- Year-to-Date Return of 32.02%
- Trailing 1 Year Return of 26.07%
- Annualized Lifetime Return of 14.29%
- Alpha of 4.52 (vs Benchmark*)
- Beta of 0.73 (vs Benchmark*)
- Average Dividend Yield of 4.29%
Many employers today offer retirement plans to their employees, very commonly set up as a 401k plan. These retirement plans can be an excellent way for investors to build their retirement with help from their employer, but there are many pitfalls to be had if the plan administrator does not understand what to watch out for.
This week, Durig takes another look at the number two grocer in the United States. Albertsons has made a significant turnaround in the past few years after its purchase of Safeway stores in early 2015. With its most recent quarterly results, the company has now logged seven consecutive quarters of identical store sales growth. In addition, the company’s online grocery sales grew by 40% year-over-year, a massive win for this traditional brick and mortar retailer. (Other results from its Q2 results, see bullets above)
In this special review, Durig benchmarks the performance of its three unique blue chip equity portfolios, the Dogs of the Dow, Dogs of the S&P 500, and the Dividend Aristocrats, all of which are designed to capture high quality blue chip dividends of some of the most reputable companies on wall street.
With interest rates continuing to fall and attractive yields becoming increasingly difficult to find, many investors are turning away from conventional fixed income investments such as US Treasuries.
A review and performance recap of Durig’s highly successful Dividend Aristocrats Portfolio that also compares the portfolio to another aristocratic dividend portfolio. The Dividend Aristocrats Portfolio was also designed with income stability in mind, maintaining investment focus on only higher quality blue chip companies known as “Aristocrats.”
October Performance Highlights
A benchmark performance review of Durig’s unique Dogs of the S&P 500 Portfolio that examines the income benefit the portfolio can provide, also exploring some of the achievements the portfolio has had in lifetime performance.
October Performance Highlights
This week, Durig looks at an energy company that is making the transition from its historical focus on natural gas to be more focused on oil production. Chesapeake Energy (NYSE:CHK) has been making strides this year to transition towards a more oil focused production portfolio. Chesapeake has already increased oil in its production portfolio from 17% in 2018, to 24% as of the end of the second quarter. The company estimates it will exit 2019 with oil representing 26% of its production. Oil is a higher margin product, so Chesapeake is already seeing the fruit of its decision (see bullet points above).
A monthly performance review of Durig’s Dogs of the Dow Portfolio that explores several benefits that income producing investments such the Dogs of the Dow can help to provide.
Durig takes an in-depth look at it’s newest addition to its portfolio of investment solutions, the Income Aristocrats. An extremely diversified portfolio, the income aristocrats seamlessly blends the Fixed Income 2, Dogs of the S&P 500, and the Dividend Aristocrats strategies into an income generating machine.
This week, Durig looks at the auto industry to focus on a manufacturer who supplies components to many of the industry’s leader auto makers. American Axle & Manufacturing (NYSE:AXL), a leading supplier of driveline technology, recently released its second quarter results. The company registered solid free cash flow, net cash from operations and improving EBITDA and EBITDA margins (see bullets above).
A monthly performance review of the Dividend Aristocrats, a diversified blue chip stock portfolio built around some of the highest yielding dividend payers listed on the S&P 500. We also examine the various benefits the strategy can offer investors in volatile markets.
(performance is net of fee, 9-17-19)
Annualized Return Since Inception of 8.03%
Average Current Yield of 3.52%
This week, Durig Capital takes a look at a unique oil and gas producer. Reviewed several times in the past, most recently in May of 2019 following the company’s release of their Q1 Results, California Resources Corporation (NYSE:CRC) produces oil, natural gas and natural gas liquids (NGL) strictly within the state of California. And, it sells all of it oil production in the state of California, which, as a state, represents the 5th largest economy in the world. The company recently signed its third major joint venture agreement, which will allow the company to add production and revenue with no initial capital cost to CRC. In addition to this great news, CRC also posted some excellent results from its second quarter (see bullet points above).
