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

[Coolius]

Well, not too painful. With zero div, I'm out $60. Any pro-rated div reduces that.

You will not lose much. MNR-A accrued interest is 0.52 cents/day, per share. For 200 shares, you will be getting 0.0052 * 200 = $1.04/day.

The worst case is they announce a call tomorrow; you then will receive about 23 days accrued interest, ( about $24 ), plus par on day of redemption.

So your max loss is $36. And each day where no call comes, you lower your max loss amount by a dollar.

In 5 weeks from now, you break even. But, from Mulligan's posts - I agree with him, you will likely not have those 5 weeks, unfortunately. Let's hope I turn out to be wrong.

 

[Running_Man]

I think this is important to understand at some point, but it escapes me how to. And I just cant conceptualize "real world family finances" from governmental and Central Banking finances... What is the impact of monetizing the debt? As this isn't possible with my finances, unfortunately... or at that magnitude.... The amount of money and losses is just staggering.
So you are still projecting lower long term rates ( in historical sense) for many years to come still, correct?


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This is nothing that is around the corner, at this point ZIRP is still the order of the day and will continue in my mind for 6-12 more months at a minimum and likely out to 2020. Japan has managed to maintain it since 1995 and the US can maintain this for equally as long unless a major shock hits, so that is my assumptions for the near term (1-3 years) I watch to see if anything major can change this.

Many people do not realize that someone who invested 100,000 in 1920 would have gotten 30 years at 5.32 percent, with a 4 percent withdrawal adjusted for inflation it would be 1947 before you would ever spend as much as $4,000 after 1921. And never for the life of the 30 year bond would the simple interest not have supported an inflation adjusted withdrawal of 4 percent. Deflation is a very powerful force that is being battled. I do not see any imminent claim of victory to be made.

 

[Mulligan]

Took my OSBCP sellings and used that to purchase 700 shares of the Monmouth Realty new preferred in grey market pre IPO sale. Temporary ticker is MONMP. Will be MNR-C eventually... 6.125% par yield. Yep, they are getting lower.

 

[Texas Proud]

Took my OSBCP sellings and used that to purchase 700 shares of the Monmouth Realty new preferred in grey market pre IPO sale. Temporary ticker is MONMP. Will be MNR-C eventually... 6.125% par yield. Yep, they are getting lower.

Well, at least you do not have a call risk with this issue....



Do you know the rating?

 

[Mulligan]

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

Well, at least you do not have a call risk with this issue....



Do you know the rating?

Monmouth is a company I have read about a lot for 18 months...If you think FedEx isnt going anywhere neither is MNR.. They have been joined since 1992. Now Fed Ex has other partners but Monmouth has over 50% of their warehouse reits with them...However they sign 15 year leases. This is a long term partnership. Plus MNR is a traditional company. It aligns the lease with the note. So after 15 years its paid off. They also have not (at least in the past) use leverage...Just finance like a traditional family does. They they do oddly maintain a portion of their money in a "reit income investment portfolio" which some of that money is in UMH which BoD have a cross relationship too. Company has been around since 1968 and the founder is still the CEO.
Additionally in past conference calls, CEO mentioned they are very close to receiving investment grade status and felt that would happen in 2017. Their 4% ish 15 year loans they secured the past year indicates they are all but their also.

 

[Running_Man]

A person will not get rich and famous buying this one, but I like it.


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MNR-C
It is a cumulative preferred that has a call date of Sept 15,2021 and dividends paid do not qualify for the qualified dividend rate. the funds are being delivered to Monmouth on September 13th so I would expect the A preferred will be called as of Sept 15th and no dividends will therefore accrue on the prior issues.

Copy of the prospectus is here:
http://www.snl.com/Cache/35790568.pdf?IID=102974&FID=35790568&O=3&OSID=9
Monmouth is on a roll right now with the stock up 42% YTD, it started the year with a 6.4% common dividend now down to 4.3%. Fed EX exposure is the main risk, loss of that business would sink the company. My expectations are for a company of this quality the price will settle into a range of 26.5 - 27.50 pretty quickly a yield of 5.5 - 5.75 in the present interest rate environment, but that is just an uninformed speculative view on my part, and I am not presently interested in this preferred myself right now

Current quote
https://www.google.com/finance?chdnp=0&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chls=IntervalBasedLine&q=OTCMKTS:MONMP&&ei=SInRV6nLKJeZjAGu7IxI

 

[Coolius]

MNR-C
It is a cumulative preferred that has a call date of Sept 15,2021 and dividends paid do not qualify for the qualified dividend rate. the funds are being delivered to Monmouth on September 13th so I would expect the A & B preferreds will be called as of Sept 15th and no dividends will therefore accrue on the prior issues.

Copy of the prospectus is here:
http://www.snl.com/Cache/35790568.pdf?IID=102974&FID=35790568&O=3&OSID=9

MNR-B is uncallable until its First Call date of June 2017.

 

[Running_Man]

MNR-B is uncallable until its First Call date of June 2017.

Thanks for that!

 

[Coolius]

For the opportunistic ones among us, MNR-B could represent a short term holding yielding more than a Money Market fund. With little risk.

there are 3 more dividends until First call, for a total of $1.47.

MNR-B ask is $26.17. Buying now and holding till First Call yields about $0.30 - 1.1%. Better than keeping your money in a savings or MM account.

But trading commissions will reduce that somewhat - I am holding my MNR-B to FC.

 

[Mulligan]

Coolius, B got to 25.85 yesterday...I was a bit too slow, as I would have parked some money there... Not interested above that price though.

 

[Coolius]

Coolius, B got to 25.85 yesterday...I was a bit too slow, as I would have parked some money there... Not interested above that price though.

