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

[Mulligan]

Well you know an issue is illiquid when after 4 days of trading and 500 shares you know exactly who bought what of FIISO....I bought the bookend prices of $90 and $115, and Coolius and MooreBonds picked up the middle 300... Some very interesting obstacles to over come in Grey Market to get the shares bought.


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[Mulligan]

Facing too much cash coming at me soon from a few impending calls I decided to play safe and buy 400 shares of GJP today at $21.75. Its odd how these computers work. The issue hadnt traded for a few days, and I actually lowered my bid 13 cents then it hit a few minutes later. Then immediately after my trade someone puts down a 1000 share bid at $22, and only a couple hundred were sold at that price. So basically with the 40k I sold of most of my BGLEN, I have replaced with FIISO, PJS, and GJP.



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[Texas Proud]

As Coolius would tell me, calm down the battle isnt over yet!
I sold 400 at $103 today...But I kept 200 for the heck of it. Besides, my thought is stay calm, as they may not announce anything until after divi declaration... Snag it then throw them out to some nit wit and you still may make money yet!!!! BGLEH acted today like nothing happened. Bidder at $103.01 and ask $107... No shares trading....I made some darn good money flipping this bad boy over the past year and its sisters too. A shame to see this little friend had to go...


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Looks like someone is dumping a bunch now... some even below the divi amount... maybe just wants the money now....

I think that the price will not go back up after the divi... or it might even be called prior to divi... if so, I will make a few bucks, but not as much as I wanted... and will still have to reinvest....

 

[Coolius]

BGLEN has been called for September 18.

Calculating from the last div payment date of July 1, we have 78 days accrued interest, about $1.43.

Another one bites the dust - bummer.

 

[Mulligan]

Well I just made a purchase today that guaranteed a $30 loss. I bought 280 shares when it was cratering this afternoon... Gambling it would pay entire divi them flip to an idiot...Well, I was the idiot this time. Oh well, stiff my GF out of a bottle of wine for dinner this weekend and I got my money back, ha!


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[Texas Proud]

Well I just made a purchase today that guaranteed a $30 loss. I bought 280 shares when it was cratering this afternoon... Gambling it would pay entire divi them flip to an idiot...Well, I was the idiot this time. Oh well, stiff my GF out of a bottle of wine for dinner this weekend and I got my money back, ha!


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LOL... I was hoping for the full divi also... but alas, not to be...

I will have to calculate... I will now be close to break even or maybe a bit under... glad I grabbed that cap gain when I did... stupid for me to chase getting back in when I did....

In the end, no big deal... I have lost much more on a stock before... I just do not want to buy my next one above par... so I will have spend some time and research to get a replacement...

 

[Winemaker]

Well I just made a purchase today that guaranteed a $30 loss. I bought 280 shares when it was cratering this afternoon... Gambling it would pay entire divi them flip to an idiot...Well, I was the idiot this time. Oh well, stiff my GF out of a bottle of wine for dinner this weekend and I got my money back, ha!


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Stop by the house Mully, I'll give you a few for your good looks!

 

[Mulligan]

Stop by the house Mully, I'll give you a few for your good looks!

Why didnt I think of that? Beg you to give up a bottle, so I can keep GF happy and pass the bad trade onto the man who would never miss a bottle out of his vault.


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[Mulligan]

LOL... I was hoping for the full divi also... but alas, not to be...

I will have to calculate... I will now be close to break even or maybe a bit under... glad I grabbed that cap gain when I did... stupid for me to chase getting back in when I did....

In the end, no big deal... I have lost much more on a stock before... I just do not want to buy my next one above par... so I will have spend some time and research to get a replacement...

Texas, here is the problem in this environment...Only crap distressed companies or adjustibles are under par. You may consider this one...I bought 200 shares of AES-C yesterday at $50.43. Pays 84 cent quarterly divi. Current yield over 6.6%. AES is a world wide power producer with some regulated utilities under its fold. A dedicated seller last 2 days has dropped stock price a $1.50 in last few days. This seems to happen a time or two a year as it is a big near $300 million and is very tradable.
I wouldnt be to concerned about debt rating as it has been that almost all the time. This issue has seen it all.. The power producers bankruptcies of 2002-03 "think the Enron's", through great world recession 08-09, and never once missed an interest payment on the issue. AES several months back tried to tender offer a different bond and holders largely rebuffed effort as they were very comfortable holding the issue. If seller is still trying to finish off sell order, it may go lower some more...I am content at this price though. Since it was a late 1990s debt issue its maturity is 2029. I like that backstop.



