This quick note is to add a page for discussion for “flipping” issues and for “dividend capture” techniques.
We all discuss these types of things all the time so it is way past time to add a area for discussion for of techniques you use for “flipping” (a quick hold and resale for profit-or occasionally a loss) and for “dividend capture”–buying with the intent to secure a dividend and probably sell shortly there after.
First (partial) payment on Brookfield 6.25% BPYPM:
In addition, the distributions on the new series of preferred units of Brookfield Property Preferred L.P. (NASDAQ: BPYPM; TSX: BPYP.PR.A) are cumulative from the date of original issue (July 26, 2021) and are payable quarterly in arrears. The Board of Directors has declared the pro-rated initial distribution on these preferred units of $0.2734 per unit payable on September 30, 2021, to holders of record at the close of business on September 1, 2021.
Not sure how to start new thread. Does anyone know ex div date for psec-a?
payment in Sept. last quote in mid 24’s.
bill o – As is convention for all issues, your answer is found in the prospectus…. Assuming quantumonline is correct, first payment isn’t until Nov 1, not in Sept. The Ex-Div date range (no specific date is designated) is spelled out in the DESCRIPTION OF THE SERIES A PREFERRED STOCK section of the prospectus as linked on qol…. Happy reading…….
2WR, Do you still own EP-C? I bought it pretty hard for me about a month ago for the zillionth time around $50 and it went crazy last couple days and also today, and I am back out again. QRTEP went crazy also. I bought again maybe a week or so ago and its already up $2. Crazy stuff.
Grid – Yes I do still own both.. to be honest, I had not noticed how hard EP-C has rallied (thanks for pointing it out!) but as you know I had done a relatively aggressive (for me) sell and buy back in February that captured about 4 points in 2 days but I doubled up on what I sold and ended up with shares bot at around 51.50 to add to my other shares bot previously as low at 46.26. Will have to figure out what to do if anything.
I had noticed QRTEP but not today’s move. Thanks to your previous post pointing out your early dividend capture purchase at 107.90 I did take a look at what yields were on this one at those levels and was amazed how cheap it was relatively speaking as a 10 year term preferred with a premium first call that I believe makes the ’27 “par” call the YTW. Trying to bid for a round lot failed as I kept being bid up by the pros.. So on Tuesday I put in a bid for 75 only and got them on the opening at 108.25, a price that doesn’t even show up as having been possible on that day… Go figure…. Also, BTW, I was very impressed with the company and their respect for my wife’s privacy when in their quarterly report they said without naming her specifically, “We delivered strong increases in apparel and accessories and growth from our best customers at QxH.”
2WR, Well EP-C unsurprisingly made its round trip back down. So after flipping out at $51, for a relative quick buck, I repurchased them all back again 5 days later at 50.20 and under today. Goes exD in a month, so maybe there will be another run again before exD.
More available–I was just gifted some at 50.13.
Its one of my favorites, Furcal. Funny how people will chase it to $51, and then someone turns around and dumps it back to near par. I like keeping a certain amount of investments with some reasonable duration as a back stop.
I doubt this one has any flipping juice, but I bought 400 of RMPL- at 25.30-31, mostly for its relative price stability and 2024 maturity. It doesnt trade much or move much, so I took the chance when they were laying there. It is redeemable so entry point matters here.
Thx for the tip Grid. Bought a few more thousand a little bit ago. Had some cash from a few weeks ago from gains. Probably next week someone wants to buy them from me over $51/share
Last trade for EP-C 48.50. Dumping continues.
I am in a 50.10. I love this site!
thanks
bill o
New threads are initiated at the BOTTOM of each section;
Scroll down to the end and there you are.
howard
bill o
new threads are initiated at the bottom of the section.
scroll down all the way.
If you like to leap into the dumpster bin ATLCP is finally showing signs of life. And look at the common stock chart…Wow why didnt anybody tell me to buy that thing 6 months ago.. Anyhow.. Its creeping towards par finally and its going to go exD someone time this month and pay a fake oversized first divi. So its going to pop up as an 8% preferred when its finally posted as here is the first divi and stub that is payable about 9/15. Notice the issue is a 7.625% one. And yes I own this and bought more a couple days ago as it dredged its way up into the 24.70s.
The first dividend, which is scheduled to be paid on or about September 15, 2021 in the amount of $0.49774 per share of Series B Preferred Stock, will cover the period from, and including, the first date we issue and sell the Series B Preferred Stock through,
merci
I bailed out for break even, partially. Kept 200 shares in a thinly traded account, just because. Long forgotten.
Martin, It has ran out of the IPO gate as fast as PSA-P has. They both have needed oxygen and wheel chairs to move, lol. I got my initial batch around 24.60 and bought some more in mid 24.70 recently. I have done better recently daily trading the old veteran issues. Well except for METCL which did what it was supposed to do. I started peeling back that onion today near $26.20, but am still holding a decent amount. The fact they can redeem this in 2 years keeps me from trying to ride it too hard.
Martin, I forgot to tell you. You will get a kick out of this being a fellow SB-C/D honk. Out of boredom this morning I flipped 400 of my SB-D shares at 25.21 for 400 shares of SB-C at $25.13. This may make the hall of fame of meaningless flips. But I was unbalanced and now I have flipping firepower either way as I had wound up on one side of the boat holding only D recently.
I tried to do that swap for 7 cents yesterday but didn’t get a fill at 25.14. Today I was bidding on the SB-D repurchase instead. A free 5 or 10 cents per share isn’t meaningless to me I do it all the time while I’m in there looking for bigger fish to fry.