Yeah, I see the smart guys are moving in now and scooping up the $26.15 shares - they are guaranteeing a return of 1.1% over the next 9 months ( about 1.3% annualized ).

I suppose if one has millions in cash earning zilch, that is a small way to make some of it work just a tad harder, no?

 

[Sunset]

I'm not sure it's so smart for the poor folk, you can get 1% FDIC at an online bank which I'd rather have than the extra 0.1% for the first 250K as a 0.1% difference would be worth the insurance.

True if you have millions to sink into it, then do both.

 

[youbet]

Took my OSBCP sellings and used that to purchase 700 shares of the Monmouth Realty new preferred in grey market pre IPO sale. Temporary ticker is MONMP. Will be MNR-C eventually... 6.125% par yield. Yep, they are getting lower.

How is the price of monmp being determined? I see it varying around above par. Isn't the seller the issuer at this time? I got 400 at 25.02.

 

[gerntz]

How does one feel about Alcoa?

Their preferred is way below par at ~$34 for a $50 issue, yielding over 7%. I took a chance with 200 shares. What you say?

I say this is the market timers play thread. Enjoy!

 

[Mulligan]

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

How is the price of monmp being determined? I see it varying around above par. Isn't the seller the issuer at this time? I got 400 at 25.02.

Its "Grey Market" randomness...There are different brokerage "runners" divvying out the shares...They already gave Monmouth their money, and now they want theirs...You just have to submit a bid and they will except or reject. I went a little high, but I didnt want to get bid out. No ask prices are ever given on grey market.. They accept or reject...By next week it will become MNR-C and trade officially on the exchanges.
Btw- Youbet...That was a very nice price....Congrats!

 

[Mulligan]

Btw--- Anybody who jumped in with me on AES-C notice the price rise? This is an example of an easy no brainer trade... When an individual illiquid issue comes under price pressure from selling volume and the common stock and bonds are acting fine, the preferred always goes back up once normal slower trading volume begins again... It was back around 12,000 shares today which is closer to its 90 day average (before last week). I wouldnt be surprised if it doesnt climb a bit more when it creeps toward next dividend.

 

[Coolius]

Yes, congratulations to Youbet getting the best price out of all of us on this board.

Anyone bested Youbet on $25.02, speak up now, or forever be silent.......

When MNR-C officially hits the exchanges, there could be selling during the first few weeks as underwriters unload their inventory. I notice that occurs often in new IPOs; if it happens with MNR-C and price swings to par or below, I'm in for a few more.

FedEx outlook is good - especially if you believe the news media hyping that online stores will do better than brick-and-mortar stores over the next several years.

This will support MNR - and if they do achieve investment grade status, well - then we start worrying about MNR-C being called at FC

 

[Mulligan]

Yes that could happen...But compared to its rate quality and where others are trading I dont see a long stay under par if it happens...I am in and content at my price point. Btw- Got my Dad "calmed down". His $25 bid didnt hit so he will goose it tomorrow. He is only going to buy 2000 shares instead of the 6-8,000 shares he was thinking about...Geez....

 

[Sunset]

I know if I have shares in 1 brokerage I can transfer them to another brokerage easily.
How about if I have some of these rare shares in an IRA could I transfer them to a non-IRA account and whatever the value is that day would count as my withdrawal ?

For ordinary shares like GE that are so widely traded, it's not an issue, just sell in 1 account and buy in the other. But with rarely traded shares if you sell some, you might be the only seller that day and somebody could easily snatch them away.

 

[Mulligan]

I have been led to believe transfers of these issues may be problematic. But this only asking people not the brokerage, so I dont really know. I would blow my gasket if they screwed up and I somehow lost my Illiquids. A few of them it may take years to get again if ever. So I wont ever chance it. That is probably the main reason I will not consolidate brokerages.

 

[Winemaker]

400 shares nailed at $25.00 plus $7.95 commission at FIDO this AM.

 

[Sunset]

Yes, congratulations to Youbet getting the best price out of all of us on this board.

Anyone bested Youbet on $25.02, speak up now, or forever be silent.......

When MNR-C officially hits the exchanges, there could be selling during the first few weeks as underwriters unload their inventory. I notice that occurs often in new IPOs; if it happens with MNR-C and price swings to par or below, I'm in for a few more.

I rose to the challenge
Just picked up 800 shares of MONMP/MNR-C at $25.01

It was a bit of a hassle, the brokerage I used would fail at online orders, so I phoned the local office. The guy there was a moron and told me it was delayed today and not trading and to try later, after pointing out I could see different stuff than him, he put me through to the "head office".

There I talked to the fellow and he could see it and transferred me to a broker, the broker was fine, and then as he does the trade he wanted to charge me the broker assisted fee. I disputed this as it should be the online fee since the online system fails. He agreed.
I saw the order pop up after he entered it, and 5 minutes later it was filled.

 

[Mulligan]

Congrats Winemaker and Sunset! It definitely is interesting to see how different brokerages react to initial IPO trading. My dad got his 2000 shares bought this morning at $25... It sat all afternoon yesterday without action.

 

[jim584672]

I have been led to believe transfers of these issues may be problematic. But this only asking people not the brokerage, so I dont really know. I would blow my gasket if they screwed up and I somehow lost my Illiquids. A few of them it may take years to get again if ever. So I wont ever chance it. That is probably the main reason I will not consolidate brokerages.

It should be no problem if the shares are held in street name. They do it with an ACATS transfer from broker to broker.

 

[Mulligan]

It should be no problem if the shares are held in street name. They do it with an ACATS transfer from broker to broker.

Thanks, Jim.....Good to know if I ever want to eliminate one.