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

[Mulligan]

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

Well I couldnt help myself and bought 150 shares of BANC-D in premarket at $24.50. Cant complain about price movements as my BANC-C is up 75 cents already. Since these are in taxable, the allure to hold 8% QDI under par is strong... I may do it, yet... Bought 100 shares of CNLPL at $53.79 mostly to keep from buying more BANC. Unless I get the urge to flip UBP-F which I hope to resist, I am largely tapped out until my 1200 AHT-A shares gets called and then its off to buy again!

 

[Mulligan]

Couldnt stand to hold the BANC preferreds. Not a very conservative bank at all. Took my $300 easy money and am moving on... Need to find something else to buy now.

 

[Freedom56]

There are very few preferred share and exhange traded note bargains today especially with investment grade issues. What is particularly disturbing are the low coupons on new investment grade issues. Instead of buying those overpriced issues, I'm using my cash to support short term trades of preferred CEFs, banks, and certain DOW 30 stocks. I believe a market correction is coming.

 

[Mulligan]

I agree Freedom, the risk of a 15% -20% haircut in the investment grade issues is a real risk. That is why I have most of my investment grade issues in past call "yield trapped" issues. Of course one is taking the call risk to mitigate the risk of price degradation with that option. And plus they are illiquid and very few can participate in such issues. If we would get a significant correction in market, I would start rolling over some money into common stock index funds.

 

[Freedom56]

I would worry more about the non-investment grade preferreds issued by low capitalized over leveraged issuers. Those will take a huge hit.

 

[Mulligan]

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

I try to stay away from them as much as possible anyways..BUT.. believe it or not history shows the high yield non investment grades hold up better in a rate increase environment. Its when you mix in recession or credit lock ups is when they get torched. The investment grade issues compete more head on with CDs and govt bonds so they feel the heat first.
But...The devil is always in the details and some of those companies you mentioned couple topple if overleveraged that is for sure. And I am not smart enough to pick those winners and losers.

 

[Slow But Steady]

Anybody still own GWSVP? I came back from vacation to learn that they've agreed to be acquired by Primo Water Corp.

 

[RE2Boys]

Anybody still own GWSVP? I came back from vacation to learn that they've agreed to be acquired by Primo Water Corp.

Interesting situation. Have they been regularly paying dividends for you? I noted that they can suspend dividend payments for up to 60 months and can't find any record of dividend payments recently.

 

[Coolius]

Interesting situation. Have they been regularly paying dividends for you? I noted that they can suspend dividend payments for up to 60 months and can't find any record of dividend payments recently.

GWSVP: I have a very small position. They have been paying dividends as far back as I know - at least over a year ago. Have not experienced or heard of any skipped payment.

Their financials are very difficult to understand. They don't have clear reporting of revenue streams, and appears to have big liabilities. Advise anyone interested to do their DD and be comfortable before committing to a purchase.

But, strangely, through all this - the dividends have been paid. Go figure.

Mulligan can provide much more details - he did research on it.

 

[Texas Proud]

Anybody still own GWSVP? I came back from vacation to learn that they've agreed to be acquired by Primo Water Corp.

Thanks for the heads up... I had not seen anything on this... and it looks like it was announced on the 10th...


I have not owned it that long, but have received my divis each month....

Looking a Primo's site... it looks like they plan to keep the prefed outstanding... my emphasis.....

Transaction Highlights
The total preliminary transaction consideration is approximately $263 million, consisting of approximately $50 million in cash, approximately $36 million in Primo common stock, approximately $177 million of net indebtedness and preferred stock being assumed or retired, and five-year warrants to purchase 2.0 million shares of Primo’s common stock at an exercise price of $11.88 per share, subject to adjustments based on any increases in Glacier’s debt and certain transaction expenses. The assumed indebtedness includes Glacier’s trust preferred securities due in 2028, which will remain outstanding and will not be affected by the transaction. The acquisition agreement has been unanimously approved by the Board of Directors of both companies. The transaction is expected to close in late 2016, subject to customary closing conditions.
​

 

[Slow But Steady]

I guess I'll hang on to my GWSVP for a while. I do like the monthly dividends.

 

[Running_Man]

On GWSVP there is no news but someone unloaded a large position today and the price fell under 25.50. Now I do not see how they would close out the position before the acquisition closed which should not be for a few more months I would think, though with only 20 shareholders Glacier probably can hurry the completion of the takeover.

Having looked at the trading in GWSVP it appears there is a correlation to Texas Proud mentioning Glacier preferred in May and the price going up over 26 when it had traded around 25.5 for quite a while. I see there are quite a few folks reading this thread at any given time (there were 17 as I write this) so there may be a few secret preferred shareholders getting ideas from this thread and yesterday’s posting may be the cause of the selling, hard to know. I will say this is the best thread with the best exchange of ideas and challenging of ideas with resulting in a highly informative and entertaining thread that Early Retirement Forums has ever had, cumulative knowledge is really something to see.