Martin, Dry Bulk Index just hit 11 year high…
The Baltic Dry Index surged about 2% to 3,566 on Friday, its highest level since mid-2010 and extending gains for a fourth straight session, helped by improving demand, congestion in Chinese ports, and weather concerns in the Pacific. The capesize index, which tracks iron ore and coal cargos of 150,000-tonnes advanced 3.4% to a four-month high at 4,766; and the panamax index which tracks cargoes of about 60,000 to 70,000 tonnes of coal and grains, increased 0.5% to 3,566 a peak since July 21 at 3,566. Among smaller vessel, the supramax index rose about 19 points to a fresh all-time high of 3,098. The Baltic Dry Index posted a 5.8% gain for the week, its best in eight. . source: Baltic Exchange
Grid, I tend to avoid dumpster diving for the most part, as I cannot stand the stink. But I made an exception for this one time, held my nose real tight, and bought a small position in ATLCP at $24.90.
The larger than normal dividend helps, and it might also give the wrong impression to naive investors who extrapolate the div amount to a full year, and buy in the mistaken belief the yield is great ( I would likely flip this one ).
Inspy, either way we blew it already. The common ATLC hit 52 week high today closing at $47.50 and is up 92% YTD and 450% in past 52 weeks.
Dividend captures I’m following for August
TECTP 5th
GNE-A 6th low volume
GMLPF due soon not yet announced
AIRTP 12th
UMH-C UMH-D 13th high price
SCHW-D 16th ye old call risk
PBI-B 20th
and looking ahead to end of month
MITT-A MITT-B MITT-C AIC QRTEP IVR-B IVR-C
Martin, I jumped in on BPYPP at $25.35 this morning for a divi capture as it goes exD at end of month. I already jumped back in QRTEP for same reason last week at 27.90. I tend to buy the divi captures a few days earlier as it seems at times I take it too close and it spikes immediately before I pull the trigger… TECTP I have just been sitting on a full position and holding it for time being.
Grid,
Last Friday, I got a little BPYPP and BPYPM after someone posted they were tanking. Was that 27.90 for LBRDP?
Mbg, No, that was QRTEP re-enter flip position purchase.
After this weeks fiasco I don’t trust Brookfield.
How did you get QRTEP at $27.90? Its trading at $108.24 right now. Or am I wrong?
Thanks
Ugh, Now I understand why MGB was asking. Ya, I was converting to $25 for some unknown reason. I bought at $107.90 last week. I wish it was $27.90, lol..
Since ALIN-s have been moving wildly. I jumped in so I could trade between them and in and out of them. Made some money on the swings already, though it is a high risk strategy. Not for the feint of heart.
If anybody still has ALIN-B now is a good time to swap it for ALIN-E at a lower price for higher yield if ever salvaged. Friday it was as much as 85 cents higher. Wild free falling stocks can have those opportunities.
Make the switch if only to capture the loss for tax purposes. Your basis is almost certainly higher than present price.
But don’t sell and rebuy the same issue! That is a wash sale and the loss is disallowed.
I do all of my quick trades in IRAs. Otherwise I’d have millions of wash sales.
Very sound plan.
Nickel stackers with idle cash may want to bird dog some HLM- at $25.24-25 or so today. It goes exD tomm with 24.17 cent interest payment and ultimately is redeemed for cash at $25.0966 come August 12.
Hillman delivered a notice of redemption for all of its outstanding 11.6% Junior Subordianted Debentures due 2027 (the “Debentures”) on August 12, 2021 (the “Redemption Date”) and the Hillman Group Capital Trust delivered a notice of redemption for all of its issued and outstanding shares of Trust Preferred Securities at a redemption price in cash of $25 per Trust Preferred Security, plus an amount equal to the accrued and unpaid distributions thereon to the Redemption Date. The total amount payable upon redemption will be $25.09666667 per Trust Preferred Security and will be payable August 12, 2021 to holders of record as of August 12, 2021. Hillman is redeeming the Debentures and the Trust Preferred Securities in connection with the consummation of the Merger and such securities will cease to be outstanding as of August 12, 2021. The last day of trading for the Trust Preferred Securities on the New York Stock Exchange (the “NYSE”) will be August 11, 2021
Grid – I lost track of this one mainly because of the monthly pay aspect…. Where are you seeing the x-div date? Is QOL wrong with what they’re saying, “paid monthly on the last day of each month to holders of record on the first business day of each month?” It would seem to me that if they’re right, x-div date for July would have already past, right??? Market pricing would imply you’re right that ex-div for July has not passed.
2WR, I cant link on phone. Google, HLM- stock price TD Ameritrade. It will pop up a quote page for HLM- and show exD.
Here’s the link you couldn’t post from your phone – https://invest.ameritrade.com/grid/p/site#r=jPage/https://research.ameritrade.com/grid/wwws/research/stocks/news/article?c_name=invest_VENDOR&docKey=100-197u5028-1 whic
As previously announced on July 13, 2021, The Hillman Companies, Inc. (“Hillman” or the “Company”) stated that a cash distribution had been declared by Hillman Group Capital Trust for the month of July in the amount of $0.241666667 for each Trust Preferred Security (NYSE-Amex: HLM_P). As an amendment to the previous announcement, the distribution will be payable August 2, 2021 to holders of record as of July 26, 2021, instead of as of July 23, 2021.