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[Mulligan]

Their earnings just came out recently...

AES Reports Strong Cash Results for Second Quarter 2016: Consolidated Net Cash Provided by Operating Activities of $723 Million and Proportional Free Cash Flow of $417 Million

Highlights
•
Second quarter 2016 Diluted EPS of ($0.16) and Adjusted EPS of $0.17
•
Reaffirming 2016 guidance and 2017-2018 expectations
•
Prepaid an additional $181 million in Parent debt, bringing total year-to-date prepayment to $306 million and refinanced $500 million in near-term Parent debt
•
Announced the sale of Sul in Brazil for BRL 1,698 million (equivalent to approximately $470 million) in proceeds to AES
•
Completed 2,414 MW of projects under construction
•
Total of 3,921 MW currently under construction and expected to come on-line through 2019
◦
Broke ground on the Colon project in Panama, including a 380 MW CCGT plant and 180,000 m3 LNG regasification and storage facility

There are worse things the invest in for higher yield than this company.


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[Coolius]

Used to own AES-C, but sold ou for a loss about 2 years ago, can't remember why now.

Might look at getting some to replace the lost income from BGLEN & EYMXP.

Not many alternatives out there in Preferred land. Not many at all.

 

[Mulligan]

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

Used to own AES-C, but sold ou for a loss about 2 years ago, can't remember why now.

Might look at getting some to replace the lost income from BGLEN & EYMXP.

Not many alternatives out there in Preferred land. Not many at all.

When it comes to studying companies balance sheets, I can belt out numbers and know what they mean better than most common people. But where I am "smartest at" in studying these numbers, I know they really mean nothing to me as I cant ultimately coordinate and synthesize them in any coherent manner.. So I have to trust the more "aerial view". Being .... 1) Its companies history to survive everything thrown at it through 2 horrible time periods. Even at its low point many
years ago when AES-C dropped below 10 they said at that time they would have no problem covering the payment and they were right. 2) Common stock is near 52 week high and up slightly today. 3) Bonds that I looked at are trading way above par. 4) Company says they are on track... So this is what I have to go by and just try to exploit the dump sell off of the debt issue. May not get low point, but I am in at an attractive point so that will have to suffice. 5) Recent trading volume way higher than normal, so this is a dump, not normal trading day...Look at recent volumes..This happens once or twice a year. Last time it scared me as I was unprepared...This time I will not be.


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[Texas Proud]

Texas, here is the problem in this environment...Only crap distressed companies or adjustibles are under par. You may consider this one...I bought 200 shares of AES-C yesterday at $50.43. Pays 84 cent quarterly divi. Current yield over 6.6%. AES is a world wide power producer with some regulated utilities under its fold. A dedicated seller last 2 days has dropped stock price a $1.50 in last few days. This seems to happen a time or two a year as it is a big near $300 million and is very tradable.
I wouldnt be to concerned about debt rating as it has been that almost all the time. This issue has seen it all.. The power producers bankruptcies of 2002-03 "think the Enron's", through great world recession 08-09, and never once missed an interest payment on the issue. AES several months back tried to tender offer a different bond and holders largely rebuffed effort as they were very comfortable holding the issue. If seller is still trying to finish off sell order, it may go lower some more...I am content at this price though. Since it was a late 1990s debt issue its maturity is 2029. I like that backstop.



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Thanks for the suggestion... a quick look at it makes it look attractive considering the other choices that I have on my list... (even though my list is not that big).... Also, not way over par, so there is that....


Just got an email while reading this that I sold out of my BGLEN at $101.50... so, made a few pennies more than if I held... and I got my money now so I can get into something else sooner....

 

[Mulligan]

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

AES-C 90 day trading volume is under 10,000 daily...Already 30,000 today. Past several days have been considerably above normal volume. There were a minimum of 9 million shares issued at IPO, but ultimately if memory serves there were more than that.
Fidelity is showing more than 10 million outstanding.

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[Mulligan]

Thanks for the suggestion... a quick look at it makes it look attractive considering the other choices that I have on my list... (even though my list is not that big).... Also, not way over par, so there is that....


Just got an email while reading this that I sold out of my BGLEN at $101.50... so, made a few pennies more than if I held... and I got my money now so I can get into something else sooner....

Something you may consider monitoring and thinking about...I cant remember if you own CVB, but if you have or havent either way, you may monitor its underlying issue, the actual debenture. Unlike CVB, it is not callable (CVB has call warrant holders that have been silent and never have exercised, which I have no clue). Cuspid number is 482620AX9..... Around 7%.... It is basically a perpetual bond as it isnt called until end of century...It does have BBB- investment grade status. Just some "bathroom study" material, ha!


