Fixed Income 2 (FX2) Bond Review

TD Ameritrade RIA Services

We are offer TD Ameritrade Advisors the opportunity to work with the FX2 individually segregated bond accounts.  The FX2 portfolio has provided a much higher levels of income to our clients while allowing you the freedom to set your clients fee.

FX2 excels in:

  1.  Outstanding Performance – Better than almost all High Yield Mutual Funds in every benchmark and/or maturity.
  2.  Easy to Sell  – Everyone loves more income.
  3.  Very Short Maturities –  Limited Interest Rate Risk.
  4. Low Management Fees – 0.50 basis points – Often giving you a higher payout percentage.
  5.  Co-Branded –  Making it proprietary to you.
  6. Professional Support – We have a dedicated support team for your RIA’s.

We provide superior performance (enclosed) and variable payout levels so you can spend more time bringing money in the door while attaining the returns you and firm requires.

If you have any questions and / or want further information about how FX2 can work with you please let us know.   We welcome any questions that you might have.

Sincerely,

Randy Durig

 

FX2 Portfolio Manager
Info@Durig.com
(971) 732-5119

Up 13.05% per year for the last three years – FX2 – January Review

Durig Fixed Income 2 (FX2) Portfolio Review: February 5th, 2018

 

With all the volatility seen in the equity markets this past week, some may be wondering how Durig’s FX2 portfolios have fared.  Well, we have a surprise for you..

 

The portfolio’s short average maturities and the low to negative correlation of the high-yield opportunities pursued has enabled us to not only see minimal impacts from the recent volatility, but has produced positive returns in light of this sell-off.

 

The relatively standard benchmarks shown below are compared to the Year-to-Date (YTD) and Trailing 1 year, Trailing 3 year and Trailing 5 year returns provided by the High-Yield Bond Mutual Fund database provided by Morningstar.  We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on February 5th, 2018, this is how our clients aggregated FX2 portfolios compared to Morningstar’s high-yield bond fund database:

YTD  

Year-to-Date, FX2 returns were up 3.81%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in Year-to-Date return were:

 

  1. RBC BlueBay Diversified Credit R6 (RBDRX), 2.18% YTD
  2. RBC BlueBay Diversified Credit I (RBTRX), 2.18% YTD
  3. Virtus Newfleet Credit Opportunities R6 (VRCOX), 1.45% YTD
  4. Virtus Newfleet Credit Opportunities I (VCOIX), 1.45% YTD
  5. Virtus Newfleet Credit Opportunities C (VCOCX), 1.45% YTD

 

  • The average YTD return among the high-yield bond mutual funds listed was -0.06%
  • FX2 aggregated year-to-date returns were 6350% above the average YTD return of the high-yield bond mutual funds listed

 

Trailing 1 Year

For a Trailing 1 Year period, FX2 returns were up 17.50%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in Trailing 1 Year  return were:

 

  1. Diamond Hill High Yield Y (DHHYX), 10.06%
  2. Diamond Hill High Yield I (DHHIX), 9.84%
  3. Diamond Hill High Yield A (DHHAX), 9.65%
  4. Deer Park Total Return Credit I (DPFNX), 9.43%
  5. DDJ Opportunistic High Yield Institutional (DDJIX), 9.27%

 

  • The average Trailing 1 Year return among the high-yield bond mutual funds listed was 4.74%
  • FX2 aggregated Trailing 1 Year returns were 269.2% above the average Trailing 1 Year of the high-yield bond mutual funds listed

 

Trailing 3 Year

For a Trailing 3 Year period, FX2 returns were up 13.05%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in Trailing 3 Year return were:

 

  1. Fairholme Focused Income (FOCIX), 8.57%
  2. Artisan High Income Advisor (APDFX), 8.05%
  3. Artisan High Income Investor (ARTFX), 7.87%
  4. Credit Suisse Strategic Income I (CSOIX), 7.73%
  5. Credit Suisse Strategic Income A (CSOAX), 7.41%

 

  • The average Trailing 3 Year return among the high-yield bond mutual funds listed was 4.61%
  • FX2 aggregated Trailing 3 Year returns were 183.08% above the average Trailing 3 Year return of the high-yield bond mutual funds listed

 

Trailing 5 Year

For a Trailing 5 Year period, FX2 returns were up 9.50%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in Trailing 5 Year return were:

 

  1. Fairholme Focused Income (FOCIX), 9.49%
  2. Fidelity Capital & Income (FAGIX), 6.97%
  3. Fidelity Advisor High Income Advantage I (FAHCX), 6.83%
  4. Credit Suisse Strategic Income I (CSOIX), 6.70%
  5. Morgan Stanley Institutional High Yield I (MSYIX), 6.65%

 

  • The average Trailing 5 Year return among the high-yield bond mutual funds listed was 4.35%
  • FX2 aggregated Trailing 5 Year returns were 118.40% above the average Trailing 5 Year return of the high-yield bond mutual funds listed

 

Past performance is no guarantee of future results. FX2 is a composite of individual (segregated) bond accounts comprised of individual bond positions, with return averages both higher and lower than the FX2 composite returns.  Individual (segregated) accounts are a different investment vehicle than bond funds, offering more easily customized asset allocation and tax accountability compared to having all the investments held in one single large pool.

To learn more, call us toll-free at: (877) 359-5319  or find us at: Durig Fixed Income 2

Year Bond Return 16.94% – 2017 in Review: Durig Fixed Income 2 (FX2)

In this review, we will take a look at the Fixed Income 2 (FX2) Benchmark Performance, and then go on to provide a recap of Durig’s 2017 individual bond picks, and a brief update on the issuer. The relatively standard benchmarks shown below are compared to the Year-to-Date (YTD) and Trailing 1 year, Trailing 3 year and Trailing 5 year returns, provided by the High-Yield Bond Mutual Fund database provided by Morningstar.  We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on January 10th, 2018, this is how our clients aggregated FX2 portfolios compared to Morningstar’s high-yield bond fund database:

YTD  

Year-to-Date, FX2 returns were up 1.55%.

