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

[Mulligan]

AGO-E is liquid enough for me to exit next week with a nice profit. I was looking for one quarter of dividend payments for a flip. However, if these funds keep buying I should be able to exit at 25.70 or higher.

Everyone has to buy, hold, and sell for their own strategy and needs. You dont need my help...But, personally, I like what you are thinking...It already was in your mind to flip to begin with. And it probably has already spiked to your intended goal already.
Unrelated thought... These things are hard to have a group mentality as people look at things from different viewpoints. Take a distressed bond or preferred. I would stay away because safe income stream is my basic goal (flipping spikes a distant secondary goal). Others with deeper thoughts on say a distressed bond may be not even considering the income, just a cap gains trade or a conversion into equity.

 

[Freedom56]

Out of AGO-E this morning between 25.78 and 25.80. The orders filled pretty fast at all three brokerages - all 5300 shares. I won't have to worry about PR for now. But at some point real estate in PR will be a buy -- but not yet.

 

[Sunset]

Out of AGO-E this morning between 25.78 and 25.80. The orders filled pretty fast at all three brokerages - all 5300 shares. I won't have to worry about PR for now. But at some point real estate in PR will be a buy -- but not yet.

I was also thinking PR real estate could be a good buy in some time. The positive is that PR is a tax shelter. The PR income tax is 4.4% and your Federal tax is 0%, but for new arrivals the Fed tax is 5%
Still a great deal.
The negative issue is the high crime rate, which was high before the hurricane and now is at insane levels, due to no lights, no alarms, no phones, fewer police.

 

[Winemaker]

I'm out, too, at $25.78. Put $87 in the pocket; these Mully trades are gonna put me in the 8 figure club!

 

[Freedom56]

I was also thinking PR real estate could be a good buy in some time. The positive is that PR is a tax shelter. The PR income tax is 4.4% and your Federal tax is 0%, but for new arrivals the Fed tax is 5%
Still a great deal.
The negative issue is the high crime rate, which was high before the hurricane and now is at insane levels, due to no lights, no alarms, no phones, fewer police.

I haven't been there since the 1993. I stayed there several months and rented an apartment in Fajardo. It was okay then but a long commute to the Navy base where I was working at the time. Then I found a place at Palmas Del Mar. That was nice then. My wife even came with me and stayed there. A lot of speculators were pouring money into condos in San Juan before Irma and Maria but they were too early. People were preaching doom and gloom in Florida after 2008. In 2011 when things couldn't get any worse, I plopped down $90K cash for a condo in Downtown West Palm Beach that originally sold for $410K in late 2007. Now I can get $320K easily for it. For me it was a no-brainer. My wife was more apprehensive. Now she wishes we bought more of them.

 

[Mulligan]

I'm out, too, at $25.78. Put $87 in the pocket; these Mully trades are gonna put me in the 8 figure club!

Winemaker, you banged out about 40 more bones than I did on the trade.....Freedom, congrats for locking down the quick gains!

 

[brokrken]

Dang it, I've been trying to up my position in IPL.D and buy into AILLL for the last 3-4 trading days and can't get my bids picked up. You guys got any other ideas for good yields at decent prices?

 

[NgineER]

Herd mentality here, following the leaders/ Got out of AGO-E at $25.91.

 

[pig pile]

I was that guy who picked up NEWEN today. Over paid for sure @$120. Hardly ever see 100 shares up for sale at that price so had to jump.

 

[Mulligan]

I was that guy who picked up NEWEN today. Over paid for sure @$120. Hardly ever see 100 shares up for sale at that price so had to jump.

You are a jerk, Pig...Who do you think had the $118 bid you jumped? It wasnt the Easter Bunny I assure you, lol... I swear our brains are connected to each others, lol... I wasnt wanting this for the yield, I was wanting to add it to the sock drawer antique collection, lol... It is amazing how often we have either jumped each other or sold to each other unknowingly.

 

[Mulligan]

Dang it, I've been trying to up my position in IPL.D and buy into AILLL for the last 3-4 trading days and can't get my bids picked up. You guys got any other ideas for good yields at decent prices?

That is tough question, Brokrken. Perpetual? Yield need? Risk level? QDI? Those questions tend to guide you to what is available.

 

[Freedom56]

Winemaker, you banged out about 40 more bones than I did on the trade.....Freedom, congrats for locking down the quick gains!

The profit pays for some of my 2017 home projects. Money flows like water when you act as the general contractor/handyman and manage the project yourself.

 

[brokrken]

That is tough question, Brokrken. Perpetual? Yield need? Risk level? QDI? Those questions tend to guide you to what is available.

Good point, Mully. Doesn't need to be perpetual or QDI (buying in IRA), 5%+ yield is what I'm searching for. I would say my risk level is on the aggressive side, although I don't want to buy pure crap for the sake of yield. Looking at some of the issues you guys have been discussing, I'd say I'm in the same category of risk.

 

[pig pile]

You are a jerk, Pig...Who do you think had the $118 bid you jumped? It wasnt the Easter Bunny I assure you, lol... I swear our brains are connected to each others, lol... I wasnt wanting this for the yield, I was wanting to add it to the sock drawer antique collection, lol... It is amazing how often we have either jumped each other or sold to each other unknowingly.

what was weird, that 120 ask was there for awhile and I actually took a long time to try and figure what to sell to get it. ended up selling CHCT, it has run up huge and I think due for plateau or headed back down---anyway, yeh was surprised nobody jumped immediately.

I figured you had been watching this, lol. amazing what we do for that gigantic 5% uncallable eh?

