to OutPerform at Wells Fargo. CTL yields 8.59% currently, even after a dividend cut to $0.25 per quarter. Unfortunately, the high yield exists because of a precipitous decline in the stock price from the $25-$30 range that existed until mid-2017, to barely over $10 now.
Intel (INTC) was initiated at UnderPerform at Wedbush.
The week ahead should be a quiet one, with the 4th of July holiday coming up, and the G20 meetings concluded with perhaps less rancor than expected, and the Democrat “debates” endured, for now. One commentator characterized the debates as effectively two nights in a row of highly effective infomercials for Donald Trump, as the reality of today’s Democratic Party was on display for all to see. It’s going to get worse before it gets better, I predict.
1st Posting for Week Beginning Monday 06/24/2019
Posted Sunday 06/23/2019 07:00 AM
Another impressive week of gains on all the major averages, as investors and traders defy the pundits predicting a collapse. The perverse logic seems to be that with the economic numbers indicating a slowdown, further Fed tightening is off the table, and in fact easing of monetary policy is more likely than further tightening. Whether correct or not, it doesn’t seem to matter, it’s the blind faith in the Fed that rules.
I wouldn’t characterize it as blind faith, but I do have more faith in dividend-paying stocks than in most other investment choices. Following are the stocks on my lists going ex-dividend next week. Frequency is quarterly unless otherwise stated.
AGNC Investment (AGNC), 6/27/2019, yield 11.40%. AGNC pays monthly.
Covanta Holding (CVA) 6/27/2019, yield 5.49%.
Park Hotels Resorts (PK), 6/27/2019, yield 6.34%.
Spirit Realty Capital (SRC), 6/27/2019, yield 5.54%.
Enerplus (ERF), 6/27/2019, yield 1.20%. ERF pays monthly.
Main Street Capital (MAIN), 6/27/2019, yield 5.99%. MAIN pays monthly.
Stag Industrial (STAG), 6/27/2019, yield 4.53%. STAG pays monthly.
Prospect Capital (PSEC), 6/27/2019, yield 10.96%. PSEC pays monthly.
Chimera Investment (CIM), 6/27/2019, yield 10.45%.
Annaly Capital Management (NLY), 6/27/2019, yield 12.40%.
Pattern Energy Group (PEGI), 6/27/2019, yield 7.16%.
Nucor (NUE), 6/27/2019, yield 2.97%.
National Health Investors (NHI), 6/27/2019, yield 5.17%.
BGS Foods (BGS), 6/27/2019, yield 8.66%.
Ventas (VTR), 6/28/2019, yield 4.42%.
Realty Income (O), 6/28/2019, yield 3.71%. O pays monthly.
General Electric (GE), 6/28/2019, yield 0.36%. GE pays a miserly penny per quarter. Why bother, is my reaction? This was at one time a “widows and orphans” stock. Unbelievable!
MFA Financial (MFA), 6/28/2019, yield 11.10%.
Kimco Realty (KIM), 7/1/2019, yield 5.85%.
One dividend I missed last week was Altria (MO), ex-dividend on 6/13/2019, yielding 6.37%.
Two of my stocks will be reporting next week, both on 6/26/2019. General Mills (GIS) and Paychex (PAYX).
Of my 15 CEFs, one will be going ex-dividend on Monday, 7/1/2019. The CEF is First Trust Intermediate Duration Preferred & Income Fund (FPF), yielding 7.48% as of last week’s closing price. FPF pays monthly.
Analyst actions regarding my stocks noted by E*TRADE last week were as follows:
Kinder Morgan (KMI) was downgraded from Buy to Hold at Stifel.
GlaxoSmithKline (GSK) was initiated at UnderWeight at Morgan Stanley. GSK has long been the highest-yielding Pharma stock. It remains on my Tier2 list, but I believe all pharma stocks have two major risk factors – dependence on the government and potential technological obsolescence.
Hershey Co (HSY) was reiterated at Buy at Bank of America.
Kimberly Clark (KMB) was reiterated at Neutral at Bank of America.
Roche Holdings LTD (RHHBY) was upgraded from Hold to Buy at Deutsche Bank.
Ventas (VTR) was upgraded from UnderPerform to InLine at Evercore ISI, from Hold to Buy at Stifel, and from Neutral to Buy at Citigroup. It must be time to sell, if all these firms say to buy! More on this later.
Hershey Co (HSY) was downgraded from Neutral to UnderWeight at Piper Jaffray.
Roche Holdings LTD (RHHBY) was downgraded from Buy to Hold at Liberum.
Darden Restaurants (DRI) was reiterated at Buy at Maxim Group.
The optimistic mood held on until the end of the week, when the specter of war with Iran became a serious possibility after they shot down an unarmed US surveillance drone. While the President wisely held off on an immediate retaliation, if further incidents occur, that restraint is unlikely to recur.
Regarding Ventas (VTR), I had been eyeing this position for some time as a potential sale, based on the price having been run up over the past few weeks. I had planned on holding off until after the next dividend, but a price spike of nearly four dollars on Thursday forced my hand. I suspected it wouldn’t hold, at least not entirely. Just in case I was wrong, I went in with a stop loss order slightly below where it was trading at mid-morning Thursday. It subsequently dropped over three dollars, but I was taken out by the order right away, missing most of the decline. Over the short term, it appears my strategy was the right one, allowing me to exit with a nice gain, including most of the Thursday morning price spike. I would not be surprised if the market has the last laugh, with the stock heading back up by the time it goes ex-dividend on 6/28/2019. But my motto is, “when the market gives you an unexpected gift, take it”! So that is what I did.