  1. Ivy ProShares Interest Rate H HY Idx N (IIRNX), 1.41% YTD
  2. Ivy ProShares Interest Rate H HY Idx I (IIIRX), 1.41% YTD
  3. Ivy ProShares Interest Rate H HY Idx E (IIREX), 1.41% YTD
  • The average YTD return among the high-yield bond mutual funds listed was 0.52%

Trailing 1 YearFor a Trailing 1 Year period, FX2 returns were up 16.94%.

  1. Fidelity Advisor High Income Advantage I (FAHCX), 11.45%
  2. Fidelity Capital & Income (FAGIX), 11.24%
  3. Fidelity Advisor High Income Advantage A (FAHDX), 11.11%
  • The average Trailing 1 Year return among the high-yield bond mutual funds listed was 6.09%

Trailing 3 Year
For a Trailing 3 Year period, FX2 returns were up 12.13%.

  1. Fairholme Focused Income (FOCIX), 9.07%
  2. Artisan High Income Advisor (APDFX), 8.41%
  3. Artisan High Income Investor (ARTFX), 8.23%
  • The average Trailing 3 Year return among the high-yield bond mutual funds listed was 5.07%

Trailing 5 Year
For a Trailing 5 Year period, FX2 returns were up 9.29%.

  1. *Fairholme Focused Income (FOCIX), 10.03%
  2. Fidelity Capital & Income (FAGIX), 7.33%
  3. Fidelity Advisor High Income Advantage I (FAHCX), 7.19%
  • The average Trailing 5 Year return among the high-yield bond mutual funds listed was 4.50%

See disclaimer at end of article.

Bond-Yields.com – 12 Month Recap

Year-In-Review: January 1, 2017 to December 31, 2017

Over the past twelve months, Durig Capital has registered outstanding results in its Fixed Income 2 (FX2) managed income portfolio. This portfolio is comprised of debt instruments issued in US dollars as well as Canadian dollars. In 2017, Durig Capital successfully focused on seeking higher yielding bond issues from companies with improving financial metrics. The following is a review of the 39 bond reviews (from 32 different issuers) that were recommended to our clients during 2017. Each issuer is highlighted, along with a summary of the recommended bond and a brief update on the issuer.

Four of these recommendations (from three different issuers) were debt instruments denominated in Canadian dollars. Each summary that follows lists the issuer, coupon rate, maturity, credit rating, the yield (at the time of recommendation), the acquisition price, the current value indication (as a percentage of par), as well as a brief update on the issuer.

Not included or calculated is the additional accrued interest that is earned with the issuer’s coupon rate. As of today, there were no recommendations in this time period that were not acquired, but two had limited availability. ____________________________________________________________

*Yield indications at the time of recommendations for addition to individual portfolios and currently indicated values are not presented as overall or year to date performance averages. As a result of our institutional association, we may obtain better or differing yield/price executions for our clients than is initially indicated in our reports. ___________________________________________________________________________

22% Northern Oil and Gas

Issuer: Northern Oil and Gas
Ticker: (NYSE:NOG)
Coupon: 8.00%
Ratings: Caa3 / CCC+
Maturity: 06/01/2020
Pays:  Semi-annually
Price: 74.3
Yield to Maturity: ~22.175%
Date of Review: December 20, 2017
Current Price: 82.9

Northern Oil and Gas recently updated its expectations for its Q4 results, raising its fourth quarter production guidance to reflect an increase in average daily production (to increase by 4% to 6% over third quarter 2017). In addition, the company also gave preliminary guidance for its 2018 fiscal year, projecting annual production to increase by 10% to 14%. More on Northern Oil and Gas.

9% Chuck E Cheese

Issuer: CEC Entertainment Inc.
Ticker: CEC
Coupon: 8.00%
Ratings: Caa2 / CCC
Maturity: 02/15/2022
Pays:  Semi-annually
Price: 96.25
Yield to Maturity: ~9.09%
Date of Review: December 12, 2017
Current Price: 97.0

Chuck E. Cheese is testing the pizza home delivery market. Recently, the company announced that it is partnering with delivery companies GrubHub and DoorDash to offer delivery of its pizzas for the first time. The company is testing delivery in the greater San Francisco Bay Area, along with cities around Miami and Dallas. More on Chuck E. Cheese.

11.3% Bristow Group

Issuer: Bristow Group
Ticker: (NYSE:BRS)
Coupon: 6.250%
Ratings: Caa2 / B-
Maturity: 10/15/2022
Pays:  Semi-annually
Price: 81.38
Yield to Maturity: ~11.31%
Date of Review: November 22, 2017
Current Price: 85.46
Date of Review: November 22, 2017
Current Price: 85.46

In mid-December 2017, Bristow Group announced that it will offer $125 million in convertible bonds. The notes are expected to pay interest semi-annually and will be convertible into cash, shares of the company’s common stock or a combination of cash and shares of the company’s common stock, at the company’s election. The notes will mature on June 1, 2023. More on Bristow Group.

19.75% Legacy Reserves

Issuer: Legacy Reserves LP
Ticker: (NASDAQ:LGCY)
Coupon: 8.0%
Ratings: Caa3 / CC
Maturity: 12/01/2020
Pays:  Semi-annually
Price: 74
Yield to Maturity: ~19.78%
Date of Review: November 16, 2017
Current Price: 76.83

For the nine month period ending September 30, 2017, Legacy Reserves recorded increases in its oil, NGL, and natural gas revenues over the same period in 2016. Oil revenues increased by 40% year-over-year, NGL’s increased by 70.4%, and natural gas revenues increased by 25%. More on Legacy Reserves.

11.4% Entrec Corporation

Issuer: Entrec Inc.
Ticker: (TSE:ENT)
Price: $0.23 CAD (as of 11/14/2017)
Conversion Price: $1.00 CAD
Coupon: 8.5%
Ratings: NA
Maturity: 06/30/2021
Pays:  Monthly
Price: 91.6
Yield to Maturity: ~11.4%
Date of Review: November 14, 2017
Current Price: 65.0

Entrec’s revenue for the quarter ended September 30, 2017 increased by 29% to $36.7 million from $28.4 million in 2016 due to significant growth from the company’s operations in the United States. More on Entrec Corporation.

