Cruising Into the Weekend

We all know today will be pretty darned quiet as no one is doing much investment wise–except some of us that are addicted to some sort of market adrenalin fix.

Today we have to search a little harder for that ‘fix’. Maybe one of the most interesting items today is the B. Riley (RILY) baby bond ‘call’. The company is calling the RILYL 7.50% issue which is the only issue outstanding that is currently in the early redemption period.

B Riley has become a complicated company that operates in traditional financial markets as well as having ownership (or partial ownership) of various operating companies–sometimes to take advantage of operating losses. bebe Inc. , magicjack, themaven?? Do I smell an implosion if a recession ever comes??

We haven’t had the time to do a deep dive into B Rileys financials lately, but anytime I see a company that has debt of almost $800 million with total equity of $299 million I get highly suspicious – I am going to try to dissect this one sometime soon.

This weekend we will post the latest version of the Sortable Master Listing. Since we had originally posted an earlier version we have been tweaking some components and now will put out a version for readers to use if they so choose. This will require you make a copy for yourself–so you should have a google account if you want to use it.

I will then start working on the next version for everyone–I plan to post an updated version every month.

26 thoughts on “Cruising Into the Weekend”

  1. i joined this site recently and also would like to thank Tim for such a good job with it. To the regular writers, also my thanks for your comments making it even better.
    Excuse me for being late, but we´ve had some crazy days in South America.

  2. Tim, Every day is a day to get my fix in…Not one of my trades executed yesterday for some reason, ha…
    Reached conclusion Vanguard is dumb…So, one redeeming feature of Vanguard is ability to leave open orders without cash covering the trade. Im not enthused by current yield but decided to leave a standing bid of AILLI at 102.01. It said call brokerage to place order. So I did and they informed me I couldnt buy this because its a “private company”.
    I told him what does that have to do with the price of tea in China as all the other sister preferreds are tradeable but this one. So he said he would investigate for me. He calls back today and says Bloomberg confirmed it was private and couldnt be traded. Just going in circles… I told him that is irrelevant as IPWLO, PPWLO, AILLL (sister series preferred), UEPCO, and UELMO that are in my Vanguard are also private companies with public holding companies… He didnt understand and couldnt override it anyways. I have noticed they have an unhealthy reliance on Bloomberg for some reason. They are the worst at trying to overcome a problem on their end. I would drop them but I do like the ability to float bids out there. But most importantly I cant move the issues to TD, because they are “risky illiquid preferreds”. But they dont have an answer for why I can buy them at TD no problem. Just cant transfer them…Crazy…

    1. What happens if you have TDA submit an ACAT transfer for the positions you want to move? Is Vanguard really allowed to say no?

      Also, are there any brokerages that *don’t* let you have open buy orders for more than your available funds? Schwab certainly allows it.

      1. David, my other two brokerages dont (TD and ALLY). I cant use margin in my tax free accounts and my taxable at TD is stuffed full of CAD issues and Pink sheets that wont allow margin off of…And like heck if I am opening up another account. That was the reason I opened up an account at TD was to consolidate into one. Now I have three. Vanguard nor ALLY were the problem on transferring these issues…TD (the receiving brokerage) is the problem. Despite several appeals they refused to accept them. My local broker got involved on an appeal but to no avail also.

    2. Grid – Though this is based on old experiences, if Vanguard is over reliant on Bloomberg, TDA is the same with quantumonline…. I forget the specifics of a very serious blowup I had with them a few years back but it involved wrong identification of a security I owned at TDA because quantum had a wrong cusip number. When I identified the problem I went about resolving it in the wrong order….After I got quantum to change the Cusip number to the correct one, I told TDA what happened…. They refused to do anything because quantum had the RIGHT Cusip # when I complained… Quantum only had the right one because I got them to change it! TDA didn’t care… I pulled my account all together because of it, but then subsequently went back relatively quickly because they then allowed me to collect what was a substantial cash bonus for opening a new account. Duh! Idiocy prevailed, inflexible idiocy at that.

