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

[Coolius]

Mulligan, nope, I noticed. My broker has a page with upcoming dividends on holdings, so yesterday the screen showed the FIISO XD.

Good buys for both of us, wish we could get more, but I've had a GTC at $106 for many weeks now, no movement whatsoever.

What do you think of the new Urstadt Preferred? Temp symbol URRDP, 6.25% coupon IIRC. I currently own UBP-F which will be called as stated when they announced this new issue, so looking for a replacement.

 

[Mulligan]

I like the company...I dont like the yield...Shocking huh? If one wants 6% plus yield I suspect it will be as good as long as it is outstanding...Which should be forever... The question is will 6% be ok if price sinks to $21-22? Because that is where it will go immediately if 10 yr ever creeps toward 3%. We all look at things from different perspectives . I have my pension, so I can be less yield hungry if I want...Hence the KYN-F purchase today. Or all the other term dated issues I own....But I also own BRG-C and ABRN. Go figure...I cant....But I bought them.

 

[Coolius]

My projections call for a minimum portfolio return of 5% to ensure I can meet living expenses and allow for modest inflation.

So URRDP yielding 6.25% is sufficient for my requirements, and the important factor is the stability and dependability of the income stream.
That will kick the can down the road for at least 5 years.

If I can get it at or below par, I'm going for a starter position.

 

[Mulligan]

Well the here is something interesting.... 7.125% UBP-F was issued in Oct. 2012 when 10 year treasury was 1.75%... 6.25% UBP-G went to market with 10 year around 2.2%... UBP is not appreciably different now than then financially. The yield chase craze is wild now...The safety of payment is fine. The protection of capital is not....Its the world we live in now...

 

[Texas Proud]

OK.... this system is more rigged than I thought....

I had a bid for 25.85.... so a sale occurs at 25.851 and the next is at 25.86... only a hundred shares, but if a computer is doing this for the broker that is a buck they made doing nothing but jumping in front of a real bid...

Do this millions of times and you can make real money....

 

[Mulligan]

Texas, the brokerages have a kick back agreement with the whole sellers they send the orders to. They can be sent to different whole sellers who of course may have other agreements with computer bot people who intercept orders. Of course the brokerages claim these "rebates" help them offer lower discount sell order prices...Ya ok....whatever....
Sold off my CRLKP, should have got an exD this week pocket but who knows...Bastards at SP Parking are totally unhelpful about providing any info on this issue they are in charge of paying. I dont mind dark, but not pitch dark and arrogance. Im done with it....Used that cash,divi cash and leftover KTH proceeds for these purchases today... Bought 200 of HGH at $30.38.... 3.25% YTC for 4.5 yrs and lower investment grade paper. Not bad for a safe shorter term issue. It has a juicy huge kicker with Libor in 2022 to incentivize call. If they dont I will take the higher float yield....Or sell if it spikes again in a few months if it happens... Bought 200 of LXP-C at $25.40. Basically at par 6.5% yield allowing for accrued divi...I was surprised to find out this issue has become investment grade. LXP has come quite a ways in improving its finances the past few years. And last but not least overpaid to snag 200 more AILLL at $26.95.... Just keep adding here... Too many other people have bought in and about killed the trading float anymore.

 

[Texas Proud]

Texas, the brokerages have a kick back agreement with the whole sellers they send the orders to. They can be sent to different whole sellers who of course may have other agreements with computer bot people who intercept orders. Of course the brokerages claim these "rebates" help them offer lower discount sell order prices...Ya ok....whatever....
Sold off my CRLKP, should have got an exD this week pocket but who knows...Bastards at SP Parking are totally unhelpful about providing any info on this issue they are in charge of paying. I dont mind dark, but not pitch dark and arrogance. Im done with it....Used that cash,divi cash and leftover KTH proceeds for these purchases today... Bought 200 of HGH at $30.38.... 3.25% YTC for 4.5 yrs and lower investment grade paper. Not bad for a safe shorter term issue. It has a juicy huge kicker with Libor in 2022 to incentivize call. If they dont I will take the higher float yield....Or sell if it spikes again in a few months if it happens... Bought 200 of LXP-C at $25.40. Basically at par 6.5% yield allowing for accrued divi...I was surprised to find out this issue has become investment grade. LXP has come quite a ways in improving its finances the past few years. And last but not least overpaid to snag 200 more AILLL at $26.95.... Just keep adding here... Too many other people have bought in and about killed the trading float anymore.

Where do you see LXP-C as investment grade? That is a decent yield for one...

 

[Mulligan]

Where do you see LXP-C as investment grade? That is a decent yield for one...

