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

[Mulligan]

CFC-B is just a stable rock. Picked up a few hundred before it went exD this week at $25.88, it went exD and back to $25.72 already.

 

[Freedom56]

OHI hit my stops today at $33.50 and automatically sold off. I still made a $2.55 gain over the past 4 weeks plus the $0.63 dividend that will be paid May 15. Bloomberg reported that "The Centers for Medicare & Medicaid Services is considering changing Medicare reimbursement policy and cutting payments to providers with exposure to patients who use the system the most". Heathcare REITS are selling off. I'll wait for the dust to settle before getting back in.

 

[Coolius]

Bought back HE-U at $27.30 ( Sold at $28.00 a few days earlier ).

A nice little flip, picking up a few more nickels in front of steamroller.

He who flips and runs away, lives to flip another day. unless the steamroller accelerates forward and crushes him, of course.

 

[Texas Proud]

Bought back HE-U at $27.30 ( Sold at $28.00 a few days earlier ).

A nice little flip, picking up a few more nickels in front of steamroller.

He who flips and runs away, lives to flip another day. unless the steamroller accelerates forward and crushes him, of course.

Yea, I got crushed a couple of times.... and that usually cost more than a few nickels and dimes....

 

[Mulligan]

OHI hit my stops today at $33.50 and automatically sold off. I still made a $2.55 gain over the past 4 weeks plus the $0.63 dividend that will be paid May 15. Bloomberg reported that "The Centers for Medicare & Medicaid Services is considering changing Medicare reimbursement policy and cutting payments to providers with exposure to patients who use the system the most". Heathcare REITS are selling off. I'll wait for the dust to settle before getting back in.

That is cheating Freedom, that is a common stock. [emoji3]Congrats on the quick profits! Not much going on for me,as there is little price movement in what I own to do any trading. I sold off AES-C the other day and bought it back 20 cents cheaper today. That is fewer crumbs than Coolius will even mess with.
GBLIL seems to be creeping up a bit every day since I bought at $24.84 though. Everything else is just sitting there not trading, but that is pretty normal for most of mine.

 

[capjak]

WFC-F? Anyone guess the likelihood of it being called on or soon after 12/15/2017? Contemplating..

 

[Mulligan]

WFC-F? Anyone guess the likelihood of it being called on or soon after 12/15/2017? Contemplating..

You mean WFC-J, Cap? I see no F issue... You can bet your life it will be called. They just issued a sub 6% issue.. I suspect 10 year would have to be near 4% to keep them from being able to call. I have flipped it some in past year, but not enough meat on the bone right now..

Moved a few issues around, and letting my big dividend dump just sit tight for now...This week I bought 400 shares of BPFHP at $25.74 ( a bank preferred Boston Private Financial, 6.95% par) snagging the divi before it goes exD here in a week or so. Bought back 500 shares of BGE-B at $25.70 yesterday. And my oddball common stock purchase...NORSB...100 shares at $62.78 today. Interesting little telecom. Will just hold and see how it plays out over the coming years...
So my issues now are CFC-B, GBLIL, NORSB (it trades less often than an illiquid preferred and yields 8% plus so Im considering it a preferred, plus it has no voting rights like a preferred, lol), CTWSP, CTWSO, DMRRP, CNTHP, CNLPL, CNIGO, CNIGP, BPFHP, AILLL, AILNP, AES-C, BGE-B, FIISO.

 

[capjak]

Mull,

Yes I meant WFC-J, thanks, I'll have to think about doing something after a few Divis.

 

[Mulligan]

Mull,



Yes I meant WFC-J, thanks, I'll have to think about doing something after a few Divis.

You got time I suspect as it will slowly descend towards par. You have a $1.50 in dividends left...So 19 cents left at todays price...But you may catch a brief spike at some point to exploit... You certainly are not going to lose money holding. Since you are more the buy and holder you have time to think and exit at the best price for you....J is a $2 billion dollar issue...Just think of the cash Wells will save by reissuing a $2 billion preferred at 6%... This wasnt their issue to begin with.

 

[Mulligan]

Well I thought I was through trading but things change... I have tried off and on to get BURCP for 2 years. Put a bid out while bored at dealership waiting for repairs and almost instantly it hit at $48.50 for a 6% $50 par, $52 call issue...Its semi annual $1.50 payment comes my way also next month...Very nice stodgy conservative 100 year old family ran company that makes Boilers- HVAC products. Last 100 share trade was 2 years ago, and right after I bought someone paid $55 for another small lot purchase. Very old illiquid issue and probably never to be called as only 4000 shares or about 40% of float is still around anymore.
Since I was on a roll I sold off some CFC-B and bought 400 UMH-A at $25.985 that goes exD next week. Hold my nose and hope for no call for a while with UMH.

