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

[bobandsherry]

According to Quantum, the IPO was 400,000 shares. If they just called 2 mln shares in December plus the shares called before and considering a market value of $188 mln they must have dipped into this pot many times since the IPO in 2012. I never really thought about it, but does this happen often? Why not just issue a different series of preferred?

IPO info on Quantum of 440,000 shares doesn't relate to the actual redemption.

According to Quantum, they've been pretty aggressive in redeeming these shares:

• Dec. 13, 2017 -- Cedar Realty Trust, Inc. announced it will redeem 2,000,000 shares - representing approximately 58% of the total outstanding shares
• Aug. 16, 2017 -- Cedar Realty Trust, Inc. announced it will redeem 3,000,000 shares - representing approximately 47% of the total outstanding shares
• July 17, 2017 -- Cedar Realty Trust, Inc. announced it will redeem 1,500,000 shares - representing approximately 19% of the total outstanding shares.

They had a new issue CDR-C (6.5%) on 8/16/17 for 3,000,000 shares which ties to the 8/16 redemption for the "B" shares, so they did issue new series.

Shows 1,400,000 shares currently outstanding for "B", so perhaps there will be one more axe swing on this to fully retire it, trading at $22 it would be a great deal.

 

[bobandsherry]

Well, crap.... I had a position in PIY for awhile... was living with it being below what I paid... it had been bouncing up and down for awhile and I decided to try and sell on an uptick and possibly buy when it dipped...

Sold yesterday at a small loss at 15.70.... but today jumps to 16.50... and looks to be going up more...

I have been listening to Mulligan on this and might stay out of it unless there is another drop down into the 13s...

The good earnings for FTR that I mentioned gave me a pop in my FTRPR just had trickle down to the PIY shares as well. A lot less concern for FTR going BK.

Also, even at your small loss, did that include the $1.05 div you pocketed?

 

[brokrken]

IPO info on Quantum of 440,000 shares doesn't relate to the actual redemption.

Perhaps I'm slow, but what I'm wondering is how can you redeem millions of shares if you only issued 440k unless they issued many more after the IPO. And, I'm wondering if this is normal and what does it do to the risk profile of the issue.

 

[Texas Proud]

Perhaps I'm slow, but what I'm wondering is how can you redeem millions of shares if you only issued 440k unless they issued many more after the IPO. And, I'm wondering if this is normal and what does it do to the risk profile of the issue.

They had the right to issue more shares on this series.... many companies will do this...

I really had not paid attention to how fast they were calling this issue... might have to hold on for awhile and hope

Either way, an 8% yield is worth holding for a bit... and if I get a $3 pop even more

 

[bobandsherry]

They had the right to issue more shares on this series.... many companies will do this...

I really had not paid attention to how fast they were calling this issue... might have to hold on for awhile and hope

Either way, an 8% yield is worth holding for a bit... and if I get a $3 pop even more

I got pulled in on this. Like you, I'm OK with 8% div and hoping that based on their aggressive redemption during the past year it's fully called by end of the year. If not, I'll just keep pocketing the div until they do. The "C" share has a slightly better yield, but that can't be called until 2022, so not as much upside potential

 

[Mulligan]

I got pulled in on this. Like you, I'm OK with 8% div and hoping that based on their aggressive redemption during the past year it's fully called by end of the year. If not, I'll just keep pocketing the div until they do. The "C" share has a slightly better yield, but that can't be called until 2022, so not as much upside potential

Bob, its happened before with this...They were trying to redeem as quickly as they could as market would allow in lower reissues. It turned on them before they could clear the deck. They will not be redeeming more unless interest rates/mall reit expectations change. That doesnt mean its not good value though to buy now. I only have followed from a distance and dont know the financial specifics of company. Its not an area I like to hold issues in, but that doesnt mean its not good value though.
AHT had similar problem with AHT-D as Cedar had...They had about 3/4 quick partial calls last year on D, but couldnt get the last million shares off the books before market turned on it. When the new issues dropped and went over 8% there was no value in calling and reissuing for them. So they stay stranded in the market also.

 

[Mulligan]

Well, I have even more cash stacking up now...Officially lost my CTWSO and CTWSP today. Hardly crying though. My CTWSO shares were at $15 and they were called at $21. Now I have to pay cap gains on my slug of CTWSO. The horror of it all!

