JT’s DAILY (WEEKLY as of 12/9/2013) BLOG for Month Of December 2017
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 12/18/2017
Posted Sunday 12/17/2017 5:30 PM
Another week, another slate of new highs for the various stock averages. With the exception of a minor decline on Thursday, last week saw stocks advance all the other days of the week just ended. The news Friday that the Income Tax bill, with a number of positive changes for business, was close to passing generated a major rally to close out the week.
My usual one week look ahead for ex-dividend dates and earnings will be for the upcoming two weeks this time, as I don’t intend to post again until after Christmas.
Stocks on my lists which have announced dividends, with ex-dividend dates coming up in the next two weeks, are listed following. Assume the frequency is quarterly unless otherwise indicated.
Main Street Capital (MAIN), 12/18/2017 (special dividend) and 12/28/2017 (regular monthly dividend), yield 5.62% (only considering the regular monthly dividend).
Gladstone Investment (GAIN), 12/18/2017, 7.03%. GAIN is also a monthly payer.
Blackrock Capital Investment (BKCC), 12/18/2017, yield 11.09%.
Washington Real Estate (WRE), 12/19/2017, yield 3.71%.
Horizon Technology Finance (HRZN), 12/19/2017, yield 10.88%. HRZN is another monthly payer.
Altria (MO), 12/20/2017, yield 3.68%.
Phillip Morris (PM), 12/20/2017, yield 3.97%.
PennantPark Investment (PNNT), 12/22/2017, yield 10.08%.
General Electric (GE), 12/26/2017, yield 2.72%. GE will be moving from Tier1 to Tier2 in my scheme. After coming back from disaster in 2008, GE is once again underperforming, as a couple of major acquisitions are turning out to have been ill-advised.
MFA Financial (MFA), 12/27/2017, yield 9.88%.
AGNC Investment (AGNC), 12/28/2017, yield 10.58%. AGNC pays monthly.
STAG Industrial (STAG), 12/28/2017, yield 5.07%. STAG also pays monthly.
Prospect Capital (PSEC), 12/28/2017, yield 10.59%. PSEC is another monthly payer.
Annaly Capital Management (NLY), 12/28/2017, yield 9.87%.
Nucor (NUE), 12/28/2017, yield 2.55%.
Ventas (VTR), 12/29/2017, yield 9.87%.
Realty Income (O), 12/29/2017, yield 4.48%. O is the foremost monthly payer, referring to itself as the “monthly dividend company”.
Kimco Realty (KIM), 12/29/2017, yield 6.10%.
Unlike last week, with no earnings reports, several of my stocks will be reporting earnings in the next two weeks. All are noted as reporting outside of the usual quarterly earnings reporting cycle. Firms scheduled to report are;
Darden Restaurants (DRI), 12/19/2017.
General Mills (GIS), 12/20/2017.
ConAgra Foods (CAG), 12/21/2017.
Paychex (PAYX), 12/21/2017.
Upgrades / downgrades on my stocks coming out last week are listed as follows. As a reminder, note that I report these as being of interest, not as actionable advice.
Waste Management (WM) was upgraded from Hold to Buy at Stifel.
Freeport McMoRan (FCX) was reiterated at Neutral at B. Riley FBR Inc.
Kimberly Clark (KMB) was downgraded from Neutral to Sell at Citigroup.
Magellan Midstream Partners L P (MMP) was initiated at OutPerform at BMO Capital.
ConAgra Foods (CAG) was upgraded from Sell to Neutral at UBS.
General Dynamics (GD) was downgraded from Neutral to UnderWeight at JP Morgan.
Verizon (VZ) was upgraded from Neutral to Buy at Nomura.
Entergy (ETR) was upgraded from Neutral to Buy at BofA/Merrill.
Freeport McMoRan (FCX) was upgraded from UnderWeight to Equal Weight at Morgan Stanley.
Raytheon (RTN) was downgraded from OverWeight to Neutral at JP Morgan.
Sysco (SYY) was reiterated at Buy at Pivotal Research Group.
Chevron (CVX) was initiated at Neutral at Credit Suisse.
ConocoPhillips (COP) was initiated at Neutral at Credit Suisse.
Exxon Mobil (XOM) was initiated at Neutral at Credit Suisse.
American Electric Power (AEP) was upgraded from Equal Weight to OverWeight at Morgan Stanley.
Energy Transfer Partners L P (ETP) was upgraded from Hold to Buy at Tudor Pickering.
Enterprise Products Partners (EPD) was also upgraded from Hold to Buy at Tudor Pickering.
ConocoPhillips (COP) was upgraded from Neutral to Buy at Goldman.
Verizon (VZ) was downgraded from Buy to Hold at HSBC Securities.
DrPepper Snapple (DPS) was initiated at Buy at Deutsche Bank.
