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

[Mulligan]

Oh, I still have my portfolio of prefs that I plan on keeping... unless called of course...



My flipping is just play money and as long as it is fun I will do it... but it is a planned flip.... get in, get out and hope to make some money...



At first I was like you... hey, this stock has gone up a divi or two... why not sell and find something else and maybe get back in at a cheaper price... but I have stopped that for now... then again, just looked and I have none that would be worth it anyhow... in fact, losses in 4 of my 7 holdings...

Texas, I start with a plan, and then it falls to the wayside. I am going to have to get a lock for the “sock drawer” issues as they seem to escape. I just checked. At beginning of this year, I had 17 preferreds, and today, I have 20. But out of those 17 only FIISO, NSS (which I sold out several times in between then and now), and a now much smaller amount of MSEXP are the only 3 that are still around from just 6 months ago. Its worked a bit though as I am grinding towards 9% this year. Its going to probably flatten out from here though. I was getting way too aggressive and have scaled back buying some safe lower yielders for income that really have zero upside such as IPWLK, WELPM, and CTGSP.

 

[Texas Proud]

Ok.... going to admit my stupid mistake


I was going too fast for my own good... I was trying to buy something to do a flip and the one I wanted was not getting to my price point... so I had looked at some others over the weekend and chose one to go to if needed...


Today decided to change and go to my alternative... so did a quick look on a website to see the price and it looked good... went an put in an order and it was filled about an hour later... GREAT!!!


Then was putting it into my spreadsheet and went back to look at ex-divi date and pay date and to my surprise it is 48 days!!! WHAT!!!



Silly me, when I was looking up the price the ticker did an auto fill... so it brought up TANNL when I wanted TANNZ..... well, I will wait the couple of days to settle and sell... not much money so I will not take a bath on this... just lost out on a divi...

 

[Mulligan]

Dont be too ashamed, Texas...We all have down worse. I put a bid in for a $1000 par issue and slide an extra zero in...Luckily the ask wasnt much higher than the bid I thought I was typing in and only bought 10 shares or I could have taken a whipping.
I have tweaked a bit and forgot to post. I will finish off my buying tomorrow hopefully and repost the new scorecard.

 

[brokrken]

Yeah, Texas, no shame in a mistake. I sold some options a few weeks back and fat fingers the limit order. So I put in my ask below the market ask. The system even warned me before I hit enter, but I was too fast. In any case, I got the market ask which wasn't much worse than what I had meant to enter. Cost me a steak dinner, maybe.

 

[Mulligan]

Yeah, Texas, no shame in a mistake. I sold some options a few weeks back and fat fingers the limit order. So I put in my ask below the market ask. The system even warned me before I hit enter, but I was too fast. In any case, I got the market ask which wasn't much worse than what I had meant to enter. Cost me a steak dinner, maybe.

Isnt it amazing how at times the eyeballs and the brain arent connected when reviewing transactions? I have to guard against “getting too comfortable” hitting buttons without proper review diligence.

 

[Texas Proud]

Isnt it amazing how at times the eyeballs and the brain arent connected when reviewing transactions? I have to guard against “getting too comfortable” hitting buttons without proper review diligence.

The problem comes because we get used to just clicking the warnings... it is like I have to do click, click, click and I can do that is 3 seconds as I KNOW what I want


My problem was the autofill... it threw me off when I was looking in the morning... that and a quick look at my scratch on paper looked the same (the top of my Z was really short so it kinds looked like an L)... so when I did my review it was what I wanted to buy... or at least I thought it was...

 

[brokrken]

So, I noticed yesterday that NS and LAND are both issuing new preferreds with the intent of refinancing current debt. I wonder if that debt includes the NSS that many of us own or LANDP that is callable in September.

 

[Mulligan]

LANDB was issued 6 months ago. A private continous funding preferred. Such a crap offering nobody would buy any tranche until now...Its not being used to redeem A. NSS wont be redeemed I assume. They need to pay off revolver debt used to redeem a bond last April.

 

[Mulligan]

i know its low yeilder but I picked up 100 more WELPM at 113.40 today on golf course. Probably safest electrical ute preferred and noncallable. I will not sell these. More liquidity in past 2 weeks than in years. With only ~65 owners it dont change hands much.

 

[Mulligan]

Well I exited out the last of my Entergy Ark positions today. Half of them I got $2 cap gain and a divi. Most of other half I got the divi and sold then at price I paid. One lot, I tossed at a $2 loss, but gained the $1 plus divi, so loss was not as bad. Overall a nice but small easy gain, for a month. Since it wasnt a quick hook redemption as hoped for, I just took my gains and sold.
With proceeds the past week or two I used proceeds to buy some different issues. I am going to the sideline trading probably for a bit and just let them ride...
CNIGP, CTGSP, MTB-P, NSS, CTV, IPWLK, WELPM, AILLL, FIISO, FPI-B, MSEXP, KTBA, BRG-A, RILYL, PFX, HE-U, AHL-C.

 

[brokrken]

Mully, I had never heard of FPI-B. When I did a quick look, I see a tiny 16 person REIT with increasing debt and a declining trend in operating cash flow. Seems like the 6% coupon isn't nearly enough to cover the risk. The market doesn't seem to agree with me since it's not far from par. But, I wonder what I'm missing.

 

[Mulligan]

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

Mully, I had never heard of FPI-B. When I did a quick look, I see a tiny 16 person REIT with increasing debt and a declining trend in operating cash flow. Seems like the 6% coupon isn't nearly enough to cover the risk. The market doesn't seem to agree with me since it's not far from par. But, I wonder what I'm missing.

All they own is basically crop land to rent out, so they dont need personnel for the business, just paper pushers. Ag has struggled last few years so have they. I suspect the common divi is in danger of being cut some in a year. CEO said its safe this year, so that is code for it will happen. Pretty easy company to follow. Not a big fan thus a very small position. In fact my smallest.