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[yakers]

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[Mulligan]

AES-C 90 day trading volume is under 10,000 daily...Already 30,000 today. Past several days have been considerably above normal volume. There were a minimum of 9 million shares issued at IPO, but ultimately if memory serves there were more than that.
Fidelity is showing more than 10 million outstanding.

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Clearly it isnt a call notice, as price is driven below accrued price call. 40 days into next divi cycle, plus 30 day minimum notice is required. The leaves a minimum of $50.60 (conservative guess) call price if it happened today.


Except as provided below, the Junior Subordinated Debentures may not be
redeemed prior to October 17, 2002. AES shall have the right to redeem the
Junior Subordinated Debentures, in whole or in part, from time to time, on or
after October 17, 2002, upon not less than 30 nor more than 60 days notice, at
the following prices (expressed as percentages of the principal amount of the
Junior Subordinated Debentures) together with accrued and unpaid interest,
including Compounded Interest to, but excluding, the redemption date, if
redeemed during the 12-month period beginning October 15:



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[Coolius]

Bought in on AES-C. 200 shares @ $50.18. This price is less than par+30 days accrued interest, so even if called anytime after today, I will not be losing out.

If, by some chance it swings below par, will double up.

 

[Mulligan]

Bought in on AES-C. 200 shares @ $50.18. This price is less than par+30 days accrued interest, so even if called anytime after today, I will not be losing out.

If, by some chance it swings below par, will double up.

You never know...Keep watching...There was a big seller around first of the year also, and it wound up dropping $5 or so...But it also happened during some down market days probably inflaming the situation.


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[Mulligan]

Trading volume 48,000 already today... 5 times daily volume already.


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[Texas Proud]

AES-C 90 day trading volume is under 10,000 daily...Already 30,000 today. Past several days have been considerably above normal volume. There were a minimum of 9 million shares issued at IPO, but ultimately if memory serves there were more than that.
Fidelity is showing more than 10 million outstanding.

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Thanks...

Yes, I already own CVB... it is second largest holding behind CNLPL... used to be BGLEN


I just bought some AES-C.... about half my holdings of BGLEN.... it is close enough to par that I am not worried about a call... and I can hopefully grab a few divis if I decide to go a different direction...

So as Coolius said, even if called I have a gain...

 

[Mulligan]

Thanks...

Yes, I already own CVB... it is second largest holding behind CNLPL... used to be BGLEN


I just bought some AES-C.... about half my holdings of BGLEN.... it is close enough to par that I am not worried about a call... and I can hopefully grab a few divis if I decide to go a different direction...

So as Coolius said, even if called I have a gain...

You may want to track underlying bond and look to convert your CVB at some point if you are looking to own long term and hold...CVB at todays price would represent a huge near 10% haircut on a call. As it would be at $10... The underlying bond if bought near same yield is not subject to a call. Just something to consider. I haven't pulled plug to switch but will think about it... A 10% call haircut would really tick me off... I just do not know who owns the warrants. It may be the trust issuer...With bond trading $7-$8 over par, they could make a quick profit calling at $10, and selling off the underlying bond for a quick 8% profit.


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[Mulligan]

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

Thanks...

Yes, I already own CVB... it is second largest holding behind CNLPL... used to be BGLEN


I just bought some AES-C.... about half my holdings of BGLEN.... it is close enough to par that I am not worried about a call... and I can hopefully grab a few divis if I decide to go a different direction...

So as Coolius said, even if called I have a gain...

Some "guru" I heard recommended selling AES-C specifically recently. Maybe that is the cause... Selling volume been huge last 3 days and 11 times normal volume today alone. Despite this barrage its only down less than a quarter today...A very good sign... All its debt including other debentures are on snoozefest and way over par...Common stock up a penny today.... Just a sell issue not a company issue... The reasons cited to sell I knew long ago... Heck you don't want the company hitting all cylinders anyways...That is for the commons... You just want them to pay the bills...Otherwise they do too good they would be calling the darn thing!
The guru guy had held for long time and was locking in profits... I bet his sell reco was for when it was over $52 the other day...Not at near par! I need to thank him...I needed a 6.6% payer with a nearly 20 year history of paying the interest every 3 months through thick and thin.

Get me under par and I will buy a bit more!
Geez in 5 minutes time its now 14 times daily volume! Wow!!!
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[aja8888]

It's $50.05. Time to buy some?

 

[Mulligan]

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

I cant help it...I got a bid in for 100 at that price, ha!
Hoping for an end of bell blow out!

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