I had no idea either as I havent looked at it in 3-4 years. Its a busted convertible so call will never be an issue. I got the scoop from this article. I still didnt believe it but he was right. I went to Moodys and it has been investment grade since 2016 anyways.

https://seekingalpha.com/article/4106970-lxp-convertible-series-c-preferred-stock-good-value

New York, May 26, 2016 -- Moody's Investors Service ("Moody's) has affirmed Lexington Realty Trust's ("LXP") Baa2 senior unsecured rating. The outlook is stable.

The following ratings were affirmed with a stable outlook:

Lexington Realty Trust -- senior unsecured debt at Baa2; issuer rating at Baa2; senior unsecured debt shelf at (P)Baa2; subordinated shelf at (P)Baa3; preferred stock shelf at (P)Baa3.

RATINGS RATIONALE

 

[RE2Boys]

As we have heard, it is official now, TCF-B called. Received an email from Fidelity which stated:

CUSIP: 872277207
Description: TCF FINL CORP DEL DEP SHS REP SR A 7.50000% PFD
Rate: 0.000%
Maturity Date:
Redemption Price: 25.00
Call Date: 2017-10-16

 

[Running_Man]

Made an homage trade for Running Man.... 400 shares of KYN-F at $25.26 today... 3% YTM for 2.5 years and return of money aint so bad... Especially if his thesis proves true... If I had a dozen opportunities to invest in such issues as KYN-F with about 2.5 yr maturities I wouldnt be upset if all my money were in these types.

I am actually hoping my thesis is not correct, but if it is I would expect that in the next few months we will see the 30 year bond with a 4 - 4.5% yield. Sold portfolio positions to get closer to the 25% and 4% preferred down today, the Monmouth Realty, PG, D, TGT. Was going to sell 1/2 of my position in WFC-L but just couldn't get myself to pull the trigger......

 

[Winemaker]

Colony Northstar called 1 issue entirely 8.125% and 1 partial issue 7.875%, replacing it with an 7.125% issue. I got 2 divvies anyhow and a 0.65 capital gain.

 

[Mulligan]

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

Colony Northstar called 1 issue entirely 8.125% and 1 partial issue 7.875%, replacing it with an 7.125% issue. I got 2 divvies anyhow and a 0.65 capital gain.

Congrats Winemaker! Nice to hear from you and know you have a little time left in the day to step away from the fermenting buckets and make a little extra cash during the day!

 

[Texas Proud]

Let's hope nobody was holding any Toys R Us bonds or pref.... just filed for Chap 11...


I did flip some about a month ago and made about $900 profit... part of my buying divis trying to juice yield.... I sold before the divi since the price had gone up so much...


They did pay the divi... but that might be the last...

 

[Texas Proud]

OK... now this is getting ridiculous....


I had a partial call on AHT-D a in Aug... OK, fine... so I wanted to top up, but decided to add to my position since I thought it was now safe since they did a partial call...


WELL, yesterday there was ANOTHER partial call!!! REALLY?

Not as much as the first, but now I will not touch this as it is toxic IMO as you never know when they are going to do it again....

Might even have to reduce my holdings....

Edit to add.... Just looked.... have 666 shares left... a sign this is the devil pref....

 

[Coolius]

Texas, there was a partial call that hit my account this morning. I had 83 shares taken away, received $25/share plus accrued interest of about $0.45/share.

And on October 4, there will be another one.

I believe that there are only these 2 partial calls, am not aware of a third one - if so , can anyone please confirm.

 

[Mulligan]

Let's hope nobody was holding any Toys R Us bonds or pref.... just filed for Chap 11...


I did flip some about a month ago and made about $900 profit... part of my buying divis trying to juice yield.... I sold before the divi since the price had gone up so much...


They did pay the divi... but that might be the last...

I knew Toys was struggling long ago. I never had the courage to play that debt issue. It was too risky for me. Glad you made some quick bucks!
Alot of people have complained on income forums about the incessant drumbeat of calls. But outside of the one trade where I knew it was coming in short order, I have not had any. Of course most of my purchases have been made that are noncallable, term dated, or not likely ever to be called (hopefully).

 

[Texas Proud]

Texas, there was a partial call that hit my account this morning. I had 83 shares taken away, received $25/share plus accrued interest of about $0.45/share.

And on October 4, there will be another one.

I believe that there are only these 2 partial calls, am not aware of a third one - if so , can anyone please confirm.

I had 66 shares set aside about a month ago... I think that they are being processed now and I should see the money soon...

Today when I looked at my account another 34 shares were set aside yesterday... I had no knowledge of this partial call... if they had announced it earlier I missed that...

If that is the end that is great... but I wonder why they did 2 partial calls instead of just one?