P 120 of prospectus seems to say the same thing re ex-div date: “Distributions on the Trust Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which will be the first business day of the month of the relevant
distribution payment date.”
Im under impression you get paid twice…The normal interest payment date then the redemption plus accrued for final payment.
Tsakos preferreds;
I went long the F and D issues. The F is paying this month and the D is next month along with the E. There is still time to buy if there is any interest.
This company is a dog with fleas, but in a hot industry. A rising tide lifts all boats, but I will most likely get rid of both. I may keep the D a little longer though.
Furcal asked about sources of ex-dividend dates. If anyone is interested here are the issues that I show with ex dates from 7/13 through 7/29. It is NOT a complete list, I am sure some that are going ex are MIA. Also, you absolutely, positively MUST double check the date BEFORE placing any trade counting on the date to be correct. Stated differently, there are likely some errors in the list, although I spot checked many and found them correct.
CMRE-B 7/13/21
CMRE-C 7/13/21
CMRE-D 7/13/21
CMRE-E 7/13/21
ARR-C 7/14/21
BAC-O 7/14/21
BAC-P 7/14/21
BEP-A 7/14/21
BPOPO 7/14/21
CODI-A 7/14/21
CODI-B 7/14/21
CODI-C 7/14/21
FBPRM 7/14/21
FBPRN 7/14/21
GMRE-A 7/14/21
LTSA 7/14/21
NREF-A 7/14/21
NRZ-A 7/14/21
NRZ-B 7/14/21
NRZ-C 7/14/21
SLMNP 7/14/21
XFLT-A 7/14/21
FRC-K 7/15/21
OXLCM 7/15/21
OXLCP 7/15/21
UBP-H 7/15/21
UBP-K 7/15/21
UELMO 7/15/21
UEPCN 7/15/21
UEPCO 7/15/21
UEPEM 7/15/21
UEPEN 7/15/21
UEPEO 7/15/21
UEPEP 7/15/21
MSSEL 7/16/21
PPWLM 7/19/21
PPWLO 7/19/21
OCCIO 7/22/21
OCCIP 7/22/21
SR-A 7/23/21
HIG-G 7/29/21
LXP-C 7/29/21
MTBCP 7/29/21
VER-F 7/29/21
Thanks for the list. I sometimes post abbreviated lists of what I think are the best ones I don’t do it often because there didn’t seem to be much interest.
i always looked for your list . so it was appreciated
JMPNL and NYCB-U 7/29. And several that haven’t been officially announced yet.
EFC-A typically mid-month
SB-C SB-D typically the following week.
ET-E RMPL- typically end of month. and a few I already purged from my list.
Wow, thanks Tex, that took some time to compile.
MINDP announced yesterday (which seems on the late side) their upcoming dividend payable that goes record in 1 week.
Trading just below par.
https://ir.mind-technology.com/news-releases/news-release-details/mind-technology-declares-cash-dividend-its-900-series-2
Could I ask what makes you take the risk in owning this pfd stock? While 9% is good, it isn’t if the stock tanks. Do you feel that strongly about the company’s future success. Thanks. (I will occasionally risk a little on a flyer.)
The price has been in a consistent range just below par for years with the exception of the crash last year, which it recovered. So if their prospects were dicey, I would have thought the price would have not recovered to par, where it is now. their financials improved in 2020 over 2019, so I am expecting the dividend to continue to be paid.
But It is definitely not one of the stronger issuers and only one that I buy and sell at the same price after either capturing the dividend or selling if the price goes up between declaration and ex-date by 1/2 the dividend rate.
That is the point of this section.. To get the dividend without long term risk.
Thank you. Most helpful.
Dividend capture is about short term price movement. Only major risk is that it tanks during the few days that I hold it. So I bought a smallish amount to hedge the risk. BWSN too, barf, puke.
The old gridbird special SLMNP also goes ex-div next week. EFC-A which is priced a little high and NREF-A XFLT-A up in nosebleed territory. The following week it’s SB-C and SB-D which may not be much of a capture but I’m holding them anyway for the swaps.
Keep spreading the work on how awful BWSN is. I’m looking for a lower price at which to add.
I can’t do that because I would be “pushing a stock.” or the opposite. Pulling a stock?
I bought 300 shares and I’ll buy more before Wednesday if the price cooperates. I’m hooked on awful.
Forgot to add NRZ preferreds going ex-div next week.
Thanks Justin Im in on MINDP
Can anyone confirm what’s left to gain on RILYG currently trading around $25.40? I am coming up with $.10 or $25.50. It is scheduled for call on July 26 and will go ex-div 07/15 for $0.453125. I assume it will accrue interest up to the day before the call so another $.05? I already have a good bit but if I buy more there is about a dime to gain here?
Since pay date is 7/30, you will get than a full dividend roughly 25.43 in total.
Given I’m never wrong (?????) the exact number, Kapil, should be 25.42795. lol. Case confirmed. With RILYG closing today at 25.39, if you use tomorrow as settlement date, that gives you a 2.52% annualized yield on a purchase tomorrow at 25.39
I don’t get it. There is $25 on the call (July 26) plus a full dividend of $.453125 (July 15 record date) plus interest after the dividend and up to a day before the call date. What am I missing?
Dividends are based on the pay date of July 31, not the record date of July 15.
What? Then what is the reason to have a record date?
Record date is a record keeping date only allowing the payor of dividends time in advance of payment to know who’s entitled to get paid the dividend amount….