7.85% McClatchy Company

Issuer: McClatchy Company
Ticker: (NYSE:MNI)
Coupon: 9.00%
Ratings: B1 / B
Maturity: 12/15/2022
Pays:  Semi-annually
Price: 104.75
Yield to Maturity: ~ 7.85%
Date of Review: November 3, 2017
Current Price: 103.8

In late December, McClatchy Company announced its call for the redemption of $75 million of the principal amount of its outstanding 9.00% Senior Secured Notes due 2022. The bonds will be redeemed on January 25, 2018 at a redemption price equal to $1,045 per $1,000 principal amount, along with accrued and unpaid interest. More on McClatchy Company.

17.8% Denbury Resources

Issuer: Denbury Resources Inc.
Ticker: (NYSE:DNR)
Coupon: 6.375%
Ratings: Caa2 / CCC+
Maturity: 08/15/2021
Pays:  Semi-annually
Price: 69.35
Yield to Maturity: ~ 17.83%
Date of Review: October 31, 2017
Current Price: 82.65

In early December 2017, Denbury issued an offer to exchange its outstanding 2021, 2022 and 2023 bond issues for new notes, up to approximately $182 million of new 9.25% Senior Secured Second Lien Notes due March 31, 2022 and up to approximately $147 million of new 5% Convertible Senior Notes due December 15, 2023. More on Denbury Resources.

9% SuperValu Inc.

Issuer: SuperValu, Inc.
Ticker: (NYSE:SVU)
CUSIP: 868536AW3
Bond Coupon: 7.750%
Maturity: 11/15/2022
Rating: B3/B-
Pays: Semi-annually
Price: 94.85
Yield to Maturity: ~9.04%
Date of Review: October 20, 2017
Current Price: 99.34

In December 2017, SuperValu announced its completion of its acquisition of Associated Grocers of Florida valued at approximately $193 million. Associated Grocers of Florida adds a dynamic grocery wholesaler to SuperValu’s growing national distribution network with annual sales of approximately $650 million in its last fiscal year. This is the second acquisition completed in 2017 as the company continues to make strategic investments in its wholesale business. More on SuperValu.

9.5% Uniti Group

Issuer: Uniti / CSL Capital
Ticker: (NASDAQ:UNIT)
CUSIP: 20341WAD7
Bond Coupon: 8.250%
Maturity: 10/15/2023
Rating: Caa1/CCC+
Pays: Semi-annually
Price: 94.475
Yield to Maturity: ~9.48%
Date of Review: October 17, 2017
Current Price: 96.1

For the three months ending September 30, 2017, Uniti registered total revenues of $245.2 million, representing a 22.5% increase over the same period in 2016. In addition, the company had $4.8 million in net income for its third quarter, compared with a loss of $2.3 million in Q3 2016. More on Uniti.

12.5% Baker Corporation

Issuer:  BakerCorp International
Coupon: 8.250%
Maturity: 06/01/2019
Ratings: Caa3 / CCC
Pays: Semi-annually
Price: 93.85
Yield to Maturity: ~12.49%
Date of Review: October 10, 2017
Current Price: 94.0

For the three months ended October 31, 2017, Baker Corporation recorded operating income of $3.3 million as compared to $1.8 million for the same period in 2016. This represents an increase of 83%. More on Baker Corporation.

107% Cumulus Media

Issuer: Cumulus Media Holdings, Inc.
Ticker: CMLS, CMLSQ
Bond Coupon: 7.750%
Maturity: 05/01/2019
Rating: Ca/CC
Pays: Semi-annually
Price: 31.0
Yield to Maturity: ~107%
Date of Review: September 28, 2017
Current Price: 16.98

In late November 2017, Cumulus Media entered into a restructuring agreement with certain of its lenders to reduce more than $1 billion in debt. The company indicated that all operations will continue as normal throughout the restructuring process. More on Cumulus Media.

8.1% Men’s Wearhouse

Issuer: Men’s Wearhouse / Tailored Brands
Ticker: (NYSE:TLRD)
Coupon: 7.000%
Maturity: 07/01/2022
Ratings: B3/CCC+
Pays: Semi-annually
Price: 95.375
Yield to Maturity: ~8.12%
Date of Review: September 26, 2017
Current Price: 99.85

For its fiscal 2017 third quarter (ended October 28, 2017), Tailored Brands posted Q3 2017 GAAP diluted earnings per share of $0.75 compared to GAAP diluted earnings per share of $0.58 last year and adjusted diluted earnings per share of $0.71 last year. In addition, the company repurchased and retired $65 million face value of senior notes in Q3 2017 for a total of $115 million year-to-date in 2017. More on Men’s Wearhouse.

16% Jones Energy Holdings

Issuer: Jones Energy Holdings, LLC
Ticker: (NYSE:JONE)
Bond Coupon: 6.750%
Maturity: 04/01/2022
Rating: Caa2/NR
Pays: Semi-annually
Price: 71.2
Yield to Maturity: ~15.86%
Date of Review: September 15, 2017
Current Price: 76.91

Jones Energy recently reported its results for its third quarter 2017 performance. Total operating revenues for the three months ended September 30, 2017 showed a healthy increase at $44.2 million, as compared to $33.4 million for the three months ended September 30, 2016. In addition, during Q3 2017, Jones Energy increased its production levels, producing 1,970 MBoe, which was slightly above its high end of guidance. More on Jones Energy Holdings.

