This sector could have a half million job openings and opportunities for older workers


Although the coronavirus continues to rattle global markets and industries, some analysts expect to see greater demand for advanced manufacturing talent in the U.S. as the pandemic diminishes. That could create opportunities for older men and women, including white-collar professionals struggling to find jobs.

Before COVID-19, there were 500,000 manufacturing jobs open in the U.S., according to the National Association of Manufacturers (NAM). “We’re going to have a need very quickly to ramp up on hiring in those facilities that may have been shut down during the crisis or that need to expand operations,” said NAM president and CEO Jay Timmons in a recent press conference.


“The fact that one can get a certificate in about nine months and totally re-career into a nearly guaranteed job is an incredible opportunity for an older worker.”


— Nora Duncan, Connecticut state director of AARP

As manufacturers frantically try to keep up again with demand for essentials and lifesaving PPE (Personal Protective Equipment) for health care workers as cases rise across the country, their innovation and high-tech problem-solving could help dispel misconceptions that all manufacturing jobs are dirty and physically demanding, said Sara Tracey, project manager of workforce services for the Ohio Manufacturers’ Association in Akron, Ohio.

Manufacturing jobs and what they pay

Entry-level manufacturing jobs in industries such as aerospace, technology and defense include CNC operators, set-up technicians and programmers, as well as inspectors, higher-end assembly technicians and quality assurance.

The pay typically ranges between $35,000 and $65,000, including overtime and benefits, said Richard DuPont, director of community and campus relations for the Advanced Manufacturing Technology Center at Housatonic Community College in Bridgeport, Conn. More experienced professionals can earn upward of $95,000.

80% of older Americans can’t afford to retire – COVID-19 isn’t helping

In Ohio, manufacturers have been training and moving some workers into higher positions so the companies can hire and train new candidates for vacated ones, Tracey noted. Resources such as the Making Ohio website let people explore careers in manufacturing, including robotics, automation and 3-D printing.

Industrial maintenance is an important career pathway these days, as well, Tracey said. This sector is expecting more retirements in the near future, which will create jobs from “traditional machine mechanics to troubleshooting state-of-the-art electronic or robotic processes,” Tracey noted.

Also see: Cannabis, whiskey, and mobile bike repair: These entrepreneurs are thriving in the pandemic

Connecticut, among other states, now offers training programs with community colleges, state manufacturers and other organizations.

From banking to precision tools

This kind of training helped Allison Clemens-Roberts, who is over 50, find work after losing her clerical job in the pensions department of a Connecticut bank in 2017. A severance package gave her time to look for work, but she couldn’t find even temporary employment. She blames age discrimination by white-collar employers.

“There’s no way to hide how old you are. They can ask when you graduated from school,” Clemens-Roberts said.

But while she was out of work, Clemens-Roberts received a postcard from AARP offering a 25% tuition scholarship on advanced manufacturing programs at Goodwin University, a career-focused school in East Hartford, Conn.

She wasn’t interested until her husband Frank saw a TV commercial touting the benefits of Goodwin’s manufacturing and other programs.

“He said, ‘Why don’t you think about changing careers?’” Clemens-Roberts recalled.

So, with several months left on her severance, she enrolled in a full-time, six-month CNC (Computer Numerical Control) Machining, Metrology and Manufacturing Technology certification program. It would prepare her for a job working with automated machine tools which requires mathematical skills, attention to detail and critical thinking.

SectorWatch: 80% of older Americans can’t afford to retire – COVID-19 isn’t helping

Scholarships cut Clemens-Roberts’ tuition bill from $7,000 to $3,200. After a two-month paid internship at TOMZ, a manufacturer of precision components for major medical devices in Berlin, Conn., she was hired in April 2019. Six months later, TOMZ reimbursed Clemens-Roberts $1,500 for her education tab.

Clemens-Roberts said her family is now in a better financial position than when she was working in a bank, living paycheck-to-paycheck. Considered an essential worker, she has kept her full-time job through the pandemic, except for three days in March.

“I never thought I would go to college and participate in a graduation — in cap and gown,” Clemens-Roberts said. “That was a big surprise. And [actor] Danny Glover was the speaker. A bucket-list experience.”

There’s “obviously age discrimination, among other things, at play” for job seekers over 50, said Nora Duncan, Connecticut state director of AARP. “The fact that one can get a certificate in about nine months and totally re-career into a nearly guaranteed job is an incredible opportunity for an older worker.”

While AARP helped Clemens-Roberts pay for the tuition initially, the internship helped her get hired as a machine operator.