OK, I think I understand. The interest starts accruing after the last payment date which was April 30 and up to, but excluding the redemption day of July 26. I am glad I asked since my thinking was wrong.
35 – When in doubt, the answers can always be found in the original prospectus…. This is pretty much boilerplate in that it hardly ever varies from this way of things being done issue to issue, but the language in the RILYG prospectus sums it up pretty nicely under Description of the Notes, p s-35 – Pay no attention to the language on initial period being from Dec 13 as that, of course is not relevant to now:
https://www.sec.gov/Archives/edgar/data/1464790/000161577417007206/s108375_424b5.htm
“Interest on the Notes will accrue at an annual rate equal to 7.25% from and including December 13, 2017 to, but excluding, the maturity date or earlier acceleration or redemption and will be payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, beginning on January 31, 2018, to the record holders at the close of business on the immediately preceding January 15, April 15, July 15 and October 15, as applicable (whether or not a business day).
“The initial interest period for the Notes will be the period from and including December 13, 2017, to, but excluding, January 31, 2018, and subsequent interest periods will be the periods from and including an interest payment date to, but excluding, the next interest payment date or the stated maturity date, as the case may be. The amount of interest payable for any interest period, including interest payable for any partial interest period, will be computed on the basis of a 360-day year comprised of twelve 30-day months. If an interest payment date falls on a non-business day, the applicable interest payment will be made on the next business day and no additional interest will accrue as a result of such delayed payment.”
After ex-div on 7/14, RILYG went up >0.30 in a week. So, is the holder on the record day will get the July Div or the holder on the last trading day(7/25)? If it will be the owner on record date, why are ppl buying now?
Falcon – With the actual call being 5 days before payment date, there was market confusion as to whether or not there has been an actual x-div date declared or not. Normally there wouldn’t be. I believe more than one person here has confirmed with IR that there was no ex-div date declared. The market seems to be coming more and more convinced of that and looking forward to collecting 25.428 approx on 7/26.
Anyone notice that odd LBRDP spike? I sold a partial position 500 shares at $28.50 and bought them all back at $28 as this is supposed to be a core hold for me.
Didn’t notice 28.50 but I’ll be glad to sell you some at 28. I have 200 in a taxable account but there’s only so much I can put on my active watch list without going berserk, This one is more of a passive watch.
I just wanted those back, not more, especially at $28, ha. My cost basis was $26.50 ish. Held in tax free account so I didnt need to chase bottom dollar, as I didnt intend to sell to begin with.
I don’t know if any body needs a flipper, but I have been nibblin’ on SRG PRA. It goes ex on 6/29 and has a 7% coupon.
What I like:
Under par
Focus on selling assets and reducing debt
Cash flow seems decent (CFO)
Multi use property emphasis
Got rid of previous management
Seems to be untangled from the whole Sears leaseback boogie
Didn’t suspend the preferred dividend in 2020 and steady so far..common not so much
What I don’t like:
It’s a REIT and I got too many
Profits are sucky to light
E. Lampert is (I believe) a director. Not so sure I have much trust after he stripped Sears to the bone.
Wouldn’t have had to get rid of old management if old management was decent?
It doesn’t trade many shares (illiquid) so my nibbles have been sharked by somebody who keeps buying and driving the price up (1,000 shs at a time once a day……Grid? ha ha)
Bottom line I would rate this “medium-high risk” long term. But for a flipper, probably enough liquidity for the management team to at least pay a few more dividends. If I get “stuck” with it short term it’s still under par with a decent coupon. YMMV
It’s on my watch list of soon to be ex’s (Hey, that sounds like a divorce thing). Not low enough for me to nibble early, though standards change as ex-date approaches. Not a hold, the risk is that I bail out for a small loss. Unless it nosedives before then.
NYMTO is the type of thing I look for. Priced nearly equal to NYMTP when it should be about 30 cents higher. At times there is very large volume on the ask price. These are clues that it may be temporarily underpriced. It’s gone up and I already sold 100 shares though most is still a hold until ex-div. Unless it keeps going up.
Other examples. AGNCO dropping a little while its brothers have gone up. AFINP only a few cents higher than our old friend AFINO. TWO-C steady while A and C rose a lot. PMT-A a good deal lower than PMT-B but still rather high. All going ex-div in 2 to 4 weeks.
Thank you for the thoughts MG. I’ll take a look see. It’s always good to hear new ideas.
Best
Another successful flip with the SRG PRA. I was able to scoop up a dividend and squeeze a small gain as well. 😉
Sold my last of my shares today at $24.71 avg and bought my shares at $24.53 avg.
I may look to re-enter below $23.85 again, but will depend on other alternatives.
CIM-B goes ex-div tomorrow ans sitting at a nice price compared to other CIM preferreds. Nearly equal to CIM-D when just last week it was 50 cents higher where it belongs because of the higher float.
Thank you Martin…that one netted a very nice steak dinner. Anytime you can make 1.6% in less than 5 business days… that’s a winner. Very much appreciated.
Buy a bottle of wine with dinner and give a toast to this board.
All of the CIM-s did better than expected. I sold some, kept holding most since it’s still priced favorably compared to the others. This is a good one to trade between issues while also earning 8%.
If you still have any it shot the moon this week, I traded for CIM-D at a 45 cent spread and traded back on a 10-15 cent spread. Been a very good one.
FYI, CIM-B and CIM-D crrently at the same price. B generally runs higher because of the higher floating rate. CIM-C only a little lower despite having a lower yield.
