Author: Tim McPartland

Financial services company B Riley (RILY) which had gotten a bounce in the last week up into the $24/share area are tumbling again–trading this morning at $18.62. Shares had been as high as $43 only a month ago. Short sellers have had the company under attack all year long starting in February with a report from Wolfpack Research.

As we all know RILY has made a gaggle of marginal investments all of which Richard LeJeune covers on Seeking Alpha in a credible argument on the bullish side from last week. Richard argues that fair value on the common shares is around $57 in spite of bad investments.

To name a few of their problem investments they include the Franchise Group, the Arena Group, Babcock & Wilcox and most recently Synchronoss Technologies.

Of course B Riley has many baby bond issues outstanding, as well as 1 preferred issue and their common stock. The yield on their common stock is now over 20%–great opportunity or trap? All of their issues are here.

The speculator in me wants to buy some of RILY’s securities–but the conservative in me says ‘don’t do it’. I won’t be participating in this potential ‘bargain’.

Just like most days last week stock markets aren’t really moving much at all—up a tiny amount and down a tiny amount.

I guess that there are fair odds that this week will remain quiet, at least until Thursday when we will see some inflation numbers in the form of the personal consumption expenditures (PCE).

The 10 year treasury yield is falling today – off 7 basis points to be trading around 4.40%. This might be giving preferreds and baby bonds the tiniest of gains–more green than red, but maybe just an average move of a nickel or a dime. Looking down the list I see a handful of issues moving 2-4%–but in the world of illiquid stocks this happens every day.

My accounts are up .1% today–like everything, some up, some down. I am fine just ‘cashing’ dividend and interest checks–capital gains are simply gravy.

A Friday after Thanksgiving in the U.S. The trading day ends at noon (central) for equities–bond trading ends an hour later at 1 p.m. (central).

Not much is likely to happen today–although we have a little economic news hitting at 8:45 a.m. (central).

Don’t think I will do anything today market wise–can’t say for sure because sometimes crazy things happen in relatively illiquid preferred stocks and baby bonds–a big price drop on a couple hundred shares of volume may present an opportunity.

So let’s finish this holiday week and get on to more normal times next week.

Well we get to get away from market fixation tomorrow. Actually I have so much work to do other than market stuff I’ll spend a fair amount of time painting one of the walls in my office.

But I hope that you all have a Thanksgiving that is meaningful to you–maybe around family or friends. I will have a nice meal with family—but will bow out of the 6 hours of chit-chat, but it is always nice to get caught up a bit for a few hours with people.

My wife and I talk about thankfulness quite often. Usually when we think we have more than our share of bad luck with cars or something else unimportant. It almost always comes down to having relatively good health, families we love and are supportive and a decent roof over our heads. Money kind of brings up the rear-her and I have no real reason to complain. I’ve been relatively poor and I have been relatively wealthy and wealthy is better by a tiny amount, but I am not sure having money in the bank makes me any happier.

What makes me as happy as about anything is to see all the folks on this website – the exchange of ideas and the civil discourse. I’m not sure if someone would have told me that in 17 years of website publishing that only 2 folks would have to be ‘banned’ out of the thousands of folks we have here every week and month that I would have believed it–most certainly I wouldn’t have. But the folks here are just the best and it gives me great pride and happiness to ‘hang out with you all’.

The 10 year treasury is drifting lower again today–now at 4.377%. We do have economic news today that could move the rate in either direct–in particular on the day before Thanksgiving in the U.S. when many traders are likely taking the day off.

Today I will likely do nothing—but I am studying 2 preferred issues for potential nibbles. Both issues follow my recent theme of higher yielding issues.

First is the new oddball (liquidation is $9.13) Energy Transfer 9.25% preferred (ET-I) non callable which is trading at $9.95 for a current yield of 8.48%. This issue is new and was issued in connection with the acquisition of Crestwood. Being that this issue is from an MLP this is K-1 generating.

The other is the preferred from holding company Steel Partners (another MLP) 6% cumulative preferred which is trading at $23.44 and has a mandatory redemption of 2/10/2026 for a yield to maturity of around 9%. Steel Partners (SPLP) has been a solid performer–holding many different company’s in many industries–a very well managed company.

Both of these ideas were stolen from others. Someone asked about the Energy Transfer issue on this site which set me off on a deep dive to find the details. The Steel Partners issue was written about by Preferred Stock Trader on Seeking Alpha.

PS–I have no problem getting ideas from others that fit my needs–to overlook them would be foolish.

Well we had the FOMC meeting minutes just a bit ago and nlike many times in the past equities didn’t reaction too much–off a little bit at first and then back about to where things started. The minutes still warned the Fed was ready to act, but needed to go forward carefully. Higher for longer was still a theme–seems to me the policy is about right now until we get more data.

The 10 year which had drifted below 4.40% popped back up to 4.44% now. I highly suspect we will be in a tighter range until we get some new data on employment and inflation. Much of the data has shown some softening–but nothing that anyone is taking too seriously–certainly not common stock buyers.

As I mentioned I have done nothing–of course I am now back to having minimal ‘dry powder’ until December when I have more CDs mature so at this stage I would have to sell something to buy other securities. Right now I am pretty well positioned for my risk/reward mindset.

I continue to update my ‘laundry list’ of holdings–it is quite a collection of oddball cats and dogs.

Yesterday we had the leading economic indicators which came in softer than anticipated. For the 8th month in a row LEI came in soft—certainly the equity markets don’t care –just lots of partying.

Today we had existing home sales shown to be heading lower- 14.6% below a year ago–BUT the median price was up 3.4% from a year ago. This is no surprise as the ‘haves’ which many times are older demographics with lots of coin in their pockets continue to vie for limited inventory. The ‘have nots’ are happy to stay put with their 3.5% mortgage–screw’em they say. Mortgage rates are down from the high–but not really enough for folks to list their property, sell and buy something else with a 7.25% rate.

The 10 year treasury remains trading in the the 4.40 area–but drifting slowly lower. Equity prices are drifting lower today–for no particular reason except folks have to pocket a little profit somewhere I guess.

Today I do nothing–maybe stare out the window and watch the birds. My little Bridgewater Bancorporation preferred is taking a decent bounce higher to $16.06–nicely above my buy price yesterday at $15.52 and $15.60 last Friday. Maybe folks are looking for ‘bargains’–but this has happened many times and with thin volume (although heavier today and yesterday) it only take a couple thousand shares to send it back down. We’ll see.