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

[Mulligan]

The safest ones to play now are large cap financials trading close to par. I in round 3 with COF-P. I buy at $25.10-15 and sell at $25.40. I also own 4000 share of COF-F since August 2015. It's call protected until August 2020. I picked those up for about $24.10. I don't understand why WFC-J hasn't been called yet and why is it trading above $26. It goes exdiv soon and it can be called on 12/15/17

J started its descent towards par several years ago. It sat right around last divi plus par and only very recently shot up. Very strange. Not worth the risk. It does need 30 day call notice as I checked. They can save almost 300 bps on a call/reissue. That is a lot of savings for a massive issue that it is.

 

[Freedom56]

J started its descent towards par several years ago. It sat right around last divi plus par and only very recently shot up. Very strange. Not worth the risk. It does need 30 day call notice as I checked. They can save almost 300 bps on a call/reissue. That is a lot of savings for a massive issue that it is.

Probably fund buying. WFC-J is the top holding for a lot of ETFs. Another example why passive preferred ETFs perform poorly.

 

[Mulligan]

They should have had the call notice already on speed dial a year ago set up for Nov. 15....Very odd...

 

[brokrken]

By the way, why is LANDP down $1 today?

 

[Mulligan]

By the way, why is LANDP down $1 today?

I see it at $26 down 6 cents on 150 shares traded...Are you sure you are looking at it correctly?

 

[brokrken]

Hmmm, I also see it at $26, but down $0.94

 

[Mulligan]

Hmmm, I also see it at $26, but down $0.94

If I ever had a chance to sell at 26.94 I would be out! Its a term dated issue so there wouldnt be enough meat on the bone to hold at that price.

 

[bobandsherry]

FYI - NuStar Energy prices 6 mln of its 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units at $25.00 per unit.

Think this is the take out for NSS come January? NSS has been trading down again near par, 25.002 this morning.

 

[Mulligan]

FYI - NuStar Energy prices 6 mln of its 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units at $25.00 per unit.



Think this is the take out for NSS come January? NSS has been trading down again near par, 25.002 this morning.

Not with this issue....The new preferred is for cap ex and cleaning up the revolver credit line that has to be cleaned up to fund company expenses. They will need a new offerring...But they have a debt issue that matures in April. I suspect this may hang out there a bit before they call...Depending on Libor movement and company debt leverage.

 

[brokrken]

Just curious, is there a way to get these NuStar Series C at issuance rather than waiting and getting them on the open market?

 

[Mulligan]

Just curious, is there a way to get these NuStar Series C at issuance rather than waiting and getting them on the open market?

NSSTP is temporary ticker grey market.

 

[brokrken]

And, how can you execute a trade on this ticker? Sorry, maybe dumb questions.

 

[Mulligan]

And, how can you execute a trade on this ticker? Sorry, maybe dumb questions.

Not a dumb question...It depends when it starts trading . And some brokerages delay a day a two...So you just got to keep trying. I would guess this week sometime. I havent tried on mine.

 

[Mulligan]

Brokrken, Its currently trading in $24.65 range on some brokerages now.

 

[brokrken]

OK, guess I'll check back. My brokerage doesn't show it yet.

 

[bobandsherry]

OK, guess I'll check back. My brokerage doesn't show it yet.

Shows on my brokerage, 1.7 million shares traded today. 9% div seems like a pretty good rate, floating rate of 3Mo LIBOR+6.88% after 12/15/2022.

 

[Mulligan]

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

Shows on my brokerage, 1.7 million shares traded today. 9% div seems like a pretty good rate, floating rate of 3Mo LIBOR+6.88% after 12/15/2022.