Has anyone ever received an official notice to exchange their SESCF? I am not going to exchange but was going to read what they sent. But I have not received anything from either brokerage.
Grid,
Just got my “invitation” in Vanguard thru the Corporate Actions tab…never got a message or email that often precede these things..must have showed up in last day or 2 cos wasn’t there at start of week. Below is the “narrative that came with it:
“Atlas Corp. is offering to exchange up to $80 million principal amount of Seaspan Corp.7.125% notes due 2027 for an equivalent principal amount of new Atlas Corp. 7.125% notes due 2027 (ATCO Notes).
The ATCO notes will be substantially similar to the Seaspan notes except for the following:
-The ATCO notes will be the obligations of Atlas, the parent entity of Seaspan
-After the 2nd anniversary of their date of issuance, the ATCO notes will be redeemable at 100% of principal
-The ATCO notes are expected to be listed on the Nasdaq Bond Exchange
-The ATCO notes terms will exclude covenants that govern the primary business activities of Atlas and require certain reporting in the event of cross default
Notes will be exchanged in minimum denominations of $25 and in multiples of $25 thereafter.
For the complete terms of the offer, please see the Prospectus (Form 424B3) filed April 7, 2021.
https://ir.atlascorporation.com/sec-filings
Note:
If you exchange your notes through this offer, your notes will not be available to sell or transfer. Any withdrawal requests will be handled on a best efforts basis up until the response deadline. It generally takes 2-3 weeks from the offer deadline for Vanguard to credit the proceeds to your account.
Thanks Adrain, maybe mine will come soon. Vanguard has a nice corporate actions tab but mine werent in that account of course. But at least you made me look and find a “shareholders library” in TD. Got an offer to attend an annual shareholder meeting I dont want to go to. The third brokerage wouldnt send a message if my account was being drained and wired to Nigeria. In fact half my issues are screwed up as they state I dont even own them if I try to sell. But its not worth calling because I continue to receive the dividends from the issues I “dont own”.
That third brokerage sounds like Ally.
Martin, you know incompetence when you see it. They are so bad, I feel sorry for them. But they are super fast getting out IPO tickers and outside of Canadian OTCs, you could buy a dog turd with them if it has a ticker symbol slapped on it.
Nest time I am in the market for TURD I will head over to ALLY.
I like your humor, Bob. But then again you confessed to liking Rodney Dangerfield… “I didnt see a thing……You’re perfect”……
I never got to see Dangerfield work blue but I hear he was something else.
Never saw Dangerfield either but did go to his club, Dangerfield’s in NYC once and saw Monte Rock III after a Queen concert at MSG… Literally 5 people in the audience including my wife and me yet he performed his heart out,… Monte Rock III???? The DJ in the club 2001 Odyssey in “Saturday Night Fever???” Self deprecating type of humor in his own right…. Hey it was on a lark..
Rodney Dangerfield in person was an awesome show. Saw him once in Vegas. One of the better shows I have seen
i briefly had an ALLY. account. Closed it when they wouldn’t fix basic problems. Preferreds are listed several different ways and you can buy them any of those ways. But if it’s not listed exactly as on their master list then the program claims you don’t own it. I had to teach the clueless reps about their own platform. Never got fixed.
I saw Dangerfield live in the 80’s. He’s funny but I knew all the jokes. He didn’t do any new material or improv.
Yep, thats the same Ally, I know. I used to call in and have them adjust it, but I dont even bother anymore. Some of these I really dont intend to sell like the SLMNP types. One of these days I will just have to sell them and then close it out. Surprised it even has customers. Even Robinhood laughs at it.
I got a corporate action notice from Schwab last week for seaspan. I didn’t participate, but I did see the notice.
Hi Gridbird–
I received the notification from Schwab a few weeks ago. Adrian has pointed
out the key features re the conversion offer. In my opinion, the offer stinks!
I had 1000 shares and sold for a profit just hours after the announcement; happy as all heck re my decision.
FPI-B dropped down to $25.70 today. A little juice game I play is buy here (which I did), and dump near $26, as that is its range. Its current “par” is $25.80 and may increase on any participating land value increase adjustment come this August. Has some volume today at 27,000.
Grid, how do you gauge the call risk on FPI-B since it is 9/30/2021? Obviously, your entry price is below 25.80 but do you think they will call it?
Mikeo, I dont really worry about that, being its good here. The real worry if one doesnt like, is they could convert to common shares after that point. Im not sure that is a game I want to play. The CEO is constantly rattling his thoughts on this issue in conference calls. He knows his arse is backed into a corner. He really cant raise the common divi much until he gets this cash draining preferred off the books. And that would be by a diluting conversion to common . Maybe a LANDM term type issue could lower the 6% and get the 2024 9% penalty rate off the books. But it doesnt look likely.
He said they had plenty of time (they do as the penalty is 3 years away) but he wasnt going to wait until end and get backed into a corner (I take that as being forced to convert at a time when common stock is low). The common is pretty high now. For me? I trade it all the time over and over. And I want to be a player at the table when the August land adjustment is posted. But come September, I dunno.
Mikeo, Since it has become a fairly large position now for me (at least near term) I did some reflective thinking on it last night as opposed to next flip with it. I dont know specifically what rolling 12 month period is used for land appreciation from USDA, but farm land is increasing again. In some parts of Illinois it has jumped double digits, since last fall and FPI has over 30% of their land in Illinois alone. If the total ave comes in at 4%, that boosts the “par” value to $26.05 come August.
