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

[Mulligan]

Coolius, you seen AHT-D today? How does that stock get any sleep? Every morning its taken back behind the wood shed with pants pulled down and beat hard for 7 hours. Rinse and repeat...


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[Coolius]

Quote:

Originally Posted by Mulligan Coolius, you seen AHT-D today? How does that stock get any sleep? Every morning its taken back behind the wood shed with pants pulled down and beat hard for 7 hours. Rinse and repeat... Sent from my iPad using Tapatalk

yep, simply watching in amazement. the energy sector looks totally ravaged.

even my favorite, WFC-L, has not been spared. A few very scared sellers today, dumping for whatever reason. Down $10 a share to $1,165. if I didn't already have an overweight position, would be sorely tempted to add. ( BTW, my original cost basis for WFC-L is $1,192 per share, so I feel the pain as well )

[aja8888]

I think it's time to buy some CHSCM.

[Mulligan]

Quote:

Originally Posted by aja8888 I think it's time to buy some CHSCM.

I watching what do you think?


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[aja8888]

I am going to pick up 200 shares. It dipped below $25 a while ago.

[Mulligan]

Quote:

Originally Posted by aja8888 I am going to pick up 200 shares. It dipped below $25 a while ago.

I almost bit at $24.60 something. Comfortable with the CHSCL I have as I got most at $25.15 when issued... I really had a couple other issues on my mind, but cant get them to budge...


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[aja8888]

Quote:

Originally Posted by Mulligan I almost bit at $24.60 something. Comfortable with the CHSCL I have as I got most at $25.15 when issued... I really had a couple other issues on my mind, but cant get them to budge... Sent from my iPad using Tapatalk

When I went in, bid was much higher as I missed the earlier dip down as I was buying my daughter lunch at the time. She owes me!

[Mulligan]

Quote:

Originally Posted by aja8888 When I went in, bid was much higher as I missed the earlier dip down as I was buying my daughter lunch at the time. She owes me!

I think you know that isnt happening...She is your daughter. She has cost you since birth and that wont ever change. But hey, you still caught at good price. I just couldn't pull the trigger. I already am into Ag enough through it and another convertible.


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[Mulligan]

No fire sales on the utility preferreds. In fact little changed, one up, one down, and rest unchanged. Through in the towel and continued my build up of BGEPF for a very long term hold.


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[Mulligan]

I dont like to sell my favorites, but someone really wanted CNLPL, so I sold 250 of them over $55.That is a years worth of dividends paid up front. Will wait for the nutty buying to subside and reenter closer to $52 later, unless I find something else.
Had a little fun with AILLL before that. Had extra money to buy some more and continue to accumulate. Not being greedy but I wanted them at $26.03, so I threatened a 1000 share sell dump from a safe ask price lurking in the shadow. That caved them to sell fearing that block would come down and dump.
Also bought a couple more hundred GJP. I accumulate these as a long term play, that counters perpetual preferreds. Sometime in the next 20 years the 3 month treasury will go above 1.85% and every basis point above that goes to the 3.65 yield plus the $4 plus cap gain is always in the pocket long term.


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[Coolius]

For those who may be interested , there is an article on Seeking Alpha about Wells Fargo preferred stocks.

Perhaps it can help clarify some of the reasons why the WFC-L series, even at a PPS of $1,170, is a reasonable buy-and-hold for a steady income stream.

Author is Vlae Kershner, so you can search for his articles.

Title is:
One Of These Preferreds Is Overpriced - Another Is A Bargain

[Mulligan]

Got all my tax free space all filled up again... Got 500 shares in on a few different trades this morning on KTH (PECO energy trust preferred) in the $31.40s... Very satisfied to hold this as its an A3 grade and mandatory termination 2028 with no call possibility. This may be my favorite next to my Amerens....Sounds like a long time away, but heck I wont even be at retirement age yet when it matures, and I have been retired for 6 years already.


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[aja8888]

Quote:

Originally Posted by Mulligan Got all my tax free space all filled up again... Got 500 shares in on a few different trades this morning on KTH (PECO energy trust preferred) in the $31.40s... Very satisfied to hold this as its an A3 grade and mandatory termination 2028 with no call possibility. This may be my favorite next to my Amerens....Sounds like a long time away, but heck I wont even be at retirement age yet when it matures, and I have been retired for 6 years already. Sent from my iPad using Tapatalk

Why was KTH down $1.55 today to $31.00 ?

[Mulligan]

Quote:

Originally Posted by aja8888 Why was KTH down $1.55 today to $31.00 ?

Somebody was unwinding a position. Average daily volume is 900 and 12,000 traded today. Anytime someone unloads an illiquid this is what happens. Just yesterday when it wasn't trading I sold a couple hundred shares at $33 that I bought at $31 a few weeks ago. When I saw the dump going on I jumped in, just a hair too early, but not as early as some getting them at $32. A person just never knows how deep the dump is as they hide and hold back available shares. It got under 31 then jumped back it appears. If more were available I would buy more if I had more tax free space. Paying 31% in taxes on this issue would not make this as inviting of a purchase in a taxable account for me. Im fine with the 31.40 purchase price.
This is the one problem with accumulating a big stash in an illiquid and needing to sell them all. I would face this same problem if I ever had to sell AILLL, but I never plan on selling.


