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

[Texas Proud]

Well, I got killed today on my PFH... it is backed by JC Penney.... down over 17% today!!!


I was thinking JCP was turning it around and this would rebound... had actually bought a bit more a month or so ago...


This is the bad side of investing in junk!!! Still, if I took the loss my yield will have dropped to 6.8%, so still better off than bank CDs...


I will have to look at it a bit, but I think I will hang on to see what happens over the next few months...

 

[bobandsherry]

Texas, only a loss if ya sell I don't follow JCP so not sure why, but their stock dropped by 30% ($2.50 to $1.75) in same time period so that's why PFH felt the pain. But you having doubts that div won't be paid or will go BK? If not then a hold on that will give you an generous yield. Just interesting that JCP hasn't seen benefits in stock price that Macy, Kohl's, Nordstrom have, instead following in Sears footprint on price.

 

[Mulligan]

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

Texas, only a loss if ya sell [emoji4] I don't follow JCP so not sure why, but their stock dropped by 30% ($2.50 to $1.75) in same time period so that's why PFH felt the pain. But you having doubts that div won't be paid or will go BK? If not then a hold on that will give you an generous yield. Just interesting that JCP hasn't seen benefits in stock price that Macy, Kohl's, Nordstrom have, instead following in Sears footprint on price.

Bob it tanked because they reported massive unexpected quarterly losses. Simply JCP has no identity, losing customer base, cant bring new generation into their buildings. Its hopeless. In fact I am now reading its possible they could go bankrupt before Sears does and they wasnt even thought as a possibility a year ago. JCP is just backed into a corner. Debt troubles, shrinking margins, no money to meaningfully have a cap ex program for a turnaround...Simply a sinking ship and they cant find a plug to put in the floor.

 

[Mulligan]

Well, I got killed today on my PFH... it is backed by JC Penney.... down over 17% today!!!


I was thinking JCP was turning it around and this would rebound... had actually bought a bit more a month or so ago...


This is the bad side of investing in junk!!! Still, if I took the loss my yield will have dropped to 6.8%, so still better off than bank CDs...


I will have to look at it a bit, but I think I will hang on to see what happens over the next few months...

Sorry Texas. Yesterday was not good. JCP has never really turned it around. They just stopped bleeding for a while and hocked about everything they could to lower massive debt. They are back to floundering again as the easiest stuff was done. The kitchen is just too hot for me to be in. Its not if but when. I suspect down the road JCP will survive, but in some form after bankruptcy and those note obligations being wiped out.

 

[Freedom56]

The problem with JCP is that they are stuck in the 90's. Ever walk into one of their stores? At least at Sears you can buy tools. I wouldn't know what to buy at JCP. But both are headed into a slow grind to chapter 11 with more store closings before that happens. It's a matter of time before other retailers such as Bed Bath and Beyond start closing more of their empty stores and follow Sears and JCP off the cliff. I still say there are far too many malls. The retail landscape is changing and so are consumer buying habits.

 

[Texas Proud]

JCP closed a bunch of bad stores last year... it was doing some things that I thought would have them survive without going to BK... if they did, then the debt would be paid... I do not think their stock is worth investing into as I do not see any gain to that for many years if at all...


So, thinking they would not go BK, their junk bonds looked attractive... but then again Toys-R-Us closed down quickly... but I was not following them at all so they might have been walking dead for awhile..


We will see... they should go up a bit as people chase the yield.. for me, my yield is already fixed with the price I paid... I will probably take my loss on at least the shares I recently bought if not all of my holdings...


Yes, chasing yield has a downside!!!

 

[Mulligan]

BGCA has been officially called...Redemption is early Sept. I think.

 

[bobandsherry]

Thanks to Ken I dumped out of BGCA early this month at $25.61. Thanks for the heads up on the actual call Mulligan.

 

[aja8888]

JCP closed a bunch of bad stores last year... it was doing some things that I thought would have them survive without going to BK... if they did, then the debt would be paid... I do not think their stock is worth investing into as I do not see any gain to that for many years if at all...


So, thinking they would not go BK, their junk bonds looked attractive... but then again Toys-R-Us closed down quickly... but I was not following them at all so they might have been walking dead for awhile..


