I suspect that most dividend investors are conservative by nature. I am. I don't believe I have any special talent or gift for trading, a crystal ball, or any access to insider information. Consequently, I have little expectation of prospering by consistently buying low and selling high. In fact, prior to becoming a dividend investor, my trading history boasted the opposite, buying high and selling low. Tis sad but true, over those years, I'd given more to the market than I'd taken from it. However, that's yesterday's news, and of no real interest. Of importance is that I'm patient, analytical, organized, pretty good at math, and always looking for that angle, strategy, or edge to help guarantee my continued market success. My book, The Dividend Investor's Guide, details my history, education and growth as a dividend investor and the lessons I learned along the way. It details an effective and safe overall investing philosophy, along with a discussion of several proven trading strategies designed to enhance one's portfolio's income and dividend yield.
Jim Roumell is Founder and President of Roumell Asset Management, LLC. Mr. Roumell founded the firm in 1998 after more than a decade as a financial advisor. Mr. Roumell is highlighted in, “The Art of Value Investing: How the World’s Best Investors Beat the Market” by John Heins and Whitney Tilson. Martin J. Whitman, Founder of Third Avenue Value Funds, says, "Jim's investment philosophies and his actual investments snugly fit into my criteria for securities investment." Mr. Roumell was selected to participate in, and won, two consecutive Wall Street Journal stock picking contests (in 2001 and 2002) before the contest was discontinued. He is a graduate of Wayne State University, Detroit, Michigan.
Andrew Left's Citron Research (http://www.citronresearch.com/) (formally known as Stocklemon.com) seeks to expose companies whose management is in some way misleading investors. Left digs into SEC filings, financials, management histories and other data to uncover such situations, and he is usually short the stocks he writes about. Mr. Left has been publishing for 7 years and has created a track record that is unrivaled in short selling. Mr. Left has been cited in Barron's, Wall St Journal, CNBC and other major publications repeatedly for his work. Mr. Left was also an invited speaker at the reknown Master Investor Conference.
Visit: Citron Research (http://www.citronresearch.com/)
Reuben Gregg Brewer spent about 15 years at world renowned Value Line, the Publisher of The Value Line Investment Survey. During this time he worked in various facets of the company's research efforts, including equities, mutual funds, convertibles, and options. For six years, he directed all of the company's research efforts as Value Line's Executive Director of Research. Today he writes about the things that interest him.
I am an undergraduate finance student and value investor influenced by the likes of Buffett, Graham, Marks, Klarman, Greenblatt, etc.
I can be contacted by phone at 1-508-505-8910 or e-mail at firstname.lastname@example.org
Ross Taylor has been an institutional or hedge fund portfolio manager for over 28 years. He was head of Institutional Equity and Balanced investing for a NYC based Trust Bank and then went to a a major New York City based hedge fund where he was a partner from 2001 to 2009. He has been at Somerset Capital Advisors since 2009.
Mr. Axler is Founding Partner of Spruce Point Capital Management, a long/short hedge fund. Mr. Axler is also the co-founder of Prescience Point Research Group. Mr. Axler is an activist short-seller, forensic financial researcher, and has exposed over $1.0 billion of alleged listed frauds on Nasdaq and the NYSE. Prior to founding his company in 2009, Mr. Axler spent eight years as an investment banker with Credit Suisse and Barclays Capital where he structured and executed billions of dollars of financing, derivative risk management, and M&A deals for leading Fortune 500 clients. Prior to starting Spruce Point, Mr. Axler was an Associate Director at Barclays Capital in the Diversified Industrials Group. Mr. Axler started his career with Credit Suisse in 2000, where he held roles with the Financial Strategy, Corporate Risk Management, and M&A groups.
Mr. Axler is a contributing writer to Seeking Alpha, and was profiled in the book "The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work." Mr. Axler's short research has been profiled by the National Bureau of Economic Research (NBER) in an analysis entitled "How Constraining Are Limits to Arbitrage? Evidence from a Recent Financial Innovation," and shown to produce superior investment returns. In addition, according to a research study from Sumzero analyzing 12,000 analysts recommendations since 2009, Mr. Axler is the top ranking short-seller.
Mr. Axler graduated from Yale University with a masters degree in Statistics, and received both a Bachelor of Arts degree in Statistics and a Bachelor of Science in Marketing and Business Administration from Rutgers College, where he graduated with Summa Cum Laude and Phi Beta Kappa honors.
