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

[copyright1997reloaded]

Did you mean Spire, SR-A? I just recently reentered in 23.20s myself. Today I bought CMSD at $22.24 when it dropped for some odd reason hard, despite common was up strongly today. My walk on the wild side purchase was some NYCB-U at various purchases at $35.70 today.
Past 3 months I have been mostly buying more and more CDs, some bonds, a few TBills, and yearly IBond allotment. I would say about 70% of my money is there, maybe 30% preferreds but a lot of that is also baby bonds and ultra safe GBIL.

Sorry, yes Spire SR-A.
For some reason I have a mental block and just about ALWAYS say/type Shire.

ETA: Similar. I had been buying T-Bills in the 4.8-5.2 range hand over fist, and also exploiting late last week/yesterdays CD buys, and expanded my ladder a bit with 1-5 year CD's all at/above 5%. With my splurge, I'm just about tapped out in terms of funds in my IRA (where I have been buying the vast majority of CD's and treasuries), so I will need to wait a few weeks for some things to mature. I am hesitant to use all of the funds because some of it is earmarked to equities if we get a big leg down.

 

[copyright1997reloaded]

Got some Monday at 9.50, some at 9.75 and some at 11.75. Interesting to see what it does today.

What a fantastic buy!

I sold off half of my fairly small position today at 20.47.

 

[Mulligan]

Sorry, yes Spire SR-A.
For some reason I have a mental block and just about ALWAYS say/type Shire.

ETA: Similar. I had been buying T-Bills in the 4.8-5.2 range hand over fist, and also exploiting late last week/yesterdays CD buys, and expanded my ladder a bit with 1-5 year CD's all at/above 5%. With my splurge, I'm just about tapped out in terms of funds in my IRA (where I have been buying the vast majority of CD's and treasuries), so I will need to wait a few weeks for some things to mature. I am hesitant to use all of the funds because some of it is earmarked to equities if we get a big leg down.

I have an advantage remembering over you Copyright. I get a monthly bill from them so I cant forget, ha.

 

[Texas Proud]

Got some Monday at 9.50, some at 9.75 and some at 11.75. Interesting to see what it does today.

WOW, got a great deal...


I got mine at 15.88... seems like a good yield...

 

[Phroig]

WOW, got a great deal...
...

+1
Took some guts to buy them on Monday, well done! I got some ALL and BAC prefs. (mid-morning, so didn’t get the best prices). I flipped them early today, so I could follow the smart money (Mulligan, Copyright) into CDs.

 

[Hamster]

+1
Took some guts to buy them on Monday, well done! I got some ALL and BAC (mid-morning, so didn’t get the best prices). I flipped them early today, so I could follow the smart money (Mulligan, Copyright) into CDs.

Guts or stupidity. One of those two. Sadly, the panic seems mostly over and the opportunity for 20+% yield on these is gone.

 

[Mulligan]

Guts or stupidity. One of those two. Sadly, the panic seems mostly over and the opportunity for 20+% yield on these is gone.

To the victors go the spoils and congrats! I think diving in on price drops from sell imbalances is a good strategy. Dine and dash when opp presents itself. Because just static pricing doesnt support much confidence in holding 6% IG preferreds. What I mean is a few years ago you could get about a 6% IG preferred while the 10 year and CDs were 1%-2%.
Now we see 6% ish IG perpetual preferreds and 5% plus CDs. The math just doesnt make a solid risk/reward scenario.

 

[pb4uski]

OK, so help me out here. ALL-G has an announced call on 4/17. As I understand it on 4/17, I would receive $25.35 for each share, right? Current price is $25.20. So a 15c profit over 31 days if I bought today and it settles on 3/17, annualized that is $1.77 and divided by $25.20 that is a 7% yield for 31 days. What am I missing?

tIRA so no tax implications.

 

[Winemaker]

OK, so help me out here. ALL-G has an announced call on 4/17. As I understand it on 4/17, I would receive $25.35 for each share, right? Current price is $25.20. So a 15c profit over 31 days if I bought today and it settles on 3/17, annualized that is $1.77 and divided by $25.20 that is a 7% yield for 31 days. What am I missing?

tIRA so no tax implications.

You're learning from Mully!

 

[Phroig]

ALL must feel pretty secure about their finances if they’re calling a 5.625% preferred. I was in the H; maybe I’ll look at it again.

 

[perrytime]

need help researching HBANL

From the prospectus, which is only 1 day old, its 6.875% yield ( 25 par value),
at current price it yields 8%. I found link to prospectus on quantumonline.

seems too good to be true. Unless HBAN is at some risk.

 

[perrytime]

PACWP - PACW is in the making some headlines, I'll try the preferred. Many bank preferred seem non-cumulative. So if earns are poor i guess they can suspend as long as they want. Last I saw FRC is suspending regular, but not preferred divs

 

[Mulligan]

PACWP - PACW is in the making some headlines, I'll try the preferred. Many bank preferred seem non-cumulative. So if earns are poor i guess they can suspend as long as they want. Last I saw FRC is suspending regular, but not preferred divs

That one is sure not for the meek and timid, ha!
I dont know if any bank preferreds qualifies for a “safe” (whatever that means) investment, but I have bought into the WaFed preferred (WAFDP) over 8% and around $15. It appears to be conservatively run. They invest mostly in shorter maturities and hedge longer term. Their common stock has held up pretty good. Certainly way better the past 12 months than BAC and Wells. But the preferred has been torched from being a low yield par issue and current upheaval.
Here is the CEO interview last week. Its worth a bit of a play for me. That being said I have a heck of a lot in 5% CDs now, too!

https://www.cnbc.com/video/2023/03/...-the-healthiest-banks-says-wafd-bank-ceo.html

 

[bobandsherry]

