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

[Freedom56]

Keep posting the good thoughts, Freedom. Im kind of hunkered down overweighted in a few issues, now. But if they ever get yanked from me, I may have to steal an idea or two from you.

Mulligan... Will do. BTW I had a GTC order on CNLPL and CNTHP at $52 for 500 shares each and after 3 months I gave up.

 

[Mulligan]

Mulligan... Will do. BTW I had a GTC order on CNLPL and CNTHP at $52 for 500 shares each and after 3 months I gave up.

Yes, If that is the max price your willing to pay, its probably better to buy something else. Even at $54 one is getting about a 100 bps free ride. Would need some long term rate jumps to send it closer to call price. I am plenty content with safe 6% yield now, so I bought more.

 

[Freedom56]

Yes, If that is the max price your willing to pay, its probably better to buy something else. Even at $54 one is getting about a 100 bps free ride. Would need some long term rate jumps to send it closer to call price. I am plenty content with safe 6% yield now, so I bought more.

That was last November through February when preferred stocks were selling off. Those preferred stocks are held by individuals for income until they are called. Unfortunately there aren't too many of those.

 

[Mulligan]

That was last November through February when preferred stocks were selling off. Those preferred stocks are held by individuals for income until they are called. Unfortunately there aren't too many of those.

They were issued long before preferred stock index funds were in existence. Plus with now considered tiny 10 millionish floats they cant burrow in deep enough to help their needs. I have checked a few preferred funds and some do have a small allotment of old illiquid ute preferreds but not of any consequence.

 

[Mulligan]

Sold off my ABRN a few days ago fearing a call coming with new convertible offering going to market at 5.5%. Used a lot of it to buy more CNLPL the other day and used rest on late sell offs of CHSCO and RLJ-A. Bought a few hundred shares of GJP for heck of it too.

 

[Mulligan]

Snagged 60 shares of PPWLO at $105, 5.71% investment grade QDI, and perpetually uncallable. When Buffet bought PacificCorp and took it private he called all the company preferreds naturally. Except for the 2 that are uncallable old tiny floats. Kind of nice to know Mr. Buffet has to pay me before he can extract any profits from the company.

 

[Texas Proud]

Can anybody find info on PIY?

Seems to have gone down big time today... 30%... but 40% the last two...

I see that Frontier is having an issue with debt and maybe they just will not pay going forward....

Is this another JCP? Or a Toys-R-Us....

 

[Mulligan]

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

PIY, is finally trading where it deserves to be. It was just uniformed buyers buying something they didnt know what it was...PIY is just simply Frontier 2046 junior debt held in trust. The underlying bonds actually trade in the market also. They have been in the 50s for quite a while. PIY should then be trading about $14 dollars. As that is all its worth.
And yes it could be a potential bankruptcy down the road. Look at what happened to FTRPR. It was issued as a $100 par convertible preferred. It was down to around $15-16 the last time I checked. Some people have lost their ass on Frontier this year.

 

[Freedom56]

Can anybody find info on PIY?

Seems to have gone down big time today... 30%... but 40% the last two...

I see that Frontier is having an issue with debt and maybe they just will not pay going forward....

Is this another JCP? Or a Toys-R-Us....

Frontier has has a interest coverage ratio of 0.59 which means operating earnings cannot cover interest payments. Anything below 1 means possible solvency issues. See the link below for income data for the last 4 quarters:

Frontier Communications Corporation (FTR) Stock Report – NASDAQ.com - NASDAQ.com

Some quarters the operating income was negative (that could be due to non-cash charges). Net income is always negative. It's a good idea to check the 10-Q and calculate interest coverage before buying a baby bond/note or bond.

 

[Freedom56]

PIY, is finally trading where it deserves to be. It was just uniformed buyers buying something they didnt know what it was...PIY is just simply Frontier 2046 junior debt held in trust. The underlying bonds actually trade in the market also. They have been in the 50s for quite a while. PIY should then be trading about $14 dollars. As that is all its worth.
And yes it could be a potential bankruptcy down the road. Look at what happened to FTRPR. It was issued as a $100 par convertible preferred. It was down to around $15-16 the last time I checked. Some people have lost their ass on Frontier this year.