This week, Durig takes a closer look at the various benefits that its Dogs of the S&P 500 Portfolio may provide investors in light of today’s unpredictable financial markets. September Performance Highlights (See bullet points above).
A Multi-Benefit Income Strategy
Durig’s Dogs of the S&P 500 Portfolio has the dual benefit of growth and income from a variety of the highest yielding (with regard to dividends) blue chip companies listed on the S&P 500. The portfolio is able to capture the highest quality blue chip dividends through its use of strategic weighting, achieving an average dividend yield of 4.66%, with the growth component of this strategy helping to boost the total year-to-date portfolio return to 20.78%, and a trailing 1 year return of 13.77%, outpacing the S&P 500 itself in both year-to-date return and trailing 1 year return. This multi benefit strategy allows investors to capture strong growth in principal, while still generating a healthy level of diversified income and realizing strong historical returns.
Once in a great while you find or learn something that is so unbelievably good, that you have to hear or read it over and over again, often from different sources or perspectives, before the truth of it actually starts to sink in and really make sense. Perhaps it’s that initial bewilderment that has served to curb much of any demand from the fixed income markets for this otherwise “golden” opportunity. Fortunately, this is great news for those that eventually arrive at a deeper understanding of why these Gran Colombia Gold bonds are so darn good… and it is why these bonds are well deserving of overweighting in our high performing FX2 fixed income portfolios.
Do you want more income? If your answer is yes, we have excellent news for you! Durig’s FX2 Portfolio has a lifetime track record of historical outperformance of its peer benchmarks while generating extremely high levels of fully customizable income options, something that no mutual fund can offer, all within your own separately managed account.
This week, Durig Capital takes a look at a company that provides compression services and equipment for the oil and gas industry. With the demand increasing for takeaway capacity from oil and gas fields around the country, CSI Compressco’s services become even more valuable and essential. The company had a fantastic second quarter, with record setting utilization, increased revenues and adjusted EBITDA.
Second quarter overall utilization came in at a record setting 89.1%.
Revenues increased by 36% over second quarter 2018.
Adjusted EBITDA increased 22% over first quarter and 41% year-over-year.
Outstanding interest coverage of 2.2x.
This week, Durig Capital look again at the parent company of a long-time, beloved family entertainment restaurant. Chuck E. Cheese, whose parent company is CEC Entertainment, has long been a beloved rite of passage for children’s birthday celebrations. CEC has spent the past few years updating the venue’s image, mainly in an effort to appeal to the parents as well as their kids. The new image seems to be working. With the release of its second quarter and year-to-date results, CEC has now logged five consecutive quarters of same-store growth. Other highlights from CEC’s latest results (see above).
This week, Durig Capital looks at the healthcare sector to review one of the largest publicly traded hospital companies in the United States. Community Health Systems (NYSE:CYH) has spent the last few years rationalizing its portfolio of hospitals. The company is beginning to realize the effects of this strategy as evidenced by its same-store results for the second quarter (see above).
Over the last few months, the ongoing trade-war between the U.S. and China has escalated into something of a volatility generating machine, with some market indices jumping up or down hundreds of points in a single day as new tariffs are added, sentiments of certain key political figures are expressed, etc. Causality aside, the markets are boiling and have many investors looking to find a way to beat the heat without having to leave the kitchen entirely. This week, Durig Capital explains how investors can do just that with its Dogs of the S&P 500 Portfolio.
This week, Durig Capital reviews one of the leading producers of steel products in the United States. AK Steel (NYSE:AKS) produces steel for the automotive, infrastructure and manufacturing sectors. There has been much talk of bringing back manufacturing jobs to the U.S., especially in the production and manufacturing of steel. AK Steel is one of the companies trying to ensure continued heavy manufacturing capabilities within the United States. It recently reported its second quarter results (for the three months ending June 30, 2019) with the highlights (listed above).
