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

[aja8888]

Am I missing something why would someone pay 25.75 for AILLL today?

I had a friend of mine call me yesterday asking if he should buy some @$25.26. He didn't know the call was announced. He is a pretty savvy investor. He thought there might have been some bad news, power wise and knew I had followed the issues.

 

[pb4uski]

Am I missing something why would someone pay 25.75 for AILLL today?

Clueless? Not paying attention?

If not for this forum and innovativeincomeinvestor if I held AILLL I would have never known. Sounds like only Fidelity sent a call notice to holders of AILLL and that was long after that one sentence "announcement" buried in another filing.

I can see someone who has had it on their watchlist for a long time getting a notification that it has slipped below their target price and acting on it without thinking about whether it has been called. No mention of the call as of right now on quantumonline or innovativeincomeinvestor. I could see that I would be fooled... price is below target and check those two and no mention of a call.

 

[pb4uski]

... Aint that crazy, huh...Should pay out about $25.27 March 29.

So why would someone bid $25.38? or ask $25.45... trying to snag a sucker?

 

[bobandsherry]

Guess lesson learned on thinly traded issues trading well over par, you have to count on your own ability to stay up on SEC filings and read through them when they are published. AILNP is still trading at $105 today. Maybe $1.25 in dividend to be paid. I'd guess some people had a GTC that they forgot about and this is now buying up the "discounted" shares.

 

[youbet]

Neither Quantum or Schwab gives a clue about the "special div" that splp-a paid yesterday along with the regular div. Anyone know what that was?

 

[brokrken]

Neither Quantum or Schwab gives a clue about the "special div" that splp-a paid yesterday along with the regular div. Anyone know what that was?

Not sure why, but they split the divy into two parts, but if you add them up, it equals the 6% coupon due that quarter.

 

[youbet]

Not sure why, but they split the divy into two parts, but if you add them up, it equals the 6% coupon due that quarter.

Thanks brokrken. That's what it looked like to me. But after this AILLL surprise (at least to me), when I saw the words "Special Dividend" attached to the SPLP-A payout I figured maybe I'd forgotten how to pay attention and am gettin' too old for this investin' stuff..........

 

[youbet]

This is the only mention of the AILLL call on Seeking Alpha I could find.

AILLL is defunct

 

[Mulligan]

Not sure why, but they split the divy into two parts, but if you add them up, it equals the 6% coupon due that quarter.

Duh, I didnt even notice. Mine was unequally split up also. No mention of special though. Just partnership distribution. Remember this is not a QDI but K-1 income.
I bought 2000 shares of AILLL at $25.05 and .06. Sold half today at $25.38. Didnt get best price but more than I was planning on..
Yes, people have got screwed up...This is the “good old days” and I forgot dangit...See 7-8 years ago more of these old illiquids were redeemed just like this one was. No one knew what was going on, sometimes even selling the wrong sister issues. Those were lovely free money plays that was stealing candy from a baby... Maybe I can do better on my last 1000 to sell.

 

[pb4uski]

Well done Mulligan! Easy money for you!

 

[Mulligan]

Well done Mulligan! Easy money for you!

PB, you wanna know how crazy I was? 1000 of those shares I bought on margin. Never done that before, lol.
I was thinking about that SPLP two payments. There actually was an SPLP-A and SPLP-T for a short period before T was folded into A. Maybe they are still segregated in the backroom still.

 

[brokrken]

I was thinking about that SPLP two payments. There actually was an SPLP-A and SPLP-T for a short period before T was folded into A. Maybe they are still segregated in the backroom still.

I was thinking the same thing, but back in 2019 (after the A/T combo), Q1 was split, but Q2-Q4 were not. I can't figure out the rhyme or reason.

 

[Winemaker]

Neither Quantum or Schwab gives a clue about the "special div" that splp-a paid yesterday along with the regular div. Anyone know what that was?

My Fidelity Account shows just ordinary dividend paid, nothing special.

 

[Sunset]

My Fidelity Account shows just ordinary dividend paid, nothing special.

For me, it's 2 separate payments amounting to 37.5 cents per share in total.

 

[youbet]

Finally! This morning my Schwab account shows AILLL as being called.

AMEREN ILLIN 6.625% PFD **CALLED** @PAR EFF: 03/29/2021

Picked my 800 shares up in Feb, 2016 around a buck over PAR, so not a bad run. Still, disappointed to see it called.

 

[youbet]

For me, it's 2 separate payments amounting to 37.5 cents per share in total.

Here's how mine looked:

03/15/2021
Special Dividend
SPLP+A
STEEL PARTNERS HOL 6%PFD DUE 12/31/49SUBJ TO XTRO REDEMPTION


03/15/2021
Cash Dividend
SPLP+A
STEEL PARTNERS HOL 6%PFD DUE 12/31/49SUBJ TO XTRO REDEMPTION

 

[Mulligan]

Here's how mine looked:

Kind of odd how this preferred is acting like a dog. I have been buying and flipping all sorts of crap issues and they keep bouncing and running. Yet this one is woof woof barely break even since I bought last month including the divi payment.
Almost tempted to buy more..... My CEQP- bounced nicely today on them simplifying their MLP structure and announcing buybacks of common and preferreds.