I sold all of my RILYL at a nice profit and a few good divis and bought 300 more of NSS at $25 today and then spent the leftover on 200 more of LANDP at $26 today. Not particularly proud of the NSS purchase as it doubles my amount to 600. I just have to stay on the debt side with this issue right or wrong. No clear sign this issue will or can be called anytime soon. Oddly enough since it will go adjustable at 6.73% plus Libor, come April the payment yield could be near 8.50% if Fed hikes in December. Throw in a few more hikes next year that are projected and this could be tickling the 9% mark on the debt side... My hope is the Libor northward march will force their hands and call it sometime next year. Yes, I bought with the hope of a call next year which is counter intuitive for most since many seek call protection.
Could have sold RNR-C today and captured almost all the divi holding a week. But after thinking it over, I suspect I will want to hold this issue a longer while unless it goes over $26 after exd then I would sell.

 

[Winemaker]

I picked up some NSSTP for $24.65 yesterday.


Edit to add: I put this one in my speculative, mad, money account, and it was only for 100 shares.

 

[Mulligan]

I picked up some NSSTP for $24.65 yesterday.

Winemaker, I sure you checked their finances, but based on what I have seen you own that you posted this is way out of bounds from your norm. Something isnt right with this company on why went had to send a 9% to market compared to their recent debt rating. A similar company with similar 6X Debt/EBITA and credit rating just sent to market a 7 3/8% issue. I am staying on the debt side of NS. And my eject button will stay nearby.

 

[Mulligan]

Winemaker, I sure you checked their finances, but based on what I have seen you own that you posted this is way out of bounds from your norm. Something isnt right with this company on why went had to send a 9% to market compared to their recent debt rating. A similar company with similar 6X Debt/EBITA and credit rating just sent to market a 7 3/8% issue. I am staying on the debt side of NS. And my eject button will stay nearby.

If fortunes change and they get debt under control this one could see very nice cap gains though. At least it is positioned very nicely to do so and can see the value in this type of purchase.

 

[Mulligan]

I picked up some NSSTP for $24.65 yesterday.


Edit to add: I put this one in my speculative, mad, money account, and it was only for 100 shares.

Ok, now I can sleep better! Nice to know you have a bit of me in you. I was beginning to think you were “Just the facts Ma’am” type of investor. Good to know you can get crazy too!

 

[Free To Canoe]

....Tip toed into my first MLP...Bought some EPD at $24.92 today.

EPD looks like a bargain lately. Div yield has been above 7%. Closed today at $23.89. I wonder why so cheap?

 

[Mulligan]

A lot of them dipped. A lot of speculation about debt, slowing dividends and increased self funding. I am long out of it as it spiked to over $26.25 or so real quick after I bought so I sold for quick profit. I look at it, but wouldnt ever buy in taxable because I dont want to mess with K-1. My tax free accounts arent huge to begin with, but I am committed to SPLP-A long term, just doubled down on NSS, increased my LANDP, and recently bought a couple of bonds. I have a few trade able issues left, but unwilling to sell those for time being.

 

[Freedom56]

Year end portfolio restructuring time. I sold my JPM-H, COF-F, SNHNL, LMHA, EBAYL, C-S, BAC-C, DLR-I. I have held these in some case for over two years and my gain is now equivalent to the next two years of dividends and as they will approach their call dates, they will start dropping to par. My capital gains tax will be at a 15% rate. If there is a sell-off of these I can always get back in. I assessed the risk on the downside for those preferred stocks and exchange traded notes.

 

[Mulligan]

Year end portfolio restructuring time. I sold my JPM-H, COF-F, SNHNL, LMHA, EBAYL, C-S, BAC-C, DLR-I. I have held these in some case for over two years and my gain is now equivalent to the next two years of dividends and as they will approach their call dates, they will start dropping to par. My capital gains tax will be at a 15% rate. If there is a sell-off of these I can always get back in. I assessed the risk on the downside for those preferred stocks and exchange traded notes.

Dont blame you, Freedom. The yield isnt what you paid for it, its the yield that the stock currently trades at. Im in the middle of a little cost reduction trade myself. Hope I finish it up soon.