 

[brokrken]

I feel like our thread is losing a bit of steam here. So, I'll pipe back in with a question. Huge volume in SPLP-A today pushing the price up nearly $0.60! I can't find any news. Anybody know something?

 

[Mulligan]

I feel like our thread is losing a bit of steam here. So, I'll pipe back in with a question. Huge volume in SPLP-A today pushing the price up nearly $0.60! I can't find any news. Anybody know something?

Its losing steam for me Ken, because I have just been sitting on my issues like Winemaker. No real movements that I follow, so I just sit. I did get a divi dump recently so I am trying to buy a few hundred shares with the proceeds, but nothing worth being excited over. I saw the jump also...I think the reason is that it was just added to a “preferred stock index” (US Preferred Stock Index). These are used as trading benchmarks and for funds to buy issues of. Many of the newbees added over the weekend are up because the assumption is funds are buying them. This is an arbitrary index.

 

[brokrken]

Its losing steam for me Ken, because I have just been sitting on my issues like Winemaker. No real movements that I follow, so I just sit. I did get a divi dump recently so I am trying to buy a few hundred shares with the proceeds, but nothing worth being excited over. I saw the jump also...I think the reason is that it was just added to a “preferred stock index” (US Preferred Stock Index). These are used as trading benchmarks and for funds to buy issues of. Many of the newbees added over the weekend are up because the assumption is funds are buying them. This is an arbitrary index.

Ah, OK. Makes sense. At least it's gotten back over what I paid. I too haven't made any changes. I have some idle cash to put to work, just haven't had the time to do any research.

 

[bobandsherry]

Heh, I've got some money on the sideline as well. Went looking and didn't find anything interesting. Been watching CDR-A rachet up ($24.35), moved up a buck over the past week and more than $2 when I bought it back in May plus div pocketed (Thanks Texas Proud for the suggestion). Feels like time to get finger on trigger.... but then I'll have more cash to find a home...

 

[Texas Proud]

Heck, my problem is that I got my Glacier Water cash, plus my flipping money is just sitting around as there are very few pref with ex-divi dates that seem worth the bother.. IOW, if I cannot pocket about $200 I do not want to do it... now, I do not get $200 that often but I do avg about $125 for the past few months which includes 2 that lost money...

 

[Mulligan]

Just not a lot of flip movement anywhere. So I am just rooting in and keeping my proper balance. I was too much on the safe end (and still am), but I bought 200 shares of DCP-B at 25.04 today. It will pay out a one time 67 cent (4month approx) divi next month since it is a new issue, then will start its normal sub 50 cent payout the following divi. I also bought 200 of PIHPP at 25.75. I am very underwhelmed with that purchase. But I needed to bolster higher end yeild and its QDI, which I needed. Just mostly getting in position to hold most longer term. Would like to sample a bit more issues that go fixed to float in a few years and yet have current call protection.

 

[bobandsherry]

For those that are flipping shares that are QDI, ya'll do know there's a required holding period, right? I was talking with another person and they had no idea there was a holding period.

For preferred stock, the holding period is more than 90 days during a 181-day period that starts 90 days before the ex-dividend date.

https://www.investopedia.com/terms/q/qualifieddividend.asp

 

[KenZ71]

For those that are flipping shares that are QDI, ya'll do know there's a required holding period, right? I was talking with another person and they had no idea there was a holding period.



https://www.investopedia.com/terms/q/qualifieddividend.asp

Good to know. Although all my stuff is held in IRAs

 

[Mulligan]

For those that are flipping shares that are QDI, ya'll do know there's a required holding period, right? I was talking with another person and they had no idea there was a holding period.



https://www.investopedia.com/terms/q/qualifieddividend.asp

Ya, I knew... most is done in tax free...But in the others my brokerage come tax time in the forms always labels it QDI....And then so do I....

 

[bobandsherry]

Just not a lot of flip movement anywhere. So I am just rooting in and keeping my proper balance. I was too much on the safe end (and still am), but I bought 200 shares of DCP-B at 25.04 today. It will pay out a one time 67 cent (4month approx) divi next month since it is a new issue, then will start its normal sub 50 cent payout the following divi. I also bought 200 of PIHPP at 25.75. I am very underwhelmed with that purchase. But I needed to bolster higher end yeild and its QDI, which I needed. Just mostly getting in position to hold most longer term. Would like to sample a bit more issues that go fixed to float in a few years and yet have current call protection.

You always amaze me at the preferred issues that you find and share. The DCP-B looks good, has a K-1 so a bit of a pain come tax time. With cash on the sideline I snagged a few shares at 25.04, saw it closed today at 25.22 so already in the money.

 

[Mulligan]

You always amaze me at the preferred issues that you find and share. The DCP-B looks good, has a K-1 so a bit of a pain come tax time. With cash on the sideline I snagged a few shares at 25.04, saw it closed today at 25.22 so already in the money.

Bob, I tucked this away in my HSA brokerage, so I dont have to worry about the K-1. If I cant squeeze a K-1 in my tax free account I wont buy. I dont want to deal with K-1 s....Or learn how too, lol.

 

[bobandsherry]

Bob, I tucked this away in my HSA brokerage, so I dont have to worry about the K-1. If I cant squeeze a K-1 in my tax free account I wont buy. I dont want to deal with K-1 s....Or learn how too, lol.

I've had a couple in the past. The tax software makes it painless, just tell it you have a K1 and fill in the prompts. I really don't like them as they tend to run late, delaying me from filing and getting my refund.

 

[brokrken]

SPLP-A still plugging along. Up another $0.40 today. Must be something in addition to being added to that index. I just can't find anything.