My point is that this participating part of the preferred is most likely going to force a conversion sooner than later, as it just gets more expensive waiting to redeem or convert. Letting the preferred appreciate more is just “wasting money” that would just dilute the common more. Reading the cycle here of locked in rents for 2021 and farmers expecting to “pay for it” in increased rents 2022, Im warming up to letting some just convert when/if it happens. The rent cycle would be on upswing, the stupid court lawsuit will eventually wind down and free up cash, and there is a definite recent trend in people “buying up land” with their wealth. Maybe Bill Gates will just buy up FPI, lol. He already is biggest farmland owner in US. He owns at least 100,000 more acres than FPI does.
Thanks for the thoughtful replies Grid. It does seem farmland is an unappreciated nugget of opportunity.
Gridbird:
Using the hypothetical 4% appreciation of composite farmland value in your example with a 50% participation for FPI-B, 4% x 50% x $25/share = 0.50 increase from the present redemption value of 25.80. 25.80 + 0.50 would equal $26.30, NOT $26.05. Am I missing something?
By comparison a 2% appreciation would equate to a redemption value of $26.05/share come August. I would speculate that the redemption value in August might be something in the range of $26.00 – $26.30/share.
You have a good point with the incentive for conversion of the preferred as a path to increase the common dividend.
I have no interest in a conversion to common stock either. That would be a problem. Common is a speculative bet on farmland values for certain types of farmland.
Dave said: “I have no interest in a conversion to common stock either.”
Dave, we don’t know for sure but personally I would say there is a >50% chance the preferreds will have a forced conversion to the common. And the second FPI announces it, the common will drop because of dilution. And you will have ZERO warning before it happens.
There is a precedent for this. AMH had a similar feature on AMH-A &B where the principal value increased each year based on housing prices. AMH-A was worth $28.96 when it converted to common. The common fell enough it was something like being converted for ~ 0.75 to 1.00 less. You still came out ahead if you bought it around 25, but if you were late buying it you would have lost money. I expect the exact same scenario to play out for FPI. We can estimate how far the common will fall based on dilution, but it appears to be a significant amount. I would not be surprised to have the conversion effectively come out to less than $25 if you sold the common immediately.
Thank you Tex.
For what it’s worth, here’s a link to last August’s Land Values Summary from which FPI’s FVI Factor is calculated. https://release.nass.usda.gov/reports/land0820.pdf. Figuring the exact way this will be applied by FPI to come up with its FVA number when this next comes out this August is tougher to figure out as it requires an exact knowledge of where its current portfolio of farms are located vis a vis the August report and the percentages within each sector…. in ’18 FVA amount was +21¢. ’19 was +48¢ and ’20 was +11¢ for a total of 80¢ presently. Given farmland in general seems to be playing catchup after 2020, it would seem reasonable to guesstimate +50¢ this year imho, particularly when taking into account Grid’s more specific data from the IL area.
Regarding calling or converting, I fully expect something to happen on first available date 9/30/21. Having played the two AMH preferreds back when that conversion took place, I know there are ways to hedge out the risk of conversion to stock via shorting the common in advance or other more sophisticated ways… I didn’t do that… I let them convert to common and then sold the common… It was difficult if not impossible to capture the full conversion value completely by just plain selling when your shares of common posted, however, it did not take long for the common to recover from the selloff of those wanting out immediately… I forget how long it was exactly, but the point is it’s highly likely that a decrease in the share price caused by the conversion and probable selling pressure from those wanting to cash out immediately will most likely be a temporary event.. Also, going by memory alone, even the immediate sale of yoru common still netted a good return – but maybe that wasn’t the case for those who came late to the game.
New bullish SA article today on FPI-B by Trapping Value https://seekingalpha.com/article/4420435-farmland-partners-preferred-shares-still-attractive?mail_subject=fpi-fpi-pb-farmland-partners-preferred-shares-are-still-attractive&utm_campaign=rta-stock-article&utm_content=link-2&utm_medium=email&utm_source=seeking_alpha
Looks like he is guessing farm appreciation this year where I have been reading. Take the 4% middling guess range, and it resets value to $26.05. He hints around on a few things correctly I believe but doesnt drill in.
I know you agree, but Pittman has to redeem this sooner than later. The preferred will just keep getting more expensive with land on upswing, and this ultimately dilutes common even more. TV didnt mention that side of the coin.
There just isnt a path out of conversion as he needs the cash flow to bump up common divi, and has admitted as such. Unless he can stall out with some goofy term dated issue at lower yield to justify stalling out the preferred riddance.
You would think that FPI has matured enough as a company that given the prices achieved by OCCI and some of the other BDC type companies prone to issuing 5 year paper that FPI could easily issue a plain vanilla 5 year type of issue that could command something around 5.50-6% or better range (hello private placement for better rates) just to get out from under the costly FVI Value wrinkle that they needed to include to do FPI-B.
LAND pulled it off with LANDM, so it is possible to get out from under the PVI and stall out dilution process. But it doesnt help with the chronic cash poor generating position to help common stock though.
2WR, Last time it popped to near $26 I didnt sell instead I just tripled down at 25.70. But thanks to TV I guess, I just unloaded half the recent 25.70 load at 25.98 and .99. Its still my second biggest position though. Im going to be a bit more guarded with the rest as I wanna be a player come August adjustment.
