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

[Mulligan]

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

Is there a prize? How about NI-B? Currently 6.06% yield. And would you include SCE-H and SCE-J at 6.04% and 6.14% respectively. These all go floating rate in several years, but fixed for now.

Good answers,I should have been precise as I discount those as they are going to crapper come adjustment time if rates to move a lot from here...But nobody knows so they could maintain it...I should have said a fixed perpetual ute preferred...Have any guesses? There is only one I know of.
Sorry, Im too cheap for a prize, ha!

 

[bobandsherry]

Good answers,I should have been precise as I discount those as they are going to crapper come adjustment time if rates to move a lot from here...But nobody knows so they could maintain it...I should have said a fixed perpetual ute preferred...Have any guesses? There is only one I know of.
Sorry, Im too cheap for a prize, ha!

Close, but with current price SCE-L is short of target @ 5.62%. And, well if BK exit plan approved, all the PCG's, with exception currently of PCG-I. And I had looked at what those would be if they were 6% after the arrears were paid. Below is the target price and the current % discount to current price.

6% Target	$ Share	Current Disc
PCG-A	$29.13	5.06%
PCG-B	$26.70	4.49%
PCG-C	$24.27	4.41%
PCG-D	$24.27	3.18%
PCG-E	$24.27	5.24%
PCG-G	$23.30	3.65%
PCG-H	$21.84	6.52%
PCG-I	$21.16	-1.54%

I had looked at based on your comment earlier about possibly buying a few more shares of PCG-A once BK exit plan approved. So I thought I'd see what the opportunity might be for grabbing a few more % points through gains if PCG issues settled around 6%

Is that the point you were looking to make?

 

[Mulligan]

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

Yes, I was framing the concept to say that PCG preferreds at 6% are still relative values. If I get clear confirmation the voters approve the exiting bankruptcy plan, I will buy more at that point...And only at that point with a plus 6% yield backing out the accrued dividend...
The only plus 6% fixed ute preferred currently is AILNP. I own 300 of them...At a beefy 25% over par, past call, ouch....Its a 7.75% par yield. Very tiny float of 4500 shares.

 

[bobandsherry]

Yes, I was framing the concept to say that PCG preferreds at 6% are still relative values. If I get clear confirmation the voters approve the exiting bankruptcy plan, I will buy more at that point...And only at that point with a plus 6% yield backing out the accrued dividend...
The only plus 6% fixed ute preferred currently is AILNP. I own 300 of them...At a beefy 25% over par, past call, ouch....Its a 7.75% par yield. Very tiny float of 4500 shares.

Even AILNP doesn't qualify as it's not perpetual. [emoji39]. With no stated call or maturity it seems to be a true unicorn. At 4,500 outstanding shares and looks like around 20 shares avg volume, that's probably about as thinly traded as you could get and still be active trade. Is there a bid and ask on most days?

 

[Mulligan]

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

Even AILNP doesn't qualify as it's not perpetual. [emoji39]. With no stated call or maturity it seems to be a true unicorn. At 4,500 outstanding shares and looks like around 20 shares avg volume, that's probably about as thinly traded as you could get and still be active trade. Is there a bid and ask on most days?

The volume you see Bob was me mostly shuffling around a few of them I had to taxable. In fact the last couple 100 share transactions the past month or so was me buying and or shuffling...Prior to that the last 100 share trades was me...selling in 2017, lol... So effectively there is no trade volume. There is one share available at $200 though, ha. Its actually a roached out $10 million issuance that Ameren got 96% of the shares tendered to the back in 2004 or so when they bought the ute from Dynegy. These left are just the ones that didnt get tendered back then.

 

[bobandsherry]

The volume you see Bob was me mostly shuffling around a few of them I had to taxable. In fact the last couple 100 share transactions the past month or so was me buying and or shuffling...Prior to that the last 100 share trades was me...selling in 2017, lol... So effectively there is no trade volume. There is one share available at $200 though, ha. Its actually a roached out $10 million issuance that Ameren got 96% of the shares tendered to the back in 2004 or so when they bought the ute from Dynegy. These left are just the ones that didnt get tendered back then.

Is that you out there with a crazy $200 Ask today? LOL

 

[Sunset]

Is that you out there with a crazy $200 Ask today? LOL

What happened to "You get what you pay for"

 

[Mulligan]

Hey ya never know...I tried to buy BANGN but it was fruitless.. I even a couple weeks ago paid $175 for 1 share to shake the tree.. All it got was a comp bot who put up a bid for $200 for one share..So I gave up and sold it to it for $200... Welcome to the seedy underworld of illiquids.