9.4%  Kindred Healthcare

Issuer: Kindred Healthcare, Inc.
Ticker: (NYSE:KND)
Bond Coupon: 8.750%
Maturity: 01/15/2023
Ratings: B3 / B-
Pays: Semiannually
Price:  89.3
Yield to Maturity: ~9.4%
Date of Review: September 14, 2017
Current Price: 105.65

In late December 2017, Kindred announced that it had approved a definitive agreement to be acquired by a consortium of three companies – TPG Capital, Humana, Inc., and Welsh, Carson, Anderson and Stowe. The deal was valued at approximately 4.1 billion in cash, including the assumption or repayment of net debt. More on Kindred Healthcare

7.4% Albertsons

Issuer: Albertsons Companies, LLC
Ticker: ABS (proposed)
Coupon: 6.625%
Maturity: 6/15/2024
Ratings: B3 / B+
Pays: Semi-annually
Price: 95.99
Yield to Maturity: ~7.39%
Date of Review: September 7, 2017
Current Price: 95.6

In late November, 2017, Albertsons announced it will increase and improve its customers’ shopping experience through a newly forged agreement with Instacart, a technology driven, nationwide on-demand grocery delivery service. This agreement will enable Albertsons to offer same-day delivery to its customers in as little as an hour. More on Albertsons.

25% W & T Offshore

Issuer:  W & T Offshore, Inc.
Ticker: (NYSE:WTI)
Coupon: 8.50%
Maturity: 06/15/2019
Ratings: Ca / CC
Pays: Semiannually
Price:  76.125
Yield to Maturity: ~25.95%
Date of Review: August 30, 2017
Current Price: 96.7

WTI recently reported its financial results for its third quarter 2017 as well as for the nine months ending September 30, 2017. For the first nine months of 2017, the company’s net cash provided by operating activities was $130.3 million, compared to net cash used by operating activities of $9.2 million for the same period in 2016, an improvement of $139.5 million between periods. More on W & T Offshore.

13% Ferrellgas Partners

Issuer: Ferrellgas Partners LP
Ticker: (NYSE:FGP)
Bond Coupon: 8.625%
Maturity: 6/15/2020
Rating: Caa2 / CCC+
Pays: Semi-annually
Price: 89.75
Yield to Maturity: ~13.07%
Date of Review: August 25, 2017
Current Price: 89.4

Ferrellgas recently reported its results for its first quarter for fiscal year 2018. For Q1, the company reported a 9.5 million gallon increase in total gallons sold in the first quarter over the same period in Q1 2017. This increase partially offset the effects of lower margins as the company continues to aggressively market to and acquire new customers.  Ferrellgas reported adjusted EBITDA of $26.2 million, compared to $29.0 million in the prior year period. More on Ferrellgas Partners.

14% Jones Energy

Issuer: Jones Energy Holdings, LLC
Ticker: (NYSE:JONE)
Bond Coupon: 6.750%
Maturity: 04/01/2022
Rating: Caa2/NR
Pays: Semi-annually
Price: 76.125
Yield to Maturity: ~13.88%
Date of Review: August 17, 2017
Current Price: 76.91

9.5% Seitel, Inc.

Issuer: Seitel, Inc.
Ticker:  N/A
Bond Coupon: 9.500%
Maturity: 04/15/2019
Rating: Caa2 / CCC+
Pays: Semi-annually
Price: ~100.5
Yield to Maturity: ~9.50%
Date of Review: July 28, 2017
Current Price: 99.4

For the first nine months of 2017, Seitel, Inc. showed excellent improvements over the same period in 2016. Total revenue for the period was $68.3 million compared to $59.5 million in 2016. Cash resales totaled $43.5 million compared to $31.1 million in 2016. Cash flows from operating activities were $44.3 million compared to $29.1 million in 2016. Finally, cash EBITDA was $29.3 million compared to $18.4 million in 2016. More on Seitel Inc.

9.5% Community Health Systems

Issuer: Community Health Systems
Ticker: (NYSE:CYH)
Bond Coupon: 6.875%
Maturity: 02/01/2022
Rating: Caa1 / CCC+
Pays: Semi-annually
Price: 91.2
Yield to Maturity: ~9.5%
Date of Review: July 25, 2017
Current Price: 62.9

Community Health Systems continues to rationalize its portfolio of hospitals. For 2017, the company divested a total of 30 hospitals (as previously announced), and the company continues to receive interest from acquirers for certain hospitals it still maintains. More on Community Health Systems.

14% Aurora Diagnostics

Issuer: Aurora Diagnostics
Ticker: N/A
Bond Coupon: 10.75%
Maturity: 01/15/2020
Rating: — /–
Pays: Semi-annually
Price: ~95
Yield to Maturity: ~14%
Date of Review: July 21, 2017
Current Price: 100.0

Aurora Diagnostics celebrated a successful 2017 which included the acquisition of five high-quality pathology practices to its ranks. The acquisitions of University Pathologists in Warwick, R.I.; Pathology Associates of Princeton in Plainsboro Township, N.J.; Cleveland Skin Pathology Laboratory, Inc. in Cleveland, Ohio; CytoPath in Alabaster, AL.; and CBM Pathology in Gaithersburg, MD., brought the number of affiliated local pathology practices to 31 in 19 states.  More on Aurora Diagnostics.

8% LSB Industries

Issuer: LSB Industries, Inc.
Ticker: (NYSE:LXU)
Bond Coupon: 8.500%
Maturity: 08/01/2019
Rating: Caa1 / CCC
Pays: Semi-annually
Price: 100.50
Yield to Worst: ~7.98%
Date of Review: July 13, 2017
Current Price: 99.8

LSB Industries third quarter results showed excellent improvements in its year-over-year numbers. The company had net sales of $92.4 million for the third quarter of 2017, up from $80.3 million for the third quarter of 2016. In addition, LSB registered a net loss from continuing operations of $17.1 million for the third quarter of 2017, an improvement from a loss of $39.5 million for the third quarter of 2016. Finally, adjusted EBITDA from continuing operations was $2.8 million for the third quarter of 2017, an increase from an Adjusted EBITDA loss of $26.5 million for the third quarter of 2016. More on LSB Industries.

