Summary of Trades:
Cash Covered Puts
- Sell To Open LJPC Feb17 12.5 Put $1.60
Stock Covered Calls
(do not buy into these positions; do not sell unless you already own the stock)
- Sell To Open BREW Feb17 17.5 Call $0.25
- Sell To Open ZIOP Jul17 12 Call $0.05
- Sell To Open SNSS Feb17 4 Call $0.30
- Sell PAAS – Stock Assignment $16.00
- Buy BREW – Stock Assignment $17.50
- Sell SNSS – Stock Assignment $4.00
CJREF @ $10.05
Corus Entertainment (OTCPK:CJREF)
This stock yields 8.85% with a 66% dividend payout ratio. There are no Options available on this stock.
It has paid monthly dividends since 2007.
It did a major deal in 2016, which grew revenue by 73% and net income by 34% over the past four quarters.
It has received multiple upward earnings estimate revisions in the past 30 days.
With winter upon us, most of us spend a lot more time indoors, pursuing more sedentary activities, such as watching more TV. Imagine if you lived north of the border, in snowy Canada – if you’re not into engaging in winter sports, that TV probably starts to occupy even more of your leisure time.
That’s where the focus stock in this article, Corus Entertainment (OTCPK:CJREF), comes in. We first covered Corus back in the summer of 2016 shortly after it had done a major deal which transformed it into a major Canadian media and content company.
Corus was founded in 1999 by JR Shaw of Shaw Communications (NYSE:SJR). On 4/1/16, Corus acquired Shaw’s portfolio of TV brands in a $2.6B deal. The company divested its pay-TV assets as part of the deal (All currency amounts are in Canadian dollars, except where noted otherwise).
Corus reaches nine out of 10 Canadians every week, and reaches 96% of all Canadians in a month. It also owns content which is sold internationally.
There are two ways you can buy Corus – either on the Toronto exchange under the ticker CJR.B, or on the US OTC market under the ticker CJREF. The “F” on the end of CJREF’s code indicates that it is a fungible stock, which means investors can either trade it in the US or on its foreign exchange. The Toronto shares’ trade volume was over 850K shares on 1/12/17, and the US OTC shares traded over 3,800 shares.
As with most foreign shares, you’ll gain diversification vs. your US-based holdings. The flip side of this is that you’ll have currency risk exposure. Fortunately, the Canadian dollar has been one of the strongest vs. the US dollar over the past year, gaining 8.59%.
One attractive feature of monthly dividend-paying stocks is that you usually get advance notice of payouts each quarter. Management just declared the monthly dividends and pertinent dates for February-April 2017. It tends to go ex around mid-month, and pays at the end of the month.
Corus has paid monthly dividends since 2007.
Options: There are no US options listed for CJREF.
Earnings: Corus has had major growth in revenue, (up 72.8%) and adjusted net income, (up 33.8%) since the Shaw deal. However, its share count jumped by 45% as it issued new shares in order to partially fund the deal. This in turn caused its total dividends paid to rise by 45%.
However, look at the bottom line for fiscal 2016 -Corus went from a $19M loss in 2015 to a $143.5M gain in fiscal 2016.
Financial s: The company’s ROA and ROE should improve as it moves past those one-off acquisition/restructuring costs and debt refinancing costs, and squeezes cost advantages out of the new company structure.
Debt and Liquidity: Management reiterated its goals on the fiscal 2016 annual report, which include deleveraging to below 3x by the end of fiscal 2018,maintaining its $1.14 total annual dividend, and delivering $40-50M in cost savings synergies within 18-24 months of the 4/1/16 Shaw deal.
Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. This now becomes a quarterly feature instead of Monthly.
Closed Positions: (4)
Close date: 01-20-2017
CASC @ $5.37
Cascadian Therapeutics, Inc.
Cost basis $.90 per share. $5.40 after spilt on 100/6 = 16)
1% Return in 9 months
Cost basis $7.93 per share.
Premiums collected: $ per share
Dividends Collected: $4.67
Total $ -$3.26
-58.89.% Return in 16 months
PAAS @ $18.39
Pan American Silver Corp.
Cost basis $36.00 per share.
Premiums collected: $3.50 per share
total $21.70 (60.27)
-39.73% Return in 73 months
SRPT @ $32.66
Sarepta Therapeutics, Inc.
02/17/2017 Sell SNSS – Stock Assignment $4.00
SRPT Cost basis $30.00 per share.
Premiums collected: $10.20 per share
34% Return in 10 months
(Closed Positions from the spreadsheet)
As of 12/15/2016
Daily Avg of all trades .26%
Monthly Avg of all trades 7.82%
Annualized Avg of all trades 95.02%
Avg days in trade 106.47
Winning % of all trades 94.49%
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