It has been a freaky day — but it has been a freaky 2 weeks for the preferreds of the Federal Agricultural Mortgage Co, (AGM).
Someone has been dumping shares continually and these high quality issues have been pummeled (note I own the AGM-E issue).
Farmer Mac provides financing in the agricultural sector and it is a very well managed company. Here is there latest earnings statement. I see no news or any reason for this selloff–maybe there is something out there–if anyone knows please chime in.
Here is the issue I own.
While it was not my intention to buy today I was reminded of this issue (and other AGM issues) by some discussion in the sandbox section today and entered a GTC buy order to add to my current position—we’ll see if anyone wants to give me some shares at a sale price.
Well it looks the the GTC order will have to wait for another day–I am leaving it in place–at $20.80. At Noon today it is trading at 21.75.
Tim; Sometimes I actually think we are on the “Same Page”. LOL. I own a huge boatload of AGM+E. I have spoken to their IR MGR numerous times–what a truly sweet & helpful lady she is!!!! Like you said their “financials” look rock solid and as she once told me “Farmers will do anything they can to keep their farm” afteral its their life blood. On another note I have been buying and now own a huge boatload of CHSCL. Another one that has been getting hammered. I also spoke to their treasurer just a day ago and was told that everything is fine with the company. They are ranked #90 in the fortune 500. I also have been buying 3 different corp bonds that are really very mispriced. Long maturities but that has never bothered me if the coupon is high enough.
I’ve been buy a couple of the chs issues as well. Nice when you can get them under par
can i ask what bonds you have been buying
thanks
“never bothered me if the coupon is high enough” . I’ll go further and add discounted low coupons are also acceptable. It’s all about yield on funds invested. The coupon is incidental. Plus, with heavily discounted issues, there’s the possibility of capital gains. Case in point, I’ve recently added to my GDVpr K and the TY preferred. Although I don’t expect the TY issue to be called.
Wish I had time to meticulously check the coupons. I’m still going off what I scanned over in the financials when picking amongst their bonds** in the recent past. The last time, first week of October, I loaded the old double-barreled 8-gauge, old Bessie that is, with birdshot and pointed it skyward at a flock of preferred flying south and started blasting, I brought down some AGM.E at a no-haggle price of $21.60. Not complaining. In a few months I probably won’t care. And in 1 year or 5, how much will I care which days in the first two or three weeks of 10/2023 I averaged into AGM.E/G? Double naught sounds about right. Cleaned and reloaded old Bessie and will have another go at the next flock. Almost feel sorry for the little guys.
** For example I bought a tad of “Fidelity cusip 31422X2K7” at a paltry effective yield of something like 4.86% back in 4/2023. Remembering I’m on 3i’s I realized I’d better feed the cusip thru finra.org, which indirectly acknowledged one of my ‘FAMC’ holdings with, “Symbol:AGM5595469 CUSIP:31422X3M2 Bond Type:AGCY”, but not much else info was forthcoming. Got a smidge more info out of Fidelity’s cusip search page and their trade history data. For the least info I was able to find, so far that prize goes to https://www.farmermac.com/ … of course.
That said, I came to same conclusion today as I did way back in April ;): What me worry (about their credit worthiness)?
Farmer Mac is ‘overseen’ in one way or another by a small army of Federal watchdogs these days and you’ll find encouraging quotes on their website such as, “Farmer Mac has never had a credit loss on its Farmer Mac II program or its Rural Utilities program”, and so on. Plus, they’ve got some pretty darn valuable collateral.
That’s all I’ve time for. Hopefully, the para-prospectus-legals won’t spot this sloppy work and fire up the copy & paste engines! Would I buy them again today (assuming you even can be at the right place at the right time with these cusips)? Meh. But, they’ll redeem soon. Back in the day, 4.86% wasn’t so bad. Does the common stock AGM look like it could be about to settle back down into it’s methodical climb up now that the recent spike of exuberance has dissipated? Maybe. Has the narrative really changed all that much since the unproductive frenzy faded?
common has taken a drubbing the past few weeks.
Just another case of post-parabolic blues. Situation normal.