Preferred Stock Investing-The Good , The Bad and The In Between 2015 - 2020

[Coolius]

Mulligan was toying around with some Variables in the past - I forget now what they were.

I have no issues against Variables so long as the fixed component is reasonable ( usually variables are based on LIBOR + some bps ).

I did own CHSCM for a while last year, but sold and now no longer in it.

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

I had asked before but got no answers....


Any recommendations on a variable issue?


I had bought NSS, but I just looked and their rating is going down... with negative outlook as they are putting on more debt and pref..... I will probably keep it for now....

Im not too worried about NS as this increased debt was to acquire good permian assets. But it aint the shining star in the sky. I bet they cut the common divi. NSS sits on top of 700 million in preferreds besides the commons. I will watch the debt to EBITA. They said it would be reduced some this year. If ratio goes higher I may run. But Im fine now. Only other one I own is GJO. I am more into term dated preferreds.... One thing to be mindful of is this. Last year Libor raised and long end didnt. It is possible long end could rise and Libor doesnt. So Libor isnt infallible. Term date at least you have a defined exit point.
There are some funds or CEFs that invest in variable rate loans. But I suspect these loans are not to pristine companies.

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

CNLPL, CNTHP, AILLL and WFC-L are the only preferreds I own (thanks Mul and Coolius for your contributions to this thread over the last 3years) and the only individual preferreds my Mom owns.... So I guess I'll hang tough and not try to venture further into the category. My Mom does own some PFF though, has for years, and I'm debating selling out of that position.


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Golden those are the perfect preferreds for a “motherly income”. If the approx. 6% fits the needs, the price movement is irrelevant as the safety is extremely high. Nothing wrong with a bit of PFF added either for income.

 

[Texas Proud]

Im not too worried about NS as this increased debt was to acquire good permian assets. But it aint the shining star in the sky. I bet they cut the common divi. NSS sits on top of 700 million in preferreds besides the commons. I will watch the debt to EBITA. They said it would be reduced some this year. If ratio goes higher I may run. But Im fine now. Only other one I own is GJO. I am more into term dated preferreds.... One thing to be mindful of is this. Last year Libor raised and long end didnt. It is possible long end could rise and Libor doesnt. So Libor isnt infallible. Term date at least you have a defined exit point.
There are some funds or CEFs that invest in variable rate loans. But I suspect these loans are not to pristine companies.

GJO does not interest me as it is LIBOR + .5.... it is safe, but not the yield I am looking for...

I have seen a few with + 3 to 4 something, but not as good as NSS...

I looked at every one on Quantum and nothing stands out...


SOOO, any term that is less than face besides SPLP? I have enough of that... and term that is not so far in the future that I will be long gone...

 

[Mulligan]

GJO does not interest me as it is LIBOR + .5.... it is safe, but not the yield I am looking for...

I have seen a few with + 3 to 4 something, but not as good as NSS...

I looked at every one on Quantum and nothing stands out...


SOOO, any term that is less than face besides SPLP? I have enough of that... and term that is not so far in the future that I will be long gone...

I wouldnt reject above par on term dated as you just punch in YTM calculator to determine if it meets your needs. There are several term dated brokerage/investment firm baby bond preferreds out there in the 4-10 year range. I bought 600 more (I think that was the number) last week of LANDP at 25.88 and bagged the monthly divi of 13 cents. YTM is about 5.5% for 2021. They can call 9/2018 but that isnt Gladstone’s MO....So I am not worried...If they did it is 2.5% YTC. It spiked today but it could be in 25.80s tomorrow as it bounces up and down a bit. I got a buttload of that right now....You probably dont want to be patient, but I got some CNIGO which is a nice 2023 term dated gas utility preferred.

 

[Mulligan]

Texas keep an eye on INBKL...It may sag to a price point worth entering. It is a fixed to floater in 2021 if they dont call... Some of the utility stocks are starting to sag rather quickly... If 3 or 4 water utility common stocks sag enough to get close to 4% yield this year, I am moving big money (for me) to them and just watch the 50 plus year consecutive annual divi increases continue and call it an investing career.

