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

Status
Not open for further replies.
Mulligan said:
You, are right to wait on what you want to hold at what price...I kind of play on all ends of duration and various levels of yield. Like the CTPPO...It wont trade much and it certainly isnt a cap gain trade. The 5.45% is nothing to beat my chest with either. But these are small trades that just get stuffed in the drawer. Most preferreds on market outside illiquids may be covered on earnings by single digits of 2-6 times coverage. Central Maine only has this last tiny preferred left and wont be issuing anymore. Its dividend coverage is 3,294 times. In other words I will never pay attention to companies earnings. My more aggressive trades such as ABRN I keep a closer eye on.
Click to expand...


Congrats on the CTPPO purchase Mulligan. What price does that 5.75% yield represent. (Too lazy to do the math)😬


Sent from my iPad using Early Retirement Forum
 
Golden sunsets said:
Congrats on the CTPPO purchase Mulligan. What price does that 5.75% yield represent. (Too lazy to do the math)[emoji51]


Sent from my iPad using Early Retirement Forum
Click to expand...



Golden, its 6% par, so purchase price yield is 5.45%. Actually on a comparative basis to other noncallable utes the yield was quite good. NEWEN noncallable 6% is only 5.0% and PPWLO 6% is 5.0% and PPWLM 7% is now 4.5%.... But with only 1900 shares outstanding if I never like the then current price I will just buy them all up and then sell myself 100 shares at $500 to make myself happy with the net worth " increase", lol.
 
BGE-B has been called. Redemption date is August 28.

Another one gone.....it was a good ride while it lasted, I enjoyed 2 dividends and the accrued interest will cover my above-par premium that I paid when I bought it.

Now, the challenge is how to replace the income stream. :(
 
OK... imagine my surprise when I looked at my account and I got the divis from CFC-B.... BUT, they REINVESTED them!!!


Who woulda thunk that this would qualify for auto reinvestment.... I do have it set to reinvest but I thought that was just common... and the price was higher than what I paid....


Will have to go in now and turn that option off :facepalm:
 
Texas Proud said:
OK... imagine my surprise when I looked at my account and I got the divis from CFC-B.... BUT, they REINVESTED them!!!


Who woulda thunk that this would qualify for auto reinvestment.... I do have it set to reinvest but I thought that was just common... and the price was higher than what I paid....


Will have to go in now and turn that option off :facepalm:
Click to expand...

Yes, there are actually many preferred stocks that are "reinvestable" for DRIPs! Make sure you verify that. Had that happen to me with Ameritrade. Back when you had to send an e-mail to customer service EVERY TIME you wanted a security enrtolled in the DRIP program, I told them I wanted 2 securities in my HSA account to be DRIPped. Well, some knucklehead somehow changed my account to set up ALL securities to be DRIPed! Found out when I checked my weekly activity and saw I had purchased 2 and some odd decimal number shares of a preferred and another stock I didn't want DRIPped. Was a little frustrated, so fired off an e-mail. They didn't offer to cancel the trade, just an "your account is now adjusted to not automatically DRIP all securities".
 
You know I never have messed with the internal controls of my account...But when I owned WFC-J it did distribute my divi into more shares...It is the only one I have ever had that happen with. I bet my account is "on" for reinvestment with everything, but most of my issues are so illiquid they cant do it.
I threw in the towel on MH-A today pocketing $50 for 10 days... Big money...Looks like its a goner and they dont accrue non declared dividends so I aint waiting around to possibly get screwed a few days holding without being paid to do so.
 
Somebody wanted a slug of AILLL at $27.04 so I let them have 700 of mine...Bought 700 more TCF-B as a profitable placeholder until other prices dip...Got a big slug of TCF-B now.
 
CHSCM is back in nose bleed territory at a few cents under a $29 handle. I am pondering putting in a sell order @$29. Thoughts?
 
Preferred Stock Investing-The Good , The Bad and The In Between

Aja, yes its high....But I guess its relative...And what is your plans with money? Sit on it? Reinvest? They have that quasi adjustable when it becomes callable but that is of little help as with the full adjustment yield would be 6.9% at current price.. So not much help.. Funny some people on another forum sold on bad earnings, which they were if memory serves...But it had zero effect on the preferred price....If you got gambling flipping blood in you it looks to be a trade...But no certainty you will get any advantage in this ever happening. A lot of companies crappier than CHS (I dont consider CHS crappy in anyway) are passing off preferreds into market at sub 7% now... So options are limited... If you are just pocketing income and not really thinking of anything else, better alternatives than this dont seem to be screaming...Yes, I would much rather load up on TCF-B than CHSCM, but goals are different for me with this purchase.
 
Yeah, I'm just looking to do a $29 sale and buy back at $25+ like happened in mid-2016.

Just curious but what's the big attraction with TCF-B other than dividend and it could be called at any time (even though I own a few hundred share)?
 
The attraction for me is minimal price downside. It has nowhere to go. Its basically the inverse buying for the reason you want to sell CHSCM. You think its too high. TCF-B really cant go down much. 2013 Taper Tantrum got it a bit below par and that was the last time. It has came down several bucks because it has ran past its call date. Its basically one of those take 7% plus until they call whenever that may be.
 
aja8888 said:
Yeah, I'm just looking to do a $29 sale and buy back at $25+ like happened in mid-2016.