 

[Sunset]

Kind of odd how this preferred is acting like a dog. I have been buying and flipping all sorts of crap issues and they keep bouncing and running. Yet this one is woof woof barely break even since I bought last month including the divi payment.
Almost tempted to buy more..... My CEQP- bounced nicely today on them simplifying their MLP structure and announcing buybacks of common and preferreds.

I think it's the company name. Very misleading as to their business.

 

[brokrken]

RILYZ getting called today. I'm in it at an average of $23.99, so don't hate it. Just need to find somewhere to redeploy

 

[Sunset]

I had read the Quantumonline statement, but here is my issue:
I have some SPLP-A in an IRA/ROTH, so I can due to the small amount, ignore the tax treatment of partnership and other tax treatments.

That might not be the same in a regular account, if someone tells me they have some similar stock in a regular account and it causes a lot of paperwork I'll skip buying it in a regular account.

Maybe I'm worried about nothing, but I don't want to spend 2 extra hours on taxes when I can just buy a different stock.

I finally got my Steel Partners K-1 form.
Glad I have all this in a Roth so I can ignore filling out the forms

I've decided I'm not buying this in a regular account.
I didn't try filling out the forms for the K-1 , but it sure looks complex from all the information they gave me, and the 23 page booklet of instructions didn't help make it look easier

 

[Winemaker]

I finally got my Steel Partners K-1 form.
Glad I have all this in a Roth so I can ignore filling out the forms

I've decided I'm not buying this in a regular account.
I didn't try filling out the forms for the K-1 , but it sure looks complex from all the information they gave me, and the 23 page booklet of instructions didn't help make it look easier

You can ignore the paperwork if held in a tax deferred account, the trustee handles that paperwork. If you use Turbo Tax they walk you through in a few minutes. Easy Peasy.

 

[JoshTrent]

Hi All.. i've been lurking this thread for, well a long while. In my down time I do go back and read through of the the previous thread too. There is a lot to absorb!

I've dabbled with some preferreds in my my Roth, and they have done well. So, thank you! (the collective you) I admit, I am more of a Buy & Hold guy, as opposed to just capturing dividends. I am in the accumulation phase, FIRE is still a few years away.

The Spring of 2020 I purchased some divi paying commons at a nice discount. Most are YOC of 8-10%, with cap gains in the 40%+ range. After you finish chiding me for market timing, can someone help explain the difference in inherent risks with this type of common stock purchase v. preferred stock purchases? I understand market risk & slashing of dividends.

In my mind, 2020 was a fire sale. I was fortunate to have cash on hand to pick up some amazing deals. I appreciate that it will probably be a once in a lifetime event, but never say never, right??

 

[Sunset]

You can ignore the paperwork if held in a tax deferred account, the trustee handles that paperwork. If you use Turbo Tax they walk you through in a few minutes. Easy Peasy.

After tax season, I suppose I should take a copy of my taxes and pretend I have the K-1 holdings in a regular account to see how easy/difficulty it really would be.

 

[DR1959]

Not sure I understand the logic in BDXB preferred. It looks like a $50 call value trading over call, but the writeup on it tells a different story. Anyone understand this preferred? I like BDX

BDXB Becton, Dickinson ADRs of 6.00% Mandatory Convertible Preferred, Series B
Dividends will be payable on a cumulative basis when, as and if declared by our board of directors or an authorized committee thereof, at an annual rate of 6.00% on the liquidation preference of $1,000 per share. We may pay declared dividends in cash or, subject to certain limitations, in shares of our common stock, par value $1.00 per share (our “common stock”), or by payment or delivery, as the case may be, of any combination of cash and shares of our common stock, at our election, subject to certain limitations, on the first business day of each of March, June, September and December of each year, commencing on September 1, 2020 and to, and including, June 1, 2023. Unless earlier converted, each share of the Mandatory Convertible Preferred Stock will automatically convert on June 1, 2023 (subject to postponement in certain cases, the “mandatory conversion date”), into between 3.4722 and 4.1666 shares of our common stock, subject to anti-dilution adjustments, depending on the average VWAP (as defined herein) per share of our common stock over the 20 consecutive trading day period beginning on, and including, the 22nd scheduled trading day immediately preceding the mandatory conversion date. At any time prior to the mandatory conversion date, a holder of 20 Depositary Shares may cause the bank depositary to convert one share of our Mandatory Convertible Preferred Stock, on such holder’s behalf, into shares of our common stock at the minimum conversion rate of 3.4722 shares of our common stock per share of Mandatory Convertible Preferred Stock, subject to anti-dilution adjustments. This security was issued by Becton Dickinson, whose common stock symbol is BDX.


I think I just figured it out, it is 20 times $50 or $1000 which can convert to BDX. So its over-valued based on that!

 

[pb4uski]

Yes, each BDXB share represents a 1/20th interest. This summary may be more intuitive for you. And the number of shares are also 1/20th.... 0.1736 @ $288.00 to
0.2083 @ $240.00

https://www.quantumonline.com/search.cfm?tickersymbol=BDXB&sopt=symbol