 

[Bruceski44]

Pacific Gas & Electric suspends common and preferred dividends!

https://seekingalpha.com/news/33195...tential-fire-related-liabilities?v=1513817463

In CA, they can be held liable for damages if their equipment is shown to have caused the recent wildfires and ensuing destruction.

 

[Mulligan]

https://seekingalpha.com/news/33195...tential-fire-related-liabilities?v=1513817463



In CA, they can be held liable for damages if their equipment is shown to have caused the recent wildfires and ensuing destruction.

I like utes but never Edison or PGE. PGE is a bad luck company stuck in an unfriendly environment and charges outrageous KWH pricing begging greenies to abandon them. They have been bankrupt before and for heavens sake built a nuke on a fault line. I never trusted them.

 

[REWahoo]

I like utes but...

What's a "ute"?

 

[Mulligan]

What's a "ute"?

Good stuff!

 

[aja8888]

What's a "ute"?

The ones I know of are here:

The Utes have a tribal membership of 2,970 and over half of its membership lives on the Reservation. They operate their own tribal government and oversee approximately 1.3 million acres of trust land. The Utes also operate several businesses including a Super Market, Gas Stations, Bowling Alley, Tribal Feedlot, Uinta River Technologies, Ute Tribal Enterprises LLC and Water Systems. Cattle raising and mining of oil and natural gas is big business on the reservation. Water Systems manager provides water and sewer needs for several communities.

http://www.utetribe.com/

 

[MooreBonds]

I don't remember who took a fleeting interest in the Toys R Us trust securities....but just to finally put your curiosity to bed - I noticed in my TD Ameritrade account that I had XKE redemeed at $2.2247/share (original par value $10/share). Better than a sharp stick in the eye.....but nowhere near what I was hoping for when I bought it in the 9s or thereabouts. Also, fairly quick action for a bankruptcy proceeding.

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

I don't remember who took a fleeting interest in the Toys R Us trust securities....but just to finally put your curiosity to bed - I noticed in my TD Ameritrade account that I had XKE redemeed at $2.2247/share (original par value $10/share). Better than a sharp stick in the eye.....but nowhere near what I was hoping for when I bought it in the 9s or thereabouts. Also, fairly quick action for a bankruptcy proceeding.

I think only you did, Moorebonds! Lets stick with ones that will actually pay and not go bankrupt. You pull another stunt like this and I am seeking conservatorship control over your assets to make sure you have money when you retire. And I will do this gladly without cost to you or any Ed Jones type fees and costs. [emoji4]
You been laying low lately, must be working hard lately?
Im flirting with Moorebonds type trouble myself. Bought 300 more shares of NSS. This would leave a serious welt on my wallet if they went under. Im gonna keep a wayward on this one and hope they dont call, and start collecting that juicy 8.4% come April.

 

[MooreBonds]

I think only you did, Moorebonds! Lets stick with ones that will actually pay and not go bankrupt. You pull another stunt like this and I am seeking conservatorship control over your assets to make sure you have money when you retire. And I will do this gladly without cost to you or any Ed Jones type fees and costs. [emoji4]
You been laying low lately, must be working hard lately?
Im flirting with Moorebonds type trouble myself. Bought 300 more shares of NSS. This would leave a serious welt on my wallet if they went under. Im gonna keep a wayward on this one and hope they dont call, and start collecting that juicy 8.4% come April.

LOL....been busy with a little crowdfunding real estate deals, as well as trying to wrap up various final details on a remodeling project. Meant to put a few words on that thread, but never got around to it. I did manage to see your post about picking up some MH-A, thanks for mentioning that, since I hadn't noticed it dipped below 25. I snagged 200 with some cash that came from some calls, cost about $24.90. Then saw it drop the next day by another quarter.

Oh, and also came to my senses and sold off my HLM preferred above $34. Made a nice little cap gain of about $1, plus some king-sized dividends for a few months, but crunched the yield to maturity again and didn't find it worth the risk that they end up calling the damn thing early and wiping out $9/share (I think it was only in the high 7% range).

 

[Mulligan]

LOL....been busy with a little crowdfunding real estate deals, as well as trying to wrap up various final details on a remodeling project. Meant to put a few words on that thread, but never got around to it. I did manage to see your post about picking up some MH-A, thanks for mentioning that, since I hadn't noticed it dipped below 25. I snagged 200 with some cash that came from some calls, cost about $24.90. Then saw it drop the next day by another quarter.



