« what source? »
You are currently on the message board page.
In the bar above the messages, click "Headlines" and then click the "Business Wire" report for Thursday, July 30, 2015.
Note that Net Investment Income per share for the THREE months ended 5/31/2015 was $0.19. That isn't enough to cover the distributions over the same period of time, i.e., $0.19 is less than 3 X $0.085.
Yesterday's Business Wire press release: "AllianzGI Convertible & Income Fund II Reports Results for the Fiscal Quarter Ended May 31, 2015", wasn't very encouraging. Looking back at previous quarterly reports, it looks to me like this is the fifth quarter in a row, that they have not earned enough to cover the current distribution.
« 6/30/1998 break point »
Years ago, I began plotting BRK-A's inflation adjusted (ala Shiller) book value per share (log) vs date (linear). I wish I could share the graph with you. It shows two distinct lines with very different slopes (growth rates). The data within the period between 6/30/1998 and 9/30/1999 is a just a mess, no doubt due to the consolidation of GenRe, so yes, 6/30/1998 is somewhat arbitrary, but only by a couple of quarters at best. By the way, the REAL (inflation adjusted) CAGR for the earlier period is ~22%, the second period is ~7%, so, in my opinion, the party ended in mid 1998.
Yes, that's based on BRK-A's price per share. For me, busting out the individual stock returns (other than IBM) is just more work than it's worth.
WEB#1 was fabulous! WEB#2, not so much.
WEB#1, 12/31/1979 to 6/30/1998, 18.5 years, 34.6% ATR.
WEB#2, 6/30/1998 to 6/30/2015, 17.0 years, 5.8% ATR.
Worth the read, IMO, Ben Inker's "Price-Insensitive Sellers". It is one of two articles in GMO's 2Q2015 Quarterly Letter (free).
"The last decade has seen an extraordinary rise in the importance of a unique class of investor. Generally referred to as “price-insensitive buyers,” these are asset owners for whom the expected returns of the assets they buy are not a primary consideration in their purchase decisions."
"Making matters worse, in order to see massive changes in the price of a security, you don’t need the price-insensitive buyer to become a seller. You merely need him to cease being the marginal buyer."
Something to think about, yainvestor2.
Sorry I can't help, hc, but I gave up on both BRK & WEB the moment I read the paragraph on page 36 of the 2014AR that starts: "Eventually – probably between ten and twenty years from now – ". That really was the last straw for me. For your sake, I hope Sean responses. Quite honestly, he's better at that type of analysis than I am. Best regards, jad.
IMO, it isn't a fear of increasing interest rates that is causing the drop in NCZ's NAV/s, it's the drop in the selling prices (and thus, the profits) of the stuff that funds the portfolio's creditors' coupons. As of 6/30/2015, NCZ's Portfolio Leverage-Adjusted Duration was only 2.53% years, which is similar to a short-term "bond" or note. Not a big deal.
To see the problem visually, bring up a Yahoo Charts, Interactive, 2 year graph for XNCZX (NCZ's NAV/s). For comparison, add DBC (a basket of commodities) and OIL (an ETF that tracks West Texas Crude Oil). Now, change the date range to: starts, 01/01/2014 and ends, 07/24/2015. It looks like NCZ's NAV 18.51% decrease over that period is tracking the decreases in commodity prices (36.18%) and the price of oil (57.55%).
As always, just my opinions.
« How low does COP go? »
Take a look at the following article in today's BARRON'S: "Low Oil Prices Squeeze Energy Dividends".
" ... ConocoPhillips (COP) offered a token 1% bump along with cuts in spending. “They have the ability to reduce capital spending significantly over the next three to four years if current commodity prices sustain,” says Dowd."
"But according to a recent note from Oppenheimer & Co., if prices remain below $60 a barrel for a prolonged period, payouts across the sector could come under the gun. “At this low price, all oil companies are funding their dividend through additional borrowing or asset sales, and even the majors could be forced to freeze or cut their dividend,” wrote Oppenheimer."
« ... amazing punishment for retail investors. »
Yes, and incurable optimists that they are, they appear to be pricing in ONLY a one cent decrease in the monthly distribution per share on a future reset.
V/s = 12 x ( $0.085 - $0.010 ) / 13% = $6.92
Yesterday's closing P/s = $6.93
I did take a look at their recent Form N-Q over on the SEC. One of their holdings, Arch Coal, Inc., 9.875%, 6/15/19, appears to have a YTM of ~68%. To understand why, search for : « Arch Coal in Trouble: Will Reverse Stock Split Help? ».
