Month: February 2020

For a change common stocks opened the day a bit weak, but since have risen to near even on some exchanges–no surprise. The 10 year treasury is off 1-2 basis points at 1.61%–hardly a move at all.

It is interesting that the corona virus is playing out like a few of our commenters thought it would–don’t believe the data from China is what they implored–and while traders moved on forgetting the virus the numbers grew by leaps and bounds overnight. I mentioned yesterday that ‘only a fool would ignore it in total’, referring to the virus. Thanks to some of our commenters I am keeping one eye on the situation.

Looking over some of the most recent new issues we see a mixed bag. The new Triton International 6.875% preferred (TRTN-D) has traded strongly–hitting $25.78 yesterday.

The new 6.25% term preferred from Oxford Lane Capital (OXLC) stays weak trading now at $24.70 as it is still trading on the OTC market under ticker OXCPP.

The Brookfield Property Partners 5.75% perpetual which just started trading on 2/11 is at $25.38 today on the OTC market under temporary ticker BOPTP.

$25/shares preferreds and baby bonds are off just a couple cents on the week. Banks show a 5 cent drop, but I see quite a few banking issues went ex-dividend today (some BAC, COF and Puerto Rican Bank, FirstBancorp, issues) so likely they are really flattish.

Folks are talking on the website about a number of items–as always.

There has been a little discussion on the just announced State Street (SST) call of a 5.25% preferred (SST-C). This kind of tells you where we are going with investment grade issues.

There is some discussion of the B Riley (RILY) new baby bond which is now trading under ticker RILYM at $24.95. At a 6.375% coupon is this one the best buy of all the issues the company has outstanding?

Also Bob-in-DE has posted a note on a new preferred which I hadn’t seen yet from Medalist Diversified REIT (who?) It is a 8% issue offering–I will get something out shortly. Bob’s note is ‘quit complaining about low rates’ (in jest I think).

While it is nothing like the last 2 days of March, June, September and December, where we have around 110-120 preferreds and baby bonds going ex-dividend the next 2 days will see significant action.

On 2/13 and 2/14 we will see around 65-70 different issues going ex-dividend. This means we may see more ‘red’ show up on our screens as many of the quote providers do not adjust by the ex-dividend amount.

Something interesting that I sometimes see on ex-dividend date is that a few issues that are either in the early redemption window or near the early redemption date are marked down by the exchanges by the ex dividend amount and then they continue to fall.

For instance if an issue is trading at $25.75 and goes ex dividend by 35 cents the exchange will open shares at $25.40 on the ex date. If the issue is beyond the early call date or very near to it the shares may continue right to follow lower because of the potential call that may be near.

We are back into a period where each day you wake up and the equity futures are up 1/2%–and then over the course of the morning they move even further higher. Obviously the coronavirus is no longer a headline–BUT this thing could flair up again and only a fool ignores it in total.

I look at the REIT indexes and they move higher and higher–the folks writing on SA on them are ‘heroes’ (in their minds) and others writing on junky stuff are also hero’s–or at least they are will take credit for good gains while shunning their lousy picks. A rising tide lifts all boats!

I am stuff watching my preferreds and baby bonds–directionally moving higher, but with smaller and smaller coupons being presented to us for the future.

Oh well – just give me my 6-7% annual returns–year in and year out–I would be ecstatic–even gleeful.

Folks on the site are mourning in advance of the pricing of the new ATT (T) perpetual preferred–they know the coupon will be inadequate–maybe even worse than inadequate considering it will be rated junk–just below investment grade.

Others are talking about the dividend capture on UMH-D–it goes ex dividend Friday for almost 40 cents and is trading at $25.05. It has traded within 2-3 cents of this level for weeks. UMH has to be in the ‘hated’ category of REITs–investors hate that the company, which is in the manufactured home site group, owns bunches of shares in junky REITs. Quite honestly they should sell those shares and pay debt or give it to the shareholders–but from a preferred stock investor perspective with a decent economy this 6.375% coupon is a gift almost–I have bought it 3 times recently (in my higher risk basket).

It is incredible how popular some of the segments on this website are becoming–we have reached a point where the Reader Initiated Alerts page is the most popular page on the site (after the homepage)–followed by the Sandbox Page and then Sock Drawer. No real surprise here–it is where the folks with knowledge and experience hang out–there is no better group to hang with–wish I had more time to do so.

The website is around 2,600 pages now, which means I have less and less time to invest while I do more and more (in the background) of the website. Oh well there will come a time when I can spend more time in discussion than on administrative.