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Bill Gross Has Started To Sell His Pimco Closed-End Funds

Summary This week there have been a few SEC Filings with Pimco Fund Sales. Thus far only three funds have been partially sold. The selling may provide a good buying opportunity at some point. I have previously written some articles describing Bill Gross purchases or sales of Pimco closed-end funds. While he worked at Pimco, Mr. Gross often supported Pimco’s CEFs with his personal money. There was also “copycat” buyers who often followed Mr. Gross into some of these issues. Bill Gross resigned from Pimco on September 26. Since then, closed-end fund investors have been wondering whether or not Mr. Gross would sell some or all of his Pimco CEF holdings. This week we finally started to see some SEC filings with sales of Pimco CEFs from Mr. Gross. These are the first trades since Mr. Gross resigned from Pimco in September. There is normally a two day filing delay, so the filings for February 5 show the trades done on February 3. It remains to be seen whether the selling is completed, but in the past, buying or selling often continued for a week or longer. Shares Tkr Sell Date Average Price $ Realized Discount/Premium (Feb. 5) 50,000 PDI 3-Feb 30.2641 $1,513,205 -0.8% 32,733 PDI 2-Feb 30.304 $991,941 6,630 PTY 2-Feb 16.7823 $111,267 +19.2% 22,649 PCN 3-Feb 15.3397 $347,429 +4.2% 29,200 PCN 2-Feb 15.3856 $449,260 Bill Gross owns several Pimco closed-end funds that hold tax free municipal bonds. PCQ and PZC hold tax free bonds from the state of California. Even though his new employer, Janus Capital Group, has headquarters based in Colorado, Mr. Gross has arranged to work out of an office in California. For this reason, I expect he will likely hold onto his California muni bond funds. Some of his other national muni bond fund positions may be sold depending on their cost basis to be replaced with similar funds from Janus. One fund that Mr. Gross has not sold yet that still looks fairly attractive is PCI. I’ve included some summary data for PCI below. But keep in mind that Mr. Gross currently owns about 2.4 million shares of PCI, so if he ever did decide to sell PCI, there could be quite an overhang. Pimco Dynamic Credit Income (NYSE: PCI ) -pays monthly Total Assets= 5,717 MM Total Common Assets= 3,096 MM Annual Distribution (Market) Rate= 9.12% Latest Monthly Distribution= 0.1563 (annual= $1.8756) Average Monthly Earnings per Share= $0.1804 (as of 06/30/2014) Fund Baseline Expense ratio= 1.30% Discount to NAV= -8.9% Average Six Month Discount= -8.8%% Effective Leverage: 46% Average Daily Volume: 712,000 Average $ Volume: 14.6MM Manager: Dan Ivascyn + team Disclosure: The author is long PCI. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article. Are you Bullish or Bearish on ? Bullish Bearish Neutral Results for ( ) Thanks for sharing your thoughts. Submit & View Results Skip to results » Share this article with a colleague

Update: Continued Regulated Expansion Will Bode Well For PPL Corp.