We will see... they should go up a bit as people chase the yield.. for me, my yield is already fixed with the price I paid... I will probably take my loss on at least the shares I recently bought if not all of my holdings...


Yes, chasing yield has a downside!!!

My highlight above on Toys.

The Private Equity guys killed Toys. Look it up. Sad, but once the PE firms get control, they load the business up with the debt that they borrowed to buy the firm's stock, cut some operating expenses out to make it look good, launch a new IPO, collect all the cash, then watch it slowly go into BK and walk away rich.

That scenario repeats itself time after time again.

 

[bobandsherry]

GLP-A caught in an updraft today. I'm considering selling off and see if this settled back down. Already up more than the next two divi's.

 

[Mulligan]

GLP-A caught in an updraft today. I'm considering selling off and see if this settled back down. Already up more than the next two divi's.

Bob, Im hanging on. Definitely has been a quick ride up. I dont know what my intentions were when I bought this and I am still deciding, but for now am holding.

 

[brokrken]

Ok I'm out of the country so there could certainly be something wrong with what I'm seeing. But I see LANDP up to 27.95. Can't be, right?

 

[Mulligan]

Ok I'm out of the country so there could certainly be something wrong with what I'm seeing. But I see LANDP up to 27.95. Can't be, right?

It was a dumb one off small opening bell purchase...195 shares one transaction.

25.4393194NDD
10:20:10f 25.43194EXGX
10:20:1025.5158150NDD
09:30:0027.95195NASDAQ
08/1725.635100

 

[bobandsherry]

Bob, Im hanging on. Definitely has been a quick ride up. I dont know what my intentions were when I bought this and I am still deciding, but for now am holding.

I originally jumped in as this had a nice yield for the risk. But sometimes opportunity knocks so jumped out, then got back in on the dip today, pocketing slightly more than 20 cents/sh. With 600 shares that was more than enough for nice steak dinner and wine

 

[Mulligan]

I originally jumped in as this had a nice yield for the risk. But sometimes opportunity knocks so jumped out, then got back in on the dip today, pocketing slightly more than 20 cents/sh. With 600 shares that was more than enough for nice steak dinner and wine

Dont blow that profit on food and drink....Reinvest that cash!
I got into some low level profit flipping and got stuck with cash. Decided last 2 days just to double down on AGO-B and have 2000 shares. Will hold for interest payment. Chart shows it consistently bounces back, so I should only have to hold a month or two. Its not getting called apparently and one is getting a 60 basis point free ride owning this over the newest sister. So it should have a strong backside.

 

[Coolius]

Decided last 2 days just to double down on AGO-B and have 2000 shares. Will hold for interest payment. ........ Its not getting called apparently and one is getting a 60 basis point free ride owning this over the newest sister. So it should have a strong backside.

Mulligan, could you provide more info for your conclusion that AGO-B is not going to be called?


I have a regular position in AGO-F, but would certainly consider swapping it out for AGO-B if I have assurance it will not be called in the near future.

 

[Mulligan]

Mulligan, could you provide more info for your conclusion that AGO-B is not going to be called?


I have a regular position in AGO-F, but would certainly consider swapping it out for AGO-B if I have assurance it will not be called in the near future.

I have absolutely no assurance, lol...I just know they have a 7% 2034 bond that is callable (been for many years) and they have never redeemed it either. AGO-B has been callable since 2006. They didnt redeem on this payment so it’s good for another. You know I love the backside price support and yield protection over call risk.

 

[Mulligan]

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

I have absolutely no assurance, lol...I just know they have a 7% 2034 bond that is callable (been for many years) and they have never redeemed it either. AGO-B has been callable since 2006. They didnt redeem on this payment so it’s good for another. You know I love the backside price support and yield protection over call risk.