This week, Durig Capital looks to a Canadian issuer, a specialty pharmaceutical company that is successfully treating long-term HIV patients with its unique medicines so that patients have the opportunity to have a better quality of life. Theratechnologies (TSX:TH) has two landmark drugs, Trogarzo™ and EGRIFTA™ specifically developed to help HIV patients. The company has reported its second quarter results (for the three months ending May 31, 2019) and continues to see outstanding growth over its product lines.
This week, Durig Capital looks at a company providing private prison services for governmental agencies both domestically and abroad. Geo Group, Inc. (NYSE:GEO) is one of only a handful of private prison service companies. With the election of President Trump, private prison companies have gotten a boost due to more stringent prosecutions as directed by our new attorney general, as well as Trump’s zero tolerance policies on immigration. The company’s first quarter 2019 results reflect this new political climate (above).
Geo Group is awaiting decisions from the Federal Bureau of Prisons on two procurements (CAR 18 and CAR 19) that total close to 12,000 beds. If these decisions come back in favor of Geo Group, the company would likely again increase its current guidance (as it just did with the release of its first quarter results). Geo Group’s 2023 bonds, couponed at 5.125%, are currently trading at a discount, giving them an enticing yield-to-maturity of over 9%. With the most recent increase in guidance and the possibility of more on the way, these short-term maturity bonds (maturing in only 44 months) are an ideal addition to Durig Capital’s Fixed Income 2 (FX2) High Yield Managed Income Portfolio, the aggregated performance of which is shown below.
This week, Durig Capital provides a brief update on 99 Cents Only Stores LLC, a deep discount retailer whose bonds we have reviewed in the past for our Fixed Income 2 (FX2) High Yield Managed Income Portfolio. 99 Cents Only Stores has recently been challenged by its outstanding debt obligations. Here are some of the highlights:
Deep discount retailer 99 Cents Only Stores recently completed an arrangement with creditors which would eliminate many of their short term debt obligations.
Debt to equity swaps are a common method companies use to improve liquidity.
Under the newly agreed upon terms, 99 Cents Only Stores will issue common and preferred stock for some of its outstanding debt.
Recent Financial Statements
This week, Durig Capital takes a second look at an issuer involved in the design and manufacture of semiconductors. Magnachip Semiconductor (NYSE:MX) has been around for over three decades and is currently the largest independent supplier of OLED display drivers to panel makers for smartphones. The company is riding the wave of transition from LED to OLED in the smartphone world. This has paid handsomely as its full year 2018 results can attest (above). In addition, the company’s first quarter also posted continued wins for its Standard Products division.
This week, Durig Capital looks at one of the top propane companies in the United States. Ferrellgas (NYSE:FGP) is the second largest propane retailer and distributor in the country. Through a combination of acquisitions and colder winter weather, the company has posted solid numbers for its third quarter (ending April 30, 2019).
This week, Durig Capital looks at an oil producer who has built its company using non-traditional production techniques. Denbury Resources (NYSE:DNR) has been successfully using enhanced oil recovery (EOR) techniques to build its name in the world of tertiary oil production. The company had a fantastic 2018 as well as a solid first quarter.
Beyond Belief… this may be the most fascinating debt instrument we have ever reviewed.
Rising with the price of gold, the cash flow and yield of Gran Colombia Gold’s senior secured “Gold Notes” appears to be headed straight into the land of unbelief. Perhaps what we see here is either wrong… or something in this picture seems to have quietly escaped the attention or the view of most other investors in the high yield bond market. Granted, this is not a straightforward and easily understood issue because of the quarterly interest boost linked to its amortized quarterly redemption of principle when the price of gold is higher 1250 per ounce. However, it is precisely this “hard to be understood” feature that is driving its current push into the land of dreams.
For this week’s bond review, Durig Capital ventures into the auto world to look at one of the leading auto rental companies in the U.S. and around the world. Hertz Global (NYSE:HTZ) had a fantastic 2018 and 2019 looks to be shaping up much the same.
This week, Durig Capital ventures into the telecom space to look at one of the country’s major telecommunications services providers. Frontier Communications (NASDAQ: FTR) has been working hard to transform itself as cable, voice and internet usage continues to change and evolve. The company’s most recent quarter highlights some of its progress as well as actions Frontier is taking to remain competitive.
