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July 18, 2018

IHIT, in the Core Portfolio, went ex-dividend and is priced at $9.89.  This is a BUY and we will be adding if we can get close to this price.  Yield is over 6%.


Linked below is a positive article on BXMT, a position in the Core Portfolio.  Total return is good:  the shares are up 5% and we have also been receiving dividends.  It is too late to add to this position and we continue to HOLD.

Blackstone Mortgage Trust has dividend and capital upside in a rising rate environment thanks to the company’s large floating-rate debt investment portfolio. The REIT has solid dividend coverage stats, and shares are not overvalued yet either. Blackstone Mortgage Trust has potential to grow its dividend above $0.62/share as long as the Federal Reserve keeps pushing rates higher. Buy for income and capital appreciation.



We have talked numerous times about stock ‘buy backs’.  Most investors have NO understanding of what this means to them and stock prices……the link below is to an excellent article that you should read.

Who other than central banks? Why the great and proud corporations of the United States of America, that’s who. Over this same time period that investors like you and me have been scaling back our equity allocations, corporations have been repurchasing their shares hand over fist. For example, since the start of 2014 through the end of 2018 Q1, they have bought back a whopping $2.4 trillion in stock according to S&P Global. And for those that might think that these share repurchases matter little to the performance of the S&P 500 Index, I present the following chart. Put simply, they matter a whole lot.



More news on the Core Portfolio holding MIC.  We managed to lose the link to the full article.

In February Macquarie Infrastructure Corp. (MIC) cut its dividend by 30% and the stock fell by 42%. Ouch! The company owns a diverse portfolio of infrastructure assets.
At the end of 2017 several customers did not renew leases on some energy product storage terminals. Due to the need to refurbish the terminals to store different products, management chose to reduce the dividend and use the retained cash for that purpose.
Free cash flow is now about 1.5 times the dividend rate, and as soon as the company can lease out the terminals, it will again start to grow the dividend. Investors buying in now earn a 9.4% yield while waiting for growth to resume. I expect MIC to be a $50 stock in 2019 compared to the current $42.


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