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

[Golden sunsets]

What is that fav Mul?


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[Mulligan]

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

What is that fav Mul?


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Ailnp....I had to resort to selling shares to myself to flush out the 85 hidden by the computer bot that sold 1/10th of a penny cheaper than my ask. Only a 1000 shares have traded in past 5-6 years and I got over half of those. Only 4500 total left outstanding. But a coverage ratio of 70 times of after tax income and yield way over 7% investment grade, I will get as many as I can however many years it takes, lol.

 

[aja8888]

Ailnp....I had to resort to selling shares to myself to flush out the 85 hidden by the computer bot that sold 1/10th of a penny cheaper than my ask. Only a 1000 shares have traded in past 5-6 years and I got over half of those. Only 4500 total left outstanding. But a coverage ratio of 70 times of after tax income and yield way over 7% investment grade, I will get as many as I can however many years it takes, lol.

How do you sell shares to yourself?

 

[Mulligan]

How do you sell shares to yourself?

Well I actually didnt sell them to myself, I put them out with an ask higher than bid, and then bought them, knowing some computer bot would jump at last second and steal the sell by 1/10th of a penny. Only 15 shares were mine and the bots 85, so I knew he shot his wad. I then sold the remaining. Its is a QDI issue stuffed in a Roth...Dumb..Didnt want to lose them but needed my tax free space for a debt issue to buy. i cant buy debt issues in my taxable as I get killed on taxes.

 

[aja8888]

Well I actually didnt sell them to myself, I put them out with an ask higher than bid, and then bought them, knowing some computer bot would jump at last second and steal the sell by 1/10th of a penny. Only 15 shares were mine and the bots 85, so I knew he shot his wad. I then sold the remaining. Its is a QDI issue stuffed in a Roth...Dumb..Didnt want to lose them but needed my tax free space for a debt issue to buy. i cant buy debt issues in my taxable as I get killed on taxes.

I'm glad to hear you know what you are doing with these trades.

 

[Mulligan]

I'm glad to hear you know what you are doing with these trades.

Well it still involves luck, as there could have been a hidden all of nothing bid or ask that would have bought or sold other shares. But risk was reasonable. I suspect based on float size there is not 25 owners of the issue.

 

[RE2Boys]

MNR-C has certainly sagged in prie in last week or so, anyone heard any news regarding this issue other than an impending fed rate increase. Also, I have not been able to locate any S&P or Moody's rating on this issue, anyone have info? Thanks so much to you'all for the education.

 

[Mulligan]

MNR-C has certainly sagged in prie in last week or so, anyone heard any news regarding this issue other than an impending fed rate increase. Also, I have not been able to locate any S&P or Moody's rating on this issue, anyone have info? Thanks so much to you'all for the education.

RE, there is nothing wrong with MNR-C payment and quality wise... Its just MNR exploited the bottom trough of the interest rate cycle and sent to market at the perfect time. MNR is a solid company but its not PSA quality. So there will be some rate back up. If it gets under $24 I will repurchase... I flipped out about $25.80 quite a while ago. Im still watching but the real high quality utes backed up enough where I am in them.
They are very close to investment grade as of a few months ago. No worries of ever being paid your dividend.

 

[Coolius]

This morning, saw an offer for 200 shares of AILLL at $25.85.

Was getting ready to move my bid up to take them, when someone had the same idea and snatched them before me.

Now the bid is $25.95, ask $26.30.

For illiquids like these, one has to move fast. Unfortunately, this time I was not fast enough.

 

[Mulligan]

I was at $25.75 hoping he would cave, but someone went right to ask price and snatched them... I figured it was you!

 

[Coolius]

Unfortunately, my GTC bid was lower than you ( at $25.70 ). You would have taken them first!

There's always another day.....

 

[Mulligan]

Ok, time for an update....DTZ officially got called decided to just take my fast food dinner profits and run... Kind of switched gears on last few purchases... Bought C-N today, SIVBO Monday, and ASRVP last week.
C-N has the huge kicker with libor yielding over 7%. SIVBO a yield near 7% and worth the risk now a month has passed since last divi. And ASRVP is a shameless yield chase of 8% from a tiny stuck in the mud bank. Severe head winds on income issues, so I keep reaching higher in yield and past call, above par (well that never changes, lol). Increasing consumer confidence, inflation over 2%, increased working income, interest rates climbing, economy growing, pro growth eco plan on drawing board from new administration.... This is what I call headwinds! Oh well, not losing any sleep over it.

