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

[Mulligan]

I am looking at this and wondering what do people see in this? Amtrust is going private to avoid continued prying into very shaky financial reporting - they have been under SEC investigation for 5 years and that is probably why they want the preferreds off the NYSE. What exactly other than high payout is a positive for these securities

The same regulatory agency investigating along with insurance regulators who went over everything are the ones that also approved going private transaction. Almost any company going private delists the ancillary issues to avoid millions in needless regulatory and exchange fees. That is just the realty. I already own one delisted insurance baby bond that I bought after it delisted.
The yield and the one day drop is exactly what made it appealing to buy as a risk trade....Good companies can make bad stock buys, bad companies can make good stock buys....look at how appealing this 12.5% is for comparative purposes... You could buy PCG-A yesterday with a present 9.55% yield...The dividend has been suspended a year, the bonds are triple CCC rated and this trades at 9.55% going into bankruptcy?
There is nothing immediately in danger of AFSI, next preferred dividend has been declared for preferreds (baby bonds need no declaration) posts of 11 cents a share posted Friday. I wouldnt touch preferreds, but baby bonds would be a bit harder to manipulate longer term at this price point.

 

[Mulligan]

Like that is so unlike you, but MTB- and then this? Like opposite ends of the spectrum

Bob, I do play higher risk with certain percentage of funds. But its measured and not always. Most people here are looking for safer yield, so I dont advocate them. This could be a couple day hold or a long term one, depending on price movement. When a stock drops 35% just from nothing more than a delistment notice that any retard should have saw coming is just insane. This is what private companies do. Funds and people not wanting or able to hold delisted preferreds are dropping and got caught with pants down. After the shareholder base rolls over, the stock will largely trade on its quality anyways...Look at IEH a 6% 2073 delisted baby bond. Last trade right at $25 par...No delistment discount there at all compared to baby bond exchange market pricing.

 

[Mulligan]

WOW.... I might have to stick my hand out and grab some of this...


Just wondering which is the better one to try and grab... I have looked at a few sites and the yields listed are different... Marketwatch has them at over 19%...


Anybody run the numbers?

You are looking at the non cumulative preferreds, Texas. I am not going there, sticking with the baby bonds. They did declare next preferred dividend though.

 

[bobandsherry]

Bob, I do play higher risk with certain percentage of funds. But its measured and not always. Most people here are looking for safer yield, so I dont advocate them.

Guess I just never saw that side of you Hope it works out for you and several others.

 

[Mulligan]

Bob, I keep it small and depends on my investing mood that day, lol...I own a couple SCE preferreds at 7% I consider a higher risk. Have owned 10% PFX for sometime now also. That high risk bucket is full now...Unless I get a bigger bucket, ha.

 

[Texas Proud]

You are looking at the non cumulative preferreds, Texas. I am not going there, sticking with the baby bonds. They did declare next preferred dividend though.

Good point... will probably go there myself...

 

[bobandsherry]

Bob, I keep it small and depends on my investing mood that day, lol...I own a couple SCE preferreds at 7% I consider a higher risk. Have owned 10% PFX for sometime now also. That high risk bucket is full now...Unless I get a bigger bucket, ha.

You know I have nothing against a risk/reward, just never saw that "dark side" of you I had a little cash on the side so I snagged a couple hundred of AFSS at $15.11. While preferred's have higher yield I just didn't like they are non-cumulative.

 

[Running_Man]

The same regulatory agency investigating along with insurance regulators who went over everything are the ones that also approved going private transaction. Almost any company going private delists the ancillary issues to avoid millions in needless regulatory and exchange fees. That is just the realty. I already own one delisted insurance baby bond that I bought after it delisted.
The yield and the one day drop is exactly what made it appealing to buy as a risk trade....Good companies can make bad stock buys, bad companies can make good stock buys....look at how appealing this 12.5% is for comparative purposes... You could buy PCG-A yesterday with a present 9.55% yield...The dividend has been suspended a year, the bonds are triple CCC rated and this trades at 9.55% going into bankruptcy?
There is nothing immediately in danger of AFSI, next preferred dividend has been declared for preferreds (baby bonds need no declaration) posts of 11 cents a share posted Friday. I wouldnt touch preferreds, but baby bonds would be a bit harder to manipulate longer term at this price point.

