Lemley Yarling Management Co
309 W Johnson Street
Madison, WI 53703
Comments on activity in client accounts
25 October 2019
We will be traveling all of next week and so our next post will be November 8.
During the week we repurchased AT&T at $36.90 after selling it last week at $38.40. We also received a 50-cent dividend. We have had good luck trading T this year.
Nokia dropped 25% on Thursday on good sales and earnings but a less than forecast and the elimination of its dividend for the next year to concentrate on its 5G business. We bought shares at $3.95 in some large accounts
We currently own AT&T, ViacomB, CBS, Nokia, and Ascena. All large accounts are 80% cash with smaller accounts at that level if their AT&T position is included.
"In three words I can sum up everything I've learned about life: it goes on." Robert Frost
18 October 2019
During the week AT&T moved higher on news that management was seeking accommodation with the Elliot Group. we added our retail trades which have backed off 10% and more from our sale price levels of last month. Even with those purchases larger accounts are 70% to 80% cash (Wisdom Tree Reset Treasury ETF) and smaller accounts have overly large position in AT&T as aggressive cash substitute with a 5.5% yield.
Markets are ignoring the Trumpster Daily Variety show and given that the Senate Is not inclined to convict the markets are ignoring the brouhaha.
We currently own; AT&T Urban Outfitters, Michael's Stores, ViacomB, Abercrombie, Macy's, The Gap and American Eagle Outfitters.
We also repurchased small amounts of Ascena in tax free accounts and will repurchase small amounts in taxable accounts next week when the 30-day wash sale period expires. We have been whipsawed and wrong on Ascena this year. But in their last quarterly report phone conference the company said they were not considering Chapter 11. We also read that Ascena is considering selling Lane Bryant. Our thought is that the negotiations on Lane Bryant and maybe Justice might-hopefully- be why insiders and the company are not purchasing shares at these levels. The position is minor -less than 1% in all accounts but if ASNA a does survive the upside is rewarding.
Hope springs eternal.
Ascena Retail Group Inc.'s ASNA, Interim Executive Chair Carrie Teffner used the fiscal fourth-quarter earnings call to reaffirm that the company won't be filing Chapter 11 like so many other retailers recently. "The company continues to consider options to optimize its balance sheet and liquidity from a position of strength," she said on the call, according to a FactSet transcript. "[T]o be clear and for the avoidance of doubt, bankruptcy of Ascena is not one of the options being evaluated." Ascena is in the process of winding down its Dressbarn business, which should see all of its stores closed in December. And Ascena has divested the Maurices business, a $300 million deal with OpCapita LLP announced in March. Remaining Ascena brands include Ann Taylor and Lane Bryant. "We have a portfolio of strong brands, three of which individually generate revenue of approximately $1 billion or more," Teffner said. Ascena reported a quarterly loss, revenue that was slightly down from last year and flat same-store sales. Ascena stock has lost more than 92% of its value over the last year. The stock was trading at 32 cents Friday afternoon. The S&P 500 index SPX, -0.08% is up 1.5% in the last 12 months.
(Bloomberg) -- Struggling Ascena Retail Group Inc. is considering the sale of two more of its chains amid mounting losses and signs that creditors are losing confidence in the company's prospects.
Ascena has held discussions about divesting Catherines and Lane Bryant, which specialize in plus-size women's apparel, according to people with knowledge of the matter. They asked not to be identified because the process isn't public.
Is Gap (GPS) Stock Undervalued Right Now?
11 October 2019
Markets recovered late week as the Trumpster decided to talk with the Chinese and promised something might occur from the reenergized talks.
We remain negative on the markets but did repurchase Urban Outfitters and Michaels as non-mall retailers who would benefit from any positive China/US action.
And we repurchased Viacom B near its 10-year low. CBS will acquire VIAB in the near future for .59625 shares of CBS stock. Both companies are ridiculously cheap. They both have a huge amount of content in their libraries and they continue to produce content every day. Eventually someone is going to buy the combined companies. We have traded profitably in the past.
Even with those purchases most accounts are 60% and more cash (USFR) or majority AT&T stock (smaller accounts) which went ex-dividend 51 cents this week.
Big freeze coming tonight.
4 October 2019
Markets were lower this week but still within two- or three-trading days of new highs.
We are content on the sidelines maintaining our all cash position. We bought shares of AT&T in larger accounts for a trade since it's backed off 10% from its recent high and is going x-dividend 51 cents next week.
The fall colors are arriving this week in the land of milk and honey.
Comments on activity archives
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