Andrew Walker, CFA, is a portfolio manager at Rangeley Capital LLC with a focus on small cap special situations investments. Mr. Walker also contributes to Sifting the World, a value investing forum.
I am an independent equity research analyst and consultant. I focus on finding small-cap biotech stocks where I believe there is favorable risk / reward because of misinformation, lack of information, or a potential fundamental turnaround. I provide detail analysis for investors and investor relations companies. I also provide due diligence and advisory services to companies. Some names I write on I invest in personally and will disclose my position. Names that have hired me to provide due diligence or advisory services I will disclose a business relationship. I previously worked for Zacks Investment Research from 2003 to 2015 as a Senior Biotechnology Analyst. Prior to Zacks, I spent 1999 to 2002 managing money with Eastover Capital in Charlotte, NC where I focused on large-cap equities, specializing in healthcare, energy, and technology. Prior to joining Eastover, I worked as a research scientist for TechLab, Inc., a biotechnology company focused on developing diagnostic kits and vaccines for infectious diseases, between 1995 and 1998. I also spent a year working at the Fralin Biotechnology Center, and a year working for a cancer researcher while at Virginia Tech. I have a B.S. in Biochemistry from Virginia Tech, with a B.A in Chemistry and a minor in Math. I have a M.B.A. in Finance, with a concentration in Securities Analysis, from Wake Forest University. I hold the Chartered Financial Analyst (CFA) designation.
Mark Krieger is an avid stock market trader dedicated to the following ideals: (1) Focus on high relative strength, (2) Buy low, sell high (3) Short high, cover low, (4) Go against the crowd, (5) It's all about the rules and discipline- hold them dear (6) Analyze the balance sheet-seek low debt,high cash and hidden value scenarios (7) Cut your losses short, let your gains run, (7) Don’t get emotional, (8) Follow the insiders- buy if they are buying, sell if they are selling (9) Be greedy when others are fearful and fearful when others are greedy.(10) Don't argue with the market unless you detect an inefficiency present-it is smarter than you are. In summary, some of these ideas might be construed as rather trite and overused, but consistent use of them pays off in the long run.
Mr. Krieger specializes in the food sector and is the originator of the "Basic Food Fund" index and the "Dirt Cheap Value Portfolio".Why the food sector? "everybody has to eat'!
He graduated from the University of Southern California with a BS in Business Administration with an emphasis in Corporate Finance. Mark resides in Cowan Heights, California with his wife, son and pug and is interested in mountain biking, gardening and reading.
I am Howard Klein, Publisher and Publisher of THE HOUSE EDGE casino investment site on SA.
For 30 years I held senior vp and exec VP positions in major casino hotel operations among them Caesars, Ballys, Trump Taj Mahal and have done extensive consulting assignments for many others in the US, including the native American property Mohegan Sun, in Connecticut.
I have also done special projects for Caesars Palace in Las Vegas. I was the founder and publisher of Gaming Business Magazine, first ever publication covering the gaming industry and have written extensively about the industry. My two books are presently sold as
Kindle ebooks on the Amazon site:
MASTERING THE ART OF CASINO MANAGEMENT and
THE GREAT AMERICAN CASINO BAZAAR.
I have appeared on industry seminar panels and on national radio and television discussing
various aspects of industry growth.
I am a graduate of NYU's Stern School of Business and did work toward a Master's degree in economics
at the Columbia School of General Studies.
MY INVESTMENT STRATEGY:
Due to the necessities of my casino consulting business which encompasses many top gaming companies, I have placed my own gaming portfolio into a blind trust over ten years ago. At that time I instructed my money manager(who is a former industry colleague herself as well as a corporate lawyer and money manager) to follow my gaming investment strategy along these lines.
1. I am a value investor first. Knowing the industry in depth I am able to plumb opportunities and problems others cannot see. Mostly I like to identify price ranges over given periods where I believe the market is asleep and I can buy in at the lowest possible risk.
2. I am a strong believer in management quality. Knowing so many top people in the industry allows me to evaluate which ones I believe have the "right stuff" to move a stock and which are populated by corporate drones.
3. I have instructed my manager never to trade on sugar high spikes in earnings or news per se but use the "string theory" I have developed which in brief, follows a skein of news and earnings releases over set periods of time for each stock and then move in or out.
4. I have instructed her to keep the portfolio diverse with holdings in four basic areas: Casino stocks in Las Vegas, Macau and the regionals, gaming tech stocks with real moats not just cute apps.