I am not viewing this negatively, my question was actual. I find your picks are about the best around so I was actually looking for the logic in the idea for holding. Thanks for the thoughts on the SEC, I thought perhaps going private was an agreement they reached to stop worrying about valuation of insurance policies with the SEC. Maybe they actually approved their financials.

 

[Mulligan]

RM, please be negative. A counter claim makes me think or expose a flaw too...Or maybe shames me into not buying more, lol. I am very skeptical of this company..And look at today. The baby bonds are bouncing up some while preferreds keep sinking. That speaks volumes of the trust worthiness!

 

[Mulligan]

I am not viewing this negatively, my question was actual. I find your picks are about the best around so I was actually looking for the logic in the idea for holding. Thanks for the thoughts on the SEC, I thought perhaps going private was an agreement they reached to stop worrying about valuation of insurance policies with the SEC. Maybe they actually approved their financials.

The family in past year or so did infuse $300 million additional capital into the company I know. I bought mostly on idea the downdraft was just over delistment and seeing what other issues are paying that yield in relation to risk. It just looked like a good small amount risk play. I will not get dragged very deep into this mudpit.

 

[Texas Proud]

You know I have nothing against a risk/reward, just never saw that "dark side" of you I had a little cash on the side so I snagged a couple hundred of AFSS at $15.11. While preferred's have higher yield I just didn't like they are non-cumulative.

I also decided to buy this... Mulligan talked me into it (he might not know he did).... but my early bid did not take and I had to buy at $15.50.... still a good yield.... and I do not think they will not be able to pay and stay in business... cannot say that with the pref...

 

[brokrken]

I also decided to buy this... Mulligan talked me into it (he might not know he did).... but my early bid did not take and I had to buy at $15.50.... still a good yield.... and I do not think they will not be able to pay and stay in business... cannot say that with the pref...

Funny, depending on how we view Mully's comments he either "talked you into it" like you or "talked you out of it" like me a few days ago

In any case, the mere idea that the family might have some crookedness to them keeps me away. Good luck to all, though!

 

[bobandsherry]

Funny, depending on how we view Mully's comments he either "talked you into it" like you or "talked you out of it" like me a few days ago

In any case, the mere idea that the family might have some crookedness to them keeps me away. Good luck to all, though!

I guess misery loves company.... guess we'll see how this goes.

 

[Mulligan]

Bob did you jump in too?

 

[bobandsherry]

Bob did you jump in too?

Yep, mentioned a couple posts above that i snagged a couple hundred AFSS at $15.11.

 

[Mulligan]

Yep, mentioned a couple posts above that i snagged a couple hundred AFSS at $15.11.

You must have been locked and loaded this morning. I didnt follow opening but I bet it jumped pretty quickly after you got in. I usually “like” what I buy, but I cant say I do here...Yep, I admit it...A shameless yield grab play!

 

[bobandsherry]

You must have been locked and loaded this morning. I didnt follow opening but I bet it jumped pretty quickly after you got in. I usually “like” what I buy, but I cant say I do here...Yep, I admit it...A shameless yield grab play!

Got in pretty early, had looked last night and made decision. The spread was a bit much, but went in at market and broker took a bit to execute but got a decent price, I was surprised. About 20 cent better than the ask was showing in the quote.

 

[Mulligan]

Well I nominate myself for wuss of the year. I sold my AFSS after it started dropping and sold at 15.45 for a bit over a $1 a share profit. I actually wanted to sell in morning, but funds hadnt settled yet and they wouldnt let me do it until the afternoon....So I bought...drum roll please...15 more shares of MTB- at 1012. Dear Lord I have too many of these.

 

[bobandsherry]

Well I nominate myself for wuss of the year. I sold my AFSS after it started dropping and sold at 15.45 for a bit over a $1 a share profit. I actually wanted to sell in morning, but funds hadnt settled yet and they wouldnt let me do it until the afternoon....So I bought...drum roll please...15 more shares of MTB- at 1012. Dear Lord I have too many of these.

