Author: bigwave

November 20, 2020 General Ag News and Notes, Stock Market Post a Comment

Bank of Hawaii’s(NYSE:BOH) Share Price Is Down 17% Over The Past Year.

SIMPLY WALL ST –

It is a pleasure to report that the Bank of Hawaii Corporation (NYSE:BOH) is up 35% in the last quarter. But in truth the last year hasn’t been good for the share price. The cold reality is that the stock has dropped 17% in one year, under-performing the market.

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unhappily, Bank of Hawaii had to report a 22% decline in EPS over the last year. The share price fall of 17% isn’t as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn’t more difficult.

It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of Bank of Hawaii’s earnings, revenue and cash flow.

What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Bank of Hawaii, it has a TSR of -14% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective
Investors in Bank of Hawaii had a tough year, with a total loss of 14% (including dividends), against a market gain of about 22%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn’t be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It’s always interesting to track share price performance over the longer term. But to understand Bank of Hawaii better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we’ve spotted with Bank of Hawaii .

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

November 20, 2020 General Ag News and Notes Post a Comment

Editorial: Signs of hope for isle agriculture

Star Advertiser –

The economic shock waves set in motion by COVID-19 have rocked Hawaii’s agriculture industry, with local farmers and ranchers suffering enormous declines in sales due to months of stalled tourism, restaurant closures and other pandemic-related factors. Even so, there’s reason for optimism that the industry can reset with a stronger foundation on which to grow food security in the islands.

One bright spot amid ongoing struggles: MA‘O Organic Farms’ plan for a new post-harvest processing facility along with expanded field operations and educational support, which will make the 20-year-old pioneering social enterprise in Waianae larger and more financially self-sustaining.

The nonprofit recently secured a total of $11.5 million for the effort from more than two dozen organizations, agencies and individuals. The infusion of funds is projected to yield a vast increase in food production, which includes more than 40 varieties of fruits and vegetables, including salad greens, root crops, cooking greens, herbs and seasonal tropical fruits. Also, there will be scores of new jobs. Both are welcome rebuilding blocks that can help stabilize the industry’s wobbly condition.

Further — and most heartening as Hawaii glimpses its ag future — is an initiative that will significantly expand youth training programs through which MA‘O pays the college tuition for young adults who work part-time on the farm as part of its Leeward community-based economic development model.

Given that Hawaii now imports more than 85% of its food — leaving us vulnerable to running out of groceries within a week or so should ports close due to natural disaster — we must strengthen our food security profile. However, despite widespread enthusiasm for a more sustainable supply of fresh produce and proteins, a dramatic ramping up of local ag production is rightly viewed as a tall order.

Farming in Hawaii has a longstanding reputation as a tough business. In addition to unpredictable weather, year-round pests and expensive land costs, there has been a shortage of people who want to work on farms. It’s a small wonder that Hawaii’s commercial farmers’ average age is roughly 60 years old, according to the Hawaii Farm Bureau Federation.

Even so, given that the nearest landmass is some 2,500 miles away, these challenges and others must be tackled. To that end, it’s encouraging that since 2001 MA‘O has helped its student interns earn 120 associate’s degrees, dozens of bachelor’s degrees and three master’s degrees.

Through their higher-education degrees and farm work, in which interns get a hands-on education that connects them with Native Hawaiian culture, these young adults hold potential to help boost the count of local farms and food businesses. Moreover, while ag still involves plenty of field labor, it’s also evolving to include promising tech advances — monitoring drones and vertical farming techniques, for instance — and plant research to develop increasingly hardy and more nutritious crops.

From this vantage point, there’s a glimmer of hope for coming years — even as Hawaii continues to grapple with the economic setbacks tied to COVID-19. On a statewide scale, success will hinge, in part, on securing ample financial assistance and in-kind donations.

A recently formed group of ag stakeholders, dubbed the AgHui, is pitching a sensible plan that starts with stabilizing still-hemorrhaging parts of the industry with emergency loans and grants, loan and rent deferrals, direct payments to farmers, and assistance for community feeding programs.

The plan’s follow-up recovery includes updating aging infrastructure and supporting regional food hubs and producers contributing to food security. Successes such as MA‘O’s bolster confidence that a thriving, resilient food and agriculture economy is within Hawaii’s reach. It is attainable with deeply rooted, sustained support.