This week, Durig Capital takes a look at a unique oil and gas producer. California Resources Corporation (CRC) produces oil, natural gas and natural gas liquids (NGL) strictly within the state of California. Most people know that California is one of the largest states (physically) in the U.S. But most probably don’t know that it represents the world’s 5th largest economy. Against this backdrop, CRC produces oil, natural gas and NGLs and sells all of it in the state of California. This looks to be a great situation for CRC – a local buyer for all of its product and a huge appetite for more. CRC, a spinoff of Occidental Petroleum in 2014, has spent the past few years recovering from the oil doldrums of 2016 and it looks to be on the upswing. Some of the highlights from its most recent quarterly results in bullet points above.
This week, Durig Capital looks at one of the leading producers of steel products in the United States. AK Steel has been working diligently over the past few years to increase its competitiveness in the marketplace. Its design of its own ultra high-strength steel (UHSS) has produced excitement amongst the company’s automotive customer base. In addition, AK Steel’s acquisition of Precision Partners a few years ago has been very lucrative as that acquisition has now resulted in approximately $50 million in additional future revenues. The company recently released its first quarter results for 2019. Amongst some of the highlights:
This week, Durig Capital takes a look at an industrial designer, manufacturer and marketer of aftermarket parts for light vehicles, commercial trucks and other industrial uses. Tenneco Inc. recently posted a fantastic fourth quarter and full year results in large part due to its recent acquisition of Federal-Mogul. Highlights include:
Later this year, Tenneco will create two separate, market leading companies from its acquisition of Federal-Mogul. Federal-Mogul brings strong brands, products and capabilities that are complementary to Tenneco’s portfolio. Creating two new product focused companies with stronger product portfolios will allow each of them to move faster in executing on their specific growth priorities.
This week, Durig Capital reviews a Canadian heavy haul transportation and crane company. Entrec Corporation provides heavy haul transportation and crane solutions to the oil and gas, construction and power generation industries, among others. Entrec’s most recent results for both its fourth quarter and full year 2018 showcase healthy growth in the company’s U.S. operations. And given the volatility in oil and gas late last year, the company’s results are even more impressive.
This week, Durig Capital reviews a traditional print-based marketing company that is undergoing a transformation. Quad Graphics (recently rebranded to just Quad) is in the midst of implementing its Quad Transformation 3.0 plan. This plan is helping to add core marketing expertise to the company’s service offerings. This has been accomplished mainly through acquisitions. The company’s most recent financial results show some of the progress on this plan.
This week, Durig Capital takes a look at a company that provides communications services for consumers and businesses across the U.S. Frontier Communications has spent most of 2018 making progress on its transformation initiatives that are designed to reduce costs, increase profitability and improve the balance sheet. The company recently released its fourth quarter and full year results for 2018. The company is showing progress on its initiatives.
Frontier Communications’ April 2022 bonds are currently trading at a significant discount, giving them an outstanding yield-to-maturity of about 23%. These bonds provide investors with an excellent opportunity for diversification into the essential service of internet connection. Considering Frontier’s solid free cash flow and excellent interest coverage, these 2022 bonds make an ideal addition to Durig Capital’s Fixed Income 2 (FX2) High Yield Managed Income Portfolio, which historically, has done well in a rising interest rate environment, shown below.
This week, Durig Capital takes a look at a company that provides compressions services and equipment for the oil and gas industry. CSI Compressco (CCLP) has had multiple successive quarters where the company has increased revenues and its latest quarter did not disappoint. Included with this increase were several other notable achievements.
With the continued demand for LNG and the current and planned LNG terminals in the U.S. and Canada, CSI Compressco looks to be perfectly positioned to take advantage of this demand. In light of the company’s solid performance in 2018, the company’s short-term bonds maturing 2022 are an ideal candidate for additional weighting in Durig Capital’s Fixed Income 2 (FX2) High Yield Managed Income Portfolio, shown below.
