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

[Mulligan]

Dont be afraid to get the full allotment of cnlpl, whatever that amount is.... Somebody is unwinding a position and it surely has to be about done. A company who covers preferred dividends by 50 times and has a monopoly utility business is about as safe as you can get in the preferred world. Seventy years of continuous payments of the preferreds issued still outstanding is a strong indicator also.


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[Texas Proud]

Dont be afraid to get the full allotment of cnlpl, whatever that amount is.... Somebody is unwinding a position and it surely has to be about done. A company who covers preferred dividends by 50 times and has a monopoly utility business is about as safe as you can get in the preferred world. Seventy years of continuous payments of the preferreds issued still outstanding is a strong indicator also.


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I have the other issue... CNTHP... it is currently 1/3 rd of my pref allocation... I want to invest more in other issues to get it down to 1/4th or 1/5th... so not looking to get more of it...

 

[Mulligan]

I have the other issue... CNTHP... it is currently 1/3 rd of my pref allocation... I want to invest more in other issues to get it down to 1/4th or 1/5th... so not looking to get more of it...

We needed to have gotten you in preferreds about 6 months earlier, as they have mostly as a group went north again in price. The unknowable question is will they drop in price or are we just heading into a longterm stretch of "lower for longer". Just to show rates can be headed even considerably more lower check out CNLTL from same family of CNTHP.... Its par yield, a very robust 3.8% ....Ouch.

 

[Texas Proud]

We needed to have gotten you in preferreds about 6 months earlier, as they have mostly as a group went north again in price. The unknowable question is will they drop in price or are we just heading into a longterm stretch of "lower for longer". Just to show rates can be headed even considerably more lower check out CNLTL from same family of CNTHP.... Its par yield, a very robust 3.8% ....Ouch.

I am going to take it slow and see what happens... I have bought about 60% of what I want to hold in the end... I am willing to buy up a bit, but do not want to way overspend....

Might try a few more of buying the dividend and selling and see how that works... I did it awhile back and did OK... but only do it with my play money... what I am doing now is permanent IMO... these are long term investments...

 

[Texas Proud]

OK, got my CVB I had been waiting for....

But, this has created a question that I cannot find an answer too...

Looking at the free real time site someone put here (not going back to name who) I see that a trade for all but 7 of my shares went through... then a bit later the 7 shares traded with a notation of "CAP election trade"...

I have looked that up and get a bunch of cap and trade links, but nothing on what this really is...

Does anybody know for sure what it means

 

[Mulligan]

OK, got my CVB I had been waiting for....

But, this has created a question that I cannot find an answer too...

Looking at the free real time site someone put here (not going back to name who) I see that a trade for all but 7 of my shares went through... then a bit later the 7 shares traded with a notation of "CAP election trade"...

I have looked that up and get a bunch of cap and trade links, but nothing on what this really is...

Does anybody know for sure what it means

It appears to be a "sweep execution trade" on NYSE. I guess maybe odd lots from other bids were swept together in a trade in the price you had submitted. Which I assume was about $10.51? Stock orders all go to different exchanges and probably some other people were sitting on your bid also. Decent volume on CVB. Congrats for being patient and holding your ground.

 

[Coolius]

This past week has seen an overall decline in the markets; but income issues seem to have weathered the storm well.

My portfolio hardly moved throughout this period, which is the way I like it. Hope that this low interest rate environment we're now in, continues for a while more.

WFC-PL very stable and rising very slowly, and continues to provide a stable and reliable income stream. The yield is still better compared with other Wells $25 preferred issues, so in that sense WFC-PL is still a buy even at these elevated levels. However, I am not intending to add any more to what I already own.

The Mulligan Ute preferreds continue to be a pillar of my income portfolio, and they will continue to be - barring a redemption call ( which will make me quite unhappy if it happens ).

 

[Mulligan]

Well since your preferred stash largely mirrors mine, you know the last few years have been a total snoozefest... How boring it is to see the market jumping all around and we just sit their twiddling our thumbs waiting for our 6% dividends roll in every 3 months. Unfortunately we are accumulating some small cap gains along the way so we are priced out from jumping back into the well and snagging some more. Coolius is helping me by tag teaming an illiquid. I needed more "arterially" which he provided to smoke a seller out...Maybe it will work Monday on him!