Overall I have done immensely well and share my views with SA readers and more specifically with strong recommendations and gaming stock strategy analysis based on my network of industry contacts for subscribers to my SA Premium Site: THE HOUSE EDGE.
Retired Pharmacist. Call me Rose. Nose= Knows enough to know I need to keep learning and keeping a great dividend paying nest egg growing upwards.
My 83 stock portfolio is listed here by sector, largest holding by value is listed first.
Consumer Defensive: KO, PM, GIS, MO, TGT, KMB, DEO, PG, PEP, MDLZ, CLX, CL, KHC, HSY, UL.
Consumer Cyclical: MCD, SBUX, GPC, NKE, HAS, MAT, VFC, HOG, HD
Healthcare: JNJ, ABBV, CVS, AMGN, CAH, BDX
Healthcare eREITs : OHI, VTR, HCP, HCN, NHI, CCP.
Energy: XOM, CVX, OXY, VLO,
Tech: AAPL, ADP, CSCO
Tech eREIT: DLR
Industrial: BA, UNP, MMM, CMI, CAT, GWW, NSC, LMT.
Industrial eREIT: STAG
Financial: TROW, MA, V, WFC, MET
Other eReits: WPC, O, XLP, UBA, STWD ,WPG
REIT Hotel: CLDT
mREIT: ARI (very very small position) and NRZ (also small)
BDCs: MAIN, PNNT, HTGC, ARCC, NEWT (small)
Telecom: VZ and T
Utility: SO, XEL, WEC, D, MGEE, DNP, CNP, LNT, FE
DNP is a CEF which predominately holds Utilities.
Valens Securities is a boutique research firm with 90+ professionals, housing truly unique, disciplined, and unbiased research systems for equity analysis, corporate credit, and macroeconomic strategy.
Valens provides institutional investor clients with various tools designed for each level of the investment process:
- Valens assists in screening and idea generation using a broad set of unique signals and Quantamental screening criteria
- Our Market Phase Cycle™ macroeconomic strategy helps CIOs, DORs, and PMs to better understand directional trends in credit and equities markets and sectors
- We provide monthly and alert-based portfolio monitoring and review, helping our clients to confirm risk-reward opportunities and avoid torpedoes
- Upon request, Valens provides an unparalleled level of forensic depth for due diligence on concentrated positions on a client by client basis
Performance and Valuation Prime™: Valens insights in financial statement analysis have been featured in presentations and publications in the top finance and accounting forums in the world. Existing credit and equity formulae are simply not geared for the complexity and distortions in financial statements. The Statement of Cash Flows, often heralded as the solution to distorted financial statements, is possibly the most flawed. Valens Securities systematically reclassifies the severe accounting distortions, providing a base for far more accurate business analytics.
Our Earnings Call Forensics™ have been featured on CNBC and in Institutional Investor Magazine. This "ECF™" is a powerful, proprietary process for studying and evaluating management's physiology and other behavioral characteristics of management during quarterly earnings calls and other public presentations. We use tools and systems that other sell-side firms and credit agencies have been either unwilling or unable to use. Their reluctance to use these technologies often stems from their fear of endangering their relationships with management teams.
Valens Credit Ratings and CDS research and pricing have made Valens Credit one of the most read authors on Seeking Alpha. The application of "Fundamental Forensics" to credit default assessments and recovery rates has contributed to the body of knowledge of corporate credit analysis that has been presented to over 30 CFA Society city and country events.
Our focus on "Incentives Dictate Behavior™" has uncovered management incentives and drivers of corporate actions that have been prescient in securities analysis. Our team focuses on the incentives and structures that highlight management’s collective and personal risk tolerance for the company, capital structure inclinations, and propensity for certain corporate actions. This uncovers hidden payout incentives that drive the value and risk of a company’s obligations and ultimate equity value. IDB™ has also been featured in the highly-acclaimed book, DRIVEN: Business Strategy, Human Actions, and the Creation of Wealth.
Valens Securities analysis teams are actually team-based with no “star analysts”. Our Chief Investment Strategist, Joel Litman, serves as committee chair for final edit of our publications. Our conflict avoidance procedures exceed that of any major agency, reducing analyst biases as we accept no issuer consulting fees and we report full disclosures of any related interests.
We disclose any holdings of any of our personnel or affiliates in any securities of the firm being rated, and not simply the credit. For holdings of any of our committee members, or any individual employee who provided analysis contributing to a particular rating, we disclose equity, credit, or options of that particular company being rated.