 

[bobandsherry]

Bob, its happened before with this...They were trying to redeem as quickly as they could as market would allow in lower reissues. It turned on them before they could clear the deck. They will not be redeeming more unless interest rates/mall reit expectations change. That doesnt mean its not good value though to buy now. I only have followed from a distance and dont know the financial specifics of company. Its not an area I like to hold issues in, but that doesnt mean its not good value though.
AHT had similar problem with AHT-D as Cedar had...They had about 3/4 quick partial calls last year on D, but couldnt get the last million shares off the books before market turned on it. When the new issues dropped and went over 8% there was no value in calling and reissuing for them. So they stay stranded in the market also.

I'm kind of hoping they aren't in a hurry to call these and pocket the 8%. Or perhaps the yield attracts some other investors and pushes the price up a buck or two and pocket that. Just hoping not to see the price drop, but if it does then makes the yield even better. Nothing jumped out as being negative in looking at the financials, but REIT's are a special bunch.

 

[bobandsherry]

Well, I have even more cash stacking up now...Officially lost my CTWSO and CTWSP today. Hardly crying though. My CTWSO shares were at $15 and they were called at $21. Now I have to pay cap gains on my slug of CTWSO. The horror of it all!

Congrats on winning the bet. Now you have to find a way to write off those steak dinners as investment expense

 

[Mulligan]

I'm kind of hoping they aren't in a hurry to call these and pocket the 8%. Or perhaps the yield attracts some other investors and pushes the price up a buck or two and pocket that. Just hoping not to see the price drop, but if it does then makes the yield even better. Nothing jumped out as being negative in looking at the financials, but REIT's are a special bunch.

If long end stabilizes close to this area and sentiment on mall reits change, you could get a cap gain... of course the opposite like CBL and their preferreds could happen also. CBL finances look great too...But market knows the repurposing and cap ex spending coming is huge and no guarantee the dinosaurs (malls) will be resuscitated again even after the expenditures. Cedar may be in this boat also. That is where the studying needs to occur. As the numbers nerds on SA got killed on CBL... There is a forest to consider, not just staring at each tree.

 

[Winemaker]

Cedar owns a major mall in the metro Pittsburgh area. It was reported on the local news that Cedar won an reassessment worth several millions, hence lowering their tax bill significantly. I'm sure they did that nationwide and are lowering operating costs.

 

[bobandsherry]

If long end stabilizes close to this area and sentiment on mall reits change, you could get a cap gain... of course the opposite like CBL and their preferreds could happen also. CBL finances look great too...But market knows the repurposing and cap ex spending coming is huge and no guarantee the dinosaurs (malls) will be resuscitated again even after the expenditures. Cedar may be in this boat also. That is where the studying needs to occur. As the numbers nerds on SA got killed on CBL... There is a forest to consider, not just staring at each tree.

Cedar is no longer in the malls. Cedar was in the traditional strip malls but management change in 2011 changed focus to grocery anchored centers. They also further changed their strategic vision to move from low density areas to higher density markets. They also changed and narrowed their geographic footprint.

Debt/Equity seems in line and less aggressive than some other REIT's I've seen and interest coverage hits the 4x mark, big improvement over company which in 2011 was 2x.

I'm far from expert in this, so the fact that market price took a dip so the experts who follow this obviously seem to fear something. Not betting the farm on this for sure.

 

[Mulligan]

Cedar is no longer in the malls. Cedar was in the traditional strip malls but management change in 2011 changed focus to grocery anchored centers. They also further changed their strategic vision to move from low density areas to higher density markets. They also changed and narrowed their geographic footprint.



Debt/Equity seems in line and less aggressive than some other REIT's I've seen and interest coverage hits the 4x mark, big improvement over company which in 2011 was 2x.



I'm far from expert in this, so the fact that market price took a dip so the experts who follow this obviously seem to fear something. Not betting the farm on this for sure.

I am not either.. I just know sentiment is bad, so its either a discount buying opportunity or a new normal...I have no idea. The grocery anchored strip mall type reits are the current ones in the crosshairs now...The flu spread from the traditional malls onto others. KIM has just been destroyed the past year. One thing is certain...The relative value of a purchase is better here than it would have been 6 months ago, lol.

 

[Mulligan]

Cedar owns a major mall in the metro Pittsburgh area. It was reported on the local news that Cedar won an reassessment worth several millions, hence lowering their tax bill significantly. I'm sure they did that nationwide and are lowering operating costs.