 

[Mulligan]

Good point, Mully. Doesn't need to be perpetual or QDI (buying in IRA), 5%+ yield is what I'm searching for. I would say my risk level is on the aggressive side, although I don't want to buy pure crap for the sake of yield. Looking at some of the issues you guys have been discussing, I'd say I'm in the same category of risk.

You have a lot of latitude with 5% findable in safe and aggressive would be higher yield. The safest way to get 5% and not be exposed to long term cap losses from higher rates is a term dated issue... LANDP bought at $25.93 will get you about 5.1% YTM assuming par $25 call. That is only 3.5 years...A nice safer hideout. It does become callable next Fall but Gladstone doesnt normally do this. Plus it is still plus 2% even if called then. I own it...I really like ABRN. The 45 odd cent divi is coming end of month, so one isnt exposed much here...Plus it has a 4 maturity backstop also and basically plus 7% allowing for accrued divi.
NSS is same situation...Could be called in January but there is meat on bone here still. And if not called it goes to adjustable rate in January. This one is higher near term call risk I believe. But enough divi is there to make it worth the shot, I think anyways...Its hard matching yield, to duration risk, if rates do rise going forward. So one has to know if cap losses for income stream matters. Term dated issues resolve that problem mostly.

 

[brokrken]

Thanks, Mulligan. Let me check those guys out. I had already looked at NSS, but the adjustable worried me that it would not only adjust down, but the price would plummet too.

 

[Mulligan]

Thanks, Mulligan. Let me check those guys out. I had already looked at NSS, but the adjustable worried me that it would not only adjust down, but the price would plummet too.

The floor rate off par is 6.73% even if Libor was zero...Libor is comfortably over 1% and rising...More fed funds hikes in store...Maybe in December so yield would rise even more. It could be an 8% issue come January...That is why market is keeping it close to par thinking a call could come.

 

[bobandsherry]

Thanks, Mulligan. Let me check those guys out. I had already looked at NSS, but the adjustable worried me that it would not only adjust down, but the price would plummet too.

Guess I'm confused by your concern with adjustable instrument (after 11/2018). It's tied to 3 month LIBOR (which is currently 1.367%, up from .88% in Nov 2016) plus 6.734%. so this would be paying 8.1% in today's rates. The fixed rate today is 7.625%, so under adjustable rate it would actually be beneficial. As Fed Funds and other rates go up so should LIBOR, so the rate should only get better.

The downside is if LIBOR rate goes up too much NuStar could call this, so figure that in on a YTM basis. It's not trading too much over par so it looks like even with a call considered you'd still get a decent return now and possibility of even better return in the future. At least that's my take on this one.

 

[Mulligan]

Guess I'm confused by your concern with adjustable instrument (after 11/2018). It's tied to 3 month LIBOR (which is currently 1.367%, up from .88% in Nov 2016) plus 6.734%. so this would be paying 8.1% in today's rates. The fixed rate today is 7.625%, so under adjustable rate it would actually be beneficial. As Fed Funds and other rates go up so should LIBOR, so the rate should only get better.



The downside is if LIBOR rate goes up too much NuStar could call this, so figure that in on a YTM basis. It's not trading too much over par so it looks like even with a call considered you'd still get a decent return now and possibility of even better return in the future. At least that's my take on this one.

This is one of these that is a close call on call...But with 32 cents meat on the bone for holding less than 3 months and its potential upside, I have been in it...The lower on capital structure preferred NS-A is a buck plus over par and current 8.06% yield. Higher in the food chain NSS debt, would yield slightly above come January. Call and reissue expenses for company have to be factored in though. I am good either way.

 

[brokrken]

Guess I'm confused by your concern with adjustable instrument (after 11/2018). It's tied to 3 month LIBOR (which is currently 1.367%, up from .88% in Nov 2016) plus 6.734%. so this would be paying 8.1% in today's rates. The fixed rate today is 7.625%, so under adjustable rate it would actually be beneficial. As Fed Funds and other rates go up so should LIBOR, so the rate should only get better.

The downside is if LIBOR rate goes up too much NuStar could call this, so figure that in on a YTM basis. It's not trading too much over par so it looks like even with a call considered you'd still get a decent return now and possibility of even better return in the future. At least that's my take on this one.

You're right, I was confused.

 

[bobandsherry]

This is one of these that is a close call on call...But with 32 cents meat on the bone for holding less than 3 months and its potential upside, I have been in it...The lower on capital structure preferred NS-A is a buck plus over par and current 8.06% yield. Higher in the food chain NSS debt, would yield slightly above come January. Call and reissue expenses for company have to be factored in though. I am good either way.

Agree, about 5.7% if this gets called in Jan with continued upside after that. With expected bump in Fed Fund rate, if it gets call in Jan 2019 that's around 8% or so return.

 

[Mulligan]

Pig, I hope you were the guy who fat fingered AILLI today at $125 for payback on stealing my NEWEN from me yesterday, lol.

 

[bobandsherry]

Pig, I hope you were the guy who fat fingered AILLI today at $125 for payback on stealing my NEWEN from me yesterday, lol.

Wow - thinking it's someone who didn't place a limit on their buy. I see there's a sell out there now at $119.

 

[Mulligan]

Wow - thinking it's someone who didn't place a limit on their buy. I see there's a sell out there now at $119.

Probably the person who realized they just made a mistake and are trying to cut their losses, lol...

 

[brokrken]

OK, I'm now in on SPLP'A, IPL'D, NSS and LANDP. Think I'll sit tight for a while unless I have something called (these or one of my bonds)