I've been contributing to SA since 2011, with a break to join the PRO editorial team from 2013-2015. I got my Series 7 and 63 back in 2000, and watched the dot-com bubble peak and then burst in real time at a small, tech-focused retail brokerage in NYC.
Founded in 2003, StockPromoters.com has tracked hundreds of thousands of promotions by thousands of promoters and counting.
Stock Promotion can be an effective and necessary tool if done correctly and responsibly, and it can be crippling to both the public company and the promoter if done recklessly.
StockPromoters.com Tracks thousands of promoters. We display their compensation and we know if they are actually the ones behind that public company despite what they may or may not disclose to the public.
We cut through the tape and get right to the heart of the matter.
What is the purpose of the promotion?
Is it being done to increase shareholder and corporate value in order to better serve the public company?
Or is it to create liquidity so insiders and “friendly” shareholders can unload their position?
Does the promoter have any "skin in the game”?
Are they paid in Cash? Free Trading Stock? Restricted Stock?
Will he be selling his stock, or holding it for the long term?
Do they believe in the company they're promoting?
What can you expect form this promoter?
Is this a "Pump and Dump”, or is this a gradual marketing campaign to attract new shareholders?
Do you want to know who the best promoters are and who you should be following?
Do you want to know who the worst is and who you should avoid like the plague?
All of this and more is answered by utilizing our proprietary stock promotion tracking system which is behind the StockPromoters.com website.
Wall Street Breakfast, Seeking Alpha's flagship daily business news summary, is a one-page summary that gives you a rapid overview of the day's key financial news. It's designed for easy readability on the site or by email (including on mobile devices), and is published before 7:00 AM ET every market day.
Wall Street Breakfast readership of over 900,000 includes many from the investment-banking and fund-management industries.
Sign up here to receive the Wall Street Breakfast in your inbox every business day: http://seekingalpha.com/account/email_preferences
Follow @SmithOnStocks on Twitter for more updates (http://twitter.com/#SmithOnStocks
Please read this section carefully for some important disclosures.
Who Am I?
My name is Larry Smith. My career was spent on Wall Street as a biotechnology and pharmaceuticals analyst and also as Director of Research at Smith Barney and Hambrecht and Quist. On my website, SmithOnStocks, which can be addressed from this Seeking Alpha site, I publish articles on biotechnology and pharmaceutical companies. I attempt to be objective and present a balanced view of negatives and positives. Readers should not rely on Seeking Alpha for my latest views and articles on Seeking Alpha should be viewed as informational only. The reports section of my website reflects my most current view on a stock.
How Do I Get Paid?
My only source of revenues from my articles is from subscription revenues from my website. I do not receive any compensation from companies or investor relations firms to write articles. I do not receive any direct or indirect compensation from hedge funds, other investment managers or any entity to write articles. I consider direct compensation to be cash compensation that is directly or indirectly tied to my writing articles.
I also do not receive compensation in the form of content. I believe that it is not uncommon for some writers to receive content from hedge funds, other investment managers or any entity that are critical components of the articles that they write. I consider this as non-cash compensation. I do not receive advertising revenues from my website so there is no incentive to be sensational in order to create page hits. I only get paid if my subscribers believe that my articles are of value to them and they then decide to subscribe to my services.
You Should View Articles Published on Seeking Alpha as Informational Only
I want to make clear to readers that not all of the reports that I publish on my website are also published on Seeking Alpha. Also, I will sometimes make reports available on my website a significant period of time before publishing the same or a condensed version on Seeking Alpha. All of the articles that are published on Seeking Alpha and my website at the same time have consistent views and opinions. However, at a later data, it may be the case that my viewpoint and opinion may change and these changes in viewpoint and opinion may only be published in articles on my website.
For this reason, readers may want to check the reports section on my website for my current opinion on a stock and should not rely on the latest Seeking Alpha article as my viewpoint or opinion may have changed. The content on my website is intended only for subscribers, but non-subscribers can view the headlines in the reports section which in most cases but not all will announce a change in viewpoint or opinion. However, I emphasize that I undertake no obligation to update my articles on Seeking Alpha and the latest article on Seeking Alpha may not reflect my latest thinking. This is why I want to re-emphasize that any article published on Seeking Alpha should be viewed as information only.