13.9% Alliance One

Issuer: Alliance One International, Inc.
Ticker: (NYSE:AOI)
Bond Coupon: 9.875%
Maturity: 07/15/2021
Rating: Caa2/CCC
Pays: Semi-annually
Price: 87.875
Yield to Maturity: ~13.92%
Date of Review: July 7, 2017
Current Price: 92.8

Alliance One recently reported improved sales and gross profit for the six months ending September 30, 2017. Sales increased 11.3% to $724.3 million. Gross profit increased 16.2% to $98.0 million and gross profit as a percentage of sales improved to 13.5% from 13.0% in the prior year. More on Alliance One.

20% Legacy Reserves

Issuer: Legacy Reserves LP
Ticker: (NASDAQ:LGCY)
Coupon: 8.0%
Ratings: Caa3 / CC
Maturity: 12/01/2020
Pays: Semi-annually
Price: 71.1
Yield to Maturity: ~20.02%
Date of Review: June 21, 2017
Current Price: 76.83

12.7% Entrec

Issuer: Entrec, Inc.
Ticker: (TSX:ENT)
Price: $0.23 CAD (as of 11/14/2017)
Conversion Option Price: $1.00 CAD
Coupon: 8.50%
Maturity: 06/30/2021
Ratings: NA
Pays: Monthly
Price: 87
Yield to Maturity: ~12.7%
Date of Review: June 16, 2017
Current Price: 65.0

16.75% Comstock Resources

Issuer: Comstock Resources, Inc.
Ticker: (NYSE:CRK)
Bond Coupon: 7.750%
Maturity: 04/01/2019
Rating: Ca / CCC
Pays: Semi-annually
Price: ~86.5
Yield to Maturity: ~16.75%
Date of Review: June 9, 2017
Current Price: 92.4

For the three and nine months ending September 30, 2017, Comstock resources registered year-over-year increases in revenues. For the three months ending September 30, 2017, the company saw a 32.7% increase in revenues, while it also registered a 43.1% increase for the nine month period. More on Comstock Resources.

40.5% Gran Colombia Gold

Issuer: Gran Colombia Gold, Inc.
Ticker: (TSE:GCM)
Price: $1.44 CAD (06/05/2017)
Conversion Option Price: $1.95 USD (approximately ~$2.63 CAD as of June 5, 2017)
Coupon: 1% Cash / 2% PIK rate
Maturity: 08/11/2018
Ratings: NA
Pays: Monthly
Price:  63.5
Yield to Maturity: ~40.5%
Date of Review: June 7, 2017
Current Price: 85.5

In December 2017, Gran Colombia Gold announced that it produced a total of 15,841 ounces of gold in the month of November, bringing the year-to-date total to 154,959 ounces. The trailing 12 months’ total gold production as of the end of November, 2017, now stands at 169,777 ounces, up 13% over 2016’s annual gold production. With one month remaining in 2017, the Company remains on track with its recently revised production guidance for the full year of 165,000 to 170,000 ounces of gold. More on Gran Colombia Gold.

14% GNC

Issuer: GNC Holdings
Ticker: (NYSE:GNC)
Price: $7.27 (as of 5/25/2017)
Conversion Price: $66.06/share
Coupon: 1.5%
Ratings:  -/-
Maturity: 08/15/2020
Pays: Semi-Annually
Price:  68.5
Yield to Maturity: ~14.04%
Date of Review: May 26, 2017
Current Price: 50.25

Ken Martindale, GNC’s chief executive officer had great things to say about the company’s 2017 third quarter performance. “GNC made good progress in the third quarter, returning to positive same store sales. Transactions, the e-commerce business and enrollment in our new loyalty programs continued to improve, and it is clear that our strengthened model is creating a solid foundation for growth,” said Martindale. “This year, the team laid a strong foundation for us to build upon.  Going forward, we will continue to focus on growing sales and on giving customers innovative, highly differentiated products and experiences.” More on GNC.

22.4% California Resources Corporation

Issuer: California Resources Corporation
Ticker: (NYSE:CRC)
Bond Coupon: 5%
Maturity: 01/15/2020
Rating: Ca / D
Pays: Semi-annually
Price:  81.0
Yield to Maturity: ~13.84%
Date of Review: May 24, 2017
Current Price: 93.0

For the nine months ending September 30, 2017, California Resources had an outstanding year-over-year increase in cash flow from operating activities. For the first nine months of 2017, the company registered cash flow from operating activities of $225 million as compared to $145 million from the same period in 2016, representing a 55% increase. More on California Resources Corporation.

10.04% Avid Technology

Issuer: Avid Technology Inc
Ticker: (NASDAQ:AVID)
Price: $5.33
Conversion Price: $21.94/share
Coupon: 2.0%
Ratings: NA
Maturity: 06/15/2020
Pays: Semi-Annually
Price:   79.25
Yield to Maturity: ~10.04%
Date of Review: May 17, 2017
Current Price: 79.85

During the third quarter, Avid signed several multi-year enterprise deals with large customers, including Viacom and NHK, Japan’s national public broadcaster; total licenses for the MediaCentral platform as of the end of the third quarter were nearly 51,000, up 27% year-over-year. More on Avid Technology.

11.3% BakerCorp International

Issuer:  BakerCorp International
Ticker: N/A
Coupon: 8.250%
Maturity: 06/01/2019
Ratings: Caa3 / CCC
Pays: Semi-annually
Price: 94.5
Yield to Maturity: ~11.3%
Date of Review: May 10, 2017
Current Price: 94.0

9% Ferrellgas Partners

Issuer: Ferrellgas Partners LP
Ticker: (NYSE:FGP)
Coupon: 8.625%
Maturity: 6/15/2020
Rating: B2/B+
Pays: Semi-annually
Price: ~101
Yield to Worst Call: ~8.0% (@100 on 6/15/2018)
Yield to Maturity: ~8.3%
Date of Review: May 3, 2017
Current Price: 89.35

11.5% Syniverse

Issuer:  Syniverse Holdings, Inc.
Ticker: N/A
Bond Coupon: 9.125%
Maturity: 01/15/2019
Ratings: Caa3 / CCC+
Pays: Semi-annually
Price:  96.25
Yield to Maturity: ~11.54%
Date of Review: April 19, 2017
Current Price: 100.10

On December 29, 2017, Syniverse voluntarily redeemed $40 million of its 9.125% 2019 senior notes. Syniverse reduced its outstanding debt by a total of $65.6 million in 2017. More on Syniverse.