Just curious but what's the big attraction with TCF-B other than dividend and it could be called at any time (even though I own a few hundred share)?
Click to expand...

That was my strategy when I unloaded HE-u at $28, "knowing" that it would likely get back to $26.50 to buy back in, as I saw it run up and down between the low $26 and above $28 so many times in the past. Still waiting for $26.50 about 9 months later, lol.
 
TCF-B

Mulligan said:
Somebody wanted a slug of AILLL at $27.04 so I let them have 700 of mine...Bought 700 more TCF-B as a profitable placeholder until other prices dip...Got a big slug of TCF-B now.
Click to expand...

Mulligan said:
The attraction for me is minimal price downside. It has nowhere to go. Its basically the inverse buying for the reason you want to sell CHSCM. You think its too high. TCF-B really cant go down much. 2013 Taper Tantrum got it a bit below par and that was the last time. It has came down several bucks because it has ran past its call date. Its basically one of those take 7% plus until they call whenever that may be.
Click to expand...

I am already wishing I had bought more of it myself; but, it is too pricy for me at the moment.
 
CoolChange said:
I am already wishing I had bought more of it myself; but, it is too pricy for me at the moment.
Click to expand...

Same here, got in at 25.46 but regret not purchasing more. Haven't been able to pick up any CNLPL or CNTHP or CHSCM in a long time either as they have been too pricey for me recently.
 
TCF-B is now starting its ramp up into XD this Friday 8/11.

If one buys today at ask of $25.53, the dividend of 46 cents will result in an effective cost basis of $25.07, if held through this week.

This over-par amount should be covered by the usual 30 day advance notice in the case of a call on September 1st.

So, buying at today's price is still a reasonable good decision, with minimal chance of loss.


Edit at 1:35 pm PST: I got a partial fill for 148 shares TCF-B at $25.51. Will check price action tomorrow and maybe buy another 252 more if price goes below today's buy.
 
Last edited:
Nice patience Coolius... The pattern seems daily to be jump at the open and then sag later as clumps are being sold still. Some funds and probably people too, dont like owning issues facing call risk...As others just lamented on high prices, this makes a safe trade to "chase income". Doubt if one sees a price spike from call risk, but the reverse is also true too making it a relative stable issue as long as it is outstanding.
 
Mulligan, like you, I have concluded that TCF-B will not see any significant price spikes or dips, but will probably trade in a narrow range between Par and Par+1 div for the indefinite future.

This is where I am putting proceeds from BGE-B which was called recently.

Worst case is a call announcement tomorrow, for redemption Sept 8. Should that come to pass, we receive the full dividend on Sept 1, plus 7 days accrued interest of around 3.5 cents. So total proceeds will be $25+0.46+0.035 = $25.495.

My loss exposure in this worst case is 1.5 cents/share - I can live with that.
 
I betting Coolius that in 4 days you are permanently good to the plus side......Maybe it will last an extra divi or 2 and we can get a sell off somewhere and then move the dough into something else....If this doesnt happen, I am sticking with an oversized position in it until call.
 
Well got tired of trying to find a home for my MH-A sale last week. Bought 600 more TCF-B at $25.52.... If this is still around in 6 months, I am unloading half and then hold the other.
 
Some guy who obviously had a lot to drink last night, bought a bunch of CNLPL at $57.39 --- :eek:

There is high valuation, then nosebleed valuation -- what would you call this one? Low earth orbit valuation??

Wow, Mulligan & I seem to be really on the same path investment wise; I bought another 200 TCF-B at $25.51 this morning. Pretty scary how we think alike - well, we'll fly high or crash & burn together :LOL:
 
Wasnt me! I did snag 100 more shares of CNTHP at $54.35 yesterday. Sounds like a bargain compared to $57.39, lol.
 
Ok, I moved a few things around and bought 400 shares of BRG-C at $26 on minor sell off today...This is a bit more riskier...But is backed by solid apt complexes....Switching from external to internal management which is good long term. Short term common shareholders took it on the chin in dilution from stock issued to external management in buyout and apparently reduced common divie going forward...The terms on this issue is beautiful....Plus 2% annual increases in divi payments if left outstanding in 2021 up to 14%.... Owners can put their shares at $25 in 2023... As long as company stays in business, lol....
 
Preferred Stock Investing-The Good , The Bad and The In Between

Moved a few things around so here is what I own now... TCF-B, CRLKP, NSS, AILLL, CNLPL, CNTHP, CNIGO, LANDP, ABRN, BURCP, WGLCP, CTPPO, CTWSO, FIISO, BRG-C.
 
Status
Not open for further replies.

Similar threads

Romer
Looking for an education in looking at a specific stock
Replies
24
Views
2K
DrRoy
DrRoy
S
Just invested heavily in Treasury Notes
2
Replies
38
Views
4K
hotwired
H
2
Reducing stock exposure in Retirement, age 60+
4 5 6
Replies
144
Views
9K
Onda
O
S
Reconciling micro observations with macro trends? (is the economy really doing well?)
2
Replies
26
Views
2K
Koolau
Koolau
PaunchyPirate
What is a good site for UK politics viewable from the US?
Replies
18
Views
612
fosterscik
fosterscik

Latest posts

Back
Top Bottom