Oh, and also came to my senses and sold off my HLM preferred above $34. Made a nice little cap gain of about $1, plus some king-sized dividends for a few months, but crunched the yield to maturity again and didn't find it worth the risk that they end up calling the damn thing early and wiping out $9/share (I think it was only in the high 7% range).

I need to start putting The Bottle away when I start posting my last three trades....GWSVP, MH-A, and more NSS...Ugh! Wait, I did sneak in a little purchase of TY-, but that hardly makes up for the other 3....I never could find out the mystery to HLM and why it never was redeemed.
Hey here is a good one for ya...PCG-A....Trading near $29, for a 6% $25 par...And they suspended the dividend and the preferred was up today...Who in the hell would pay $29 with a 5.24% yield on an issue that has suspended payments? There are only about a million preferreds that type of yield out there that actually will pay the next divi payment.

 

[MooreBonds]

I never could find out the mystery to HLM and why it never was redeemed.

From what I could tell, it appeared they were expensing/depreciating the entire face value of the issue somehow on their balance sheets over so many years. My guess is that they might redeem it if/when they reach $0 - but that's just a guess after breezing through their balance sheets for a few mins.

Hey here is a good one for ya...PCG-A....Trading near $29, for a 6% $25 par...And they suspended the dividend and the preferred was up today...Who in the hell would pay $29 with a 5.24% yield on an issue that has suspended payments? There are only about a million preferreds that type of yield out there that actually will pay the next divi payment.

Well, I'm guessing that if someone is willing to pay for an illiquid preferred that yields 5% just for the trophy aspect of it (cough cough), a 5.24% yield on a company that might be shoring up its finances by suspending the dividend on a cumulative issue might not look so bad after all. Maybe people want to be able to brag about having stock in a utility that might have caused the CA brushfires?

 

[Texas Proud]

I don't remember who took a fleeting interest in the Toys R Us trust securities....but just to finally put your curiosity to bed - I noticed in my TD Ameritrade account that I had XKE redemeed at $2.2247/share (original par value $10/share). Better than a sharp stick in the eye.....but nowhere near what I was hoping for when I bought it in the 9s or thereabouts. Also, fairly quick action for a bankruptcy proceeding.

It was me since I saw them go down so fast...

But, I bet that this was a prepackaged BK... IOW, the people who owned most of the debt all agreed to this prior to them going into BK...

Glad you got some value in the end... as you say, better than nothing...

 

[Winemaker]

I sold my PNC-P this week for $28.44, a 6% issue I bought 8/13 for $24.51. I can't figure out why it has been so high, but I figured I can pick up something at a better price, better yield.

Mully, you are starting to get in my head...

 

[Mulligan]

From what I could tell, it appeared they were expensing/depreciating the entire face value of the issue somehow on their balance sheets over so many years. My guess is that they might redeem it if/when they reach $0 - but that's just a guess after breezing through their balance sheets for a few mins.




Well, I'm guessing that if someone is willing to pay for an illiquid preferred that yields 5% just for the trophy aspect of it (cough cough), a 5.24% yield on a company that might be shoring up its finances by suspending the dividend on a cumulative issue might not look so bad after all. Maybe people want to be able to brag about having stock in a utility that might have caused the CA brushfires?

Well the trouble is they are not too common. 800,000 shares traded of the A yesterday.....So no antique value there even though it was issued in 1919.

 

[Mulligan]

I sold my PNC-P this week for $28.44, a 6% issue I bought 8/13 for $24.51. I can't figure out why it has been so high, but I figured I can pick up something at a better price, better yield.

Mully, you are starting to get in my head...

Well just think, Winemaker, if you start doing some more trading you stay out longer from underneath your wife’s feet at home. So whatcha gonna buy now?

 

[Winemaker]

Well just think, Winemaker, if you start doing some more trading you stay out longer from underneath your wife’s feet at home. So whatcha gonna buy now?

I just might delve into some more CBL-D, I think it is way over sold. It was at record low yesterday, but it was just recently issued. I don't think retail is dead, but I think there is over saturation of malls. Look at Subway,the sandwich shop. You can't go 1 mile in any direction and not find one; I think they closed over 900 stores this year. Of course, the Jared creep, didn't help much there.

