Preferred Stock Investing-The Good , The Bad and The In Between 2021

[pb4uski]

I own all three of those Coolius. Calls used to bother me but now I am much more aware of YTC when buying so calls don't bother me so much... other than having to then find another place for the money.

I've been limiting myself to ~500 shares per ticker for $25 par issues to limit my credit risk... I may have to re-evaluate that policy.

 

[Mulligan]

How about SPLP/PRA? I accumulated a significant number of shares between early January and mid-April. Now the price is heading up and I see I'm up about 12% as a STCG. Sell? (It's in an IRA.) That would give me almost two years of divs immediately and I could stop fretting about UBTI and whether it will impact me. OTOH, I notice that SPLP had a favorable earnings announcement and the common is soaring as well. Perhaps SPLP/PRA is headed higher, maybe up to PAR?

Comments?

Youbet you dont want my opinion because I locked in too early at around $22.25. I thought it would bounce down...It didnt, lol..

 

[Mulligan]

I own all three of those Coolius. Calls used to bother me but now I am much more aware of YTC when buying so calls don't bother me so much... other than having to then find another place for the money.

I've been limiting myself to ~500 shares per ticker for $25 par issues to limit my credit risk... I may have to re-evaluate that policy.

In general, I believe when preferreds are priced to premium and dont have a lot of upside in general, buying into the “pinned to par” issues provides the best downside capital protection from higher yields. Along same pinned to par vein I have done something I have never done before. I have really loaded up on IPWLK the past couple months when I can. I bought 100 more today at $103.65. I got about 600 shares which is a helluva lot for me. But basically its traded around $100 the past 10 years, and goes exD next month. I hold my call breath and use it as a hideout spot.

 

[Winemaker]

How about SPLP/PRA? I accumulated a significant number of shares between early January and mid-April. Now the price is heading up and I see I'm up about 12% as a STCG. Sell? (It's in an IRA.) That would give me almost two years of divs immediately and I could stop fretting about UBTI and whether it will impact me. OTOH, I notice that SPLP had a favorable earnings announcement and the common is soaring as well. Perhaps SPLP/PRA is headed higher, maybe up to PAR?

Comments?

I'm hanging with my SPLP/PRA, youbet. I have broken my own rule about limiting myself to ~$5000 worth of any issue. I'm well over $20,000k with an average cost of $20.88. yeah they gave one divvy in stock, but it's been cash for a while. I can't see them reneging on any part of their preferred shares, it is a easy way to keep debt/equity ratios intact for future borrowing. If they screw us preferred owners, their credibility goes south big time; and that screws their business model.

 

[bobandsherry]

Looks like the remainder of ALLY-A will be called. Ally has new issue coming:

https://www.sec.gov/Archives/edgar/data/40729/000119312521171817/d127112d424b5.htm

We anticipate receiving approximately $ in net proceeds from the sale of the Series C Preferred Stock, after the underwriters’ discount and estimated fees and expenses. We intend to use the net proceeds from this offering to redeem a portion of the Company’s 8.125% Fixed Rate/Floating Rate Trust Preferred Securities, Series 2 of GMAC Capital Trust I,

New issue going to be $1,000 par.

 

[Hamster]

Looks like the remainder of ALLY-A will be called.

There goes one of my largest positions with no good replacement in sight.

 

[KingOfTheCheapos]

I own CEQP- and its $0.0125 per share!
It is generally viewed as a very good thing for share holders to sign and I will.

I don't know who else holds a piece of CEQP-, but there's a "CONSENT SOLICITATION STATEMENT" filing on 5/17 relating to changes as one of the sponsors (First Reserve Fund) wants to exit. This would then trigger a change of control, so Crestwood is looking to change the terms of the preferred agreement to strike out the language relating to the exit of the sponsor / change of control.