What SmithOn Stocks is All About
SmithOnStocks is not registered as a securities broker-dealer or as an investment adviser with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. SOS relies solely on publicly disclosed and available information. While SOS makes all reasonable efforts to confirm the accuracy of its statements and opinions, all comments should be considered only as opinion and should not be considered to be absolute fact. Investors should carefully read the Terms & Conditions and Disclosures sections of my website. Investors should carefully perform their own due diligence, seek other points of view and consult with their broker or financial advisor.
Investing in equities includes considerable risk, and investors should be prepared for the possibility of capital loss. This is particularly the case with biotechnology stocks in which hard to predict clinical and commercial outcomes can often disappoint investors and lead to unusually large declines in price. Potential investors in biotechnology stocks must often be prepared to risk the loss of substantially all of their investment. These stocks are only suitable for investors willing and able to accept unusually high financial risk. Users of my information acknowledge that SOS and its owner are not liable to any person or entity for the accuracy, thoroughness, reliability, or timeliness of the information provided. Users further acknowledge that SOS is also not responsible for any direct or indirect losses that may arise from the use of information provided to any person or entity.
Employees of SmithOnStocks or SOS do buy and sell healthcare stocks, some of which may be the subject of written articles appearing on Seeking Alpha. In the event that employees have a stock investment in a company, that ownership is fully disclosed in notes on Seeking Alpha. On any new recommendation, I have a 48 hour waiting period before initiating a position in a stock. I trade in line with my recommendations.
In 1999 I made an ethical breach that resulted in a suspension from being a registered representative in the securities industry for a period of time. I believe that this measure was harsh beyond any reasonable measure and totally unwarranted. I have gone to great lengths in this report to give my side of the story and I hope that you will read the in-depth account that I have provided. This took place over 16 years ago and has long since ended. There has been no restriction from the NYSE for many years on my working as a registered representative if I choose to go through the required registration procedures.
Still, this NYSE action is like a Scarlett letter that I carry. I would urge you to read the full account of the events that led to this NYSE action and if you do so I believe you will agree that this in no way reflects on my integrity and the way I have always conducted myself, then and now. I strongly believe that the action taken was excessive and I think that if you read my full account you will agree.
People make mistakes. Bill Clinton lied under oath, was impeached and disbarred as a lawyer in Arkansas in connection with the Monica Lewinsky affair. However, society has judged him on the body of work that he has done. Suspensions in the security industry can result from serious infractions in which investors are defrauded or swindled. In the events that led to my suspension no investors lost money and as I explain in this report investors who followed my advice made significant amounts of money. Before you rush to any conclusions, let me tell you my story.
I Am Proud in How I Have Conducted My Career
Before I go into the details of this ethical breach, I want to emphasize that I have had a distinguished career on Wall Street. My record from 1971 when I started on Wall Street until 1999 was unblemished. I came to New York from Indiana with no business connections and no money but through hard work I became a highly regarded Wall Street analyst and was selected to the Institutional Investor All Star team in pharmaceuticals for ten years in a row. Based on my record as being the top or one of the top analysts at Smith Barney, I was selected to be head of research from 1981 until 1989. I also served on the Board of Directors at Smith Barney.
Based on my strong reputation, Hambrecht and Quist approached me in 1989 to head their life sciences research effort and to run the annual H&Q (now JP Morgan) healthcare conference. I was a Managing Director and on the operating committee at H&Q. I left H&Q in the late 1990s because I disliked the bureaucracy that was such an integral part of being head of research. I had made enough money to be financially secure and I wanted to get back into doing what I loved, biotechnology research. I joined Tucker Anthony in 1997 as a biotechnology analyst.
Explaining the Events That Led to the NYSE Issue
Tucker Anthony had a sister firm called Sutro and a decision was made early in 1998 to move health care research from Tucker to Sutro. Tucker was an east coast based firm and Sutro was based in Los Angeles. Sutro leased a New York office to which I moved. It was here that an unfortunate train of events was set in motion that led to the NYSE action that put a stain on what I consider an outstanding career.
When I moved from Tucker to Sutro, I maintained my brokerage accounts at Tucker. I conducted normal trading in this account for some months. Then the research administrative research manager for Sutro contacted me and said that for regulatory purposes I would have to move my account from Tucker to Sutro. After some time spent in looking for a broker to handle my account at Sutro I became frustrated. At that time, I had over $5 million in my brokerage accounts. While I was sophisticated in health care investing which made up 10% of my portfolio, I needed help with other parts of the portfolio. I could find no retail broker at Sutro that I wanted to trust my portfolio to. I asked and received approval to look for a broker outside of Sutro and contacted Schwab about finding an investment advisor there to manage my account.
