Month: May 2020

Bad news is good news, good news is great news–even no news is good news. So if you run an airline and your load factor goes from down 90% to down just 85% it is great news–I guess. The real question is where will it be next fall? With the FED pumping at the rate of $50 to $100 billion a week there is no use trying to guess where crazy markets will top out.

I have been chasing the new Pinnacle Financial 6.75% preferred issue all morning–I thought it would trade strong, but not quite this strong. I thought I would be able to get a decent ‘flip’ (short term holding to be sold for 1-2% gain). I have raised my bid 3 times–now I am done–I get it at $25.35 or not at all–oops it just executed so I have a 1/2 position and would be happy to sell around $25.75–or if it drops go ahead and add the other 1/2 position.

I am maintaining the 70% invested position that I have had and which has had great capital gains. Mostly utility and CEF preferreds and baby bonds–they are keepers.

I did get out of the UMH Properties 6.875% UMH_B shares–took a few days to get the price I wanted to ensure my 2% dividend capture—I wrote last week about this one (and others).

I forgot to mention I had taken a 1/2 position in the New York Mortgage Trust 7.875% perpetual preferred (NYMTO) last week on 5/22–at $18.38. I had written on an upbeat report out of NYMT the day before. The dividend is suspended on these cumulative shares right now, but I suspect they will reinstate soon. I have now sold my position at $19.60.

I wish I would have jumped on the new Stifel 6.125% perpetual—a $2/share gain in 8 days would have been possible-crazy–

I suspect I will be doing a lot of flipping and dividend captures all summer long–not likely to see great buying opportunities any time soon–party on!!

While common stocks party on the backs of extreme liquidity from government agencies of all sorts it looks like preferreds are joining in.

A few weeks ago I started doing a little dividend capture and new issue ‘flips’–given that I am flush with plenty of cash it seemed reasonable to try to garner ‘steak dinners’ (minor short term gains) on some new issues and dividend captures.

I started out by buying a 75% position in the newer Wintrust Financial (WTFC) 6.875% reset preferred at a price of $24.90. Given that I simply had a short term goal to garner 2% in a month or less I have now let this issue go (I sold it) as it hit $25.70 today. I left a little on the table, but the goal was reached–so the shares were sold.

Also a few weeks ago I bought a full position of the UMH Properties 8% perpetual preferreds (UMH-B). This issue is redeemable 10/20/20 and the company says they will be redeeming the issue. This is like shooting fish in a barrel as I bought shares @ $25.10 then the shares went ex-dividend on 5/14 for 50 cents. The share price is back above $25 so I have an order in to unload at a 2% gain.

With UMH-B with a ‘threatened’ redemption in October the shares should have a $25 floor–and should move toward $25.40 or so in August near ex-date. So one could go ahead and continue to hold–or sometime in early August it may still be around $25.10 in which case I would buy back–numerous ways to play this.

Another ‘old friend’ is the WR Berkley 5.625% subordinated note (WRB-B) which is currently callable–I bought a 1/2 position at $24.92 and it is now at $25.53–too high and I will exit today. It doesn’t go ex dividend until July so it has 1 1/2 dividends in the price, but could be called any time.

So I am off to see what else is out there to provide a little extra income while I wait.