Operating costs are lowered at the expense of what their properties are truly worth now? (Not depreciated book value). Im guessing its good on one end and not so on the other?

 

[Texas Proud]

Bob, its happened before with this...They were trying to redeem as quickly as they could as market would allow in lower reissues. It turned on them before they could clear the deck. They will not be redeeming more unless interest rates/mall reit expectations change. That doesnt mean its not good value though to buy now. I only have followed from a distance and dont know the financial specifics of company. Its not an area I like to hold issues in, but that doesnt mean its not good value though.
AHT had similar problem with AHT-D as Cedar had...They had about 3/4 quick partial calls last year on D, but couldnt get the last million shares off the books before market turned on it. When the new issues dropped and went over 8% there was no value in calling and reissuing for them. So they stay stranded in the market also.

I was actually looking at their cash flow schedule and it looks like all the money for the calls were from their revolver...


They had a $21 million writedown on 2 properties which put them into a loss which is probably why the stock went down...

 

[Mulligan]

I was actually looking at their cash flow schedule and it looks like all the money for the calls were from their revolver...


They had a $21 million writedown on 2 properties which put them into a loss which is probably why the stock went down...

According to prospectus CDR-C paid back revolver...CDR-C had expanded from original $75 million to well over $100 million they kept expanding the C issue with more shares to pay back revolver. Once the yield on C on secondary offerings got to a certain point, issuing those to pay off B made no economic sense. Usually you need 50-75 bps to make it worth time to issue new shares to pay off old ones. Ultimately that is what killed the calling of B shares for time being anyways.

 

[Winemaker]

Cedar owns a major mall in the metro Pittsburgh area. It was reported on the local news that Cedar won an reassessment worth several millions, hence lowering their tax bill significantly. I'm sure they did that nationwide and are lowering operating costs.

Correction. I thought I heard Cedar as the owner on the news. It was CBL who got their taxes reduced by $2 million.

 

[bobandsherry]

Correction. I thought I heard Cedar as the owner on the news. It was CBL who got their taxes reduced by $2 million.

Here's list of properties that Cedar shows they have:

Cedar Realty Trust

 

[brokrken]

So, my SSW-E is trading for $1 more than I paid 2 months ago, plus I've picked up 1 divy. So, if I sell now, my annualized return is around 37%. Problem is, I'm not sure what to replace it with and I don't want to sit in cash. Ideas are welcome.

 

[Mulligan]

Ken, I sit on cash usually for 2 minutes...And I have been sitting on some for a week and got even more cash with my CTWSO call monday. I am going to have to do something.

 

[brokrken]

I'm thinking about replacing it with GSL-PB. Keeps me in the same industry, although I deem GSL a little riskier than SSW.

 

[brokrken]

OK, decided against GSL as it is way too small of a company, so risk is more than I want to replace SSW with. So, here's what I did.


3/7/2018 bought SSW-E (8.25% Coupon) at 24.03
5/7/2018 sold SSW-E at 25.32 for $1.29 gain plus pocketed 0.52 dividend.
5/7/2018 bought SSW-G (8.2% Coupon) at 24.75


So, I lock in the cap gain and only lose $0.01/share divy per year.

 

[Mulligan]

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

Well, I paired down some money with some of the usual suspects with call alerts keeping the price honest. I bought 200 more CPE-A at $50.95. I bought 200 a couple weeks ago under $50.80. This will at least make it to next payment which is $1.25. If they call it, so be it, but they didnt call first date available though (end of this month). Its a bonus if it continues trading a while.
Added 200 more BGCA at 25.78. Not very optimistic on this one lasting but my cost basis is low enough with my big $25.41 purchase I really dont care. Still need to buy something else....And different too.

 

[bobandsherry]

I unloaded CFC-B last week when I saw a sudden run up in price, thought $26.50 was going to be peak, but saw it pop another 20 cents, then drop back to nearly $26.

I have CFC-B on my watchlist, saw today that it's no longer quoted on E-Trade and NASDAQ shows ticker as "This is unknown symbol". Looks like it was called and last traded at $25.72. Glad I dodged that bullet.

 

[Mulligan]

Making me some easy money today...Entergy will be redeeming some old.Arkansas preferreds. I got 40k bought before word got out. Redemption price above par price. Will be plucking several dollar cap gain plus an accrued divi for an assumed less than 2 month hold.