So today I went ahead and bought a starter position in the 2nd lodging REIT preferred shares–to accompany the Pebblebrook (PEB) position from yesterday.
I bought the RLJ-A 7.90% convertible preferred issue from RLJ lodging. While this is convertible there is virtually no chance that a conversion will ever occur. Shares are now at $23.58 with a current yield of 8.38%. Once again I chose this issue because of relative performance of the company AND importantly one of the best balance sheets in the sector–debt to equity ratio of around 1.
So for now this is all I want in the sector—I may put in some GTC orders in for additions at much lower levels in case of a ‘dump’, but like the smaller banks I want relatively small positions to begin to lock in some high current yields–am I way too early? I may be too early, but no one can buy the exact bottom nor sell at the exact top so the small position sizes protect me from massive losses.