I suspect the hesitancy to redeem is that they are already in essence perpetual due to next century redemption date. But as we know for us, anything outside of 10 years will react like a perpetual anyways. Not many Baa debt with in effect a 6.7% yield trading less than 4 months above par call price. $25.98-.43 (payment this month)= $25.55. So about 4 months above call price. I bought most of mine at $25.87-90. But I bought more today at $25.97 also.
And remember AGO-F is a 5.6% trading right at par with a 2103 maturity date. You are stealing 100 basis points...That is equivalent to a $4 price drop difference if rates rise...Translation...10 year gets closer to 3.5%-4% . AGO-F goes to $21 and AGO-B stays at par.

 

[Freedom56]

I suspect the hesitancy to redeem is that they are already in essence perpetual due to next century redemption date. But as we know for us, anything outside of 10 years will react like a perpetual anyways. Not many Baa debt with in effect a 6.7% yield trading less than 4 months above par call price. $25.98-.43 (payment this month)= $25.55. So about 4 months above call price. I bought most of mine at $25.87-90. But I bought more today at $25.97 also.
And remember AGO-F is a 5.6% trading right at par with a 2103 maturity date. You are stealing 100 basis points...That is equivalent to a $4 price drop difference if rates rise...Translation...10 year gets closer to 3.5%-4% . AGO-F goes to $21 and AGO-B stays at par.

Hello Mulligan,

I thought you didn't like AGO because of it's Puerto Rico muni bond exposure. I belive that risk is contained.

If you want a high grade shorter term note that yields 6.875%, there's AFC (Allied Capital or Ares Capital now). I picked up 4000 (not easy to do) of these at an average of $24.20 in late 2013 and have held them since. It's past its call date also and trades at very thin volume. It sometimes drops as low as $25.20 after ex-dividend and then climbs back up.

 

[Mulligan]

capital position could absorb losses on its entire exposure to issuers in Puerto Rico of roughly $3 billion and…there would be no change in Assured’s capital adequacy score or financial risk profile”
https://assuredguaranty.newshq.busi...a-financial-strength-ratings-stable-outlook-1

Hey Freedom....The above was a couple weeks,ago post...Yes I wouldnt touch them at all knowing the loss exposure was huge. But I didnt know the damage in terms of relation to their capital exposure. S&P and Moodys both have come out to say this is no concern. Plus they will soon start to profit again from the mess by reinsuring the new safer bonds that will replace the existing ones. So I dont have any concern holding now.

 

[Coolius]

In case any of you did a double take at the "dumping" of CNLPL today, no reason for concern.


I had 2 open orders, at $55.00 and $54.81, that had been open for days, and both of them did not fill. They were for far lower volumes than the 500 shares transacted in the dump.



This has got to be a "dark pool" type trade between brokers - no other way to explain why my legitimate orders got bypassed at much higher prices.

 

[bobandsherry]

In case any of you did a double take at the "dumping" of CNLPL today, no reason for concern.


I had 2 open orders, at $55.00 and $54.81, that had been open for days, and both of them did not fill. They were for far lower volumes than the 500 shares transacted in the dump.



This has got to be a "dark pool" type trade between brokers - no other way to explain why my legitimate orders got bypassed at much higher prices.

One block of 500 shows right near the close. You get those games with issues that are so thinly traded.

 

[Coolius]

One block of 500 shows right near the close. You get those games with issues that are so thinly traded.

Yep, illiquids are a ripe playing field for all kinds of strange strategies, maybe designed to flush out weak hands?


I noticed just before the close, there was an ask @ $55.77. I might be tempted to take that one if it is still around tomorrow.


Ex-dividend day is Sept 7, for about 81 cents.

 

[Winemaker]

CTXCL, a 7% note by Qwest, due 2052, will be called 9/4/18.

I've had a bunch of these I bought at $23.63. Easy come, easy go.

 

[Freedom56]

CTXCL, a 7% note by Qwest, due 2052, will be called 9/4/18.

I've had a bunch of these I bought at $23.63. Easy come, easy go.

CTX, CTU, and CTW along with a U S West 2035 bond were called on Tuesday. I sold my positions in CTX, CTU, and CTW Tuesday and Wednesday and rolled them into the Quest 2031 7.75% bond. I suppose others were rolling over to CTAA and other remaining notes and bonds. This $1.4B redemption is very bullish for the rest of Centurylink's debt. The new management appears to be turning things around.