While this was in process, the research administrative manager at Sutro called again and said that Sutro was probably planning to shut down the New York office and I would have to move to Los Angeles or leave the firm. Moving to Los Angeles was not an option for me as my roots were deep in New York. I informed her that given this choice I would soon be leaving Sutro rather then moving to Los Angeles and began to think about what to do. I came to the preliminary conclusion that I would start a consulting firm dealing in biotechnology. I also concluded that I would have to carefully manage my investment portfolio.
It was here that I made a major mistake that I have regretted ever since. Frustrated that my money was tied up in Tucker and I was unable to trade in my account and unable to find a broker that I trusted, I decided to open an account at Schwab without a broker managing it. I indicated on the account transfer form that I was self-employed based on the assumption that I was going to be leaving Sutro imminently. This was my Bill Clinton moment and turned out to be a major mistake.
I continued to work at Sutro while I was waiting for the New York office to be closed which I thought would be in a matter of days or weeks and during this time, I began to execute trades in my account at Schwab. However, after some weeks the research administrative manager at Sutro called and informed me that based on the response they had gotten from clients and the work that I was doing that the firm had reversed itself and now wanted to keep the office in New York and they were also willing to hire two assistants to aid me. There was also the promise of a significant bonus in the upcoming review that based on my work could amount to several hundreds of thousands of dollars.
Not surprisingly, I decided to stay on at Sutro instead of leaving and starting my own firm. I then looked for and finally found a Sutro broker that I could trust to help manage my portfolio. The brokerage accounts at Schwab were opened in February of 1999 and transferred to Sutro in April 1999. When I moved my accounts to Sutro the compliance department at Sutro saw that there was this hiatus when I had an unauthorized account at another firm. This was reported to NYSE.
NYSE Reviewed My Case and Took No Action for Three Years
Management at Sutro looked very closely at what had occurred and decided that while it was certainly not something they could condone, it was a minor infraction and they thought that given my stellar and unblemished record that NYSE would not take any meaningful action other than a wrist slap. Sutro decided to be pre-emptive in administering the wrist slap and fined me and suspended me for one month. They thought that this would satisfy NYSE based on their interpretation of what had occurred. They wanted me to continue with the firm, paid the sizable bonus I was due and committed to picki up all legal fees.
I then had a deposition with a lawyer from NYSE in early 2000. During a one day interview, he went over all of the details of the accounts that were held at Schwab and all of the trades that occurred in detail. He also looked at all of the reports that I had issued as an analyst during this time to compare to the trading in my account to the issuance of research reports. I then heard nothing more from the NYSE for three years.
Sutro concluded as did I that this issue was behind us. Three years later in mid-2003, I heard from NYSE to my shock that they were re-opening the case. Why after three years was the case being re-opened? In talking to the lawyers at NYSE, I came to understand that this was the result of Elliott Spitzer’s attack on Wall Street research. Remember the famous case of Henry Blodgett who recommended stocks of investment banking clients to clients that he thought were actually sales.
NYSE enforcement was under pressure because this unethical practice had been brought to light by Spitzer and they had missed it. They were under pressure to show how tough they could be as enforcers. They reviewed their records and came up with my case which they decided to reopen it in order to show that they were aggressive enforcers.
They went over the same information that had been gathered in early 2000, but came up with an entirely different interpretation. They said that I effected stock transactions shortly before issuance of research reports which I had prepared and this was a violation of Exchange Rule 472.40(2) (iii). They also said that I failed to disclose that I held securities in stocks recommended in a research report. They said that I opened accounts at a member firm that concealed fact of my employment at another member firm; violated Exchange Rule 407(b). They recommended a censure and two and one-half year suspension.
Two Stock Trades at Question
The information on opening an account at another firm is something that I just discussed at length. This was not in dispute. However, NYSE focused on two stock trades that I made and explained the suspension largely on the basis of these two trades. I believe that they were clearly wrong in their conclusions. Let me discuss those trades in detail.
The first trade was in Stericycle, a medical waste disposal company. I had been following the company for some time with a neutral rating. In my reports, I noted that the Company wanted to buy the medical waste disposal business of Waste Management and if they were successful, I would immediately go to a strong buy.