From the letter:


https://www.sec.gov/Archives/edgar/data/1136352/000119312521153359/d13751dpre14a.htm

This was also in the letter and caught my eye.....



it's fill in the blank as the amount of the consent fee, someone on another forum mention it was $0.125/preferred unit, or $1.25 per 100 block.

Might be better to force them to exercise the change of control. It currently has a floor of $10, shares closed today at $9.11

 

[KingOfTheCheapos]

Distressed Prefs to Invest in?

Hi

I made some good money investing in distressed prefs in 2020. By this I mean prefs trading well below their call price who had (or were likely to) suspend their dividend.

I invested in CEQP-, XAN (now ARC), BHR, DS, HT, NG, DCP who all recovered nicely are reinstating or not cutting their dividends.

A few are still waiting to reinstate their dividend: SOHO and PEI

But it looks like all these opportunities are gone. Any suggestions?

 

[Mulligan]

Hi



I made some good money investing in distressed prefs in 2020. By this I mean prefs trading well below their call price who had (or were likely to) suspend their dividend.



I invested in CEQP-, XAN (now ARC), BHR, DS, HT, NG, DCP who all recovered nicely are reinstating or not cutting their dividends.



A few are still waiting to reinstate their dividend: SOHO and PEI



But it looks like all these opportunities are gone. Any suggestions?

King, you look like a cap gainer player in preferreds. As you have correctly observed its the bottom of the barrel hitting on mall and hotel types that are left. Those few are out of my comfort zone.
Unless you are just a base income holder, the only way to make trade gains now is hitting IPOs right out of gate, or some divi capture plays and that is small gains compared to last years preferred sell off. Its tough out there to get what you are looking for at present time.

 

[Coolius]

Mulligan, I also own IPWLK, but far less than you.



Have you any concerns at all about the likelihood of a call? the call price is $100, so you could lose a couple of dollars should a call occur.


I have been toying with the idea of adding more, but the premium of about $3 over par gives me pause.

 

[Mulligan]

Mulligan, I also own IPWLK, but far less than you.



Have you any concerns at all about the likelihood of a call? the call price is $100, so you could lose a couple of dollars should a call occur.


I have been toying with the idea of adding more, but the premium of about $3 over par gives me pause.

See now this is where we are coming from different sides of the coin. You have been hit with a few call zingers and I have fortunately avoided any loss. So I am primed and fearless and emboldened from a great 5 months. I already flew over my 10% return goal this year, so I am willing to risk it for higher ute yield chase. Survive 4 months and your close to break even. I damn near just paid up to buy 100 more at $104.
But I snagged 100 shares of BANGN today and then traded into STAR-I at $25.60-63 today, so I doubt I buy more. I really own too much, but I dont care, I like risk reward, but that doesnt mean they wont be redeemed tomorrow at all. I can appreciate your concern. Maybe set a lower bid and if it hits it hits and if it dont you will be just fine without more!

 

[youbet]

I'm hanging with my SPLP/PRA, youbet. I have broken my own rule about limiting myself to ~$5000 worth of any issue. I'm well over $20,000k with an average cost of $20.88. yeah they gave one divvy in stock, but it's been cash for a while. I can't see them reneging on any part of their preferred shares, it is a easy way to keep debt/equity ratios intact for future borrowing. If they screw us preferred owners, their credibility goes south big time; and that screws their business model.

That makes sense Winemaker. I'm up a bit over 12% and haven't owned it very long, so it's very tempting to take what amounts to two years of divs as a CG and go on my way. But it's so satisfying to watch the divs come in, I'll likely hold.

 

[Winemaker]

That makes sense Winemaker. I'm up a bit over 12% and haven't owned it very long, so it's very tempting to take what amounts to two years of divs as a CG and go on my way. But it's so satisfying to watch the divs come in, I'll likely hold.

Watch your back, youbet, you might end up getting called a divvy payer buyer, or a rascal income investor!

 

[Coolius]

Maybe set a lower bid and if it hits it hits and if it dont you will be just fine without more!

Yeah, that is what I have done. GTC order at $102.75. If it hits, great. If not, life goes on.