I guess Pendys double down on a loser strategy works sometimes. I sold my RCA for a buck gain over 26.50 a month or so ago. Bought them back at $26.20 a bit too eager beaver because it dropped to $26 next day so I doubled down. Back in black now again. RC common been on a roll. The darn thing is actually getting within earshot of initial conversion strike price.
Moron is losing his touch. He recommended GSL-B today in SA and only gave me a 9 cent bump. Thanks for nothing Moron, lol.
Been out mowing the world’s grass this afternoon on my new Ferris since old mower bit the dust after 752 hours……. Gee, Grid flipped for immediate profits on two issues??? Who’d a thunked it?
Ha, no, just the partial FPI-B. The RCA I doubled down on, and the GSL-B I continue to own and have for a while now. I just thought I would get a better bump from Moron. That was weak. It will climb naturally on its own to $25.50 when it approaches next divi again, so he was no help at all today.
Thank you 2WR.
Picked up 400 shares at 25.71.
I will play the “Penny Dreadful” game.
Since we are 35 days past ex-div, does that mean we are up 14 cents plus the 09 cents intrinsic value?
So this is what they call BIG FARMA?
Newman, Heavy volume drove it down today. I tend to squeeze the juice out of it trading, it the 25.70-$26 range, but near term its not a bad hold issue. And being tied to FARMAland makes an interesting diversifier from the beaten path. I cant imagine farmland decreased in value from preceding year. Im hoping for a nickel or dime increase on the “par” value of the preferred come August. Anything above that is of course fine, too.
As far as the numbers go technically we are only about 19 days into next cycle. But since you only have to get to about mid June (give or take as it hasnt been declared yet) to capture the divi, your math works out the same, or close enough for me anyways.
Question. Today was ex-div for AHH-A. I have held for a while and had a nice gain in IRA. I entered a sell order last night for half at $26.49. So far I have had most of it fill, figure I can buy back cheaper by next dividend. Am I missing something or did some one way overpay for these shares? Thanks
Doesn’t sound like you’re missing anything, just a very successful dividend capture. It happens. I often place high sell orders before the open on ex-div day. Sometimes they get executed on the way down. In this case the price held up all day.
New lexicon, thanks 2WR:
Gridding my position
Gridding your position if you win.
Flipping the bird if you lose.
What is exactly is the standard “dividend flipping strategy?” Buy a few weeks before the ex-date and hope for a pop in the price? Do you hold through the ex-date or not?
Buy before, sell on or after ex-div date to capture the dividend. The price often falls less than the amount of the dividend and you make a small profit for a few days invested. Then recycle the same dollars so the small profits add up.
Exactly when to buy and sell depends on price movement.
For me, dividend capture is just another way to trade on price movement. More opportunities seem to occur around ex-div time so I specifically look for them. I don’t claim to know why it works but as long as it works I keep doing it.
For me it varies, Karma. Depending on issue also factors in. Some issues actually rise a few weeks out pre exD and then actually fall before exD so you have to be aware that you maybe “buying the divi”. I generally buy a month out and watch previous patterns from earlier payment cycles. Also like to buy on dips from “down days” inside that period.
Also some spike up and recover quicker after going exD. I generally flip more on pricing than the dividend strategy though. Crazy stuff and factors beyond ones control can occur. Just look at AFINO/AFINP. And as I mentioned LBRDP. It went exD today of 44 cents and yet closed up 85 cents. Probably will drop tomm since volume was light today.
CIM-B is now 20 cents higher than CIM-D. Normally it’s at least 40-50 cents higher sometimes as much as $1 because of higher floating rate. Doesn’t necessarily mean CIM-B is a buy but it does mean CIM-D is a screaming Sell or Swap into CIM-B. I did some of each.
AGNCM and AGNCN have also gotten way out of whack compared to AGNCO and AGNCP.
End of quarter is a huge time for REIT preferred dividend capture. I’m looking at preferreds for
AGNC NYMT CHMI
DX-C CMO-E XAN-C
ANH-C leading up to merger with Ready, may be called but trading below par.
CIM preferreds next week but may be too late they just made a big move up. Swapping between CIM-B and CIM-D has seen some nice swings.
Non-REIT div captures are also plentiful but don’t look as attractive this time around. Forum favorites XOMAP and LBDRP are in there.
AFINO is my biggest play at the moment. Trading 60 cents lower than AFINP. First dividend will be an oversized dividend and when it’s announced I’m hoping for a pop. I traded between these two for awhile until AFINP ran away.
Oh ya, Martin..The ol “Fake higher yield” fumblerooski trick play. One of my old favorites out of the coaches playbook. Almost always works when the team really needs to put some points on the scoreboard. Not a personal fan of this type of company, but I am going rent it until around exD time anyways. Thanks for the reminder. Its going to show a bloated plus 50 cent divi when company announces divi real soon, and will show an 8% yield. The last time I executed this was the SCCC issue when it had its first one time bloated interest payment posted on the board.
I am not the flipping maven you are, but AFINO has been a great little monkey. I flipped it 3(?) times since IPO and I am back in for the Divi capture. Don’t want to hold it long term, but OK for short term.
XAN-C changed its symbol to ACR-C
Putting some lipstick on that pig
Thanks Martin for the reminder. Added shares of AFINO on weakness today for the short-term rental.
AFINP 25.81
AFINO 25.04
ES MUY LOCO, NO?