Company offers an impressive yield of 4.1% and has strong growth prospects. PPL aggressively working to increase regulated operations and sell unregulated assets. Company stays on track with initiatives to strengthen regulated operations. I continue to stay bullish on PPL Corp. (NYSE: PPL ); the company offers an impressive yield of 4.1%. Along with the high yield, the company has strong growth prospects. PPL Corp. has been incurring capital spending to strengthen its regulated operations, which will augur well for its future growth. Also, the company has been aggressively working to increase its regulated operations and sell its unregulated assets. The company stays on track with its initiatives to strengthen its regulated operations, which will add value for shareholders and bode well for its stock price. Moreover, as the company continues to expand its regulated operations, its earnings and cash flow stability will improve. The company reported a strong financial performance for 4Q’14. PPL registered an operating EPS of $0.58 for 4Q’14, better than the consensus of $0.53. Total revenues for 4Q’14 were $4.02 billion, up from $2.82 billion in 4Q’13. The company also provided the 2015 EPS guidance for its regulated operations of $2.05-$2.25. As the company continues to expand its regulated operations, the company increased its long-term growth target. The company provided a new multi-year EPS growth target of 4%-6% (annual growth) from 2015 through 2017, higher than its previous guidance of at least 4%. Also, the company has been taking aggressive initiatives to sell its unregulated assets and expand its regulated operational base, as I stated in my previous article. The company sold its hydro-assets for $900 million in 2014. And it is scheduled to completely spin-off its Supply segment (unregulated assets) by 2Q’15. As the company has been selling its unregulated assets, this will allow the company to direct its capital to strengthen its regulated operations. Currently, the company generates almost 85% of its earnings from regulated operations, which is expected to increase to 100%, as the company is aggressively selling its unregulated operations. The company’s impressive capital spending outlook continues to be an important growth catalyst. The company has planned to spend $18 billion from 2015 through 2019, which will drive its growth. Earnings growth in 2015 will be mainly driven by corporate restructuring efforts, and growth beyond 2015 will be backed by regulated utility capital spending. As the company has been expanding its regulated operations, it will offer cash flow stability and augur well for its stock price. PPL Corp. has been correctly expanding its regulated operations. The company is expected to complete the sale of its supply segment by 2Q’15. Increasing exposure to regulated operations will reduce the company’s business risk and provide cash flow stability. Also, the company offers an impressive yield of 4.1%. The company has also been increasing its regulated operations, which will positively affect its stock price. Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Update: Southern Company – Construction Stays An Overhang

Company undertaking growth investments to expand and improve regulated operations. Healthy capital outlook indicates that future growth will stay healthy. Company generates almost 90% of its consolidated earnings from regulated operations. Southern Company (NYSE: SO ) continues to stay a good investment prospect for income-seeking investors, as it offers a solid yield of 4.1% . The company has been undertaking growth investments to expand and improve its regulated operations, which will augur well for its long-term earnings growth. The company’s healthy capital outlook indicates that its future growth will stay healthy. Also, as the company generates almost 90% of its consolidated earnings from regulated operations, its future earnings visibility stays high. However, as the company has been constructing new power generating plants, there is a risk of delays and cost overruns. The construction of plants will weigh on the stock price in the near term and will limit any stock price upside. The company’s operational performance stays satisfactory. The company reported an operating EPS of $0.38 for 4Q’14, in line with analyst expectations. Also, the reported operating EPS of $2.80 for full year 2014 was in line with the consensus of $2.80. The company reported quarterly revenues of $4.01 billion for 4Q’14, representing an increase of 3% year-on-year. Revenue growth for the quarter was driven by healthy industrial sales growth of 2.3%. Moreover, the company reported strong full year 2014 revenue growth of 8.3% year-on-year. Also, the company is expecting total retail sales growth of 1.3% in 2015, which will be driven by 1.7% industrial sales growth. And the company provided the 2015 EPS guidance of $2.76-$2.88, representing an increase of 3-4% year-on-year. A key growth catalyst for Southern Company stays its healthy capital spending outlook . The company has planned to incur capital spending of $16.6 billion from 2015 through 2017, which will drive its future growth. The following table shows future capital spending. 2015 2016 2017 Capital Spending ($-billion) $6.8 billion $5.5 billion $4.3 billion Source: Investors Presentation The company’s operating performance stays satisfactory; however, the construction of ongoing power generating projects remains a risk to its future earnings, as I stated in my previous article. The company registered an incremental after tax charge of $43 million because of cost overruns and a delay in its Kemper project. The project is now scheduled to be in service in the first half of 2016. The company also announced an 18-month delay and an expected cost increase of $720 million for its Vogtle project. The construction of ongoing projects will weigh on the stock price. The company’s operating performance stays satisfactory. The impressive capital spending outlook will drive its future earnings growth, and the stock stays a good investment prospect for income-seeking investors. However, cost overruns and delays of ongoing construction projects will stay a risk for the stock price in the near term, and will limit any stock price upside. Also, the stock’s return in 2015 will be mainly dividend driven. Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.