This week’s bond review focuses on one of the nation’s largest publicly traded hospital companies. Community Health Systems, Inc. (NYSE: CYH). CYH has spent the past few years divesting hospitals in an effort to reshape its portfolio towards urban and suburban markets. The company continues to make that shift and has now added urgent care centers in some of those markets to help drive additional patients to its hospitals. Its fourth quarter and full-year 2018 results look to be an indicator that the transformation is gaining a foothold.
This week’s bond review delves into the retail sector with a specialty retailer of durable consumer goods who also offers its customers financing on their purchases. Conn’s Inc., which is headquartered in Texas, has a market presence that stretches across the southern United States. Conn’s set some records in its most recent quarterly results (third quarter for its fiscal year 2019).
This week, Durig Capital looks to the healthcare industry, where a medical supply logistics provider has made some key acquisitions to broaden its revenue sources. Over the past 18 months, Owens & Minor has acquired Byram Healthcare, a direct to patient medical supply distributor, along with Halyard’s surgical and infection prevention (S&IP) business. Combined, these two acquisitions are slated to add $1.45 billion in annual revenues for Owens & Minor. The company’s last reported quarterly results (third quarter 2018) show revenue growth coming through these most recent additions.
This week, Durig Capital reviews its own version on a time-proven investment strategy. The “Dogs of the Dow” investment strategy was introduced by Michael B. Higgins in the early 1990’s as a simple way for investors to design a portfolio around the “dogs” of the broader Dow index, and re-balance it annually. Durig Capital has created its own version on this investment strategy which has historically resulted in a less volatile portfolio and has produced excellent returns since its inception in June 2017.
Since its inception (June 6, 2017) Durig’s “Dogs of the DOW” Portfolio has generated a total return of 14.26% (as of January 22, 2019). Over the same time period, the greater Dow index generated a return of 11.37%. So, Durig’s “Dogs of the DOW” portfolio returned 25% more than the index.
Most notably, during the selloff in the fourth quarter of 2018, Durig’s portfolio was down -5.23% while the greater Dow index was down -11.30%. These figures are as of January 22, 2019.
Year-to-date in 2019, the Durig portfolio was up 1.56%, while the greater Dow index was up 4.71% (as of January 22, 2019). This statistic, along with the results from fourth quarter 2018 illustrate the portfolio’s reduced volatility.
This week, Durig Capital ventures to the technology sector to review an issuer involved in the design and manufacture of semiconductors. Magnachip Semiconductor (NYSE:MX) has been around for over 30 years and is the largest independent supplier of OLED display drivers to panel makers for smartphones. The company’s latest reported quarterly results (three months ending September 30, 2018) were excellent.
Adjusted EBITDA increased 13% year-over-year.
Gross profits were up 10.8% over the prior year period.
Operating income increased by 17.9% over Q3 2017.
Revenues were up 16.6% year-over-year and were at the highest levels since Q4 2012.
Interest coverage over 3x for the third quarter.
This week, Durig Capital takes a look at a leading marine transportation company. Teekay Corporation provides marine transportation, storage, and vessel leasing for the oil and natural gas industry. The company’s third quarter saw increases in its subsidiaries revenues over second quarter. Here are some highlights from its third quarter results.
Teekay Tankers nearly doubled its quarterly revenues from the prior year period.
Teekay Corporation recorded adjusted cash flow from vessel operations of $19.8 million as compared to $1.2 million a year earlier.
Teekay LNG revenues increased to $123.3 million as compared to $104.3 million a year earlier.
This week, Durig Capital reviews a bond from an issuer that was snapped up a few years ago by one of the most enigmatic figures in corporate America. In late 2016, SolarCity was acquired by Elon Musk’s company, Tesla. The acquisition made sense- combine the maker of electric cars and energy storage with a company that produces solar panels that produce energy (seemingly to ultimately charge Tesla’s vehicles). Tesla has since integrated SolarCity’s products into the Tesla portfolio. Tesla’s most recent reported quarter (Q3 2018) was truly historical.
