Innovative Income Investor | Innovative Income Investor

Setting Up a Few Good Til Canceled Buy Orders

I am not really seeing super compelling buys out there right now–the type where you look for a decent current yield as well as potential for some capital gains, so instead, for now, I have entered some good until cancelled buy order for adding to some of my current positions.

I have positions in the Spire (SR-A) 5.9% perpetual preferred which is now trading at $24.01 as well as the NiSource 6.50% fixed rate reset perpetual preferred (NI-B) which is now trading at $24.31. My current position size is modest (less than full positions) and so would not mind adding to them if someone wants to sell them to me at MY price. My price is 75 cents or so below the current price levels–I mean I want them cheap (probably too cheap). Both of these companies are utilities and are split investment grade. My target current yield for most issues I am hoping to buy now is in the 6.5% to 7% range–which would be a super yield from quality issues–although I would be willing to go down in the 6% range for some quality CEF preferreds.

I had previously noted that I have a good til cancelled order in on the GAMCO (Gabelli) Natural Resources Gold and Income Trust (GNT-A), but my buy price is much lower–right now $2/share below the market so I don’t expect to get these but you never know. I currently have a position in this one. The coupon on this one is 5.2% so to get my target yield it needs to fall substantially.

I have a few more orders in and will post a note on them soon–just in a time crunch as always

Watching Oil Prices

Just what we need (NOT) – higher oil prices. The jump in oil prices in the last week is one more dagger in the consumer heart. More than one commenter on this site has noted that if you want to know where the economy is going just watch energy prices. With oil prices up 10% in the last week the ‘have nots’ will be harmed more than the rest of us as gasoline prices will move quickly to match the higher crude prices. It will be interesting to see where this goes as the summer driving season arrives.

Last night I posted in the ‘headlines of interest’ new statistics on bankruptcy filings in March–I don’t think the absolute numbers are that huge, but they are way up in the last year. No surprise here – when the free money stops flowing from the government there is certainly some percentage of folks (and companies) that will go belly up. This will be interesting to watch over the next number of months as we inch toward the so-called recession ahead (when?).

Well markets are pretty quiet again today–equities up slightly with interest rates up a couple of basis points with the 10 year treasury yield at 3.46%. Seems like there isn’t current news to move markets–and the big news of the week is the employment report on Friday–and markets will be closed Friday for Good Friday.

Last Friday I started setting up Good Til Canceled orders on many issues–all which would be additive to some of my current positions–I will try to get a detailed list out yet today of what I am doing and why. Needless to say I am looking for ‘sales’—with CDs still available in the 5% area I need to be paid for ‘risk’ so my buy prices are at ‘sales’ levels.

Well let’s get this day rolling and see what the markets bring to us.

Headlines of Interest

Below are some press releases from company’s with preferred stock or baby bonds outstanding–or just news of general interest.

Soluna Reports $24.4 million in Cryptocurrency Revenue in Full Year 2022, a 123% increase – Provides Operational Update

Ares Management Corporation Schedules Earnings Release and Conference Call for the First Quarter Ending March 31, 2023

TravelCenters of America Files Definitive Proxy for BP Transaction

Scorpio Tankers Inc. Announces Repurchases of Its Common Shares

ARMOUR Residential REIT, Inc. Confirms April 2023 Common Share and Series C Preferred Share Dividends

Sotherly Hotels Inc. Reports Preliminary Operating Results for the First Quarter Ended March 31, 2023

Compass Diversified Declares First Quarter 2023 Distributions on Common and Series A, B and C Preferred Shares

UMH PROPERTIES, INC. DECLARES COMMON AND PREFERRED DIVIDENDS

Costamare Inc. Declares Quarterly Dividend on Its Preferred and Common Stock

Bank OZK Announces Increase to Quarterly Common Stock Dividend and Announces Preferred Stock Dividend

Bankruptcy Filings Increase Across All Chapters in March; Commercial Filings Up 79 Percent Year-over-year

XAI Octagon Floating Rate & Alternative Income Term Trust Declares Its Monthly Common Shares Distribution and Quarterly Preferred Shares Dividend

Citigroup Declares Common Stock Dividend; Citigroup Declares Preferred Dividends

Monday Morning Kickoff

Here we go on another big week—seems like pretty much every week is a big week in some respect and this week it is the employment report which is the big news.

Last week the S&P500 was up about 3.4% – a very solid week with markets wrapping up Friday with nice gains on the back of a somewhat softer personal consumption expenditures (PCE) being released on Friday. Never mind the banking crisis as it appears that investors have put this in the rear view mirror–of course at their own peril–but for now it is ‘party on’.

The 10 year treasury yield ended the week at 3.49% which was up 11 basis points on the week. The 2 year treasury yield ended last week at 4.07% which is up about 30 basis points on the week.

Last week the Fed balance sheet fell by $28 billion after rising the 2 previous week by near $400 billion in response to the banking crisis. It will be interesting to see the movement in the next few weeks.

The key economic news item this week is the employment report on Friday with 235,000 new jobs forecast–versus 311,000 the month before. The unemployment rate is forecast flat at 3.6%. As always something a bit softer than expectations would be welcome – help provide cover for Powell at the next FOMC meeting to either hold rates steady or raise by a minimal amount.

I see that Fed official Bullard and Mester are both speaking this week–normally expected to move markets, but with the banking situation it is likely their comments will be tempered.

Last week we had a relatively strong rally in $25/share preferreds and baby bonds as the banking issues were pushed into the back of investors minds. The average share rose by 71 cents. Investment grade issues rose by 59 cents, banks by $1.13, with mREITs up 73 cents and shippers by 20 cents.

Last week we had no new income issues priced.

Pretty Quiet Waiting on Inflation Data

We are awaiting economic news at 7:30 am (central) and markets are currently pretty quiet.

The personal consumption expenditures (PCE) is forecast to show year over year inflation at 4.7% which would match last months reading. The core reading is forecast to show a .4% rise compared to .6% last month. This number could put the fed in a real pickle – a hot number begs for more interest rate increases, but with the banking situation a rise of more than 1/4 basis point at the next meeting (May 2-3) is pretty dangerous.

Here is the balance of todays economic news.

As with most days I have no plans to do anything at all today–I have just the 1 open good-til-cancelled buy order and it is more than $1 away from my buy price.

Today we have a blizzard warning in Minnesota – I have had it with this winter–March 31 and we still have a 4′ high pile of snow at the end of the driveway. Certainly we will get no sympathy from the folks out west in the mountains. In mid January we spent a week in Palm Springs–one of our favorite spots and with the benefit of hindsight I wish we would have delayed until February or gone again in March.

Well let’s get this day rolling see if things get crazy or remain calm.