 

[Mulligan]

I had 66 shares set aside about a month ago... I think that they are being processed now and I should see the money soon...

Today when I looked at my account another 34 shares were set aside yesterday... I had no knowledge of this partial call... if they had announced it earlier I missed that...

If that is the end that is great... but I wonder why they did 2 partial calls instead of just one?

Seems to me any time they find spare change in the couch they use it to call more shares. Taking a longer view its days look numbered.

 

[Texas Proud]

I knew Toys was struggling long ago. I never had the courage to play that debt issue. It was too risky for me. Glad you made some quick bucks!
Alot of people have complained on income forums about the incessant drumbeat of calls. But outside of the one trade where I knew it was coming in short order, I have not had any. Of course most of my purchases have been made that are noncallable, term dated, or not likely ever to be called (hopefully).

Yea, I have been hit with a number of calls.... but if I were in charge of the companies and had the ability to refinance at a lower cost I would... so I cannot begrudge the companies that are doing so...



As for the flipping.... I decided to take some money and trade, buying before ex-div date and then selling soon after... at first I got hit with a big price drop on one but I persisted... I am very close to one year and I think the results are pretty good.... with one sell left before my final year number I have....

15 total trades
23 days avg holding period
2 sold before divi because price increased enough for me
Best annualized return was 172% on the Toys R us
Worst annualized was -126%

Avg amount invested was $11,726
Total net income was $1,445

Since I still have a couple of weeks left it calculates to annual return of 12.6%.... I figure I made an extra $700+ doing this... might not be worth it, but it is something to do...

 

[MooreBonds]

Let's hope nobody was holding any Toys R Us bonds or pref.... just filed for Chap 11...

[heart beating faster] What's that? Toys R US?

[voice crackles in nervousness] Umm...

[beads of sweat forming on my forehead, palms getting sweaty] The corporate backed trust certificates?

[nervously loosening my collar] Nnnn....nah, I wasn't watching XKE drop like a slinky down the stairs over the past 2 weeks as talk surfaced of the possible Big B.

Had 300 shares too many in this one. Saw it plunge without warning from the 8s to 6, and read that some were worried about financing and that they hired a law firm that has bankruptcy experience (but they could just be working on a ReFi). I decided to take a chance. Obviously, got run over this time as my gamble probably won't pay off. There is still a chance of getting more than it's currently trading at ($.17 on the dollar). At least, I hope!

 

[Mulligan]

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

Moorebonds is that you crawling out of the cave? Hey the good thing is it wasnt a $100 par issue! And more importantly you wouldnt have had to tell the wife.... You know that dream vacation we were planning? Well I need to explain to you how ToysRUs will be preventing that from happening.

 

[Texas Proud]

[heart beating faster] What's that? Toys R US?

[voice crackles in nervousness] Umm...

[beads of sweat forming on my forehead, palms getting sweaty] The corporate backed trust certificates?

[nervously loosening my collar] Nnnn....nah, I wasn't watching XKE drop like a slinky down the stairs over the past 2 weeks as talk surfaced of the possible Big B.

Had 300 shares too many in this one. Saw it plunge without warning from the 8s to 6, and read that some were worried about financing and that they hired a law firm that has bankruptcy experience (but they could just be working on a ReFi). I decided to take a chance. Obviously, got run over this time as my gamble probably won't pay off. There is still a chance of getting more than it's currently trading at ($.17 on the dollar). At least, I hope!

I am surprised XKE is selling for as much as it is.... the actual bonds are like you say selling less... at .012 on the dollar...


Edit... got the price wrong.... it was selling for .12 per dollar... now at .26...

BTW, yield on the bonds is higher than on XKE...

 

[Mulligan]

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

I am surprised XKE is selling for as much as it is.... the actual bonds are like you say selling less... at .012 on the dollar...

Times change....When this debt backed trust was issued in early 2000s the rating of the underlying bond was A3! And I read JCPenny is going to try to peddle toys in their stores this year. Ya that is the path to sure fire profitability for the company. Hmm, they quit selling toys in the 70s because they werent making money on them then....

 

[Texas Proud]

I might take a flyer on this after a bit...


I remember when I was young and working for a bank that went under... there was one guy who bought up a LOT of pref shares at 1 cent per share... when it came out of BK they went back up to $25... he made millions....

There is no way this will be the same as it will never get down that low... but XKE is based on a bond and not pref so it is higher in the chain...

I need to look and see where these bonds fall... probably unsecured and at the bottom of the $5 bill owed...

 

[Winemaker]

IIRC, someone is still buying up Freddy Mac preferreds. I bought some for speculation in 2007, they were about $12, I lost my shirt and britches on that great move.