November 19, 2020 General Ag News and Notes, REIT Post a Comment

Industrial Logistics Properties Trust: You Can Relax With This Income REIT

Seeking Alpha –

Summary –

  • Occupancy in the company’s Hawaii properties has not fallen below 98% since 2003. Hawaii’s land development is limited by its geography.
  • E-commerce will act as a tailwind for the company’s properties. The company has been pretty aggressive having acquired over $1 billion worth of properties since 2019.
  • The company currently has a forward yield of 5.9% which is great in this low-interest-rate environment.

I wanted to explore income-generating REITs to add more cash flow into my portfolio. I wanted REITs that could do well in the new post-COVID environment so I have purposefully stayed away from retail and offices in certain geographies. I think Industrial Logistics Properties Trust (ILPT) with its decent yield and solid business is one to consider.

Just a brief background on the company, Industrial Logistics Properties Trust is a REIT that, as it’s named, focuses on industrial and logistics properties. The company owns 301 properties (43.8 million square feet) in Hawaii and 75 properties (27 million square feet) in 30 other states. Given the current economic uncertainty, I typically check the distribution of lease expirations of a REIT’s customer base. The good news is that the bulk of the company’s shorter-term lease, roughly 17% of revenue, is expiring all the way to 2024. Only 5.1%, 8.2%, and 6.4% of the company’s leases in terms of annualized rental revenue are expiring in 2021, 2022, and 2023 respectively. As of September 2020, the company’s properties were 98.8% leased with an average remaining lease term of 9 years. This is good news for the company as it would not have to negotiate and set lease in the middle of the coronavirus induced recession. The company currently has a vacancy rate of 1.2% which is impressive given the impact the coronavirus pandemic had on retail establishments.

The company’s properties are typically service/distribution centers and warehouses. Examining the company’s client exposure risk, we can see that its properties are rented out to 264 clients. Amazon (AMZN), FedEx (FDX), and P&G (PG) being the largest at 15.9%, 3.7%, and 3.7% of annualized 2020 revenues. Investment-grade tenants make up 64.4% of annualized rental revenues from the company’s mainland properties ensuring the credit safety of the company’s revenue stream. The company’s customer list is pretty impressive as it has the logistics departments of several well-known corporations. The company is also well-diversified as its top 25 clients only make up 53.6% of the company’s annualized 2020 revenue. This means that the loss of a single client would have minimal impact on the firm.

As of September 2020, the company’s non-Hawaii based properties made up 59.3% of annualized rental revenue. The remaining amount 40.7% of revenue is from the company’s Hawaii properties. Surprisingly, the company’s Hawaii footprint is actually an asset for the company. My initial worry was that rents could be unstable as the Hawaiian economy is very dependent on tourism which tends to be cyclical. The reverse is true actually as occupancy in these properties has not fallen below 98% since 2003. The reason I believe is that Hawaii’s land development is limited by its geography. Regardless of the current economic situation, industrial and logistic properties are still needed to move goods to the people who live there. It just so happens that there is limited ability to relocate to an alternative location.

The Hawaii properties are interesting as the company doesn’t really own the land but rather the company leases it from the state. In fact, 90.6% of Hawaiian properties based on annualized revenues are from lease lands. These leases are reset every 10 years or so and the increases are based on fair market values. The company generally is able to pass on those increases to its customers but given the economic situation, this assumption could be at risk.

With regard to short-term results, Industrial Logistics Properties Trust had a decent quarter. Revenue (i.e. Rental Income) for Q3 2020 vs. Q3 2019 increased by 4.3% on a comparable property level. Year to date results were similar to comparable property. Rental income grew by 4.4% compared to the same time last year. Overall, YTD revenues were up by 16.4% to $194.5 million due to some property acquisitions the company had done for the year. Comparable property operating income only rose by 2.6% YTD due to an increase in Real Estate taxes. Net income for the nine months ended September 2020 was $41.8 million, or $0.64 per share, which is more or less the same compared to $40.8 million or $0.63 per share earned for the same time last year. Normalized FFO was $1.40 per share.

These results demonstrate the resiliency of the company’s business model. This is not particularly surprising as even during the height of the coronavirus lockdowns industrial activity and logistics never stopped. In fact, the company believes that e-commerce, which has been boosted by the coronavirus lockdowns, will increase demand for industrial and logistics space up to 3x when compared to retail sales from brick and mortar stores. This will stimulate demand for the company’s properties and create a favorable investment environment. The company has been pretty aggressive investing in this space as well having acquired over $1 billion worth of properties since 2019.

