Discussion Page Added for Flipping and Dividend Capture

Someone suggested I set up a page for “flipping” and “dividend capture” ideas–so why not?

So I have dedicated a page where we can exchange some ideas on these shorter term techniques that we all hope will add a few hundreds–to maybe a few thousand dollars a month to our portfolios.

The page is here—and I have added a tab to the right column menu for the page.

9 thoughts on “Discussion Page Added for Flipping and Dividend Capture”

  1. AT&T baby bond with 5% Coupon I bought in OTC for 24.9x, I just sold today as it now trades on regular markets (as T/PRA) for $25.68.

    That may be a 3% return but given bought just few days ago it is almost a 100% Annualized return. I guess that qualifies it for a good trade-n-flip?

    Thanks to Tim for this board and those who posted about it here…

    1. Holy cow! You’re not kidding Georges…. Big in every way…. how in the world could this one Broadcom issue been originally priced at 8%… Heck even I would have bot this I think had I known about it…. with 2022 maturity (for conversion) what a gift..

    2. It carries 8% Coupon as it is a mandatory convertible and related to the stock price. So, far different and likely much more risk than typical preferreds. It should be thought of and invested into as a stock with a great dividend hoping/thinking its price keeps going higher…

      Even though this may be an excellent stock run by an excellent CEO it is basically in Semiconductors and far more volatile. Additionally also subject to wider than other tech-stocks is the past acquisitive nature of the company & CEO’s past.

  2. I have been following the buy at IPO and flip after a while with decent success. For me it has worked best for bank preferred but those like JPM/BAC with ‘known names’.

    This page to discuss flips / trades to enhance returns is a great idea and I hope to get some good ideas & learn from them.

  3. This should be a very interesting topic. I’m sure the discussion will be lively. Personally, I do more same-issuer swapping than flips or divi plays but I always have an open mind.

    At times, one sees an issue come to market that obviously, for whatever reason, has meat on the bone. I will buy those, as much as 2-4 times a full position, with the intention of flipping the excess. But my rule is don’t buy if not happy to hold long term if you don’t get a price bump. Selling out a big position a dollar under what you paid is not a route to prosperity.

    OK, here’s one “flip” that I thought to mention but didn’t, for reasons that should be apparent. HSE.PR.C is a 5-year rests that by its terms would have reset on Dec 1. But Dec 1 was a Sunday. But by those same terms the reset date was to move to Monday, Dec 2.

    However, the company issued a press release stating they had repriced the issue based on the BOC close as of Nov 29, the Friday before. They got it wrong.

    On Dec 2, the BOC closed above the close of Nov 29, meaning the rest rate that had been announced by the company was too LOW.

    The broad market did not get it. After rereading the prospectus 10-20 times, to be sure I had it right, I bought a very out sized position in HSE.PR.C late on Dec 1 and again on Dec 2, in the belief that the company would correct its error and the price would jump to reflect the correct, higher, reset rate.

    It worked. Even a broken clock is right twice per day. The company made the correction and the price of the issue jumped 70-80 cents per share above my cost. Not talking steak dinner here. More like a week in Colorado.

    This opportunity, stemming from a company getting the reset date wrong, is rare but was not the first. It will happen again, but requires careful monitoring to execute. But so do all arb type plays.

  4. Tim, much appreciated.
    As an investing newbie, div captures and flips are where I have gained much of my experience so far, and a good number of the ideas came from reading the postings on this site. Div captures, flips, and swapping between preferreds / baby bonds of the same company. I welcome this new discussion page. Again, much appreciated, sir.

    mbg

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