This acquisition was announced on April 14, 2009 after the close at 4 PM EST. Because it was 1 PM in Los Angeles I held a conference call with Sutro’s traders and the salesforce and told them I was going to a strong buy on the stock. It was the practice of Sutro to initiate new ideas with a conference call in this manner. The traders and sales force would then go out to the clients with the idea. After this, the analyst would follow-up by publishing a note on First Call (an electronic distribution network) and this was done on April 15 This was then followed up by a written research report on April 16. On April 16, I bought 2500 shares of the stock at a price of $12. This was accepted practice at Sutro for research analysts buying stocks that they recommended. There was no requirement to wait for a period of time to buy the stock. The analyst was allowed to buy the stock at the same time as other Sutro employees and clients
The NYSE judged my conduct on standards that were different from those that were accepted practices at Sutro. By today’s standards, the Sutro practices seem very loose but they were common at the time. This is why Sutro did not view this trade as a breach of conduct and kept me as an analyst. The NYSE also said that I did not disclose that I owned Stericycle in my written report. However, none of the analysts at Sutro were required at the time to do so. This was also standard operating procedure.
Stericycle was a major success for investors. Adjusting for stock splits the stock traded at about $3.00 when I first recommended it. Fifteen years later, the stock is trading at about $119. This was one of my best recommendations ever. I held the Stericycle stock for many years and only sold it recently.
The NYSE did not accept that my actions were in line with the practices of Sutro even though I produced a letter to that effect from the research administrative officer. I also argued that a $30,000 investment in a portfolio that amounted to $5 million at the time was de minimus. I argued that the stock was bought and maintained as a long term investment. I argued that it was an excellent money making idea for investors. The NYSE dismissed all of these arguments and maintained that I traded ahead of my recommendation.
The second trade that the NYSE emphasized was a trade in Schering Plough. On April 18, the stock had traded down by 5%. I had an accumulate rating on the stock essentially telling investors to buy the stock for the long term, but connoting less emphasis than a buy. In the morning call to traders and salesmen, I alerted them to the price weakness, but told them there was no change in the fundamental outlook and there was no change in my price target. I was not intending to issue a report, but the research administrative manager told me that the price drop in Schering Plough based on my price target indicated 25% upside that was the accepted criteria for a buy recommendation. Hence, I needed to put out a report in which I upgraded my opinion from accumulate to buy.
I bought the stock on April 20 at the same time as the written report was issued. I previously owned 500 shares and this increased my position to 1000 shares for a total investment of about $35,000 which again was within a $5 million portfolio. The NYSE again accused me of the same things as in the Stericycle situation. They said that I traded ahead of my recommendation and did not disclose that I owned the stock. My responses were the same as for Stericycle and were once again rejected.
Was The NYSE Action Justified?
I think that the NYSE action was out of all proportion to what actually transpired. I think the enforcement officers applied new standards in overturning the prior decision to take no action on this case that had been in effect for three years. They were under pressure to make a big splash in the Elliot Spitzer era to show how tough they were. My recommendations were solid recommendations and indeed the Stericycle recommendation was outstanding.
I fully recognize that my decision to open the brokerage account at Schwab prior to resigning from Sutro was an ethical breach on my part even if I was planning to resign from Sutro. When I decided to stay with Sutro, I transferred my accounts immediately. I strongly and absolutely maintain that my trading in Schering-Plough and Stericycle was in accordance with policies in place at Sutro at the time. By today’s standards these seem loose, but this was common industry practice at the time.
The NYSE review was conducted by a mediator and it was he that determined the punishment. He had spent his entire career as an enforcement officer for the NYSE. He was also friends with the NYSE lawyers on my case and sent out to lunch with them during the hearing. He was the judge, jury and executioner of my fate. As I look back, I question his objectivity and motives. In writing his opinion, he did not acknowledge documents from Sutro that showed that my stock trading disclosures were in-line with their internal procedures. I had no opportunity to review or correct his opinion in the opinion he wrote. In a country in which, guilt or innocence is established by one’s peers, mine was determined by a hanging judge with no experience in the securities business and an apparent pre-determined view on my actions.
Sirius Capital is a Biotech Portfolio Management firm specializing in mid term investments in clinical stage biotech and pharma companies.
Our analysts combine their extensive experience in Pharma and drug development with financial management expertise to yield maximal profit to our clients.
Independent banking research, focusing on large U.S., Australasian and European banks. I identify long and short ideas and trading strategies around special events (CCAR).
To benefit from independent insights and quality analysis from a banking insider - subscribe as a "real-time" follower above.