 

[Mulligan]

Is that you out there with a crazy $200 Ask today? LOL

Nope Im keeping mine. But if somebody wants them put out a bid for $200, and I will fill the order when I see it.

 

[youbet]

SLMNP?

What's happening? I noticed the stock was renamed on May 5th. And I've noticed there seems to be a time period now running driving some event. I went to the IPO prospectus but, geezerhead me, can't completely figure it out.

Anything consequential?

 

[Mulligan]

SLMNP?

What's happening? I noticed the stock was renamed on May 5th. And I've noticed there seems to be a time period now running driving some event. I went to the IPO prospectus but, geezerhead me, can't completely figure it out.

Anything consequential?

The name change of the stock should have been done long ago. Its not Schulman anymore. They folded it into another Lyondell subsidiary, so the new name of preferred properly aligns to the actual current name of subsidiary it comes from. This is a perpetual non callable from companies end. Only shareholder can “put it” back to company at $803 if they desire (which there is no reason as it trades well above that).

 

[youbet]

Thanks Mulligan.

I currently own AILLL, CNLPL, CNTHP, CHSCM and SLMNP. So far so good. And..... very entertaining!

Your help and commentary are much appreciated!

 

[Mulligan]

Thanks Mulligan.

I currently own AILLL, CNLPL, CNTHP, CHSCM and SLMNP. So far so good. And..... very entertaining!

Your help and commentary are much appreciated!

You got a pretty solid group of payers there, youbet.

 

[youbet]

Ooooops...........

Left MNR/PRC off the list.

 

[Coolius]

I see that the pricing discrepancy between CNLPL & CNTHP has disappeared, due to CNLPL coming back down from the $60 level which was unsustainable IMO.


If CNLPL dips to the low $56 range, I'm going to buy some. Had sold my position some time ago, would be nice to have them back.


CNTHO would also be a reasonable buy below $52.

 

[aja8888]

Today! What happened to the preferred market? All my positions went down significantly today.

And in an up market!

 

[Mulligan]

Today! What happened to the preferred market? All my positions went down significantly today.

And in an up market!

Hey Aja, missed this...I didnt really notice anything that day but my SJIJ which I only had 200 shares and bought 400 at $24. Are you talking about 25 to 50 cent drops? I think you are spoiled again if that was all it was, ha.
I think most are on the safer side here to begin with, so its not as relevant perhaps, but one should kind of look over their preferred stash and make sure they dont have issues that could get sucked under if economy malaise continues..
The preferreds largely went to three areas after March route...The safe ones recovered back above their par perch quickly...The economic disaster zones such as hospitality reits and mall reits have been obliterated and never recovered and have dropped more...Then you have the in between issues that hugging the $19-$23 range down a bit but not in immediate danger.
I have really battened down the hatches. I just checked and am 85% ute preferreds. Took advantage of a little volume activity and bought uncallable WELPM for 200 shares at $124, and bought more SJIJ as mentioned. Also repurchased my SR-A shares I sold near $27 a couple weeks ago and rebought at $26.12 yesterday.
...Separate note PCG bankruptcy judge ruled yesterday the voting deadline of yesterday will not change. This is a positive for the bankruptcy ending process and the thesis laid out to buy the preferreds. Collectively they are my biggest individual allocation in preferreds.
Definitely not a conservative play there.

 

[53anddone]

Drop

Today! What happened to the preferred market? All my positions went down significantly today.

And in an up market!

I would also check the Ex-Div dates. A number drop hard right afterward.

 

[Born2Fish]

Hey Aja, missed this...I didnt really notice anything that day but my SJIJ which I only had 200 shares and bought 400 at $24. Are you talking about 25 to 50 cent drops? I think you are spoiled again if that was all it was, ha.
I think most are on the safer side here to begin with, so its not as relevant perhaps, but one should kind of look over their preferred stash and make sure they dont have issues that could get sucked under if economy malaise continues..
The preferreds largely went to three areas after March route...The safe ones recovered back above their par perch quickly...The economic disaster zones such as hospitality reits and mall reits have been obliterated and never recovered and have dropped more...Then you have the in between issues that hugging the $19-$23 range down a bit but not in immediate danger.
I have really battened down the hatches. I just checked and am 85% ute preferreds. Took advantage of a little volume activity and bought uncallable WELPM for 200 shares at $124, and bought more SJIJ as mentioned. Also repurchased my SR-A shares I sold near $27 a couple weeks ago and rebought at $26.12 yesterday.
...Separate note PCG bankruptcy judge ruled yesterday the voting deadline of yesterday will not change. This is a positive for the bankruptcy ending process and the thesis laid out to buy the preferreds. Collectively they are my biggest individual allocation in preferreds.
Definitely not a conservative play there.