18.6% W&T Offshore

Issuer:  W & T Offshore, Inc.
Ticker: (NYSE:WTI)
Bond Coupon: 8.50%
Maturity: 06/15/2019
Ratings: Ca / CC
Pays: Semi-annually
Price:  82.5
Yield to Maturity: ~18.5%
Date of Review: April 7, 2017
Current Price: 96.7

23% EV Energy

Issuer: EV Energy Partners LP
Ticker: (NASDAQ:EVEP)
Bond Coupon: 8.0%
Maturity: 4/15/2019
Ratings: Caa3/CCC+
Pays: Semi-annually
Price: ~76
Yield to Maturity: ~23.3%
Date of Review: April 5, 2017
Current Price: 53.2

For the nine months ending September 30, 2017, EV Energy’s revenues registered an excellent year-over-year increase, coming in at $165.7 million versus $132.5 million in the prior year period, an increase of 25%. More on EV Energy.

8% Mens Wearhouse

Issuer:  Men’s Wearhouse / Tailored Brands
Ticker: (NYSE:TLRD)
Bond Coupon: 7.000%
Maturity: 07/01/2022
Ratings: B2/CCC+
Pays: Semiannually
Price:  95.0
Yield to Maturity: ~8.18%
Date of Review: February 9, 2017
Current Price: 99.9

40+% Intelsat

Issuer: Intelsat Luxembourg SA
Ticker: (NYSE:I)
Bond Coupon: 7.750%
Maturity: 06/01/2021
Rating: Ca / SD
Pays: Semi-annually
Price:  34.2
Yield to Maturity: ~41.75%
Date of Review: February 8, 2017
Current Price: 47.9

Intelsat’s third quarter results showed net cash provided by operating activities of $212.9 million for the three months ended September 30, 2017, and free cash flow from operations was $97.0 million for the same period. More on Intelsat.

9% Temple Hotels

Issuer: Temple Hotels
Ticker: (TSE:TPH)
Debenture (BOND): TPH.DB.F
Bond Coupon: 7.0%
Maturity: 03/31/2018
Conversion Price: $ 7.80
Rating: N/A
Pays: Semi-annually
Price: 93.5
Yield to Maturity: ~9%
Date of Review:  January 13, 2017
Current Price: 79.7

For the third quarter of 2017, Temple Hotels recorded an increase in cash provided by operating activities of $2.0 million (CAD) over the same period in 2016. In addition, during the third quarter of 2017, funds from operations (FFO) increased by $0.3 million, compared to the third quarter of 2016. More on Temple Hotels.

14.6% Affinion Group

Issuer: Affinion Group, Inc.
Ticker: N/A
Bond Coupon: 7.875%
Ratings: Caa3 / CCC-
Maturity: 12/15/2018
Pays: Semi-Annually
Price:  89.0
Yield to Maturity: ~14.63%
Date of Review: January 10, 2017
Current Price: Full Call @ PAR on May 15th, 2017

For Affinion Group’s third quarter (three months ending September 30, 2017) the company had income from operations of $50.3 million as compared to $37.0 million for the third quarter of 2016. In addition, adjusted EBITDA was $63.2 million as compared to $62.8 million for the third quarter of 2016, an increase of 0.6%.  Additionally, Affinion took part in a full call of this issue at PAR value in May. More on Affinion Group.

Disclosure:

Bond reviews are published on Seeking Alpha and on Bond-Yields.com. The summary table at the end of this review does not reflect any future fluctuations in bond valuations, nor does it include the gains or losses that have or might ultimately result from exchange rate currency changes from purchase to redemption. However, it does offer a reasonably quick snapshot of how our recommendations have been faring since adjusting our selection criteria midway through last year to bond market conditions and its ensuing volatility.

Disclaimer:

Past performance is no guarantee of future results. FX2 is a composite of individual (segregated) bond accounts comprised of individual bond positions, with return averages both higher and lower than the FX2 composite returns.  Individual (segregated) accounts are a different investment vehicle than bond funds, offering more easily customized asset allocation and tax accountability compared to having all the investments held in one single large pool. To learn more, call us toll-free at: (877) 359-5319  or find us at: Durig Fixed Income 2

About Durig

At Durig, our skilled team of financial professionals provide investors with specialized portfolio management and transparent fiduciary services at a very low cost. To obtain higher yields and to keep costs as low as possible for our clients, we typically bundle smaller retail orders into larger institutional sized orders with many global trading firms and bond platforms. Our professional service enables access to a greater spectrum of bonds, higher yields, and lower price points.  Most of our client accounts are custodied in their own name at TD Ameritrade Institutional, a large discount service provider that is SPIC insured.

We track thousands of bond issues and their underlying fundamentals for months, sometimes years, before finding any that achieve or surpass the targeted criteria we have found to be successful.  Our main priority is to provide the best opportunities for our clients.  Our bond reviews are published online and distributed through our free email newsletter to thousands of prospective clients and competitive firms only after we have first served the needs of our clients.  Bond selections may not be published if they have very limited availability or liquidity, or are viewed as not being in the best interests of our clients. When high yielding bonds with improving fundamentals are acquired at lower costs, Durig believes that investors will appreciate earning higher yields and incomes with our superior low cost, portfolio management and fiduciary services.

To learn more, call us toll-free at: (877) 359-5319  or find us at: Durig Fixed Income 2

Durig Fixed Income 2 (FX2) Portfolio Review: December 2017

For many years, we have emailing our Durig Capital Fixed Income FX2 high-yield bond ideas as they were added to our FX2 client portfolios.  The relatively standard benchmarks shown below are compared to the Year-to-Date (YTD), Trailing 1 year, Trailing 3 year and Trailing 5 year returns provided by the High-Yield Bond Mutual Fund database provided by Morningstar.