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[Texas Proud]

Well since your preferred stash largely mirrors mine, you know the last few years have been a total snoozefest... How boring it is to see the market jumping all around and we just sit their twiddling our thumbs waiting for our 6% dividends roll in every 3 months. Unfortunately we are accumulating some small cap gains along the way so we are priced out from jumping back into the well and snagging some more. Coolius is helping me by tag teaming an illiquid. I needed more "arterially" which he provided to smoke a seller out...Maybe it will work Monday on him!


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What are you looking to smoke out

I am not interested in the WFC shares... yield is below 6%... I also would like to get shares that are cumulative if possible...

Now, if the price goes down (probably not), then I might be interested... right now I am going to start to look for another investment...

So far my avg yield is 7.4% with a BB+ rating...

 

[Mulligan]

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

What are you looking to smoke out

I am not interested in the WFC shares... yield is below 6%... I also would like to get shares that are cumulative if possible...

Now, if the price goes down (probably not), then I might be interested... right now I am going to start to look for another investment...

So far my avg yield is 7.4% with a BB+ rating...

You aren't wanting what we are looking at ... 5.91% and three cents below call price...6% is all Im looking for and in utilities...Like Coolius, our main focus is this...1) Guaranteed payment 2) Price stability when things go to hell.... Utility preferreds largely shrug off even the worst of markets... Even in the 08-09 crash when most preferreds and commons were crashing 50-80%, Utes dipped 10-25%....
We have 2 separate goals from preferreds (and both are equally fine, btw) you are looking to use preferreds to replace high yield debt. Im using them to replace CDs. But occasionally I go crazy as we share a common bond in CVB!

 

[Texas Proud]

You aren't wanting what we are looking at ... 5.91% and three cents below call price...6% is all Im looking for and in utilities...Like Coolius, our main focus is this...1) Guaranteed payment 2) Price stability when things go to hell.... Utility preferreds largely shrug off even the worst of markets... Even in the 08-09 crash when most preferreds and commons were crashing 50-80%, Utes dipped 10-25%....
We have 2 separate goals from preferreds (and both are equally fine, btw) you are looking to use preferreds to replace high yield debt. Im using them to replace CDs. But occasionally I go crazy as we share a common bond in CVB!

True, I am replacing my HY bonds with these... but I also do not want to have major price changes...

My two biggest holdings are CNLPL and CVB... when I am finished with my purchases they will be over 40% of what I hold... I will have less than 20% in the lower rated issues... so I am not going way out on a limb with what I purchase... at the end I want to be with a weighted avg in the low investment grade category...

Where do you get 3 cents below call price? I see WFC L at 1266 with no call option... but a 1,000 conversion into common.... with no upside as it converts at par... unless you are talking about another issue...

 

[Mulligan]

True, I am replacing my HY bonds with these... but I also do not want to have major price changes...

My two biggest holdings are CNLPL and CVB... when I am finished with my purchases they will be over 40% of what I hold... I will have less than 20% in the lower rated issues... so I am not going way out on a limb with what I purchase... at the end I want to be with a weighted avg in the low investment grade category...

Where do you get 3 cents below call price? I see WFC L at 1266 with no call option... but a 1,000 conversion into common.... with no upside as it converts at par... unless you are talking about another issue...

I think you got MNR-A too correct? That is a very nice one also. I think you got a very strong selection and will be very pleased with the ones you have chosen. I just started into preferreds with utilities and they have remained my cornerstone even though I have branched out some also.
No, this one is an illiquid utility issue not WFC-L. It hasnt traded since April so it is a bit hard to get. Only about an 8 million issue so not many shares available.

 

[Texas Proud]

I think you got MNR-A too correct? That is a very nice one also. I think you got a very strong selection and will be very pleased with the ones you have chosen. I just started into preferreds with utilities and they have remained my cornerstone even though I have branched out some also.
No, this one is an illiquid utility issue not WFC-L. It hasnt traded since April so it is a bit hard to get. Only about an 8 million issue so not many shares available.

Yes, MNR-A is my current 3rd largest holding...

I round those out with Glacier Water, Old Second and JBN...

The one that I am going to keep a close watch is the JBN.... retail is taking a huge hit right now... but, it is a small holding and if I lose a bit on it no big deal...

My next purchase will probably be BGLEI or AILLL... just moved some money into the MM account so I can make a bid on them... but very few shares trade on these... might take awhile to get what I want....

I will again thank the main posters on this thread... it has been very good to me and I can see it has been very good to you also...

 

[Mulligan]

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

Yes, MNR-A is my current 3rd largest holding...

I round those out with Glacier Water, Old Second and JBN...

The one that I am going to keep a close watch is the JBN.... retail is taking a huge hit right now... but, it is a small holding and if I lose a bit on it no big deal...