      1. Yes, 2WR, Vanguard went there also to Quantum. Rep said I see what you are saying when I explained AILLL, AILLO, AILLN, etc. were all the same as AILLI. In fact I had owned AILLI before in Vanguard before it went “private” apparently, ha.
        I finally got the rep to understand, but he has no control. Its all in the hands of the techies who program it however, and then its useless to fight it.
        Another thing I love thats funny. On an old preferred Vanguard states to get a copy of the preferred’s prospectus call them. And when I did they had no clue on how to get it.

    3. Grid, my position in preferred AILLI is at Merrill Edge and I’m unsure what the Vanguard reps problem is or why they are giving you trouble. Ameren Illinois Company was formerly Central Illinois Public Service Company, changed symbols long ago and now trades with zero liquidity on the OTOTC (other OTC or Pink Sheets). You and I have many positions that we probably will never sell as they are “real” illiquids and impossible to replace. I have my illiquid list of probably 20 or so securities and hope this year end will open a few of them as most never have a reasonable offer.
      I sometimes wonder where AILLL would be trading at without you sharing the secret to those that have read your tells…
      The truth is not for all men but only for those who seek it.”
      ― Ayn Rand
      Nomad

      1. Hey Nomad… As you know on some of these old illiquid utes the ask can be $15-$30 higher than bid. AILLI a week or so ago dropped the ask to $106 so I thought it might be in play at $102-$103. I had a high bid out for it on TD for a couple days but $106 never dropped. So apparently its a retail investor hoping for a full market offer and wasnt coming down. So I just tried to move bid to Vanguard long term just in case. But that isnt going to happen, ha.

    4. The industry is too over reliant on data vendors.
      Funny story.
      A very large brokerage house that shall not be named incorrectly reported as qualified the dividends to the shareholder of a Real Estate Investment Trust, who also happened to be the CFO of the REIT (which was evident from his signature block)
      That same broker told him that their data vendor was right and he was wrong and they didn’t take the word of investors, no matter who they were.

    5. You could try transferring again. The standard deviation between the people that get these and process the requests is very high. My guess is that your next request might go through.

      Another example of incompetence… I called up Wells Fargo to shut down my daughter’s savings account and transfer the money from her savings to her checking account and close the savings account. The person on the phone said I can’t do it because it is my daughter’s account and she needs to call in. I tried to explain that this is a UGMA type of account and I am a custodian, and therefore I have rights. They said she is not a minor and therefore I don’t have any rights any more (she is over 18). Then I told them that for the state of MN it is 21. They were adamant and could not help me.

      The next day my daughter calls in, and they told her she was too young and the custodian of the account needs to call in. Lol. They are hilarious. So we went on line, and there is an option to close the account online, and we did that. All you need is a degree I think and you get a job. Thinking and comprehension and customer communication is not a requirement.

      TD did pass the same kind of test… I called up TD and started converting my kids UGMA accounts to single accounts.. and they told me that my kids were 18… and if I wanted to wait until they were 21, I could do that.

      1. I appealed twice. They did allow AILLL in my Vanguard Roth to transfer only after I yelled they took everything but that one, and I wanted the Roth totally consolidated. But they were hell bent on nothing else. My preference is one brokerage as that was the entire intent. But I got a half dozen preferreds that are commingled in the other two brokerages I am just unwilling to part with.
        And I wont risk trying to sell to myself to get them into TD, because Ahole market makers frequently hold up the trade 5 minutes and then magically intercept trade for a penny higher, so I am not falling for that trick.
        It is what it is I guess for now.

        1. You’re making me realize how good that rep was who went to bat for me when I consolidated everything at TDA. He fought and finagled and impeached for a couple of weeks to get me over the hump with what they initially choked on. Unfortunately for us out in the weeds, he got a promotion soon after and now only works with clients face-to-face somewhere up in the DFW area.

          I just hope the Schwab takeover doesn’t screw things up for me. I tried consolidating there first and I still hold things that they choked on back then.