Colgate Palmolive (CL) was initiated at Hold at Deutsche Bank.
Kimberly Clark (KMB) was initiated at Hold at Deutsche Bank.
Mid America Apartment Communities (MAA) was downgraded from Buy to Hold at Jeffries.
Coca Cola (KO) was initiated at Buy at Deutsche Bank.
Pepsico (PEP) was initiated at Buy at Deutsche Bank.
Procter & Gamble (PG) was initiated at Buy at Deutsche Bank.
McDonalds (MCD) was reiterated at OverWeight at Piper Jaffray.
Cisco Systems (CSCO) was resumed at Hold at Stifel.
Exelon (EXC) was initiated at UnderPerform at Mizuho.
HCP Inc (HCP) was upgraded to OverWeight at JP Morgan.
Medical Properties Trust (MPW) was upgraded from UnderWeight to Neutral at JP Morgan.
Windstream Holdings (WIN) was initiated at UnderWeight at Barclays.
CenturyLink (CTL) was upgraded from UnderWeight to Equal Weight at Barclays.
Entergy (ETR) was initiated at UnderWeight at Barclays.
Kimco Realty (KIM) was downgraded from OverWeight to Neutral at JP Morgan.
STAG Industrial (STAG) was upgraded from Neutral to OverWeight at JP Morgan.
The “Santa Claus Rally” has apparently arrived right on time, boosted it seems by the tax update that, at this point, is looking like a done deal. Of course, one of the most applicable “yogi isms” is “it ain’t over ‘til it’s over”. Either way, one has to wonder what is waiting for us on the other side, as we move past the Holidays into the New Year. It’s probably better to just not think about it, but instead just focus on enjoying the moment. Still, it might be advisable to use this calm before the storm to get ready for tumultuous times ahead. That means, conserve cash, take available profits while they are there, and get ready.
1st Posting for Week Beginning Monday 12/11/2017
Posted Sunday 12/10/2017 10:00 AM
Last week was not a week where stocks gained every day, as they pulled back a bit mid-week, but by the end of the week, all the major averages except the NASDAQ ended the week higher than they began it. As for the NASDAQ, it ended the week basically flat, just ever so slightly below the close from the prior Friday. A positive monthly Jobs report for November from the government resulted in a positive day Friday, ensuring a weekly gain for the blue chips, as exemplified by gains for the Dow Industrials and S & P 500 indexes.
My dividend payers just keep on paying, thank goodness. Stocks on my lists going ex-dividend in the week upcoming are listed as follows:
SCANA (SCG), 12/11/2017, yield 5.52%.
Dr Pepper Snapple (DPS), 12/13/2017, yield 2.47%.
Ares Capital (ARCC), 12/14/2017, yield 9.34%.
TICC Capital (TICC), 12/14/2017, yield 12.86%.
Frontier Communications (FTR), 12/14/2017, yield 26.23%. Yes, that yield is over 26%. Certainly, FTR holders deserve something after a 15:1 reverse split effectively destroyed their investment. It seems the end-game is approaching for the high-yielding rural telecoms. Windstream (WIN) has eliminated its dividend, and Consolidated Communications (CNSL), while holding steady on the dividend, has shed 50% of its value over the past 12 months.
Monroe Capital (MRCC), 12/14/2017, yield 9.76%.
Iron Mountain (IRM), 12/14/2017, yield 5.88%.
Digital Realty (DLR), 12/14/2017, yield 3.26%.
Total S A (TOT), 12/15/2017, yield 4.88%. Note that the yield is before 30% foreign tax withholding by that bastion of capitalism, France.
Greif (GEF), 12/15/2017, yield 4.88%.
Main Street Capital (MAIN), 12/18/2017, yield 5.67%. MAIN pays monthly.
Gladstone Investment (GAIN), 12/18/2017, yield 7.08%. GAIN also pays monthly.
Blackrock Capital Investment (BKCC), 12/18/2017, yield 11.03%.
Only one of my stocks reported earnings last week, Greif (GEF) on 12/6/2017. While the report was positive, success seems to be fully priced in, as shares hit a 52 week high following the report. The same sad story (for a value investor) is told for GEF as for so many other quality stocks, buying in at today’s prices almost guarantees losses unless perfection continues unabated for many years to come.
None of my stocks are scheduled to report this week.
As we move deeper into the holiday season, the upgrade / downgrade activity volume has trailed off somewhat. What came out that I managed to locate is presented as follows:
United Parcel Service (UPS) was upgraded from Hold to Buy at Deutsche Bank.
Ventas (VTR) was downgraded from Market Perform to UnderPerform at Raymond James.
Crestwood Energy Partners L P (CEQP) was upgraded from Neutral to Buy at UBS.