 

[Mulligan]

I just might delve into some more CBL-D, I think it is way over sold. It was at record low yesterday, but it was just recently issued. I don't think retail is dead, but I think there is over saturation of malls. Look at Subway,the sandwich shop. You can't go 1 mile in any direction and not find one; I think they closed over 900 stores this year. Of course, the Jared creep, didn't help much there.

As a speculative play, I can see that trade. I have looked and looked at it, but cant fully grasp enough to trust. The idiot buffoon Seeking Alpha “experts” run everybody into the ground over this company. Such dolts those writers thinking cash flow is the secret sauce to everything. Even I am not that dumb. Something just isnt right there, though the preferreds could be a great buy. Record retail foreclosures still hanging around, mall rents going down, massive need for facility upgrades. And I dont understand their recourse and non recourse debt situation.
CBL had a perfect example nearby here...They owned a mall worth $270 million in 2007. They turned over the keys to the bank which sold it this year for about $60 million. And this mall was in a nice location and it still got its tail whipped. How many of these type of CBL beatdowns are there hiding in the weeds? Hard to find safe 8% yields out there that is for sure.

 

[Sunset]

Due to this talk, I looked at CBL, the company shares sure look like a deal at $5.75 with a ~13.94% dividend after they cut the div by 1/4, and I'm thinking what has improved in retail ?

One thing I found odd, was they talked about rebranding from CBL Assoc... to CBL Properties to better reflect what they do. Why did it take them so many years to figure that out, seems pretty obvious and not reassuring in the management.

Of course I'm the dummy who sold CAT much earlier because their div was all their profit

So I know nothing....

 

[Winemaker]

As a speculative play, I can see that trade. I have looked and looked at it, but cant fully grasp enough to trust. The idiot buffoon Seeking Alpha “experts” run everybody into the ground over this company. Such dolts those writers thinking cash flow is the secret sauce to everything. Even I am not that dumb. Something just isnt right there, though the preferreds could be a great buy. Record retail foreclosures still hanging around, mall rents going down, massive need for facility upgrades. And I dont understand their recourse and non recourse debt situation.
CBL had a perfect example nearby here...They owned a mall worth $270 million in 2007. They turned over the keys to the bank which sold it this year for about $60 million. And this mall was in a nice location and it still got its tail whipped. How many of these type of CBL beatdowns are there hiding in the weeds? Hard to find safe 8% yields out there that is for sure.

As a real estate investor myself, cashflow is important. Although all of mine are profitable, one can still put money in one's pocket, and show a taxable loss. It is also the main factor factor in oil, mining, pipeline, and timber industries.

I can remember back in late '70's while while working on my MBA, the accounting professor taught a business model where one could buy a pickup, chainsaw, a piece of land and make $10,000/year tax free. One would have to spend a lot of time cutting down trees for firewood, but firewood was pretty expensive during the "energy crisis".

 

[Mulligan]

Due to this talk, I looked at CBL, the company shares sure look like a deal at $5.75 with a ~13.94% dividend after they cut the div by 1/4, and I'm thinking what has improved in retail ?

One thing I found odd, was they talked about rebranding from CBL Assoc... to CBL Properties to better reflect what they do. Why did it take them so many years to figure that out, seems pretty obvious and not reassuring in the management.

Of course I'm the dummy who sold CAT much earlier because their div was all their profit

So I know nothing....

Sunset, I just dont think there is a right or wrong answer to any stock. It just depends on what the goals, expectations, and risk levels in relation to how much percentage of portfolio one is buying it with...As an overkill scenerio....CBL-D.... Scenerio 1... Buying my standard allotment as part of my higher risk portfolio strategy......Sounds reasonable to me.... Scenario 2.... Backing up the truck and going all in...I need 8% to barely get my monthly bills paid..... Same stock but one strategy is just plain stupid while the other one sounds pragmatic.

From my observations, buying common stock to chase high yield dividends, usually ends up in more tears than chasing it more in preferreds. Though with CBL that is very obvious since the common yield is well above preferred yield (which is considered high yield in and of itself, also)