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

[Running_Man]

It seems there is developing a slight dumping of fixed income investments, I noticed Jeff Gundlach's closed end income fund DSL is falling off a cliff the last week. After both the NAV and market price being at around 20 a month ago the NAV has fallen about 65 cents to 19.34 but the CEF has fallen to 16.79. Since this is about a 2 billion dollar CEF that is indicating a lack of demand and perhaps this is showing up in preferred prices as well. Most of the public Storage Preferred are over 6 percent now.

 

[Mulligan]

It really hasnt been a bad week really. I sold 600 shares of SBNCM at $14.95 friday that I bought at $11 a bit over a month ago...And snagged the divi too. KTH is up ..KTN is up..NISOP is up...Bought 200 more ALLY-A at 25.20. I have kind of decent position in it now..Moved to 1100 shares of EBBNF buying more between $17.93 and $18.35 to go with previous purchase. I really like this one as a long term hold.

 

[Running_Man]

EBBNF Ebb and Flow??

 

[Mulligan]

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

EBBNF Ebb and Flow??

It will do that too, I am sure... Its an Enbridge preferred. Actually a Canadian preferred which had some shares registered to trade on OTC. Its a 5 year reset issued in 2012 that had first reset in 2017. Its 5 yr US Tbill plus 3.15%. Was set off 1.78% US 5 year back in Sept 2017. Last trade has it 6.77% QDI. Since 5 yr is now 2.68%, I got 90 basis points in my hip pocket for 2022 as far as downward yield protection goes. If it stays at present yield (more worried about the backside protection it has) it would be 7.67%.
Moodys just issued recently a presser saying they are reviewing for a “multi notch” credit upgrade also. Enbridge has paid a common dividend for 64 straight years. I really like the unusual and different reset mechanism here for a long term hold for income.

 

[Running_Man]

I cannot find it on quantum, is it callable?

 

[Sunset]

CBB.PB is falling faster than CBB.
It hurt.

 

[Texas Proud]

It will do that too, I am sure... Its an Enbridge preferred. Actually a Canadian preferred which had some shares registered to trade on OTC. Its a 5 year reset issued in 2012 that had first reset in 2017. Its 5 yr US Tbill plus 3.15%. Was set off 1.78% US 5 year back in Sept 2017. Last trade has it 6.77% QDI. Since 5 yr is now 2.68%, I got 90 basis points in my hip pocket for 2022 as far as downward yield protection goes. If it stays at present yield (more worried about the backside protection it has) it would be 7.67%.
Moodys just issued recently a presser saying they are reviewing for a “multi notch” credit upgrade also. Enbridge has paid a common dividend for 64 straight years. I really like the unusual and different reset mechanism here for a long term hold for income.

Looks like it fell off a cliff like some of my other holdings... I am shocked that the move of my pref was over 1%.... never have I seen that much before...


Also, I am now negative YTD on my flip portfolio!!! I was up $4000 by the end of July but have lost every month but one since... and this last 2 big time... now negative $300.... as mentioned, some of these have gone from the $22 range down to $15s.. well, it was fun while it lasted



I am not upset as the stock values have declined much more than the pref, so they are doing what I expected them to do...

 

[Mulligan]

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

I cannot find it on quantum, is it callable?

RM, here is the prospectus. It was issued in 2012. It is past call, but can only be redeemed every reset which would be 2022. It is the series L preferred.
http://www.enbridge.com/~/media/Enb.../2012_ENB_ProspectusPrefSeriesL_Eng.pdf?la=en

Yes, Texas, it has fallen off...Probably stayed too high too long. But facing a multi notch grade upgrade (which could likely put the preferred in line for a Baa3 rating), back yield price support, I like it...How many preferreds can one buy that has floating protection for future higher yields, but also has 90 bps support below it also?

 

[Mulligan]

CBB.PB is falling faster than CBB.
It hurt.

Sorry Sunset..Yes it is trading like a broken company.

 

[brokrken]

What do you guys think about buying more NSS? My first purchase was above par. Getting more now gives me a nice yield, plus I mitigate my call risk.

 

[Mulligan]

What do you guys think about buying more NSS? My first purchase was above par. Getting more now gives me a nice yield, plus I mitigate my call risk.

Ken, just me, but I have been negative on this issue a while despite still holding. It isnt one of my larger holdings. I wouldnt overexpose here. This is really a papered over preferred, not debt. Just make sure you are comfortable with their debt and capital structure if you are wanting to over allocate. Also depends on if its for a hold or flip.

 

[brokrken]

Ken, just me, but I have been negative on this issue a while despite still holding. It isnt one of my larger holdings. I wouldnt overexpose here. This is really a papered over preferred, not debt. Just make sure you are comfortable with their debt and capital structure if you are wanting to over allocate. Also depends on if its for a hold or flip.

My position is small, so adding a bit wouldn't overexpose me. But, I get your point on their debt structure, there are probably some stronger balance sheets out there with similar yield. I'll search around. On the other end of the spectrum. I was looking at LMHA. Nice yield (6.6% at current discount price) for a Baa2.

 

[Mulligan]

My position is small, so adding a bit wouldn't overexpose me. But, I get your point on their debt structure, there are probably some stronger balance sheets out there with similar yield. I'll search around. On the other end of the spectrum. I was looking at LMHA. Nice yield (6.6% at current discount price) for a Baa2.