I very likely won't buy it. IMO you need to trade it very carefully, i.e., buy it after, and then sell it before, a step down. It would not be a something to leave for my wife to have to sort out after I'm gone. I'm much more interested in OUSA now, but I need to see the first dividend. I'm guesstimating ~$0.20 per share quarter. I also want some specs (P/E, D/E, growth rate, etc.). I see OUSA as something to buy instead of the 500, but only after a correction.
« What is it about this particular fund that attracted your attention? »
Last November (Nov 8, 2014 6:45 PM) some poor, disillusioned cheerleader, who was hoping, no doubt, (in my opinion) to prop the price up, made the mistake of posting the following on the IBM message board:
« Retirees. Looking for a dividend paying stock yielding 11%
Dividends payed monthly. The stock is ncz and it is traded on the nyse. »
Not being a believe in free lunches, it piqued my curiosity.
I found the negative growth rate absolutely fascinating, and the idea that something that pays you very well even while it slowly dies could still be a good investment.
IMO, NAV and Book Value are very similar concepts. Stand alone, their both meaningless. The premium/discount (to NAV) or multiple (to BV) a rational investor should be willing to pay should depend on how much distributable cash the investment generates today and the investor's expectations regarding it's future rate of change.
My buy-in target (IF I buy at all) is just a bit south of $6. I believe, to avoid a return of capital, they'll probably have to reset the monthly distribution per share from the current $0.085 to ~$0.065 (in September?, their FY ends in February). I am willing to wait and see.
I'll have to keep an eye on this one. The 0.48% expense ratio isn't terrible, Vanguard charges 0.42% for their managed payout fund. Weeding out the squatters (the non-dividend payers) and capping any individual stock at a maximum portfolio weight of 5% might actually be worth the fee (Mr. Wonderful's royalty?).
No, I don't bet, at least not in the "day trader" sense of the word. IF I invest in this at all, it will be for the stream of payments it provides over a 3 to 7 year holding period. I have no interest whatsoever in paying ~$7 for something I believe is only worth ~$6.
#3. Based on my interpretation of the data on the "About this Fund" and the "Portfolio" tabs on the AllianzGI web site for NCZ, my best guess is that a distribution per share per month greater than $0.064 would be a stretch.
Rationalization: As of 30Jun2015, 43.08% of the portfolio was invested in convertibles with an average yield of 6.72% and 41.67% was invested in High Yield with an average yield of 9.11%. That implies that 84.75% of the investment portfolio has a weighted average yield of about 7.90%. I'll assume that the remaining 15.15% of the fund (Derivatives, Liquidity and Equity) is no better or worse than that and use 7.90% for the entire portfolio. That suggests that, net of fund fees (the expense ratio) on the common, the portfolio should earn about 57.3 M$ per year: 7.90% x $804.5 M$ -1.18% x 530.5 M$. If we divide that by 74.225230 million common shares outstanding and divide again by twelve (to convert annual income to monthly), that would suggest that the monthly per share distribution should really be about $0.064.
My expectation is that sometime in the very near future (September?) the fund will reset the monthly distribution per share to something considerable lower than $0.085.
As always, just my opinion.
« WHY would the price of oil hurt these holdings that much ? »
Read the detailed paragraph in their 28Feb2015 AR (page 4) that begins with:
"One of the most influential factors in the second half of 2014 was the drop in oil prices."
From a different source, Ara Lovitt, in his GMO white paper, "What Do High-Yield Maturities Tell Us
About Timing the Credit Cycle? Another Take on the Wall" noted that:
"The handful of recent bankruptcies in the energy sector in 2015 illustrate this point. These energy
companies filed for bankruptcy because the unexpected and dramatic decline in the price of oil
pressured their cash flows, not because they were unable to redeem debts as they came due. In fact,
one of these companies, American Eagle Energy Company, filed for bankruptcy after missing the
first coupon on a bond it issued a mere seven months earlier, making it a recent winner of the credit
market’s version of the NCAA (as in “No Coupon At All”). While extreme, this example shows that
often companies default years before their debts technically mature.
« did u listen to the conference calls ? »
No, I'm medically deaf without my cochlear implant (one side) and listening on a telephone via the telecoil is too stressful.