 

[Happyras]

OK, so anyone have details on DTJ being called? If it is prior to June 1, as in today, they payout at 102% plus accrued div. Or is there better detail on the call date?
BRIEF-DTE Energy Announces Redemption Of 2016 Series B 5.375% Junior Subordinated Debentures
BY Reuters
— 5:54 PM ET 05/27/2021
May 27 (Reuters) - DTE Energy Co ( DTE
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* DTE ENERGY ANNOUNCES REDEMPTION OF 2016 SERIES B 5.375% JUNIOR SUBORDINATED DEBENTURES Source text for Eikon: Further company coverage:

 

[Happyras]

OK found it in full on their website;
DETROIT – DTE Energy (NYSE: DTE) announced today, 5/27/2021, the full redemption of all outstanding 2016 Series B 5.375% Junior Subordinated Debentures (NYSETJ). The 2016 Series B 5.375% Junior Subordinated Debentures will be redeemed on June 30, 2021. The redemption price is 100 percent of the unpaid principal amount of the 2016 Series B 5.375% Junior Subordinated Debentures, together with accrued and unpaid interest up to, but excluding, June 30, 2021. The 2016 Series B 5.375% Junior Subordinated Debentures will be called for redemption in minimum denominations of $25 and in multiples of $25.



Holders owning 2016 Series B 5.375% Junior Subordinated Debentures through a broker, bank or other nominee should contact that party for information.

So I calculate an $0.11 div for the period up to June 30, I would expect the price should be closer to 25.11 than current trade at 25.07, not a lot of meat to hold, but opinion?

 

[pb4uski]

Yeah, I get $25.11 on June 30.

$25.07 makes sense to me in that's ~ a 2% IRR, but you're right in my experience I've seen called issues trade at about the call amount, which never made sense to me.

Maybe people are smartening up.

 

[Happyras]

Yup, folks are smarter. I put my buy order in at 25.00 and nothing.....worth the shot

 

[tizod]

what has happened to Macrotrends? I cannot enter tickers and get data for last few days? Great site ot compare many historical data (like PE ratios) over 5 companies.

 

[aja8888]

Has anybody seen the new issue from Babcock and Wilcox?

https://www.babcock.com/en/news/bab...series-a-cumulative-perpetual-preferred-stock

NYSE: BW-A.

 

[RE2Boys]

Has anybody seen the new issue from Babcock and Wilcox?

https://www.babcock.com/en/news/bab...series-a-cumulative-perpetual-preferred-stock

NYSE: BW-A.

See: https://innovativeincomeinvestor.com/babcock-wilcox-enterprises-price-new-preferred/

It appears that they can not pay a cash dividends until they re-negotiate their credit lines.

 

[aja8888]

See: https://innovativeincomeinvestor.com/babcock-wilcox-enterprises-price-new-preferred/

It appears that they can not pay a cash dividends until they re-negotiate their credit lines.

After I posted I read the prospectus. I saw that too. No wonder why it was trading under par.

 

[jriemerm]

Can anyone tell me the difference between the two Pacificorp stocks PPWLM and PPWLO? And if there are circumstances where one would be a better choice to buy than the other?

 

[RE2Boys]

Can anyone tell me the difference between the two Pacificorp stocks PPWLM and PPWLO? And if there are circumstances where one would be a better choice to buy than the other?

PPWlm has a 7%coupon. PPWLO has a 6% coupon. Search the symbols at: https://www.quantumonline.com/search.cfm

 

[Mulligan]

Can anyone tell me the difference between the two Pacificorp stocks PPWLM and PPWLO? And if there are circumstances where one would be a better choice to buy than the other?

They are both equal standing legacy issues sent to market many many decades ago. They are uncallable and thus the reason why they still trade. PPWLO is the smaller float than PPWLM. Both are tiny, the former about 500K par total and the latter $2 million. Generally PPWLM will have the higher yield buying wise.