We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on December 7th, 2017, this is how our clients aggregated FX2 portfolios compared to Morningstar’s high-yield bond fund database:

YTD   

Year-to-Date, FX2 returns were up 14.66%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in YTD return were:

FX2  up 14.66% YTD

1. Fidelity Capital Income up 10.72%
2. Fidelity Advisor High Income Advantage I up 10.38%
3. Deer Park Total Return Credit I up 10.10%
4. Fidelity Advisor High Income Advantage M up 10.08%
5. Fidelity Advisor High Income Advantage A up 10.02%

  • The average YTD return among the high-yield bond mutual funds listed was 6.13%
  • FX2 aggregated year-to-date returns were 139.15% above the average YTD return of the high-yield bond mutual funds listed

Trailing 1 Year

For a 1 Year period, FX2 aggregated returns were up 15.73%, outperforming all high-yield bond mutual funds that were listed.  The top five performing high-yield bond funds we identified on Morningstar for Trailing one year return were:

FX2  up 15.73% Trailing 1 Year

1. Fidelity Capital & Income Fund up 11.09%
2. DDJ Opportunistic High Yield Institutional up 11.09%
3. DDJ Opportunistic High Yield I up 11.06%
4. Diamond Hill High Yield Y up 10.91%
5. Victory High Yield Y up 10.87%

The average trailing 1 year return among the high-yield bond mutual funds listed was 6.97%

  • FX2 aggregated returns outperformed the average trailing 1 year return of the high-yield bond mutual funds listed by 125.68%

Trailing 3 Year

For a 3 Year period, FX2 aggregated returns were up 9.64%, outperforming all high-yield bond mutual funds that were listed.  The top five performing high-yield bond funds we identified on Morningstar for Trailing three year return were:

FX2  up 9.64 % Trailing 3 Year

1. Fairholme Focused Income up 8.34%
2. Artisan High Income Advisor up 7.55%
3. Artisan High Income Investor up 7.37%
4. T. Rowe Price US High Yield I up 7.26%
5. Angel Oak High Yield Opportunities Institutional up 7.14%

  • The average trailing 3 year return among the high-yield bond mutual funds listed was 4.54%
  • FX2 aggregated returns outperformed the average trailing 3 year return of the high-yield bond mutual funds listed by 112.33 %

Trailing 5 Year

For a 5 Year period FX2 aggregated returns were up 8.88%, outperforming all but one of the high-yield bond mutual funds listed. The top five performing high-yield bond mutual funds we identified on Morningstar for Trailing 5 year return were:

FX2  up 8.88% Trailing 5 Year

*1. Fairholme Focused Income up 9.16 %
2. Credit Suisse Strategic Income I up 7.34%
3. Fidelity Capital & Income  up 7.33%
4. Morgan Stanley Institutional High Yield I up 7.22%
5. Lord Abbett High Yield I up 7.19 %

  • The average trailing 5 year return among the high-yield bond mutual funds listed was 4.70%
  • FX2 aggregated returns outperformed the average trailing 5 year return of the high-yield bond mutual funds listed by 88.94 %

* Fairholme Focused Income I: Outperformed  Durig Capital FX2 for a 5 year period.  This is the first mutual fund to outperforming Durig Capital FX2 aggregated performance in a major category since covering our last three monthly performance reviews.

Past performance is no guarantee of future results. FX2 is a composite of individual (segregated) bond accounts comprised of individual bond positions, with return averages both higher and lower than the FX2 composite returns.  Individual (segregated) accounts are a different investment vehicle than bond funds, offering more easily customized asset allocation and tax accountability compared to having all the investments held in one single large pool.  To learn more, find us at: Durig Fixed Income 2

FX2 – Investment Presentation

Click to see Our FX2 Investment Presentation

Durig Fixed Income FX2 Review November 2017

For many years, we have been publishing our FX2 high-yield bond ideas on Bond-Yields.com as they were added to our FX2 client portfolios.  The relatively standard benchmarks shown below are compared to the Year-to-Date (YTD),Trailing 1 year, Trailing 3 year and Trailing 5 year returns provided by the High-Yield Bond Mutual Fund database provided by Morningstar.

 

FX2 Benchmark 11-9-17

We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on November 10th, 2017, this is how our clients aggregated FX2 portfolios compared to Morningstar’s high-yield bond fund database:

 

YTD   

Year-to-Date, FX2 returns were up 16.86%, and outperformed every high-yield bond mutual fund that was listed. The top five performing high-yield bond funds we identified on Morningstar in YTD return were:

 

FX2  up 16.86% YTD

1. Fidelity Capital Income up 10.20%

2. DDJ Opportunistic High Yield Institutional  up 9.92%

3. DDJ Opportunistic High Yield 1 up 9.91%

4. Deer park Total Return Credit I up 9.81%

5. Fidelity Advisors High Yield Advantage I up 9.72%

  • The average YTD return among high-yield bond mutual funds listed was 5.61%

  • FX2 aggregated year to date returns were 201% above the average YTD return of the high-yield bond mutual funds listed

Trailing 1 Year

For a 1 Year period, FX2 aggregated returns were up 19.74%, outperforming all high-yield bond mutual funds that were listed.  The top five performing high-yield bond funds we identified on Morningstar for Trailing one year return were:

 

FX2  up 19.74% Trailing 1 Year

1. Catalyst SMH High Income A up 14.13%

2. Catalyst SMH High Income I up 14.10%

3. Highland Opportunistic Credit Z up 13.88%

4. Highland Opportunistic Credit A up 13.72%

5. Highland Opportunistic Credit C up 13.17%

  • The average trailing 1 year return among the high-yield bond mutual funds listed was 7.74%

  • FX2 aggregated returns outperformed the average trailing 1 year return of the high-yield bond mutual funds listed by 155%

