I always try to read a bunch over the weekend. Thought I'd spit out some quick comments thoughts about some of my stock holdings. View this as if we're sitting at a bar or on an elevator. Not meant to be in-depth, but high level. Also, please view with proverbial grain o salt. These are views if everything goes right. I know (from hard earned experience) that bad surprises are relatively common as well.
- QCOM - stunning that they are at $51.44 and yielding 4.1%. Broadcom felt they were worth $82. The sell-off seems way overdone.
- AGX at $37.10 and yielding 2.65% seems to me like a steal. They have no debt. Earnings are expected to drop in 2018 but then ramp back up next year. That is the nature of a business working on a limited number of large projects. But even at the low earnings, they're trading under 20x earnings and if you back out excess cash, much much lower.
- AMID is priced at $11.50 and yields 14.5% and has been knocked down from recent merger with Southcross. Everything I read says there is shortage and huge demand for pipeline capacity.
- CPLP is at 3.28 with about a 10% yield. They will likely be locked at that price/yield until they increase distribution. They cover distribution easily and have some favorable tailwinds in container space. So I think an increase in 2018 is likely.
- DDR is at $6.75 with a 10.5% yield. These retail REITS (like CBL and WPG) have been under pressure from Amazon effect and higher interest rates down the road. But DDR (in my view) is further down the road in improving their portfolio of real estate and has substantial insider buying. They spiked to $8.90 in December when they announced they were spinning off some of their less desirable assets, still seems like a good plan but market has beaten them down.
- FUNC is a small (under $200m) bank in MD. They are profitable and trade at just 1.29 x book value. OLBK (also in MD), which just bought BYBK, trades at 2x book. Not saying FUNC will catch a bid, but the idea is not crazy.
- ICHR sold off double digits this week. They are down to 22.48 and have been as high as $35. They're estimated to earn over $4 in 2019. Is this a cheap stock? Heck yeah! If they stay in this price range, look for ICHR to make my May MFI portfolio.
- ISBC is another of my small/medium sized banks, for which I keep waiting for a catalyst. Up 2.7% plus dividends since I started buying last summer. I view as a relatively safe haven. Trades at 1.28 of BV and pays a 2.6% dividend. I really view as more upside than downside.
- KCLI is a stock for those who like watching paint dry. I am not sure they are even still listed, certainly a lightly traded stock. They are trading at 42.76 and have a 2.5% yield. Book value is 737m and they trade at a mere 453m. That in a nutshell is why KCLI is one of my largest holdings. They make like $30m a year, which is pretty bad. But seems like they really can't drop much further and there are numerous catalysts that could take them up.
- KNOP is another shipper that has quite a few longer term contracts and not much competition. So not a lot of upside or downside in my view.
- LADR is a REIT that everyone seems to agree has a nice niche and is well-positioned. They have steadily increased quarterly distributions from 25 cents to .315 over past three years. They had a 10% owner make a bid @$15 for entire company (when around 13.50). It was a lowball bid and rejected. Seems reasonable to expect a higher bid sometime in future. In meantime, enjoy 8.4% yield that is steadily increasing and is not as sensitive to interest rate rises as some other REITs.
- MAC is a REIT that has attracted activist interest (third point and Starboard value). They have a 5.4% yield and trade around $57. Things are falling in place for them to get sold (CEO stepping down and change of contracts, golden parachutes, for senior management). We'll see, I have see this play out before - sometimes very well and sometimes disappointing "take-under", but risk/reward seems worth it to me.
- MTG is a large (but formerly larger) holding for me that has dropped in 2018 from $16 to under $11. Yuck. I am tempted though to add. Two things caused drop. They are a mortgage insurer and a competitor (Arch) signed a deal with Fannie Mae or Freddie Mac that the market felt was detrimental to MTG. Then MTG announced that they were lowering premiums about 10% to reflect federal income tax savings. This may have been required by regulators (am not sure) as I believe mortgage insurers have to file rates with state regulators. If that is case, profit margins should still be about the same. Analysts think they trade at under 10x next year earnings and a 1.25 price to book. This is a cheap stock, happy to wait and let compounding work its magic. I believe two catalysts that caused drop are way overblown.
- NS is a MLP (involved in storage) that I was way early on. They went through a merger in 2017 and overpaid. That pressured their dividend and in Feb they cut the dividend from like $1.09 to 63 cents. The stock dropped from $31 to $20.50 post the cut. Ouch! But I decided to double down on March 21st and literally doubled my shares at $21.47. It seems to me that the bad news is all priced in, decks are cleared and they can start going up again. And even with dividend cut, given price drop, they're yielding 11.3%.
- SLSDF is my bag holder stock. They provide fracking sand and every quarter they are producing more sand at higher prices. And every quarter their stock price drops as the market seems convinced that either a bunch of sand is coming on market from other sources or alternatives are being tried. My basis is 62 cents, the stock is a true penny stock at 25 cents. Sum of the parts analysis has them worth more than $1, but I am starting to question the validity of that calc. Either way, I am in until something happens.
- SSW is one of my biggest success stories of late. My purchase in March is up over 40% to almost $8. DB issued report on Friday saying $13 was possible. They just bought out a competitor, business is booming and they have well-credentialed management (David Sokol) unlike many shipping companies... which seem to enjoy dealing from the bottom of the deck.
- TK and TGP are two of my TK holdings. TGP is in the process of having cash flow ramp up significantly, new builds will be adding $250m of cash flow. It is highly likely they will be bumping their distribution significantly in next 12 months. TK benefits from TGP as well as other Teekay companies (which all seem to have positive trends).
- WLFC is the last one I'll discuss. This has also been a great success, running from $25 to $35. They are making money (like $3 a share) and BV is now north of $40.
Ok, enough rambling.