          So it goes…

          1. Camroc, currently my only hope of getting my preferreds all under one roof is Schwab also buying out Ally and Vanguard, ha. One thing I noticed was TD still of course charges for gray market and pink sheet trades. But I noticed when I traded there with Ally they were free.

            1. Where do BAC-L & WFC-L trade. They now trade free at TDA. But none of the others I hold, I’ve noticed.

              1. Those 2 are exchange based so they are free like most. Every issue on ALLYis free. Now where that is by design or internal screw ups who knows. As that outfit is a rag tag operation.

        2. Just be aware that selling to yourself is a FINRA violation in the eyes of most brokerages. They can, and will, unwind the trade. No loss otherwise.

          It’s tough to move those highly illiquid issues.

          1. Bob, I did it internally to move a QDI from Roth to taxable inside same brokerage and got yelled at though they allowed the trade. Going from one brokerage to another brokerage is never a problem for me though. The biggest problem is market maker intercepting trade and inserting a penny higher buy price. So I have only done it on rarest occasions.

  3. Today appears to be one last gift from the PFF rebalance based on price action I’m seeing. Coincidentally one name affected is RILYG. I’ve been doing some trimming and also swapping into RILYH.

    Balance sheet equity isn’t a good measure for RILY or other broker-dealers. Most of their assets are human capital and client relationships. In general, I prefer to use common stock market cap which I think is a more accurate and market based measure as opposed to balance sheet equity which can be an accounting fiction. Equity is what the market says it is. I’m not smarter than the market.

    1. Hi Landlord–yes agree with you on the equity, partially what makes RILY so difficult to dissect. My radar goes up when a company starts making big bucks loans and equity investments which are many times financial engineering moves–a wise old saying is ‘do a few things well’. This will take a while to play out as a good economy with cheap money can hide many potential problems.

  4. Since I primarily rely on credit bureau’s or others for my financial analysis the Moody’s daily risk score is an 8 out of 10 which is very high.

    What is Moody’s daily risk score? Moody’s Daily Credit Risk Score is a 1-10 score of a company’s credit risk, based on an analysis of the firm’s balance sheet and inputs from the stock market. The score provides a forward-looking, one-year measure of credit risk, allowing investors to make better decisions and streamline their work ow. Updated daily, it takes into account day-to-day movements in market value compared to a company’s liability structure.

    Here is where I get these scores

    https://markets.businessinsider.com/stocks/rily-stock

    1. Thanks SteveA–I think right now the risk is being hidden behind a good economy and cheap money–but we shall see in a year or two.

      1. Like everything, it’s just a piece of independent data.

        recently re-established a position in CTL (CTBB to be specific). It has a score of 7 (also high). Trading today at around $25 with a 6.5% coupon, call protected until 9/2021. The current management of CTL is delivering on reducing debt. So a one year analytical measure by Moody’s although important isn’t determinative. It is helpful to me and perhaps to others

        1. I like CTBB here as well. My cost basis is below stripped par but I may add some more here at par. Appears to be another PFF rebalancing affected issue.

        2. Steve – I hope I didn’t come across as implying the info wasn’t helpful… that wasn’t the intention…. There’s probably some importance to the fact that Moody’s Analytics is run independently of Moody’s itself, and I will be bookmarking your site for future reference. I suppose there has to be similar underlying assumptions to be able to carry the Moody’s name… Afterall, it’s not Egan-Jones Analytics…. lol

    2. How interesting, Steve…. I never heard of Moody’s Analytics… From their website, “Moody’s Analytics began as the exclusive commercial distributor of ratings, content, and research from Moody’s Investors Service. While Moody’s Analytics continues in that capacity, over time we have broadened our offerings to include an unparalleled range of financial risk solutions. By 2008, Moody’s Analytics formed as a separate and independent entity from Moody’s Investors Service.” https://www.moodysanalytics.com/about-us/history . A quickie look at the site doesn’t seem show any way for the common man to search the site in an attempt to recreate the info on your site… I suspect that Moody’s itself has never even come close to providing a credit rating on RILY as opposed to this “Analytics Risk Score” issued by Moody’s Analytics.

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