Older and younger manufacturing workers helping each other

The search for skilled manufacturing labor across the country is creating opportunities for workers of all ages, said DuPont. And older and younger generations working together are assisting each other.

The older students help younger classmates with life skills, while younger students can help with technology,” said DuPont. “Together, they make excellent teams.”

Don’t miss: How will the robots see you through the pandemic?

Just ask Fernando Vega, 62, who is now a quality inspector at Forrest Machine, in Berlin, Conn. It makes precision-machined parts and other components for the aerospace and commercial industries. In the 1990s, he was a quality inspector before recessions and outsourcing forced him to consider other careers.

He tried working for a nonprofit and though Vega found the work rewarding, it wasn’t financially sustainable.

So, Vega went back to school in spring 2018 to study advanced manufacturing at Goodwin.

“I was in a class of 18, and at first everyone kept to themselves. But when it came time to read blueprints, there was some panic and I said, ‘Don’t panic, I’ll show you.’ The [younger] students helped me with trigonometry, and then we started to work together.”

Vega has worked at his manufacturing job throughout the pandemic. At one point, he was putting in 50 hours a week, but that was reduced to 40 hours plus overtime.

Vega recalled promising his mother that he would go to college. “But that was a long time ago,” he said. His mother never got to see him graduate but Vega feels he’s fulfilled his promise — not only to her, but also to himself. “I love my job,” he said.



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Regulators ease no-deal Brexit fears in funds sector By Reuters


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© Reuters. FILE PHOTO: British PM May meets German Chancellor Merkel to discuss Brexit in Berlin

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By Huw Jones

LONDON (Reuters) – Regulators in Britain and the European Union said they have dusted off their no-deal Brexit agreements to avoid disruption in cross-border asset management.

Britain left the EU in January, but unfettered access to the European market has continued under a transition agreement that ends in December.

Negotiations of a new UK-EU trade pact have stumbled, and Britain’s requests for direct financial market access are being separately by Brussels.

The European Securities and Markets Authority (ESMA) and Britain’s Financial Conduct Authority (FCA) said on Friday that memoranda of understanding (MOUs) drawn up in February 2019 in case Britain left the bloc without a transition deal “remain appropriate”.

They will now come into effect after the end of December, when the transition period expires, ESMA and the FCA said in separate statements.

One MoU allows for EU and UK regulators to swap information, a legal requirement for the continuation of “delegation”, or funds registered in EU countries like Ireland and Luxembourg outsourcing stock-picking to managers in London or elsewhere outside the bloc.

Delegation avoids the need to move portfolio managers to where the funds are domiciled.

“This was a rare bit of good news,” a senior official at a UK-based asset management company said.

In 2019, Goldman Sachs (N:) and BlackRock (N:) had considered temporarily moving some UK-based asset managers to New York before the original MoUs were agreed, since the United States already had such cooperation agreements with Brussels.

The other MoUs cover credit-rating agencies, allowing regulators to swap information on Moody’s (NYSE:), S&P and Fitch whose analysts in London rate companies in the EU. Trade repositories are also covered.

Brussels is assessing whether to grant direct financial market access, known as equivalence, to a range of financial services from January.

London and Brussels missed a deadline at the end of June for completing assessments, but Britain said last week it had now returned all EU questionnaires.

The bloc has said it will allow EU investors to continue using derivatives clearing houses in Britain temporarily after December.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Dubai real estate fund considers de-listing amid sector downturn By Reuters


© Reuters.

DUBAI (Reuters) – Emirates REIT (DI:), a Dubai-based sharia-compliant real estate investment trust, said on Sunday it was considering de-listing from Nasdaq Dubai () amid a downturn in the United Arab Emirates’ real estate sector and weak equity market conditions.

“It is looking likely that a return to operating as a private REIT, at least temporarily, is in the best interests of the fund and its investors,” the company said in a statement.

It said current market conditions in UAE public equity markets had damaged the share’s performance and led to an “unjustifiably large gap between the fund’s share price and its true value”.

The real estate sector in Dubai, one of the main emirates of the UAE, has been sluggish for years, due to a chronic oversupply of homes coupled with weak economic growth, a problem now exacerbated by the coronavirus crisis.

Emirates REIT, which has a market capitalisation of around $45 million, said “a cyclical downturn in the UAE real estate sector and a challenging operating environment” had contributed to its decision to review its options, including a potential de-listing.

Emirates REIT’s shares were trading at $0.15 on Sunday compared with a net asset value (NAV) per share of $1.57 at the end of 2019.

Earlier on Sunday, Emirates REIT said its manager, Equitativa, was being investigated by the Dubai Financial Services Authority (DFSA) for matters connected to the management of Emirates REIT, specifically on valuation, information and interests and corporate governance.