Look at the funds that bought into FTRPR (PFF, SPFF etc...). As passive funds they will watch their investments with other people's money go to zero. Convertible debt in my opinion is a bad idea for investors but great for companies. AGN-A is another example (also owed by PFF and SPFF). It was issued at $1000 and is now at $612 and more room to fall. SWN-C was issued at $50 (also owned by PFF and SPFF) now at $14.43. It's like a bad movie.

 

[Mulligan]

Look at the funds that bought into FTRPR (PFF, SPFF etc...). As passive funds they will watch their investments with other people's money go to zero. Convertible debt in my opinion is a bad idea for investors but great for companies. AGN-A is another example (also owed by PFF and SPFF). It was issued at $1000 and is now at $612 and more room to fall. SWN-C was issued at $50 (also owned by PFF and SPFF) now at $14.43. It's like a bad movie.

Its because they have to buy volume and liquidity to fill the orders from buyers of their funds. Like you Freedom, I dont think they even care what they buy. And many really stretch the term “preferred” to buy. For my needs, I can simply buy better higher quality issues than funds can. That has largely always been my reason for buying instead of purchasing mutual/etf preferred funds.

 

[Mulligan]

Frontier has has a interest coverage ratio of 0.59 which means operating earnings cannot cover interest payments. Anything below 1 means possible solvency issues. See the link below for income data for the last 4 quarters:



Frontier Communications Corporation (FTR) Stock Report – NASDAQ.com - NASDAQ.com



Some quarters the operating income was negative (that could be due to non-cash charges). Net income is always negative. It's a good idea to check the 10-Q and calculate interest coverage before buying a baby bond/note or bond.

This issue is ground zero from SA “experts” buying FTR/FTRPR all the way down and losing their arse... They think they know numbers and sight the cash flow as the “holy grail” that made it a good investment. One had been buying FTRPT from $80 all the way down... Big hole in the investment portfolio now isnt it! Cash flow is only one piece of the puzzle not the end all be all.
As far as PIY goes, all it is is a 3rd party trust preferred. It is a foolish investing cardinal sin to invest in a 3rd party trust without checking the bond market to see what the underlying bond is separately trading at. Anyone with a brain would see that a trust preferred trading at par that has its underlying bonds held in trust trading for 50 some cents on the dollar in the open market would know its a bad buy.

 

[Texas Proud]

Frontier has has a interest coverage ratio of 0.59 which means operating earnings cannot cover interest payments. Anything below 1 means possible solvency issues. See the link below for income data for the last 4 quarters:

Frontier Communications Corporation (FTR) Stock Report – NASDAQ.com - NASDAQ.com

Some quarters the operating income was negative (that could be due to non-cash charges). Net income is always negative. It's a good idea to check the 10-Q and calculate interest coverage before buying a baby bond/note or bond.

I was using it to flip... saw the big drop today....

Yes, it looks like they took on too much debt the last couple of years... but they might be able to cash flow... I would have to look at that is too much trouble for me since I only wanted it for flipping.... heck, it might be a good one to flip if you want to gamble with the divi....

 

[Mulligan]

I was using it to flip... saw the big drop today....

Yes, it looks like they took on too much debt the last couple of years... but they might be able to cash flow... I would have to look at that is too much trouble for me since I only wanted it for flipping.... heck, it might be a good one to flip if you want to gamble with the divi....

Be careful with these Texas. It is now trading at a value that resembles its true worth so, for a higher risk play it could be a good one if one is inclined...Me? I learned my lesson with JCP baby bonds. I am through. I will just focus on income now.

 

[Texas Proud]

Be careful with these Texas. It is now trading at a value that resembles its true worth so, for a higher risk play it could be a good one if one is inclined...Me? I learned my lesson with JCP baby bonds. I am through. I will just focus on income now.

I do not want to hold... when it comes time for divi I will see if it looks like one will pay... buy, get divi and sell....

But, that even might be more risk than I am willing to take.... we will see as it is a long time until next divi...

 

[bobandsherry]

Cleaned out my cash and bought more NSS at $25.16. Have a decent slug now here... Highly suspect this will be called at $25.47 (the interest payment plus par) come Jan. 15. Collect some coin while forcing money in timeout here...Maybe when it is called some selloffs may have occurred. If not I will hold and collect its payment as it goes adjustable at that point.