Wal-Mart Stores (WMT) was initiated at Neutral at MuffettNathanson.
HCP Inc (HCP) was upgraded from Hold to Buy at Stifel.
NuStar Energy L P (NS) was upgraded from Neutral to Buy at Citigroup.
McDonalds (MCD) was upgraded from Hold to Buy at Jeffries.
Novartis (NVS) was downgraded from Neutral to UnderPerform at BofA/Merrill.
Sanofi (SNY) was downgraded from Buy to Neutral at BofA/Merrill.
Ares Capital (ARCC) was initiated at Buy at Compass Point.
NextEra Energy (NEE) was initiated at OutPerform at Credit Suisse.
Total S A (TOT) was downgraded from Neutral to UnderWeight at JP Morgan.
MicroSoft (MSFT) was reiterated at OutPerform at Evercore ISI.
Emerson Electric (EMR) was initiated at Neutral at Goldman.
As the political drama continues on unabated, the major issue for investors is the fate of the proposed tax plan. Numerous pundits have attributed the recent rally to an expectation that lower tax rates for corporations and pass-through entities (partnerships and S-corporations) will lead to an improved economy and more GDP growth than has been seen for many years. Of course, the flip side is that if the plan is derailed, which is very possible, the disappointment could lead to a major selloff. With the bull market extended well beyond the usual “shelf life” already, and considering the contentious political environment and the nervous international situation, I recommend maintaining a higher than usual cash position, and exercising extreme caution when contemplating entering any new positions.
1st Posting for Week Beginning Monday 12/04/2017
Posted Sunday 12/03/2017 10:00 AM
Stocks exploded to the upside last week, with the venerable Dow Industrials index experiencing three triple-digit up days. The progress on the tax bill in the Republican Congress has been given the credit for the upswing by most pundits. It remains to be seen whether a final product will make it to the President’s desk by year-end, but for now, at least, the market has decided to “let the good times roll”.
Firms I track going ex-dividend in the upcoming week are as follows:
Gladstone Investment (GAIN), 12/4/2017, yield 7.19%. This is a special one-time dividend, which GAIN is passing out in addition to the usual monthly dividend.
Triangle Capital (TCAP), 12/5/2017, yield 12.23%.
Medical Properties Trust (MPW), 12/6/2017, yield 7.01%.
Newmont Mining (NEM), 12/7/2017, yield 0.68%.
Potlatch (PCH), 12/7/2017, yield 3.10%.
Public Service Enterprise Group (PEG), 12/7/2017, yield 3.24%.
Wal-Mart Stores (WMT), 12/7/2017, yield 2.10%.
Kimberly Clark (KMB), 12/7/2017, yield 3.24%.
SCANA (SCG), 12/11/2017, yield 5.68%.
Only one of my stocks reported last week, PennantPark Investment (PNNT), on 11/29/2017.
Again this week, only one of my stocks is scheduled to report, Greif (GEF), on 12/6/2017.
While my prediction for a quiet week as far as the market’s gyrations was incorrect, not so with my expectation for a slow week for upgrades / downgrades on stocks I track. Those that came out are listed following. As always, note that I list these as being of interest, not as actionable advice.
Kimco Realty (KIM) was downgraded from OutPerform to Neutral at Robert W. Baird.
Mid America Apartment Communities (MAA) was downgraded to Market Perform at BMO Capital.
Norfolk Southern (NSC) was downgraded from Hold to Sell at Loop Capital.
Sanofi (SNY) was downgraded to UnderWeight at Morgan Stanley.
Kimco Realty (KIM) was resumed at Hold at Stifel.
AGNC Investment (AGNC) was resumed at Market Perform at Wells Fargo.
Barrick Gold (ABX) was downgraded from Buy to Sell at Citigroup.
Merck (MRK) was resumed at Buy at BofA/Merrill.
Emerson Electric (EMR) was reiterated at OutPerform at Cowen & Co.
Mid America Apartment Communities (MAA) was downgraded from OutPerform to Market Perform at Raymond James.BMO Capital.
Wal-Mart Stores (WMT) was upgraded to Sector Perform at RBC Capital.
Colgate Palmolive (CL) was downgraded from Hold to Sell at Societe Generale.
To repeat myself from last week, the holiday season is (usually) a slow time for the markets. Not much is likely to happen until after year-end, barring some type of monumental geopolitical event (or as we saw last week, a major change in the income tax rules affecting business corporations). A couple of additional “boiling pots” that could boil over at any time are the North Korea situation and the Mueller investigation. Plus, there is always the potential for some cataclysmic event occurring that no one sees coming, such as the 9/11 terror attacks. All things considered, I remain convinced that now is a time to be cautious and hold a higher than usual cash position, as there are many possibilities for a market-unsettling exogenous event.