NSS....Thank you Sir...Come again please Sir...Ouch, Damn that hurts!

 

[bobandsherry]

NSS....Thank you Sir...Come again please Sir...Ouch, Damn that hurts!

Something/someone is driving this into the sand.

 

[Sunset]

Something/someone is driving this into the sand.

Perhaps it's because oil is down 5%, and people confuse the price of oil with pipeline transportation.

 

[Mulligan]

Perhaps it's because oil is down 5%, and people confuse the price of oil with pipeline transportation.

Yes, I agree...Of course if the oil drillers go bankrupt the contracts dont mean anything for NS, lol... I bought 300 more EBBNF at 17.75 which gets me to 7% QDI... Bought 400 SRC-A at 19.66 and it has jumped back to 20.41 already... Made a killing on the HE-U shares today at 24.50 buying over 1900 shares...The bad news...NSS beat down (only own 500 shares thankfully) and CHSCN...I took my CHSCN beating like a man and sold off today using the money to buy the SRC-A...I pretty much have lost faith in CHS.

 

[aja8888]

Well, I did a little bottom fishing and picked up a few hundred shares of EBBNF @ $17.97. Why not,?? I know Enbridge pretty well having worked on several pipeline projects of theirs in Canada and they are top notch. Plus, they have some strategic US assets in the northern states and own the Cushing Terminal a few big pipelines here.

I'm holding on to my CHSCM as I have had it a long time and why not?

 

[Mulligan]

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

Well, I did a little bottom fishing and picked up a few hundred shares of EBBNF @ $17.97. Why not,?? I know Enbridge pretty well having worked on several pipeline projects of theirs in Canada and they are top notch. Plus, they have some strategic US assets in the northern states and own the Cushing Terminal a few big pipelines here.

I'm holding on to my CHSCM as I have had it a long time and why not?

My sell was not to imply it for anyone else to panic like me...Keep on going, Aja! I just got out of all my troubled issues.
I had a wild day today...Made some great bucks buying 1900 plus shares of HE-U at 24.50 and it closed at 25.36. Bought 400 shares SRC-A at 19.66 and it jumped 80 cents... I also had 300 shares SRC-A last week at 20.70 but captured a divi there. Bought the EBBNF at 17.76. Cost basis is higher, but I am fine owning it because of its strong credit. Bought 500 Landp at 25.28 and capture tomorrows monthly divi.
I did a lot of trading to protect my profits this year...I need to get this year over with before something goes wrong, lol..
I almost dont even recognize my list of preferreds anymore, lol..

 

[Mulligan]

CBB.PB is falling faster than CBB.
It hurt.

Sunset, do you own much of this? It dropped again today. It is just stunning the drop this has had.

 

[aja8888]

Sunset, do you own much of this? It dropped again today. It is just stunning the drop this has had.

I just looked at it and the chart shows it falling off a cliff! What happened?

 

[Sunset]

Sunset, do you own much of this? It dropped again today. It is just stunning the drop this has had.

I owned 400.
Sold it off, taking the loss on it hurts, but at least will save some on taxes due to the loss.

I couldn't really find a reason why it dropped so much, which really made the problem worse as I expected it to go back up, and instead it plummeted more. It seriously looks like it's going to hit zero in a month.. (now that I sold and said that, watch it jump back to perfectly fine).

 

[aja8888]

I owned 400.
Sold it off, taking the loss on it hurts, but at least will save some on taxes due to the loss.

I couldn't really find a reason why it dropped so much, which really made the problem worse as I expected it to go back up, and instead it plummeted more. It seriously looks like it's going to hit zero in a month.. (now that I sold and said that, watch it jump back to perfectly fine).

In my entire investing career, I only had one stock go really south (but not to zero) and it was not a preferred. It went from $5 to $0.25. No buyers at a quarter so my broker bought it.

 

[Texas Proud]

I just looked at it and the chart shows it falling off a cliff! What happened?

WOW!!!! Almost a 50% drop in a short time... something is up... somebody is selling like crazy...


SOOOO, this is one of those do I take a chance or not...



Today I got slammed again.. down another 1.5%... NSS and SPLP-A...


I am a bit surprised there is so much movement... I do not know if it is related to the interest rate hikes as those were known...



Oh well....

 

[Sunset]

I have one (company shares that went to zero), it has been zero for a few years, but I bought it knowing it was high risk and only put 1K into it for a thousand shares...

So just got an email about CBB, seems I'm not the only one surprised:
https://seekingalpha.com/article/4229069-cincinnati-bell-sell-seems-bit-much?dr=1

 

[Running_Man]

I owned 400.
Sold it off, taking the loss on it hurts, but at least will save some on taxes due to the loss.

I couldn't really find a reason why it dropped so much, which really made the problem worse as I expected it to go back up, and instead it plummeted more. It seriously looks like it's going to hit zero in a month.. (now that I sold and said that, watch it jump back to perfectly fine).

Cincinnati Bell's two acquisitions in 2018 were major mistakes and are eating up the EBITDA from CCB's investment in fiber technology. Now there are worries Fiber may get pushed out by 5G and so the stock and preferred falling like a rock.