My next purchase will probably be BGLEI or AILLL... just moved some money into the MM account so I can make a bid on them... but very few shares trade on these... might take awhile to get what I want....

I will again thank the main posters on this thread... it has been very good to me and I can see it has been very good to you also...

I had JBN and flipped for a quick 50 cent profit. I have been tempted to rebuy at lower prices. Actually Coolius and I had ours long before the thread began (Coolius even longer) but we like promoting them because they serve a different segment for people who are interested. Moorebonds on a PM a great while back got me started down the path. Then talking with Coolius and Winemaker got me being more aggressive in my allocation dollars knowing they liked them also. I also like to juice my returns a tiny bit with flips. I am already out of MNR-A again... If it drops low again on call fear I will reenter. I bought and sold CNLPL with a few hundred shares a few times last couple weeks when it was liquid. Snagged a double dividend in essence by reflipping and buying back.
It is more about fun than life changing gains, ha! But now that liquidity has dried back up, I am hunkered down again with my stray CNLPL's back in the fold with the other CNLPL's that were nit allowed to participate! With the illiquids if you play the game too aggressively you may wind up not being able to reacquire them.
I have several thousands of AILLL, and would love to toss some on market at $26.65, but too afraid I cant get them back with a meaningful gain. Too risky!

 

[Coolius]

Yes, it has been a pleasant event to own shares of AILLL, CNLPL, CNTHP and BGLEI,a nd a few other similar Utility Preferreds. They provide for a good night's sleep and the illiquid nature of these stocks are an attractive feature, in my book ( I know others differ in this regard, and that's fine - it's what makes a market ).

Supporting this core are high quality REIT & Financial preferreds such as PSA-A, PSA-Y, MNR-B, HCN-J, WFC-L, HUSI-H, UBP-F and O-F.

I have other common stocks that are far more liquid and volatile, and those give me enough excitement if I wish to Trade, sell calls, or Flip.

Just hoping we will all enjoy the income from such stocks for a long, long time.

 

[Mulligan]

Yes, it has been a pleasant event to own shares of AILLL, CNLPL, CNTHP and BGLEI,a nd a few other similar Utility Preferreds. They provide for a good night's sleep and the illiquid nature of these stocks are an attractive feature, in my book ( I know others differ in this regard, and that's fine - it's what makes a market ).

Supporting this core are high quality REIT & Financial preferreds such as PSA-A, PSA-Y, MNR-B, HCN-J, WFC-L, HUSI-H, UBP-F and O-F.

I have other common stocks that are far more liquid and volatile, and those give me enough excitement if I wish to Trade, sell calls, or Flip.

Just hoping we will all enjoy the income from such stocks for a long, long time.

The key for you and I anyways was we were committed to the then contrarian view opposing the idea "rates will return to normal". For the last several years it has paid off nicely. Preferreds do serve different needs,also. Coolius has a bit different bend to his because he has more tax free space than I do. Reit preferreds and baby bonds need to be tucked in a tax free account or income must be managed to be in a 15% range. I am entrenched in 25% bracket because of pension, so the QDI ones are more essential to me.

 

[Mulligan]

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

Coolius, you need to keep your eraser handy to keep track of my wheelings here... Sold a few shares of KTH I bought a few weeks ago at a nice quick profit. I then paired it with my spare change in HSA to buy 500 shares of GYC today on a drop. An "A3" rated due to underlying bond, low paying adjustable at about 3.7%. I did this with GJP last fall and made some good quick money on "rate fears". I will patiently wait on this one and it is safe to hold. A little counter balance to my 360 shares of CTWSO I got yesterday. A fixed issue of 5.51% but bought $6.50 under call price of $21. The common has raised dividend 47 consecutive years. This little water utility is as good as gold and will never be traded. It has been around since companies origination since 1956. Only 15,000 shares available and prior to this week hadn't traded since last July.
Also bumped up my KCC last week. After studying it, Im thinking the call risk is minimal. The underlying bond itself is uncallable outside of govt regulation changes to tax structure, and the call warrant holders have already had their chance picking it over leaving 3.9 million out of this original 95 million stranded. Worth a shot for over 7% from a safe insurer.

Out of free cash again so the lineup will probably stay the same for a while. AILLL/AILNP, CNLPL/CNTHP, KCC, KTH, GYC, CVB,NGHCZ, OSBCP, UEPCO, CTWSO.


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[Texas Proud]

OK, since I have put in my bid for BGLEI only a few shares have traded and for more than I wish to pay...