Free cash flow of $881 million.
Operating income of $417 million
Cash flow from operations of $1.4 billion.
Interest coverage in Q3 of 2.4x.
This week’s bond review ventures into the auto world, specifically car rentals. Hertz is one of the leading auto rental companies in the U.S. and around the world. The company recently posted its financial results for its third quarter, presenting solid evidence that the 2017 Transformation Plan is continuing to bear fruit. Some of the company’s excellent Q3 results include the following:
A 52% increase in in global net income.
U.S. adjusted corporate EBITDA increased by 25% year-over-year.
Revenues for U.S. operations also increased 10% year-over-year.
This week, Durig Capital takes a second look at an iconic cosmetic company that is continuing to refine its market strategy. Revlon, founded in 1932, has been identified with some of Hollywood’s biggest stars over the years. The company, under the direction of a new President and CEO, has recently posted some fantastic results for the third quarter including:
Adjusted operating income increased by 82% year-over-year.
A 35% increase in Adjusted EBITDA.
An increase in e-commerce sales of 23%.
Significant sales increases in China as well as North America.
This week’s bond review looks at a diversified conglomerate that has been reshaping its portfolio of companies to grow and increase synergies. Griffon Corporation has spent the past few years strengthening its business segments, particularly its Home and Building Products segment, acquiring leading brands like ClosetMaid and CornellCookson. Griffon had a fantastic third quarter. Some of the highlights include:
A 44% increase in revenues year-over-year.
Home and Building Products sales increased 59% over third quarter 2017.
Business orders for the company’s Telephonics business were up 30% year-over-year.
The Defense Electronics segment has accumulated Contract backlog of $346 million.
Stocks versus bonds – which is the better investment? This is a highly individual question and depends on the goals of the investor. For most investors, getting the best return with the least amount of risk is a goal worth striving for. But what is the best way to do this? While stocks have generally outperformed bonds, there are exceptions to the rule. Consider Durig Capital’s FX2 Managed Income Portfolio.
This portfolio’s 3-year trailing return has handily beat the S&P 500 index.
Not only has its returns exceeded that of the S&P 500 index, it has done so with roughly half the risk (volatility).
Morningstar claimed that FX2 was the top performing Fixed Income SMA among its peer group in the last significant interest rate spike of 2016.
Additionally, Morningstar has ranked Durig Captial’s FX2 portfolio as the top performing Fixed Income SMA for Trailing 1-year, 3-year, and 5-year returns, as well as for Q1 and Q2 of 2018, amongst a peer group of over 800 SMA’s.
Informa ranked FX2 1st in performance in 1,2,3 and 5 year return categories, as well as since inception, as compared to its peers in Short-Term Fixed Income.
This week, Durig Capital looks to the skies as it reviews an issuer that is focused on the design and manufacture of aircraft parts and systems. Triumph Group has spent the past few years shedding non-core business assets, consolidating locations and streamlining its operations with an eye to cost reductions. Its latest quarterly results showcase its progress on this journey. Its fiscal year 2019 first quarter results included the following:
A 6.5% increase in net sales as compared to Q1 FY 2018
An increase of 126% in adjusted EBITDA as compared to the prior year period.
Interest coverage was an outstanding 2.3x for Q1
Triumph Group is projecting a 5% increase in net sales in FY 2019.
Backlog increased by 5% over the previous year period.
Diversification is the word this week as Durig Capital takes a second look at the number two grocer in the United States. Albertsons recently posted its first quarter results for fiscal year 2018. The company showcased some impressive financials including the following:
Adjusted EBITDA of $815.8 million, an increase of 5.7% year-over-year.
39% increase in net cash provided by operating activities.
108% increase in e-commerce sales.
Interest coverage of nearly 3x.
This week, Durig Capital takes a look at a 130-year old company, whose name is synonymous with direct selling. Avon Products is now a global manufacturer and distributor of a wide range of beauty products. The company’s recently posted its most recent quarterly results. Some of the highlights include:
A 62% increase in operating profit.
The company’s average order was up 6%.