 

[MooreBonds]

DTZ officially got called decided to just take my fast food dinner profits and run... Kind of switched gears on last few purchases... Bought C-N today, SIVBO Monday, and ASRVP last week.
C-N has the huge kicker with libor yielding over 7%. SIVBO a yield near 7% and worth the risk now a month has passed since last divi. And ASRVP is a shameless yield chase of 8% from a tiny stuck in the mud bank. Severe head winds on income issues, so I keep reaching higher in yield and past call, above par (well that never changes, lol).

Managed to sell my DTZ at $25.12 today (bought at $25.05 a few days before the call! lol...$13 loss after commissions). I had owned ASRVP a while back, and had it called during their partial call, but decided to give it a second chance, and picked up my standard 100 at $26.25. Hope I at least get my purchase covered before they think about stealing it away from me a second time!

I don't know why C-N isn't called. I have a few 3MoLIBOR+fixed in a few others, which are yielding about 6%+ currently (and can't be called for several years), but didn't feel like rolling the dice with C-N at almost $26.

 

[Mulligan]

Got good news for... Ameriserve in latest 10q laid it out they had resources to easily pay trust div and other payments for coming 12 months. I researched and they didnt call the issue previously, they converted it to commons. Back in 04 ish when it happened they had too as they didnt have resources to pay entire issue. Only 13 million now not 34 mill. C-N. Its in the black in 5 months. Next divi declared. Only 40 cents shy at end of Jan for break even. Im fine with the gamble. But it isnt for everyone as it is in danger big time. Im hoping for a year. But with bank out of danger i will keep til called.


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[Texas Proud]

OH WOW!!!!


I am trying to sell my latest batch of shares on my experiment of buying and flipping PS.... still have a few days until my next one goes ex divi so not in a rush...


BUT, I just looked at the time&sales and guess what the last trade was? 25.5499.... and what do I have mine at ask 25.55....

 

[Mulligan]

OH WOW!!!!


I am trying to sell my latest batch of shares on my experiment of buying and flipping PS.... still have a few days until my next one goes ex divi so not in a rush...


BUT, I just looked at the time&sales and guess what the last trade was? 25.5499.... and what do I have mine at ask 25.55....

Welcome to the lovely bot attack...You can show low ask price, and as a person is hitting buy button at your ask price, their sell intercepts it before hitting your sell price. Sometimes they do this to goad you lower and buy your shares at lower price, too.

 

[MooreBonds]

Added 2 new horses to the team:

SAN-A - non-cumulative for Banco Santander (Spanish bank). It has four non-cumulative preferreds currently outstanding. 3 of them are past call date. The highest has been callable for years, and has a coupon of 7.3%! (a holdover from Soverign Bancorp, which they bought several years ago). Currently around 25.75. Since they haven't called that one, I opted for the SAN-A issue, with a coupon of about 6.8%, and trading a hair above call at $25.08. Worst case, I earn 1% until next call in Feb. Best case, it's over a 6% yield (over 6.5% if I get to keep it for a few years), and should be called 2nd in line. The highest yielder is about $200MM issue, and the A is about $320MM, so they'd need to do more than just open a teller's register to redeem. I might have gone for the SOV-C if I had researched it to death like Mulligan. Might make the SOV-C my next target when my other pitiful preferreds get to work and start bringing home the bacon.

RILYL - callable in 2 years, final maturity in 5 years. A senior note for a financial firm. Relatively new issue, just issued November 1. Coupon is 7.5%. Picked it up at a hair over $25.40. YTC is at least 6.5%, with YTM of over 7%.

 

[Sunset]

Sold 200 CBB-B at 50.27 as I have a lot in this and wanted to take some profit.

Made a small capital gain after expenses, and of course collected 1 nice sized dividend for those shares.

 

[Winemaker]

Added 2 new horses to the team:

SAN-A - non-cumulative for Banco Santander (Spanish bank). It has four non-cumulative preferreds currently outstanding.

The drawback of owning foreign stocks in my tIRA, 401k, or Roth, is the foreign taxes. They take their fair share, but I feel I'm losing the compound effect in the divvies over time. I thought I avoided it with a Puerto Rican bank that paid monthly, but I was mistaken. Taxes and me don't get along.

 

[Mulligan]

I added one horse to the team. A small horse, 200 shares of UBP-F today at $25.37. It takes money to buy a bigger horse, so I had to settle for a pony. My accounts are totally drained or fully maxed with stocks, depending on ones viewpoint. Not in the mood to sell right now, so I may be done for the year trading, until its time to fund the HSA next month. I got my total stash yield inched above 7% and that is about as high as I can take it. Of course having freebee safe yields of FIISO and a nice slug of AILNP helps me over the 7% bar without a lot of undue risk taking. Though I do own a small amount of stinkers in just enough amount to push me over my self imposed yield level.