Emirates REIT said Equitativa intended to cooperate with the investigation.

In a statement to Reuters, DFSA confirmed it was investigating Equitativa with respect to its role as fund manager of Emirates REIT. It said the probe had started on May 24 but did not disclose details of the investigation.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Tesla slashes Model Y SUV price as pandemic weighs on auto sector By Reuters


© Reuters. The Tesla logo is seen on a car in Los Angeles

(Reuters) – Tesla Inc (O:) cut the price of its sport utility vehicle Model Y by $3,000, just four months after its launch, as the U.S. electric carmaker seeks to maintain sales momentum in the COVID-19 pandemic.

The reduction follows price cuts in May on Tesla’s Model 3, Model X and Model S.

The company headed by Elon Musk this month posted a smaller-than-expected fall in car deliveries in the second quarter, resilient results despite the pandemic that hit the global auto industry.

The Model Y now starts at $49,990, down nearly 6% from its previous price of $52,990, according to the carmaker’s website.

Tesla did not immediately respond to a Reuters request for comment.

The company started deliveries of the Model Y in March, promising a much-awaited crossover that will face competition from European carmakers like Volkswagen AG (DE:) rolling out their own electric rivals.

In April, Tesla had said the Model Y was already profitable, marking the first time in the company’s 17-year history that one of its new vehicles turned a profit in its first quarter.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Upcoming NAV Changes For The BDC Sector Yielding 14%


Quick BDC Market Update

As mentioned in previous articles, I was expecting Business Development Company (“BDC”) pricing to pull back from the recent highs for various reasons including profit-taking and a partial return to “risk-off” mode. Please note that most BDC charts look similar to the one below with a peak on June 8 and then mostly down.

I am expecting volatility through July until BDCs start to report Q2 2020 results (see dates at the end). However, I am expecting many BDCs to report stronger-than-expected results including net asset value “NAV” increases, adequate dividend coverage, and reaffirming current dividends. Many of the NAV increases will be due to:

  • Tightening of yield spreads (will impact each BDC differently depending on loan mix)
  • Likely improved valuations related to COVID-19 as many BDCs made large general write-downs due to the uncertainty of the impact as of March 31
  • PPP aid which reduced liquidity and leverage issues for many portfolio companies

It is important to understand that the values BDC management applied to their assets on March 31, 2020, were conservative as we did understand which companies/sectors would be the most impacted. Of course, there will be some increased non-accruals but for most BDCs, this will more than offset by improved valuations on other investments. As these results are reported (mostly in early August), it will drive some positive headlines and another rally in BDC pricing as investors are looking to improve portfolio yield/returns in this low yield environment.

Clearly the potential for additional or renewed lockdowns related to COVID-19 is a concern driving markets lower, including BDCs that are now yielding around 14% (see list below).



This article discusses Monroe Capital (MRCC) that is trading at a 37% discount to book value/NAV for the reasons discussed in “Why Investors Are Selling 12% Yielding Monroe Capital” that also predicted the recent dividend cut almost 6 months ago:

From January 26, 2020: “the quarterly dividend will likely be reduced to between $0.25 and $0.30. This also is shown in the worst-case projections that take into account continued credit issues likely from the investments discussed later in this report”

Issuing Shares Below NAV:

I am often asked about concerns that most BDCs have the ability to issue shares below NAV and hopefully, the following will help.

Most BDCs have the ability to issue shares below NAV typically related to lending facility covenants and/or extreme worst and best-case scenarios. During market volatility, BDCs could temporarily break a bank covenant and be forced to stop paying dividends until the company is back in compliance. The ability to issue even small amounts of equity can easily bring the BDC back into compliance. Also, having this option likely improves lending rates or other terms. I only invest in BDCs with higher quality management that would not issue shares below NAV unless it was an extreme case that could be either bad or good (opportunistic) such as using to make an acquisition at extremely low prices as ARCC did with Allied Capital and was a huge win for investors and NAV down the road:

The Company has also received stockholder approval to issue shares of its common stock under NAV for each of the last eight years (the “Annual Under NAV Approval”), and despite the Company trading below NAV for periods during such time frame, including for most of 2016, it has only used the flexibility provided by the Annual Under NAV Approval one time. In 2009, during a period of significant credit market volatility when credit spreads increased materially, the Company, acting pursuant to the Annual Under NAV Approval, prudently issued shares of its common stock at a price below NAV and invested the proceeds from such issuance at attractive returns to stockholders. These proceeds were also used to create liquidity and financial flexibility in an uncertain time of extreme volatility. While such issuance was at a price below NAV, it resulted in less than a 2.5% dilution in the aggregate net asset value of the Company. Additionally, the Company believes that this financial flexibility was a key component of the Company’s ability to opportunistically acquire Allied Capital Corporation, which transaction was agreed to on October 26, 2009 and closed on April 1, 2010 (the “Allied Acquisition”). The Company’s NAV increased during the one-year period following the date of the Company’s most recently determined NAV prior to such issuance, increasing from $11.21 (as of June 30, 2009) to $14.11 (as of June 30, 2010). The increase in the Company’s NAV from June 30, 2009 to June 30, 2010 includes a $1.11 per share increase related to the gain on the Allied Acquisition. Furthermore, for the one-year period following the date of such issuance, the Company’s total stockholder return outperformed that of every other BDC with a market capitalization of greater than $500 million. Therefore, periods of market volatility and dislocation have created, and may create again, favorable opportunities for the Company to make investments at attractive risk-adjusted returns, including opportunities that may increase NAV over the longer term, even if financed with the issuance of common stock below NAV.

Source: ARCC SEC Filing

MRCC is overleveraged and currently issuing shares through its “at the market” equity program at prices 30% to 40% below book value/NAV and will have a negative impact on upcoming results including NAV per share.

The following information was included in a recent SEC filing:

“this prospectus supplement and the accompanying prospectus. The equity distribution agreements provide that we may offer and sell up to $50,000,000 of our common stock from time to time through the Sales Agents in negotiated transactions or transactions that are deemed to be “at the market offerings,” as defined in Rule 415 under the Securities Act of 1933, as amended. As of the date of this prospectus supplement, we have sold $8.7 million of our common stock under the equity distribution agreements. Our common stock is listed on The Nasdaq Global Select Market under the symbol “MRCC.” On June 23, 2020, the last reported sale price of our stock on The Nasdaq Global Select Market was $7.12 per share. Our net asset value as of March 31, 2020 was $10.04 per share.”

“The table below assumes that we will sell all of the remaining common stock available under the program as of June 23, 2020 of $41.3 million at a price of $7.12 per share (the last reported sale price of our common stock on The Nasdaq Global Select Market on June 23, 2020)…The following table sets forth our capitalization as of March 31, 2020, and on an as adjusted basis giving effect to the $6.2 million of common stock sold from March 31, 2020 to June 23, 2020 at an average price of $7.86 per share and to the assumed sale of $41.3 million of our common stock at a price of $7.12 per share (the last reported sale price of our common stock on The Nasdaq Global Select Market on June 23, 2020) less commissions and expenses.”

It should be noted that as of the writing of this article, the stock was trading at $6.33 (not $7.12) which is a 37% discount to NAV and would have a larger impact if the company is actively issuing shares. Please keep in mind that any shares issued after June 30, 2020, will impact Q3 2020 results (not Q2 2020).

Source: MRCC SEC Filing


Previous Insider Purchases & Ownership:

  • It should be noted that the most recent insider purchases were at prices below $7.00:

Source: Gurufocus


Monroe Capital 5.75% Notes (MRCCL) due 10/31/2023:

I have previously invested in MRCC’s Baby Bond “MRCCL” but sold due to the amount of leverage, lower-quality assets, and declining interest expense coverage all of which increase its risk ranking. As mentioned in previous articles, I rank each Baby Bond using portfolio credit quality and many metrics including the ones listed below.

Please see the following links from Investopedia for more information:


MRCC Dividend Update

One of the methods that I use to assess BDC dividend coverage is my Optimal Leverage Analysis based on portfolio growth using available cash and borrowings (leverage) as well as changes in portfolio yield and potential credit issues. This is a longer-term run rate analysis of coverage that includes “stable” and “lower” portfolio yields with minimal amounts of non-recurring income and is an apples-to-apples comparison using similar amounts of leverage. In May 2020, MRCC announced a quarterly dividend reduction from $0.35/share to $0.25/share.


My Current BDC Investment Plan

My last two major purchases of multiple BDC common stocks were March 12 and March 19 and included 14 higher-quality BDCs. I was lucky and bought at or very near the previous lows and now collecting dividends and:

  • Waiting for BDCs to report Q2 results (see dates below),
  • Watching for preliminary result announcements (similar to NMFC discussed last week),
  • Gathering information (portfolio and capital structure updates),
  • Updating projected changes to NAV and dividend coverage for each BDC,
  • Planning for future purchases.

The information in this article was previously made available to subscribers of Sustainable Dividends, along with:

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.





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