Was gonna nibble a little more on PCG-A/B...too late?

 

[aja8888]

Hey Aja, missed this...I didnt really notice anything that day but my SJIJ which I only had 200 shares and bought 400 at $24. Are you talking about 25 to 50 cent drops? I think you are spoiled again if that was all it was, ha.

All issues I hod fell at the same time. No reason I could see. It's never happened like that except for the "big dump" days we had recently.

Fluke, I guess, since the market was up a bit that day.

 

[Mulligan]

Was gonna nibble a little more on PCG-A/B...too late?

I dunno, as they quickly jumped again this morning...I did sneak in 200 shares at market open of PCG-E at $22.66 and got lucky...Very happy with that, damn I got WAY too many PCG preferreds now...Here was morning announcement...Damn near the finish line now..

PG&E (NYSECG) +5.7% pre-market after saying preliminary voting results indicate "overwhelming acceptance" by wildfire victims of the $13.5B settlement for wildfires caused by the utility's equipment, an important victory in its effort to resolve its bankruptcy.
Based on the preliminary results, PG&E says it remains on track to meet the June 30 deadline to qualify for a $20B wildfire fund created by California lawmakers to help cover the cost of future fires caused by utility equipment.

 

[bobandsherry]

I dunno, as they quickly jumped again this morning...I did sneak in 200 shares at market open of PCG-E at $22.66 and got lucky...Very happy with that, damn I got WAY too many PCG preferreds now...Here was morning announcement...Damn near the finish line now..

PG&E (NYSECG) +5.7% pre-market after saying preliminary voting results indicate "overwhelming acceptance" by wildfire victims of the $13.5B settlement for wildfires caused by the utility's equipment, an important victory in its effort to resolve its bankruptcy.
Based on the preliminary results, PG&E says it remains on track to meet the June 30 deadline to qualify for a $20B wildfire fund created by California lawmakers to help cover the cost of future fires caused by utility equipment.

Yeah, I had seen someone post over the weekend that the judge was not going to delay the vote and that overwhelming voters had accepted. Good pickup on the PCG-E, squeaking out a few more % over where PCG-A is trading now. Kind of surprised that PCG-A is still 6.36% div yield. But did see the ask/bid get very tight for PCG-A and PCG-D.

I appreciate you sharing your insights early on with PCG. It was a bit of a risk. But I made a few bucks and now have expect nice QDI returns going forward as well.

 

[aja8888]

Yeah, I had seen someone post over the weekend that the judge was not going to delay the vote and that overwhelming voters had accepted. Good pickup on the PCG-E, squeaking out a few more % over where PCG-A is trading now. Kind of surprised that PCG-A is still 6.36% div yield. But did see the ask/bid get very tight for PCG-A and PCG-D.

I appreciate you sharing your insights early on with PCG. It was a bit of a risk. But I made a few bucks and now have expect nice QDI returns going forward as well.

Of all the PCG preferred issues, which ones are the desirable ones to own?

 

[Mulligan]

Of all the PCG preferred issues, which ones are the desirable ones to own?

Aja, its gonna come down to you backing out 11 accrued dividends (including July), then divide price into annual payment and decide if its worth the risk reward to you. I consider PCG-A the anchor base price that others trade off and that is where you find relative value like Bob mentioned...I think its valuable PCG-A is uncallable because its 6%.. The C series is uncallable I remember but being 5% par not really a big deal. Especially considering the D and E are 5% and callable, but have a $26.75 redemption price. Since these issues are very old with A going back almost 100 years, I dont think any are call risk and being under par largely irrelevant for the 5% and below issues.

 

[Mulligan]

Yeah, I had seen someone post over the weekend that the judge was not going to delay the vote and that overwhelming voters had accepted. Good pickup on the PCG-E, squeaking out a few more % over where PCG-A is trading now. Kind of surprised that PCG-A is still 6.36% div yield. But did see the ask/bid get very tight for PCG-A and PCG-D.

I appreciate you sharing your insights early on with PCG. It was a bit of a risk. But I made a few bucks and now have expect nice QDI returns going forward as well.

Its been a fun and interesting trade hasnt it Bob....We just need this thing dragged over the finish line now.