Financial Analysis and Conclusion

In terms of valuation, for REITs, I check the leverage and coverage measures as those are important indicators of a company’s financial flexibility and long-term viability. The total liabilities/total assets percentage is an indicator of debt serviceability and leverage. Industrial Logistics Properties Trust has total liabilities/total assets of 56.8% and a Net Debt level to annualized EBITDA of 7.3x. These measures indicate an above-average level of debt.

The fixed charge coverage ratio is an indicator of a firm’s ability to pay interest from its operating performance and is defined as net operating income divided by interest expense, preferred dividends, and other required distributions. The company had YTD interest expense of $40.6 million and no other required distributions. Using the company’s YTD adjusted EBITDA of $137.2 million, we can calculate an interest coverage ratio of 3.38x. This ratio is about average for a REIT.

REITs are required to distribute most of their taxable net income to shareholders through dividend payments. The dividend payout ratio (“Dividends/FFO”) is calculated in order to check if the REIT can meet this obligation moving forward. Based on the company’s financials, for the nine-month YTD, the company had an FFO per share of $1.40 and paid a quarterly dividend of $0.33, implying a payout of the ratio of 70% which is on the high side.

In conclusion, I like the overall business of the company and I believe its revenue streams are relatively safe. The company’s Hawaii portfolio acts as a solid base as it pursues aggressive expansion. While its financial ratios are not the best, I believe these are a consequence of the company’s growth strategy. The company currently has a forward yield of 5.9% which is great in this low-interest-rate environment. Income-focused investors should consider Industrial Logistics Properties Trust.

November 19, 2020 Employment/Jobs, General Ag News and Notes, Hawaii Agricultural Employment, Hawaii Agriculture Jobs Post a Comment

USAJOBS Daily Search Results for Agriculture Jobs in Hawaii for 11/19/2020

Plant Protection and Quarantine Officer (Plant Health Safeguarding Specialist) –
Department: Department of Agriculture –
Agency: Animal and Plant Health Inspection Service –
Number of Job Opportunities & Location(s): 3 vacancies – Honolulu, Hawaii
Salary: $44,597.00 to $57,972.00 / PA
Series and Grade: GS-0401-7
Open Period: 2020-11-19 to 2020-11-25
Position Information: Permanent – Full-Time
Who May Apply: Career transition (CTAP, ICTAP, RPL), Open to the public

Some jobs listed here may no longer be available-the job may have been canceled or may have closed. Click the link for each job to see the full job announcement.

November 16, 2020 Disaster Preparedness, Globel Warming Post a Comment

USDA Designates Honolulu County, Hawaii, as a Primary Natural Disaster Area

United States Department of Agriculture –
Farm Service Agency –

WASHINGTON, Nov. 16, 2020 — Agriculture Secretary Sonny Perdue designated Honolulu County, Hawaii, as a primary natural disaster area. Producers who suffered losses caused by recent drought may be eligible for U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) emergency loans.

This natural disaster designation allows FSA to extend much-needed emergency credit to producers recovering from natural disasters. Emergency loans can be used to meet various recovery needs including the replacement of essential items such as equipment or livestock, reorganization of a farming operation or the refinance of certain debts.

The deadline to apply for these emergency loans is July 6, 2021.

FSA will review the loans based on the extent of losses, security available and repayment ability.

FSA has a variety of additional programs to help farmers recover from the impacts of this disaster. FSA programs that do not require a disaster declaration include: Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program; Emergency Conservation Program; Livestock Forage Disaster Program; Livestock Indemnity Program; Operating and Farm Ownership Loans; and the Tree Assistance Program.

Farmers may contact their local USDA service center for further information on eligibility requirements and application procedures for these and other programs. Additional information is also available online at farmers.gov/recover.

November 16, 2020 Employment/Jobs, General Ag News and Notes, Hawaii Agricultural Employment, Hawaii Agriculture Jobs Post a Comment

USAJOBS Daily Search Results for Agriculture Jobs in Hawaii for 11/16/2020

Wildland Firefighter (Forestry Aid/Technician) –
Department: Department of the Interior –
Agency: National Park Service
Number of Job Opportunities & Location(s): Many vacancies – Multiple Locations
Salary: $27,705.60 to $42,452.80 / PH
Series and Grade: GS-0462-3/5
Open Period: 2020-11-16 to 2021-01-05
Position Information: – Full-Time
Who May Apply: Career transition (CTAP, ICTAP, RPL), Open to the public

Some jobs listed here may no longer be available-the job may have been canceled or may have closed. Click the link for each job to see the full job announcement.