Won't call you a wuss, but seems like you jumped ship early. AFSS closed at $15.96 today, so you left some $$ on the table. And then you buy MTB- by basically pre-paying for the dividend, so next dividend will basically be return of capital. Guessing in your IRA so mostly a wash, but essentially a small div for the short hold period before the upcoming Ex-D. But going forward you'll only get half the dividend yield. I know you are happy with the low risk stuff, so can't fault you for sticking to your guns.

 

[Mulligan]

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

Won't call you a wuss, but seems like you jumped ship early. AFSS closed at $15.96 today, so you left some $$ on the table. And then you buy MTB- by basically pre-paying for the dividend, so next dividend will basically be return of capital. Guessing in your IRA so mostly a wash, but essentially a small div for the short hold period before the upcoming Ex-D. But going forward you'll only get half the dividend yield. I know you are happy with the low risk stuff, so can't fault you for sticking to your guns.

Bob, you got to think like an optimist...I didnt jump ship and lose 50 cents...I made a quick buck buying something I had no business buying and shouldnt have bought...So that was a free buck. ...Besides, MTB- jumped $15 bucks today!
See they dont always trade that way... The last purchase was 1012 yesterday but it closed at 1027 today. But even if I held, and it got redeemed next cycle that would be $18.93 for a 3 month and one week hold which is a higher YTC than the actual par yield...You have to learn to distort the math in a truthful manner that benefits ones investing acumen ego.

 

[bobandsherry]

Bob, you got to think like an optimist...I didnt jump ship and lose 50 cents...I made a quick buck buying something I had no business buying and shouldnt have bought...So that was a free buck. ...Besides, MTB- jumped $15 bucks today!
See they dont always trade that way... The last purchase was 1012 yesterday but it closed at 1027 today. But even if I held, and it got redeemed next cycle that would be $18.93 for a 3 month and one week hold which is a higher YTC than the actual par yield...You have to learn to distort the math in a truthful manner that benefits ones investing acumen ego.

Can't argue with your record, sounds like it's time for another steak dinner and bottle of wine.

 

[pb4uski]

.... And then you buy MTB- by basically pre-paying for the dividend, so next dividend will basically be return of capital. Guessing in your IRA so mostly a wash, but essentially a small div for the short hold period before the upcoming Ex-D. But going forward you'll only get half the dividend yield. I know you are happy with the low risk stuff, so can't fault you for sticking to your guns.

I'm thinking of these preferreds as effectively a perpetual bond so if I pay the higher or par or call and the "accrued" dividend then my yield will be the coupon rate. If I pay more then I have a premium and my yield will be a little lower or if I pay less then I have a discount and my yield will be a little higher.

So MTB- at $1,012 is probably at a slight discount given a $15 dividend is on the horizon.

 

[bobandsherry]

I'm thinking of these preferreds as effectively a perpetual bond so if I pay the higher or par or call and the "accrued" dividend then my yield will be the coupon rate. If I pay more then I have a premium and my yield will be a little lower or if I pay less then I have a discount and my yield will be a little higher.

So MTB- at $1,012 is probably at a slight discount given a $15 dividend is on the horizon.

Yea, I know all that. Just that Mulligan is usually finding his gems trading at or below par and still rakes in the divy. Just look at what he's shared with us on prices he's paid recently or MTB-, just seemed outside his usual trading to pay up for the divy.

 

[pb4uski]

Yeah, I'm still wondering who sold him MTB- at $1,003.

 

[Mulligan]

Yeah, I'm still wondering who sold him MTB- at $1,003.

PB, MTB- and MTB-C are in essence the exact same identical issue. But its funny, one can be selling dribs and drabs shares the same day at 1025 and the other at 1002. And watching the individual trades from preceding days are interesting. My last trade of 1012, I had sat at $1010 and it was trading some at that price but never for me. So I bump and it hits. But of course more sells at 1010 occurred after my purchase also too.