 

[Mulligan]

No action lately from anyone? Sitting tight or heading for the hills? That isnt for me , lol. Bought BGE-B last week and flipped after holding 3 days and snagged basically an entire dividend. Went back big time on UMH-A buying again at $25.93 and 500 more at $25.95 today... This trade is already sitting on a tee. Flip opportunities have been heating back up for me. Got another dine and dash play in my cross hairs... My "sock drawer issues" are just sitting collecting dust with most not trading or too high to buy more.

 

[Golden sunsets]

Hi Mul; I had an order in for my DM's account for CNLPL at $52.84 I think to invest the proceeds of a matured bond that had a yield of 4+. It sat for 10 days or so while the price seemed to solidify in the 54+ range. I finally gave up and bought more Wellington for her(not a comparable investment of course). I own CNLPL as well as its sister, AILLL and WFC-L. I've bought the same for Mom with the exception of the aforementioned order. DM is 92 and her portfolio is primarily an income portfolio. It's hard to keep her overall yield up without taking on more risk.


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[Texas Proud]

Hi Mul; I had an order in for my DM's account for CNLPL at $52.84 I think to invest the proceeds of a matured bond that had a yield of 4+. It sat for 10 days or so while the price seemed to solidify in the 54+ range. I finally gave up and bought more Wellington for her(not a comparable investment of course). I own CNLPL as well as its sister, AILLL and WFC-L. I've bought the same for Mom with the exception of the aforementioned order. DM is 92 and her portfolio is primarily an income portfolio. It's hard to keep her overall yield up without taking on more risk.


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Yea, I sold mine at $54+.... hoping it would come back to $53 at some point in time.... so far it has not.... but like you I moved on to something else....


Opps... mine was CNTHP....

 

[Coolius]

Golden, I own all the issues you listed, and comfortable with every one of them. They are all in my sock drawer, so composition ( and odor ) is a little different from Mulligan.

I bought more AILLL today, at the highest cost ever, but thankfully my blended cost basis is still just below $26.00.

WFC-L seems to have hit a higher trading range around $1,250-$1,263. Guess my GTC order at $1,199 will not bear any fruit.

Very comforting to see our illiquids being a rock of stability in a sea of volatility these past several weeks.....

 

[Mulligan]

As Texas and Coolius noticed Golden, they aint coming down! I miss the days of buying CNLPL and CNTHP around $52 and selling over $53 and rinse and repeat.
I have went on to a different strategy that has worked well this year. Instead of flipping on price movements buying and flipping around pre exD dates. Of course this is my flipping money... 3 or 4 issues have been very accommodating. Easy way to spike returns a few percent...At least it has for now.....As for the sock drawer Coolius mentioned, I continue to look to add but have had to go deep into the vault to find good safe ones...BURCP and DMRRP for example. As my original sock drawer issues are too high to buy more.

 

[Coolius]

A decent pullback today

Shaping up for a decent pullback today, maybe -300 pts or so down on the DOW.

However, preferred stocks quite steady, not many seeing double digit declines.

And the Ute illiquids are rock steady as usual.

No danger of meltdown in our sock drawers, at least not today.

Unfortunately, the Mutual funds and CEFs in my IRA are likely to see damage from this. But it is time for a reasonable pullback, and we can hope it will allow for some consolidation before pushing higher again.

 

[Mulligan]

Just came back from golfing....Yep, nothing happening in the land of preferreds. Still looking for a drop somewhere, anywhere to exploit but it isnt happening. Been over a week since I have been able to trade... Nothing I can do...Now, aint complaining about the stability, but would like a little action somewhere to exploit.

 

[jimnjana]

Considering AFSI preferred A shares, any thoughts. Common has been trashed, preferred have been too.

 

[Coolius]

Considering AFSI preferred A shares, any thoughts. Common has been trashed, preferred have been too.

Have not followed AFSI, but recently they were in the spotlight for accounting irregularities, and may have had to restate or delay an earnings report. You should have no difficulty retrieving the articles, they were pretty prominent..

In addition, the same guy was involved in 2 other insurance companies - maiden Holdings and National General - and the AFSI problems affected them, although temporarily.

I sold MH-C at a very small gain at that time. It did not fit my profile of a SWAN stock, and was outside my comfort zone, so this development gave the final nudge to sell.

Sorry I can't be of more assistance, but that's what I can remember.