But, saw a sale on MNR-A.... so, changed my order yesterday to see if I could pick up a few more of these...

Success!!! Got another 450 today at a cheaper price than I got my last batch...

Almost have all the shares I want as a permanent holding... Have to sell some more of my other holding and still try and get that BGLEI....

Still might take some funny money and do some trading on the dividends... or price movements.... have not yet decided if I want to do this or not...

 

[Coolius]

Congratulations, Texas Proud !

I also saw the sale on both MNR-A and MNR-B, but was trying to get something else, and let the opportunity slip by.

You must be confident that MNR-A will not be called away anytime soon, since it's well past its call date. I hope and trust that you are correct as I have a few hundred MNR-A as well.

If MNR-B goes below $26 again, I will try and add to what I have.

 

[Mulligan]

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

As soon as my GYC money clears in my tax free I will look again at them. I made a quick $500 holding GYC for 2 days...But the money hasnt even settled from the purchase so I cant access the money. I have flipped "A" very successfully 3 times in past 6 months...
I just caved and bought 100 shares of BGLEP for $104.25. Got him down a quarter from ask. Be careful with these as I still think they scream call... But they did officially declare next dividend so .....whatever I am back in again...Made good money flipping BGLEI a few times this past winter.


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[Texas Proud]

Congratulations, Texas Proud !

I also saw the sale on both MNR-A and MNR-B, but was trying to get something else, and let the opportunity slip by.

You must be confident that MNR-A will not be called away anytime soon, since it's well past its call date. I hope and trust that you are correct as I have a few hundred MNR-A as well.

If MNR-B goes below $26 again, I will try and add to what I have.

I am risking less than 2 pmts... with the B you are paying more premium... sure, you will get it back, but if they call on time your rate is pretty small...

I decided to go look at the parent company and they are still expanding their RE holdings... they need cash... I would guess they do not want to issue any new pref shares.... they would need to generate a good amount of money in order to retire these securities... sure, debt is cheaper, but also more trouble which is why prefs cost more for the company....

I am hoping these never get called...

 

[Mulligan]

I am risking less than 2 pmts... with the B you are paying more premium... sure, you will get it back, but if they call on time your rate is pretty small...

I decided to go look at the parent company and they are still expanding their RE holdings... they need cash... I would guess they do not want to issue any new pref shares.... they would need to generate a good amount of money in order to retire these securities... sure, debt is cheaper, but also more trouble which is why prefs cost more for the company....

I am hoping these never get called...

No one knows the ulterior motives of executives...Especially in smaller ones such as this as the suites may own a slug themselves...But Reits are historical serial refinancers as that is what they need is lower interest rates to increase bottom line. Vereit (Ver-f) is a crap company and their preferreds are over par selling for 6.5%. Monmouth can do considerably better than present yields. I prefer to dine and dash on these. Though they both wont probably be called until B can be next year. Who knows...

 

[Mulligan]

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

Well it rained today so I didnt get to golf and played Mr. Investor too much today... But people are just paying too much and being way over par I dumped some of my AILLL and CNLPL and locked in solid profits.... Im over exposed there anyways... Flipped my GYC in 2 days with good profit... Was a good week for the illiquids... Besides I get to look for more to buy or wait for a better reentry point...
Oh and I bought 100 shares of BGLEP also...

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[Mulligan]

Still sitting on some cash but made a few trades mostly because I had even more cash after unloading some of my bloated CNLPL stash when it went to $54... That is just too high... Bought 200 shares of GOODO. A mediocre reit for a shameless yield grab near 7.5%. Preferreds are fine, the common I wouldnt trust. Not my normal type of purchase and hopefully it wont happen again!
And went back to an old stand by. Texas Prouds favorite... Bought 400 shares of MNR-A today. Maybe I can go back to the well a 4th straight time and make some more money on it. Though I mostly bought it to avoid God knows what else I would buy since Utes are through the roof. Though I do have the modest hots for one last Ute issue I got a 100 share bid on that I hope will gets snagged.


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[Coolius]

Those who own CNLPL, give yourselves a pat on the back.

Hitting close to new highs today - at $54.90, before settling back a little. As I write this, the bid is 900 shares @ $54.75, wow.

Sorely tempted to sell, but then the problem is how to replace the income stream, with comparable safety and reliability? Guess I'll hang onto mine....


Update: I could not resist - sold 35% of my position @ $54.95. I hope to buy back at the right opportunity in future, but feel a little sad, like a child going off to college.....