 

[Coolius]

Decided to sell my very small GWSVP position this morning. Overall a small loss - trade commissions mostly. Had already received a few dividends, and this was not a SWAN holding for me. Simply time to move on.

Realty Income O reported a $0.01 cent miss - and the stock is down 3.5%. Way overblown, but I guess most investors feel O is at a high valuation now.
I sold Puts ( December $55 Puts ), and will be OK holding O at an effective price of $54.50 if it is assigned.

 

[MooreBonds]

Decided to sell my very small GWSVP position this morning. Overall a small loss - trade commissions mostly. Had already received a few dividends, and this was not a SWAN holding for me. Simply time to move on.

As Runnning_Man noted, very funny how the posts in the forum preceded the big drop today, even though the press release had been issued about 2 weeks ago. The press release specifically states that the Trust Preferreds are not going to be effected. Also, in the press release, Primo states that they intend to de-leverage senior debt by 2018 - so it appears their main focus is paying down senior debt, in addition to specifically stating they aren't redeeming GWSVP. Don't know why the sudden rush for the exits. I already own 190, tempted to pick up a few more at around $25.50....

 

[Coolius]

As we all know ( painfully at times ), stocks get dumped for a variety of reasons, totally unexplainable by us retail investors.

Over the past several sessions, I have seen stocks with zero news get dumped like they were going BK. NGHCO is one example, AHT-A is another, and today its GWSVP.

And look at O today ( yes, I know its NOT a preferred stock! ) Misses by 1 cent, and the entire company valuation drops by 4%

If Glacier had better financials and if Primo was a strong established outfit, I might have held on, but with only 100 shares the angst was simply not worth it.

 

[MooreBonds]

And look at O today ( yes, I know its NOT a preferred stock! ) Misses by 1 cent, and the entire company valuation drops by 4%

I dumped O earlier this year in the mid to upper 60s, as the yield was just way too low for my comfort. I'd buy it back, but only with a yield of about 4.75%+.

 

[RE2Boys]

Wow, GWSVP is down 4% on volumes 20+ times average today. And the press release is weeks old but RE discussion is a day old!! Common stock is steady though had a big jump in early October.

What have we done Manipulated the market by discussing it here?

Wonder if previous owner thinks div may be held back?

 

[Slow But Steady]

I took another half a bite of GWSVP at $25.42, even though I already have a full position. Maybe, like Mulligan, I'll flip them when (if) they get back above $26. You may recall that I'm in the process of getting a pension lump sum invested. I hope the pressure of doing so isn't making me go out on a limb on this issue.

I'll bet it was Mulligan flipping his 30,000 share position that made this one drop the way it has.

I also sold some December 55 O puts. I got 82 cents, which sounds like it's a bit better than you got, Coolius. They're at 84 cents now. By the way (mainly so that I can feel like I'm a contributing member of this group) the options coaches at Investools, which is part of TD Ameritrade, say that you should wait until the underlying stock closes above the high of the low day before selling puts. Seems to me that you leave some premium on the table if you do that, but I guess you'd be less likely to get assigned.

Friends, I also appreciate the shared knowledge in this thread. It's one of the things I always read when I sit down at the computer every morning.

 

[Mulligan]

Moorebonds, PM'd me and challenged my manhood. I was left with no option....So, I bought 200 shares at $25.35.... Now lets see if this flea bag outfit pays that divi next month...25 times daily trading volume...Probably bought into a call.

 

[Mulligan]

Slow, we all appear to be nibblers and small bit players, especially on this issue.. Unless some whale lurks within us! And believe me I aint no whale.

 

[Mulligan]

You take out the past year, and its really just trading about its historical pricing right now....Im gonna be stuck with this mutt.

 

[Mulligan]

Ok, I had 6k extra in my cash account and was afraid I would be stupid. I have been watching MER-K lately and decided to buy 250 shares.Next divi is declared...A relative safe play it mid 25.60s with present yield close to 6.3%...Or so I hope. I only have 2 bank issues. Just cant get back in any utes of my liking price point wise.

 

[Mulligan]

Sorry, Moorebonds...I tried and failed. I just sold that flea bag outfit at $25.50.... I have owned that issue twice and maybe have held it a week in total. I swear I am through with it!

 

[Coolius]

Slow, good that you got more than me for the O Puts,

I feel quite comfortable with them, and should we get assigned, I will look at selling Covered Calls 2-3 times a year to supplement the dividend.

Had a small position beginning of this year, got a call exercised at $60 several months ago, watched as it hit $70 - but now its coming back into a reasonable buy range. So to get back in at around $54.50 is a nice situation for me.

 

[Coolius]

Sorry, Moorebonds...I tried and failed. I just sold that flea bag outfit at $25.50.... I have owned that issue twice and maybe have held it a week in total. I swear I am through with it!

Mulligan, you got challenged by MooreBonds as to your manhood, accepted the challenge, and.....LOST?

What happened to the Brave Lord Darth Mulligan that this trainee Jedi Knight looked up to? Should we turn in our light sabers and farm medical marijuana for a living?