That one is sure not for the meek and timid, ha!
I dont know if any bank preferreds qualifies for a “safe” (whatever that means) investment, but I have bought into the WaFed preferred (WAFDP) over 8% and around $15. It appears to be conservatively run. They invest mostly in shorter maturities and hedge longer term. Their common stock has held up pretty good. Certainly way better the past 12 months than BAC and Wells. But the preferred has been torched from being a low yield par issue and current upheaval.
Here is the CEO interview last week. Its worth a bit of a play for me. That being said I have a heck of a lot in 5% CDs now, too!

https://www.cnbc.com/video/2023/03/...-the-healthiest-banks-says-wafd-bank-ceo.html

Thanks for sharing Mulli - looking over their financials they have no unrealized losses (actually a slight gain), and the income statement looks good. With run-up over past couple days I flipped out of portion of my BOH-A that had run up (and lowered the yield) and traded for shares of WAFDP.

 

[Mulligan]

Thanks for sharing Mulli - looking over their financials they have no unrealized losses (actually a slight gain), and the income statement looks good. With run-up over past couple days I flipped out of portion of my BOH-A that had run up (and lowered the yield) and traded for shares of WAFDP.

Bob, Its hard to pull the trigger much and Im trying…But it seems likely if we buy some of these quality issues that are in mid teens now and trading near 8% will get rewarded at some point. When or ever? Who knows, but I feel compelled to dip a few toes in these.

 

[Texas Proud]

Bob, Its hard to pull the trigger much and Im trying…But it seems likely if we buy some of these quality issues that are in mid teens now and trading near 8% will get rewarded at some point. When or ever? Who knows, but I feel compelled to dip a few toes in these.

Might be just me but an 8% return is good enough for me... any gain is just gravy...

 

[Mulligan]

Might be just me but an 8% return is good enough for me... any gain is just gravy...

Tex, hey I love 8% too! I will just have to accept market present jitteriness and not get worked up if it bounces down.

 

[Mulligan]

OK, so help me out here. ALL-G has an announced call on 4/17. As I understand it on 4/17, I would receive $25.35 for each share, right? Current price is $25.20. So a 15c profit over 31 days if I bought today and it settles on 3/17, annualized that is $1.77 and divided by $25.20 that is a 7% yield for 31 days. What am I missing?

tIRA so no tax implications.

Sorry, PB, I missed this. It goes ExD end of month at about 50 cents. Its a 7.99% payer this quarter. And since they havent given a 30 day notice yet, it the full payment is in the bag now and would be accruing next quarter a few days even if called today.

 

[bobandsherry]

Sorry, PB, I missed this. It goes ExD end of month at about 50 cents. Its a 7.99% payer this quarter. And since they havent given a 30 day notice yet, it the full payment is in the bag now and would be accruing next quarter a few days even if called today.

Hey Mulli, he was asking about "G", that's been called for 4/17. He was looking to pickup some free nickels. I believe you confused with "B".

 

[Mulligan]

Hey Mulli, he was asking about "G", that's been called for 4/17. He was looking to pickup some free nickels. I believe you confused with "B".

Duh, thanks, Bob. Yep Im way off base. I got B fever. I bought a few hundred more today. I tend to buy more when I sell something and want to keep myself out of trouble.

 

[Mulligan]

You're learning from Mully!

I keep forgetting to ask, are you producing any nice vintage batches of wine this year, Winemaker?

 

[Winemaker]

I keep forgetting to ask, are you producing any nice vintage batches of wine this year, Winemaker?

While they're not sweet like you like them, I have a barrel of Sangiovese that has another 7 months to go, and a Barbera that went into a barrel for 11/2024.

I like to think they're all great vintages but my best was my 2019 Petite Sirah.

Cheers to you, Grid/Mully!

 

[pb4uski]

Duh, thanks, Bob. Yep Im way off base. I got B fever. I bought a few hundred more today. I tend to buy more when I sell something and want to keep myself out of trouble.

Yes, I was asking about the G looking to pick up some free nickels but I'm glad that you mentioned the B. We have some but I forgot about it and DMs IRA had a little money in it that I was wondering what to do with so I bought some of the B..

 

[ownyourfuture]

In July 2021, tired of seeing what the money market in my HSA was paying, I did something that turned out to be incredibly stupid. Started dollar cost averaging into S&P Investment Grade Preferred ETF (EPRF)

My total return is -18% & it's also the largest individual holding in the account (14%)

After today, the preferred index is sitting very near the March 2020 5 year low.

The only decision I've made is not to invest any 'new' money.

If you were in a similar position, would you ?

A-Sell
B-Hold & continue to DRIP
C:Hold & take dividends in cash.

My gut says anything other than A. Why sell something that's at a 5 year low ?

 

[Mulligan]

In July 2021, tired of seeing what the money market in my HSA was paying, I did something that turned out to be incredibly stupid. Started dollar cost averaging into S&P Investment Grade Preferred ETF (EPRF)

My total return is -18% & it's also the largest individual holding in the account (14%)

After today, the preferred index is sitting very near the March 2020 5 year low.

The only decision I've made is not to invest any 'new' money.

If you were in a similar position, would you ?

A-Sell
B-Hold & continue to DRIP
C:Hold & take dividends in cash.

My gut says anything other than A. Why sell something that's at a 5 year low ?

Unfortunately this fund is in the wrong sector at the wrong time. The “preferred universe” is close to 80% financials and yet this fund is 90%. And the financials have just been pummeled recently from the “bank crisis”. Many are so far down, one would think if you have a longer time horizon these specific preferreds will bounce back. It may be on the other side of a recession if we have one. You have the benefit of it not having single entity concentration risk. It may get worse… But timing these things in and out and back in is problematic also.