NSS dropped below $25, I had limit order in and picked up 400 more shares. I didn't get at the low but got it at $25.03, OK with just collecting 48 cent divi if this get's called in Jan. If not, with change to floating at 673.4 basis points above 3Mo LIBOR I'm still happy with the ongoing yield. Still have another limit order so hoping to pick up a few more near par.

 

[pig pile]

Sold off my ABRN a few days ago fearing a call coming with new convertible offering going to market at 5.5%. Used a lot of it to buy more CNLPL the other day and used rest on late sell offs of CHSCO and RLJ-A. Bought a few hundred shares of GJP for heck of it too.

What's the deal with RLJ-A again? I knew at one time, and it was on my watch list but it got away from me and now is actually lower then when I wanted to buy it. Looking to pick this one up but I see on QOL that it is past its call date.

 

[Texas Proud]

Crap.... just had another AHT-D call!!!


This one was much larger.... going to sell what I have left as this is not worth the trouble...

 

[Texas Proud]

NSS dropped below $25, I had limit order in and picked up 400 more shares. I didn't get at the low but got it at $25.03, OK with just collecting 48 cent divi if this get's called in Jan. If not, with change to floating at 673.4 basis points above 3Mo LIBOR I'm still happy with the ongoing yield. Still have another limit order so hoping to pick up a few more near par.

Thanks for this.... might dip my toe in this... but that just means it will be called .... I will wait a bit and see....

 

[Mulligan]

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

Pig, RLJ-A is a busted convertible. Its not going anywhere. I jumped back in a little too quick, but it is what it is. Im fine...Its a hospitality reit so risk is higher on these. But RLJ-A is on safer ground financially than the AHT preferreds are. So I will take a bit lower yield, but it is still plus
7%.

I dig a little digging to amuse myself....PacificCorp (PPWLO that I snagged some yesterday and PPWLM) has probably the highest dividend coverage safety of preferreds I have seen. They earned $763 million dollars profit last year. Total yearly preferred payments are $163,000. So they have a coverage ratio of 4,709.

 

[Coolius]

Tex, Is this latest AHT-D call for December 8th?

Yes, it has been known for quite a while.

With all the partial calls, I only have 66 shares left, out of 500 when I first bought them.

Like you, I may just dump the rest. I did buy the new ASHFP ( AHT-I ) to replace the called shares.

Of course, consistent with my investing prowess, ASHFP is now trading lower

 

[pig pile]

Pig, RLJ-A is a busted convertible. Its not going anywhere. I jumped back in a little too quick, but it is what it is. Im fine...Its a hospitality reit so risk is higher on these. But RLJ-A is on safer ground financially than the AHT preferreds are. So I will take a bit lower yield, but it is still plus
7%.

I dig a little digging to amuse myself....PacificCorp (PPWLO that I snagged some yesterday and PPWLM) has probably the highest dividend coverage safety of preferreds I have seen. They earned $763 million dollars profit last year. Total yearly preferred payments are $163,000. So they have a coverage ratio of 4,709.

Thanks Mulligan, yes I do remember now about busted convertible. Yes it's been hit good, let's see if I can pick some up here.

 

[bobandsherry]

Pig, RLJ-A is a busted convertible. Its not going anywhere. I jumped back in a little too quick, but it is what it is. Im fine...Its a hospitality reit so risk is higher on these. But RLJ-A is on safer ground financially than the AHT preferreds are. So I will take a bit lower yield, but it is still plus
7%.

I dig a little digging to amuse myself....PacificCorp (PPWLO that I snagged some yesterday and PPWLM) has probably the highest dividend coverage safety of preferreds I have seen. They earned $763 million dollars profit last year. Total yearly preferred payments are $163,000. So they have a coverage ratio of 4,709.

Looks like someone snagged 2 whole shares of PPWLO today at $105, that you again? LOL

 

[Texas Proud]

Tex, Is this latest AHT-D call for December 8th?

Yes, it has been known for quite a while.

With all the partial calls, I only have 66 shares left, out of 500 when I first bought them.

Like you, I may just dump the rest. I did buy the new ASHFP ( AHT-I ) to replace the called shares.

Of course, consistent with my investing prowess, ASHFP is now trading lower

Not sure.... they just converted my shares at Vanguard... close to 70%...

I think I will have a loss at the end of the day on this one...

 

[bobandsherry]

Managed to catch another dip on NSS, picked up remaining shares at $25, right at par.