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[aja8888]

Quote:

Originally Posted by Mulligan Somebody was unwinding a position. Average daily volume is 900 and 12,000 traded today. Anytime someone unloads an illiquid this is what happens. Just yesterday when it wasn't trading I sold a couple hundred shares at $33 that I bought at $31 a few weeks ago. When I saw the dump going on I jumped in, just a hair too early, but not as early as some getting them at $32. A person just never knows how deep the dump is as they hide and hold back available shares. It got under 31 then jumped back it appears. If more were available I would buy more if I had more tax free space. Paying 31% in taxes on this issue would not make this as inviting of a purchase in a taxable account for me. Im fine with the 31.40 purchase price. This is the one problem with accumulating a big stash in an illiquid and needing to sell them all. I would face this same problem if I ever had to sell AILLL, but I never plan on selling. Sent from my iPad using Tapatalk

I can't find this issue on Yield Hunter?

[Mulligan]

Quote:

Originally Posted by aja8888 I can't find this issue on Yield Hunter?

Aja, try quantumonline.... And use it.... This (like most of mine) arent home runs, but singles. It is a $25 par trust preferred with a PECO non callable subordinate bond as the underlying issue with $27.10 mandatory call price in 2028. It is not callable. It only pays twice a year and the next 6 month $1 dividend is coming in April. I like part of my money in a terminating date issue.
http://www.quantumonline.com/search.cfm



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[aja8888]

Quote:

Originally Posted by Mulligan Aja, try quantumonline.... And use it.... This (like most of mine) arent home runs, but singles. It is a $25 par trust preferred with a PECO non callable subordinate bond as the underlying issue with $27.10 mandatory call price in 2028. It is not callable. It only pays twice a year and the next 6 month $1 dividend is coming in April. I like part of my money in a terminating date issue. Search Results - QuantumOnline.com Sent from my iPad using Tapatalk

Thanks, aren't these pretty expensive preferreds? In down markets they revert back to the offering price and even have slipped below it.

[Mulligan]

Quote:

Originally Posted by aja8888 Thanks, aren't these pretty expensive preferreds? In down markets they revert back to the offering price and even have slipped below it.

My thinking is ALL preferreds can sink to par or below if market collapsed or inflation ran rampant again. That is why I like the mandatory call. It serves as a backstop. It could drop to $10 and I know in 2028 I am getting $27.10 back no matter what. This works out to around 5.7% or so YTC for an A3 issue from a utility that owns no power plants. A perpetual issue does not provide that protection.
Though I imagine my YTC will be higher if I sell a year prior to maturity. Assuming nothing changes, the market usually will not allow an 8% one year bond at $27.10 with an A3 rating at start of 2027. That is too much of a free lunch for a one year bond. But either way I am comfortable riding it out until call. But as I have said before I am not swinging for the fences, just trying to leg out some infield hits.


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[Coolius]

Quote:

Originally Posted by Mulligan My thinking is ALL preferreds can sink to par or below if market collapsed or inflation ran rampant again. That is why I like the mandatory call. It serves as a backstop. It could drop to $10 and I know in 2028 I am getting $27.10 back no matter what. This works out to around 5.7% or so YTC for an A3 issue from a utility that owns no power plants. A perpetual issue does not provide that protection. Though I imagine my YTC will be higher if I sell a year prior to maturity. Assuming nothing changes, the market usually will not allow an 8% one year bond at $27.10 with an A3 rating at start of 2027. That is too much of a free lunch for a one year bond. But either way I am comfortable riding it out until call. But as I have said before I am not swinging for the fences, just trying to leg out some infield hits. Sent from my iPad using Tapatalk

A 5.7 YTC ( or YTM ) is acceptable for me, I can regard it as a 12 year CD.

The only problem that could arise would be if the holding had to be liquidated for whatever reason. Then you would be at the mercy of the bid/ask price at that time.

But if the intent is to hold to maturity, and you don't anticipate ever having to liquidate prematurely, then that's a reasonable investment.

[aja8888]

Quote:

Originally Posted by Mulligan My thinking is ALL preferreds can sink to par or below if market collapsed or inflation ran rampant again. That is why I like the mandatory call. It serves as a backstop. It could drop to $10 and I know in 2028 I am getting $27.10 back no matter what. This works out to around 5.7% or so YTC for an A3 issue from a utility that owns no power plants. A perpetual issue does not provide that protection. Though I imagine my YTC will be higher if I sell a year prior to maturity. Assuming nothing changes, the market usually will not allow an 8% one year bond at $27.10 with an A3 rating at start of 2027. That is too much of a free lunch for a one year bond. But either way I am comfortable riding it out until call. But as I have said before I am not swinging for the fences, just trying to leg out some infield hits. Sent from my iPad using Tapatalk

I read some of the offering prospectus and for the life of me I can't pin down what assets are behind this offering besides Citibank. Also, Lehman is mentioned. Granted, it's late at night and I have not poured thru what looks like 100 pages. Who is paying the dividends?