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

[Mulligan]

While it is true that the agricultural business is under pressure from commodity collapse and as such is vulnerable to a deflationary scenario, the interest rates on these compensate for this risk well to me when one considers the more likely scenario of long term very low inflation pressures resulting in long term low interest rates such as in Japan. In such a scenario as that, these will be excellent investments and far better than plays in the energy arena in my opinion.

Just don't let any one industry dominate your portfolio too much, I do not like the financial arena as well but WFCPL is the one banking company that is strongest for paying so I do own that one as well as CHSCM and BGEPF.

Trying to get one of Mulligan's nice Utility Preferred for me is like trying to catch a couple of greased pigs released in Yellowstone, they may exist but I can't get my hands on it with any success.....

Im glad I got mine, because like you said, they are getting impossible to buy at a reasonable price. A perfect example was PPWLM from PacifiCorp. After a small bit of cat and mouse I bought some around $112 and was worried I paid too much then. Flipped at $125 3 months and a dividend later thinking I will re buy around $115. It has sat at $135 with bids stacked at $125 months on end...Incredible...I will never be able to get back in. That is why I decided not to reach for bottom dollar price with a few others I own as I would run this risk of never getting in. The "low" or "last price" is only for the last trade. Rarely for the next guy.


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[Mulligan]

Excellent points you make. Even in a long term deflationary environment, the agriculture business is likely to survive, if not thrive.

I know what you mean about greased pigs in Yellowstone - been trying to catch them for quite some time now. Waiting for CNLPL to come down to the $51.50 area is like Waiting For Godot.

Did you check CNLPL sells today? It went over $55 today. The yield isnt even 6% now. And $3 plus over call price. That is just simply way too much to pay.


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[Coolius]

Did you check CNLPL sells today? It went over $55 today. The yield isnt even 6% now. And $3 plus over call price. That is just simply way too much to pay.


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Not only CNLPL, but CNTHP also caught the fever. Both are up to ridiculous nosebleed levels. I'm tempted to sell some of each, but like you said, it might not come back down again for months, and I would lose out on the dividends in the meantime.

Perhaps we might be seeing a shift to the very high 5% range for this class of Ute Preferreds. No idea why, maybe institutions just want to position themselves for a lengthy time of low and slow rate hikes.

Even my old favorite WFC-L seems to have stopped going down. The 6.4% yield is still very attractive for a safe steady company. Perhaps the insties are willing to accept a 6.4% yield now.

 

[jim584672]

It looks like the High Yield bonds are catching bids because oil has gone up a bit. This is lowering yields / raising prices on everything, including the preferreds. If oil reverses this all gets undone.

 

[Coolius]

Congratulations to all who bought WFC-L at around $1,155 a few weeks ago.

Not only have you a $18.75 per share dividend coming your way on March 15th, you also enjoy appreciation of the PPS to its present $1,175.

And remember this is not callable as it's a convertible which can only be implemented if WFC common is in the triple digits - something that is unlikely to occur in my lifetime. Qualified dividend treatment is another bonus for those in the 15% Fed Tax bracket.

Enjoy the income stream !!

 

[Golden sunsets]

Congratulations to all who bought WFC-L at around $1,155 a few weeks ago. Not only have you a $18.75 per share dividend coming your way on March 15th, you also enjoy appreciation of the PPS to its present $1,175. And remember this is not callable as it's a convertible which can only be implemented if WFC common is in the triple digits - something that is unlikely to occur in my lifetime. Qualified dividend treatment is another bonus for those in the 15% Fed Tax bracket. Enjoy the income stream !!

Just bought some for my Mom's account at 1,170. Yield 6.4%. She was happy. My own cost is 1164. I'd love to see market price come back down.

 

[Golden sunsets]

Help me out you gurus. I know that putting a limit order in and specifying all or nothing is the recommended action but I ignored this when placing a limit order for a significant number of shares of KCC. And not surprisingly I had a partial order of 1 share filled . Crap. Do I now just sit patiently for the rest to fill or change my order? My reasoning was not many transactions occur at the Share number that I placed. Fortunately I pay no transaction fees and this is in my IRA. What to do now

 

[Coolius]

Help me out you gurus. I know that putting a limit order in and specifying all or nothing is the recommended action but I ignored this when placing a limit order for a significant number of shares of KCC. And not surprisingly I had a partial order of 1 share filled . Crap. Do I now just sit patiently for the rest to fill or change my order? My reasoning was not many transactions occur at the Share number that I placed. Fortunately I pay no transaction fees and this is in my IRA. What to do now

Golden Sunsets, you are indeed fortunate that you do not pay Transaction fees.

I had the same thing happen to me, but had to pay the brokerage commission of $7 for that 1 share. Fortunately, Customer Services waived the commission for me as a long time client, when I called to express my disappointment.

KCC goes Ex-Dividend on Thursday March 10. The price may adjust down by $1.02 that day, so you might want to crank down your bid price if you have open bids at close of business Wednesday evening.

I will probably try to buy more around $28 if it gets down that afr - and will have my bid as AON.