I am an event-based investor focusing on opportunities with hard or predictable catalysts - particularly companies undergoing demergers or mergers, or otherwise able to manufacture high-probability growth due to some quirk of corporate structure, capital structure, accretive share issuance, growth via acquisition pipeline, competitive advantage/reinvestment, or other high-probability mechanism.
I am always on the look-out - especially in context of the opportunities mentioned above - for supply and demand imbalances: forced or uneconomic sellers, predicable (exploitable) behavioral trends, or unusual securities that can't be held by many industry players. Any ideas or thoughts would be appreciated.
BS in Economics, MA in Public Policy (International Economic Policy). J is a well-known voice in the global shipping community, with unparalleled investment results and a penchant for activist investing.
Mintzmyer founded Value Investor's Edge, a top-ranked deep value research service in May 2015, with the goal of establishing a top-tier community of deep value investors and activists. Value Investor's Edge subscribers leverage exclusive in-depth analytic reports and community investment experience to discover disconnects in global shipping and a variety of other beaten down sectors.
TipRanks.com ranked Mintzmyer’s performance in the top 3% of all global analysts at the end of 2015 for his 2-year investment performance. While compiling his research, Mintzmyer has interviewed numerous management teams at public maritime firms, and has worked with a multitude of investors. His exclusive analysis has received numerous 'Top Idea,' 'Must Read,' and 'Small Cap Insight' awards.
J is a CFA candidate and investment enthusiast who utilizes Seeking Alpha to provide an open exchange of both trading and investment ideas. Masters in Public Policy, with focus on International Security & Economic Policy from the University of Maryland, College Park. Distinguished Graduate of the United States Air Force Academy with a B.S. in Economics. President of Mintzmyer Investments LLC, a financial services company specializing in equity research and hedge fund advisory.
Extensive background in financial analysis, equity research, accounting, portfolio management, and customized asset allocation through nearly a decade of formalized education, personal studies, and practical experience. Avid reader of business/investments and biographies.
Legal Disclaimer: Any related contributions to Seeking Alpha, or elsewhere on the web, are to be construed as personal opinion only and do NOT constitute investment advice. An investor should always conduct personal due diligence before initiating a position. Provided articles and comments should NEVER be construed as official business recommendations. In efforts to keep full transparency, related positions will be disclosed at the end of each article to the maximum extent practicable. The majority of trades are reported live on Twitter, but this cannot be guaranteed due to technical constraints.
My premium service is a research and opinion subscription. No personalized investment advice will ever be given. I am not registered as an investment adviser, nor do I have any plans to pursue this path. No statements should be construed as anything but opinion, and the liability of all investment decisions reside with the individual. Although I do my utmost to procure high quality information, investors should always do their own due diligence and fact check all research prior to making any investment decisions. Any direct engagements with readers should always be viewed as hypothetical examples or simple exchanges of opinion as nothing is ever classified as “advice” in any sense of the word.
I am a private investor based out of Toronto, Canada and I have been investing since 2003. After 8 years in Corporate Finance with a Canadian Telecom company I have decided to dedicate myself full-time to the capital markets. I write on Seeking Alpha to demonstrate my financial analysis and writing skills across a variety of industries and to take advantage of any story-based trading opportunity that may arise. My passion and greatest depth of knowledge is on Canadian small cap stocks and I consider my blog posts to be some of my best work. I am interested in any freelance opportunities that may arise outside of Seeking Alpha on Canadian or American listed stocks.
TheBaron Investing is a long-only writer for Seeking Alpha with a focus on financial institutions, private equity firms, Real-Estate Investment Trusts and other companies/fields of interest. Published articles are intended to give readers a thorough understanding of the analyzed company, and bring investor attention to little-known companies with upcoming catalysts, or under-appreciated operational excellence, that allows purchases within a margin of safety.
Articles are intended to raise awareness of quality companies, and are for investor interest only. For actual investment advice, please consult a qualified financial adviser. TheBaron Investing strongly recommends diversified, ETF-focused investing for the majority of retail investors.
Private investor with more than 25 years experience investing. Career has included thousands of investments, which have helped to improve my performance. My career has enjoyed many fantastic winners, some mediocre investments and few mistakes. As investors, we learn from our mistakes, try to avoid the mediocre ideas and use the capital from our winners to grow our portfolios.
Currently managing a long / short portfolio for a family office
BA in Economics from Yale University
MBA from Stanford Graduate School of Business
Prior Investing Experience:
Leonard Green and Partners Private Equity