Trailing 3 Year

For a 3 Year period, FX2 aggregated returns were up 9.98%, outperforming all high-yield bond mutual funds that were listed.  The top five performing high-yield bond funds we identified on Morningstar for Trailing three year return were:

 

FX2  up 9.98% Trailing 3 Year

1. Fairholme Focused Income up 7.60%

2. Artisan High Income Advisor up 7.21%

3. Artisan High Income Investor up 7.03%

4. Credit Suisse Strategic Income I up 6.72%

5. Diamond Hill Corporate Credit Y up 6.64%

  • The average trailing 3 year return among the high-yield bond mutual funds listed was 3.85%

  • FX2 aggregated returns outperformed the average trailing 3 year return of the high-yield bond mutual funds listed by 159.2%

 

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Trailing 5 Year

For a 5 Year period FX2 aggregated returns were up 9.81%, outperforming all high-yield bond mutual funds listed. The top five performing high-yield bond mutual funds we identified on Morningstar for Trailing three year return were:

 

FX2  up 9.81% Trailing 5 Year

1. Fairholme Focused Income up 8.49%

2. Fidelity Capital & Income up 7.71%

3. Credit Suisse Strategic Income I up 7.50%

4. Fidelity Advisor High Income Advantage I up 7.49%

5. Morgan Stanley Institutional High Yield I up 7.45 %

  • The average trailing 5 year return among the high-yield bond mutual funds listed was 4.88%

  • FX2 aggregated returns outperformed the average trailing 5 year return of the high-yield bond mutual funds listed by 101%

Past performance is no guarantee of future results. FX2 is a composite of individual (segregated) bond accounts comprised of individual bond positions, with return averages both higher and lower than the FX2 composite returns.  Individualized segregated accounts are a different investment vehicle than bond funds offering more easily customized asset allocation and tax accountability compared to having all the investments held in one single large pool.  To learn more, find us at:

 

Durig Capital, Inc.

Registered Investment Advisor

11600 SW 69th Avenue

Tigard, Oregon 97223

Toll Free: (877) 359-5319

Fax: (971) 732-5121

E-mail us at:

Info@Durig.com

Find FX2 on the web at: fixed-income2.com

Ask a question, or, tell us what you’re looking for:

To learn more about this bond call our fixed income specialist at (971) 327-8847

Always putting your interests first,

Randy Durig
Registered Investment Advisor
DIR  971-732-5119


A+ Rating with the BBB!
Fixed-Income2.com I Distressed Debt 1 Hedge Fund

How does Durig’s Fixed Income 2 (FX2) portfolio stack up against comparable high-yield bond mutual funds?

Well, we might have a big surprise for you.

For many years, we have been publishing our FX2 high-yielding bond ideas as they were added to our FX2 client portfolios.  The relatively standard benchmarks shown below are compared by Year-to-Date (YTD),Trailing 1 year, Trailing 3 year and Trailing 5 year returns, using the High-Yield Bond Mutual Fund database provided by Morningstar.

FX2 Benchmark 10-19-17.JPG

We estimate that Morningstar tracks the performance of and benchmarks close to 800 High-Yielding Bond Mutual Funds, and on October 19, 2017,  this is how FX2 compared to Morningstar’s high-yield bond database:

YTD  

Year-to-Date, FX2 returns were up 16.28%, and outperformed every high-yield bond mutual fund that was listed.  The best performing high-yield bond fund we could identify on Morningstar in YTD return was Fidelity Capital & Income, up 10.40%.

  • FX2 Beat the top performing high-yield bond mutual fund in YTD return by 56.53 %

 Trailing 1 Year

For a 1 Year period, FX2 returns were up 17.80%, outperforming all high-yield mutual funds that were listed.  The best performing high-yield bond fund in Trailing 1 year return that we could identify on Morningstar was Catalyst/SMH High Income I, up 15.50%.

Read more

Fixed Income 2 - By Durig Capital

FX2 Year-To-Date up 18.10 % – Since Inception FX2 is up 9.71 % – Trailing 1 Yr Return is up 20.69 %

fx2-10-2-1017preCapture

Click to see FX2 most recent performance FX2 Master (Summary) 09_30_2016 to 09_29_2017.pdf

fx2benchmark-9-26-2017Capture

Click to see FX2 most recent benchmark performance CFX2 Master (Summary) 09_26_2016 to 09_25_2017.pdf

FX2 | Fixed Income2.com Is A High Yielding, Short Term, Low Cost Managed Income Portfolio. Designed to earn you both a higher fixed income and your money returned back!

Read more

Fixed Income 2 - By Durig Capital

High 7 – 8.5% Yields | Fixed-Income2.com

FX2 | Fixed-Income2.com targets an 8 – 8.5% yield with our 3+ average maturity that is far better than the current 0.90% range that the three year government bonds are currently paying.  That works out to about an 800% increase in fixed income, by switching to our services.

Based on the above treasury yield, if you have a $1,000,000 portfolio in US government bonds for three years, your yearly income would be $9,000 dollar. Or about  $758.33 dollars per month, hardly fitting life style for a millionaire.

Using our midpoint 8.25% yield with a similar maturities using the same $1,000,000 portfolio, the yearly income would be income $82,500. Or $6,875.00 dollars per month. Thus a higher yield can greatly increase your standard of living, in this case over 800%.

It’s simple: You worked hard to earn your money,  it’s time your fixed income worked as hard as you do ! Read more

Fixed Income 2 - By Durig Capital

Higher Institutional Yields, and Diversified Portfolio’s | Fixed-Income2.com

FX2 | Fixed-Income2.com is able to access the much higher yielding global institution bonds. Whether this is because of our outstanding reputation or high internet presence, or because we often have major US and World bond firms contact us wanting our services and business isn’t clear. However it does put us in the enviable position to pick and work with the trading firms we think will provides better price and higher values for our clients.   Thus, we are able to shop the globe, often seeing much higher yielding bonds from a wide variety of counties, industries and services that most of our clients can’t find or purchase on their own. Thus we shop the world to find our clients the best bonds. Read more