 

[Mulligan]

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

Im with Coolius, Jim. I can really only assess comfort risk of buying anything anecdotally and birds eye aerial. True serious balance sheet comprehension and especially insurance companies is beyond me. I have looked in past to buy but many commenters on AFSI for the past year threw up red flag accounting issues. May be a good risk/reward trade, but I am passing. I have GBLIL of similar vein but they have not had any "accounting stories" and has a similar yield though it is debt not QDI like A is.

 

[jimnjana]

Thanks for feedback. Will keep looking. Jim

 

[Mulligan]

Thanks for feedback. Will keep looking. Jim

When I first got in this, Jim, I thought preferred buying was a math problem meaning there is a right one to buy and a wrong one to buy. But now to me anyways, what is right for one may not be for someone else. Different people weight different variables which include: Below par, yield, call protected, risk level, liquidity, business sector, QDI or not, etc. etc. What is important or unimportant to me may not be to others. I just bought 300 more shares of AILLL today $26.50. Many wouldnt consider that because its past call (been that way for over 25 years) and over par. But to me that isnt as important as the safety of payment and relative stability of price. I need more of this like I need a hole in my head, but I trust the company, follow the company, and understand the company. I value that. My weakness as an investor is thinking most issues are crap and someone is trying to pawn their crap on me by selling it to me,

 

[MooreBonds]

what is right for one may not be for someone else. Different people weight different variables which include: Below par, yield, call protected, risk level, liquidity, business sector, QDI or not, etc. etc. What is important or unimportant to me may not be to others.

I personally am willing to wade in and take a risk with AFSI. I previously owned 100 AFST. When it plunged to about $23.35 earlier this year (the first time, lol) I took a risk and picked up another 100. Why? Because even after the 'accounting irregularities', the net result on the balance sheet was minimal. It might have changed how they accounted for revenue/profits with a few items over a few years (and even that didn't change net earnings much), but it's not like they suddenly revealed that $10B of assets was actually worth just $1B. As a preferred shareholder, we are far more concerned with the net assets on the balance sheet more than net income and income growth in any given year - while a common shareholder is more the opposite. Granted, if they start losing money perpetually and are hemorrhaging cash, that's a concern for a preferred holder - but that wasn't the deal with AFSI.

Then, the second time the [-]manufactured news[/-] [-]short hit piece[/-] news story appeared about some "whistleblower" that supposedly said something to the FBI over 3 years ago took it down a second time, I was tempted to pick up another 100, and very tempted to pick up some common to flip....but didn't want to increase my exposure. But bottom line is that if you actually analyze the facts of the case (as far as they are known), there was far, far, far more hyperbole and drama than actual nit picking facts. It sounds bad if you just read the 10 word headline...but dig down into what was actually going on and see what the actual gov't claims were, and how it's been 3 years since the whistleblower supposedly said something to the FBI (you think they have that much serious fraud going on and they let an insurance company go on for years and years?), and I felt it was a far greater reaction than was warranted.

Sure, there's a chance that the auditor might say "Well, their actual balance sheet may not actually be correct"...but I felt the risk/reward ratio was worth a shot.

When it recovered to above 25, I sold 100.

As a few others have commented, I try to limit my total holdings to any one parent company to about $5,000 or so in preferreds. That way the eventual screw-up I make doesn't hurt too much.

 

[Mulligan]

You know Moorebonds, for me part of my problem is psychological. When you helped me jump in several years ago, I bought a few and then started researching more about the preferred market and history...And of course as fate would have it, about 3 days of my readings lead mostly to the collapse of preferreds in 2008-09 and how bad the bank and financial preferreds tanked to under $10. Then reading about how desperate companies issue preferreds as a source of "hidden debt". I never could quite shake the fear in me of preferreds and where they reside in capital structure. So that is mostly why I own preferreds from companies that dont need them or are a tiny zit on their capitalization structure. It probably isnt needed, but it helps me shake the feeling they are issuing these to screw me over. It also helps give me comfort in my lack of complete understanding of a companies capital structure and means to get more.
But for some it doesnt matter...LTS is a total polished turd of a company. Never makes money and when it does its never enough to pay the preferreds. But why do they worry...They just keep issuing more preferreds every year from same series to pay the dividends of the already sold ones. But I got a few that are a bit more up the risk chain...MHO-A, UMH-A, and GBLIL (AM Best rates them BBB-, but I aint buying it)

 

[pig pile]

Hello all, new poster here. A preferred nut case is the description that best fit me. Figured this might the thread to introduce myself. I recognize this Mulligan fella from somewhere.