 

[Coolius]

BGLEI, a Yield Trapped Ute Preferred, went Ex-Div today.

As typical with these illiquid issues, the price did not adjust at all for the $1.78 dividend. Ask is still at $103.50, what it was before ex-div.

Since call risk is quite high for this issue, would not buy at this price.

Anything below $100.53 ( par plus 30 days accrued interest ) would be OK, but does not look likely the price will go down that far, unfortunately.

 

[Mulligan]

Help me out you gurus. I know that putting a limit order in and specifying all or nothing is the recommended action but I ignored this when placing a limit order for a significant number of shares of KCC. And not surprisingly I had a partial order of 1 share filled . Crap. Do I now just sit patiently for the rest to fill or change my order? My reasoning was not many transactions occur at the Share number that I placed. Fortunately I pay no transaction fees and this is in my IRA. What to do now

Its a personal choice, but I never use all or nothing on these illiquids.
I get what I can when I can, and sometimes it doesnt work out but I just keep trying to accumulate. I got 19 shares once on KCC, but was able to snag in 100 share lots other times...If you track it you will fimd days when it is active and that is when shares trade more freely. Only 3.9 million in market value left so these things happen. You will get "no deal" on a stock that only issues dividend every 6 months right before going ex. Wait...as after it goes exD , there will be significant time where call risk occurs without next dividend being declared. This will provide a better opportunity.
Last week I tried to snag an older than dirt very illiquid Union Electric issue with a 100 share bid at $100... It threw me 10 shares and dried back up... Now someone has jumped me to $102 and it still wont trade. I will just keep it as an orphaned stock and collect the dividends. If opportunity presents itself down the road, I will try for more.


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[Texas Proud]

Golden Sunsets, you are indeed fortunate that you do not pay Transaction fees.

I had the same thing happen to me, but had to pay the brokerage commission of $7 for that 1 share. Fortunately, Customer Services waived the commission for me as a long time client, when I called to express my disappointment.

KCC goes Ex-Dividend on Thursday March 10. The price may adjust down by $1.02 that day, so you might want to crank down your bid price if you have open bids at close of business Wednesday evening.

I will probably try to buy more around $28 if it gets down that afr - and will have my bid as AON.

I thought that they adjusted the bid price on an open order when it goes ex dividend.... am I mistaken

 

[Coolius]

I thought that they adjusted the bid price on an open order when it goes ex dividend.... am I mistaken

Texas Proud, yes, you are correct; brokerages do adjust the bid down for the ex-dividend.

I had a bad experience a long time ago when a small brokerage ( which no longer exists ) did not do that, and I got stuck with a stock as a result. I remember that I raised a stink and they corrected the error, but it was an unpleasant surprise, I tell you.

So I tend never to assume my open bids will be automatically adjusted on ex-div day - just being ultra careful.

 

[Golden sunsets]

Texas Proud, yes, you are correct; brokerages do adjust the bid down for the ex-dividend. I had a bad experience a long time ago when a small brokerage ( which no longer exists ) did not do that, and I got stuck with a stock as a result. I remember that I raised a stink and they corrected the error, but it was an unpleasant surprise, I tell you. So I tend never to assume my open bids will be automatically adjusted on ex-div day - just being ultra careful.

Yup. This just happened to me. I had changed my bid to reflect the x dividend but noticed the day after xdiv date that the brokerage did as well.

 

[Coolius]

Yup. This just happened to me. I had changed my bid to reflect the x dividend but noticed the day after xdiv date that the brokerage did as well.

I cancelled my open order the night before, and entered a new order reflecting the adjusted ex-div price right after the market opened.

Didn't do much good, as the price barely moved the entire day. IIRC, the ask came down to $29.44 - not attractive, so I passed.

Were you able to get any shares ?

 

[Golden sunsets]

I cancelled my open order the night before, and entered a new order reflecting the adjusted ex-div price right after the market opened.

Didn't do much good, as the price barely moved the entire day. IIRC, the ask came down to $29.44 - not attractive, so I passed.

Were you able to get any shares ?

I rethought the plan and decided to cancel the order entirely. I sold the 1 share that had filled. Instead I'm going to either buy a bond for my bond ladder to mature in 2024, the next slot that I need to fill for planned RMD in my IRA, or dump it into a bond fund that I own in my IRA, DLTNX. I don't like bond funds due to their tendency to depreciate when rates rise. The expense ratio is pretty high too. I'd rather buy an individual maturity for a targeted withdrawal date, but rates are so abysmal I don't know what I'll do.

 

[Mulligan]

I rethought the plan and decided to cancel the order entirely. I sold the 1 share that had filled. Instead I'm going to either buy a bond for my bond ladder to mature in 2024, the next slot that I need to fill for planned RMD in my IRA, or dump it into a bond fund that I own in my IRA, DLTNX. I don't like bond funds due to their tendency to depreciate when rates rise. The expense ratio is pretty high too. I'd rather buy an individual maturity for a targeted withdrawal date, but rates are so abysmal I don't know what I'll do.