 

[MooreBonds]

The drawback of owning foreign stocks in my tIRA, 401k, or Roth, is the foreign taxes. They take their fair share, but I feel I'm losing the compound effect in the divvies over time. I thought I avoided it with a Puerto Rican bank that paid monthly, but I was mistaken. Taxes and me don't get along.

Hmm...forgot that they are a foreign bank, Winemaker. Thanks for pointing that out. I actually own SAN common stock in my taxable account, but didn't look that closely at it. They withhold 19% from each dividend payment, AND to add insult to injury, they also deduct a $1.50 ADR fee from EACH DIVIDEND PAYMENT! Definitely looks like one for the taxable account. No wonder the damn thing yields so much!

However, on a related note....I had saved this paragraph from when I made the mistake of buying a DORAL preferred. It was in one of their annual or quarterly reports, and applies to all Puerto Rico-based dividends

United States Citizens Not Residents of Puerto Rico.

Dividends paid on the preferred stock or the common stock to a United States citizen who is not a resident of Puerto Rico will be subject to a 10% Puerto Rico income tax, which will be withheld by us or our transfer agent. These individuals may also elect for the dividends to be taxed in Puerto Rico at the normal income tax rates applicable to individuals in the same way as Puerto Rico resident individuals. The 10% Puerto Rico income tax withheld is creditable against the normal tax so determined by said individual shareholder. No 10% Puerto Rico income tax withholding will be made if such individual shareholder opts out of the 10% withholding tax and timely files with his broker a withholding exemption certificate to the effect that the individual’s income from sources within Puerto Rico during the taxable year does not exceed $1,300 if single or $3,000 if married (see “— Special Withholding Tax Considerations” below).

I currently hold one Puerto Rico bank preferred (BPOPP) at an account at TD Ameritrade, and no Puerto Rico tax is withheld from my monthly dividends.

 

[Mulligan]

Hmm...forgot that they are a foreign bank, Winemaker. Thanks for pointing that out. I actually own SAN common stock in my taxable account, but didn't look that closely at it. They withhold 19% from each dividend payment, AND to add insult to injury, they also deduct a $1.50 ADR fee from EACH DIVIDEND PAYMENT! Definitely looks like one for the taxable account. No wonder the damn thing yields so much!

However, on a related note....I had saved this paragraph from when I made the mistake of buying a DORAL preferred. It was in one of their annual or quarterly reports, and applies to all Puerto Rico-based dividends

I currently hold one Puerto Rico bank preferred (BPOPP) at an account at TD Ameritrade, and no Puerto Rico tax is withheld from my monthly dividends.

Big fan of Puerto Rico, huh Moorebonds? You own almost as much PR stuff as I do US sovereign banks, lol.

 

[Slow But Steady]

The other day I changed my 8.45% AHT-D for 7.375 AHT-G. The yield was about the same, since the G shares were trading well under par. The G shares have since gained 2% or so in value. I'm hoping for more gain in the long run.

I did sell and buy a like number of shares, so overall I lightened up on my AHT holdings.

On the "Ughhh" side, a while back, I sold half my AHT common shares, and they are up 15% since then. I'm trying to remind myself that you never go broke by taking a profit.

 

[jim584672]

WFC-L down to 1164, 6.44% current yield. Bond market is getting killed. 2.46% 10 year note and still rising.

 

[Mulligan]

WFC-L down to 1164, 6.44% current yield. Bond market is getting killed. 2.46% 10 year note and still rising.

I was noticing the WFC-L. It has a higher yield than BAC-L which is odd. I have largely had my holdings stay in tact because I bought above par past call yield trapped issues. BUT...It hasnt gone unnoticed that the liquid quality preferreds have sold off so much their yields are the same as mine now...Translation...Next leg down my go down too...So I did so modest portfolio moving the past few days. Going low yield and term dated... Bought 300 shares yesterday of GDL-B at $50.55 and $50.58. Bought 300 shares of KYN-F at $25.38. Today I took advantage of a big seller and bought 1000 shares of PFK at $25.40 which is a monthly CPI plus 2.4% yield kicker. GDL and PFK mature in spring 2018 and KYN does in 2020. A good place to hide out with much lower yield but safe and capital will be returned in full at par.