I floated a 300 share bid of KCC right after exD in low $28 range just to see if post Div sellers were out... Everything stayed dried up. Many times trading locks up right after exD on illiquids because sellers still want same price, but buyers want the loss of dividend accounted for. There were too many shares on bid price way above what I was willing to pay and they were nit getting a sniff, so I pulled after 2 days.
This is a good one to buy in upper 28's after about 3 months into next divi, but not at this point due to being past call.
I did a quick flip on my SSW-C I bought last month. Bought at $23.75 and sold yesterday at $25.09. My funds are building back up. I did buy $5k of DJCI which is not a preferred, but an ETN that tracks the gamut of the commodities in whole from oil to crops.


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[Mulligan]

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

Had a little extra cash and 3000 shares of CNLPL was being dumped at a fair price of $53, so I added a 100 more to the collection. Still about 80% preferreds but my other 20% has shifted over to a couple common stocks, commodity fund note DJCI, and Ag fund PAGG. Will mostly use additional free cash to devote to this 20% unless some big Ute preferred goes on sale.
Preferreds are mostly same...AILLL/AILNP, CNLPL/CNTHP, BGEPF, KTH, KCC, UEPCO, CVB, GJP.


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[capjak]

Had a little extra cash and 3000 shares of CNLPL was being dumped at a fair price of $53, so I added a 100 more to the collection


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Nice I saw this after the close and thought what is going on wish I would have seen it as I would have picked up some more also.

 

[Mulligan]

Nice I saw this after the close and thought what is going on wish I would have seen it as I would have picked up some more also.

Cap, this all happened right in last hour of trading and a few were right at close. There may be more left to sell in the morning. Seller was hiding back behind a $55 plus 100 share ask price, but jettisoned them any time a $53 plus bid was offered. Whenever high bid was below $53 no sale would take place.


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[Coolius]

Difficult to bring myself to buy more at higher prices, but it is possible that this is now the new "normal" and $53 will be the pivot around which the price will remain for a while.

The entire Preferred sector seems to have firmed up quite a bit, especially after this latest Fed meeting. Folks must be getting more used to the idea that we won't see too many Fed rate Hikes for 2016.

I know there were many of us on this forum that expected this to be the case - hopefully most, if not all, are by now fully invested in income issues at lower prices.

 

[Mulligan]

Difficult to bring myself to buy more at higher prices, but it is possible that this is now the new "normal" and $53 will be the pivot around which the price will remain for a while.

The entire Preferred sector seems to have firmed up quite a bit, especially after this latest Fed meeting. Folks must be getting more used to the idea that we won't see too many Fed rate Hikes for 2016.

I know there were many of us on this forum that expected this to be the case - hopefully most, if not all, are by now fully invested in income issues at lower prices.

$53 isnt rock bottom, but fair if wanting them. I have paid between $51 and $53.20... Speaking of CNLPL, I hadnt really noticed, but I have not seen a dividend declaration...It technically is past exD date for April payout, but nothing has been mentioned anywhere I can find. Have you read anything? I see no call notice in SEC filings. Kind of odd, though it is hard to find this info on these illiquids.. No mention of a declared dividend for any of the entire series of preferreds.


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[Mulligan]

$53 isnt rock bottom, but fair if wanting them. I have paid between $51 and $53.20... Speaking of CNLPL, I hadnt really noticed, but I have not seen a dividend declaration...It technically is past exD date for April payout, but nothing has been mentioned anywhere I can find. Have you read anything? I see no call notice in SEC filings. Kind of odd, though it is hard to find this info on these illiquids.. No mention of a declared dividend for any of the entire series of preferreds.


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Hmm, My go to site from Fidelity still showing the Dec. 2015 ExD date. But Marketwatch I just checked shows the March date. Usually I can dig deep into internet bowels and find an official press release but haven't located.. Im sure its fine. Life of tracking old illiquids... They pay but you never know anything about them.


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[Coolius]

The CL&P investor site has previous Dividend Declarations, I noticed this paragraph in the announcement dated Dec 18, 2015.
CNLPL is the $3.24 Series G Preferred.



For the following issues, the payment date is April 1, 2016, and the record date is March 10, 2016:
•Holders of the 5.28% Series preferred stock will receive a dividend of $0.66 per share.
•Holders of the $3.24 Series G preferred stock will receive a dividend of $0.81 per share


https://www.eversource.com/Content/...ferred-dividend-release-12-18-15.pdf?sfvrsn=0


Sure reads like a Dividend declaration to me. Ex-Div must have happened March 7, and we are all unaware of it.

 

[Mulligan]

Yes, I knew it was past exD date, but Fidelity wasnt showing it all. I forgot all of their various issues are strung out over 3 months... Its already time for them to declare the next batch as CNTHP goes exD early next month.


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[intl]

Trying to get into so long term solid PS plays for income. Any suggestions? I've been trying to get into the WF one, but doesn't seem to want to come back down to around 1150 or so. Any other ones I should look into? Looking for companies that will be here for the long term. Solid companies if you will. Am I hoping for too much?