Mahty its just returning to the price where it was at last week while AFINO is still sitting on the same stump price wise. The fools chase divi still hasnt been posted yet for AFINO. In fact it doesnt appear the preferreds or common has been posted yet.
probably 4/1…..April fools day, no pun intended.
I contacted them and they said it will be declared in the next few days. Load up.
Thank you eoz3106…..I’m in for 40 shares
Thanks for info, EOZ. I bought another small lot at $25. Aholes werent gonna go $24.99 for me at all. They need to get that fat oversized divi plus stub posted to get the hogs and dummies interested in chasing that divi before it goes exD.
Maybe the same fool who is trying to buy 5% $20 par HAWEM at $26 unsuccessfully will switch over and over pay for my AFINO..
Hopefully we arent getting ATM dumped by AFINO to keep price down. It sure is having a lot of volume right at $25. But no company would be dumb enough to do that I hope.
The bid on HAWEM now at 24. I’m guessing the 50 ask is yours?
Bob, I dont own it. If I did I doubt I would ask for $50, maybe $29 tops, lol. Maybe the guy got a bit smarter and dropped it to $24, but he forgot to drop his HAWLN 5% $20 par bid as it is sitting at $24.40. Where are these fools coming from? And more importantly why dont I own HAWLN and HAWEM so I can give them what they want? 😕
I could use one of those guys to show up on GGO-A and maybe pay $48 or so on that $40 preference issue.
2WR, Nothing is coming that easy for me, but Im grinding away for nickel stacking. Latest has been selling spikes and then turning around and buying them right back. A couple examples rode GSLD up to $25.80 and dumped yesterday and bought them all back in $25.50s today. Just recently bought in 25.20s and didnt really want to let go. Same thing with LBRDP dumped some a couple days ago over $27 and bought back at $26.70 yesterday. Keeping a full load there. Probably should be selling on todays spike but kinda like this issue as a hold for a while.
And then you will really like this for micro flipping today… I have about 1000 shares of PCG-A and saw the bid and ask were bouncing by the second up and down a buck with no action. So I decided to micro market dump in small lots and was snagging over $30 on them for a few hundred in total. Then turned around and bought some PCG-B with the proceeds as the price was better stripped yield than the lead dog A series was sold at. That kind of stuff keeps me amused until some of the actual real flips get heated up enough to sell and move on.
Well I guess for all the BMC’ing going on with the AFINO flip (led mostly by me I must admit), it really hasnt turned out bad as it came through on the back door side. If I sold now the annualized return would be about 28%.
I overloaded to buy soley as a flip. But I dont see a better option, especially with AFINP flipping the bird at us at $26.76, so Im digging in and hanging on.
I thought I was the only one keeping my stash on this one.
I have an order in to sell, but it is a LOT higher than what it is trading at now.
I am with you, as long as something better doesn’t come along I might as well see if the price rationalizes on this one at some point.
Scott, Its either going to catch up, meet closer in the middle, or AFINP will fall back. Two out of three options are positive for us, lol…
Kind of concerned I have been stretching and reaching for yield as my biggest 5 holdings are WTREP, TDJ, QRTEP, NSARO and SESCF. But then I just checked from this time 3 years ago and it was NSS, FIISO, ALLY-A, ABRN (now defunct) and GBL-B (now defunct). So it looks like my memory is faulty.
I think most people’s portfolios are a bit more risque’ than they imagine them to be.
We all think we are stately ballroom dancers who carefully consider each step we take in a finely choreographed procession of moves, but when we go back and look at the tape it probably looks a lot more like a cross between an epileptic seizure and go-go dancing ;o)
Everyone has to dance with the Mr. Market, and that bi-polar drunk calls the tune.
As long as liquidity and risk on is prevalent with a growing economy I will push it some. But I still force myself to keep a third in illiquids. I will trade them with each other for small gains in a walled off stash.
As I look at that list of 5 I ask the pre school question, “which one doesn’t belong in that group?”
Really keeping my fingers crossed WTREP stays outstanding for a time. Effectively, it’s BBB credit with B yield.
Nice chat we had with pendy.
You think NSARO is stretching for yield? Hmmm…. Or am I misreading you?
Camroc, you are only misreading because I didnt elaborate fully. No, clearly NSARO is a quality illiquid. But I had to mention it because it was in my top 5. But, top 5 can be misleading though. WTREP is my biggest holding, but if you viewed my Ameren preferreds collectively then it would be my biggest hold even though singularly they arent.
Bob, I missed your post here.. You have doing a good job of razzing from the peanut gallery. I got to join you on one, and tried to do more but was blocked at the source. I think Penniless is finally getting smart and not taking the cheese anymore as much as it kills him. But he finally learned just we bring up more of his bad picks if he engages and his hole gets dug even deeper.
Sold my 2nd 100 of AFINO still holding a huge stash, three or four times my normal amount. Could end up being my biggest short term winner ever.
I bought a bunch of LBRDP at basically same time and it has done a lot better than our AFINO. Though that was a more predictable event than this one has so far. Due to dearth of opportunities I probably will keep my LBRDP as its basically a tracking stock for Charter since it owns 25% of Charter. Im still looking to exit AFINO, I just need a reason or opportunity on a bigger bounce.
If anybody is still in AFINO note that AFINP fell within range and AFINO crept above 25. I cashed out half of mine and used a small amount of the proceeds to buy AFINP in the 25.30’s. Still holding half for potential gain or for trading.
Martin, Im still hanging on to my AFINO. It started as a flip when purchased, but dont have a real exit plan yet.
I thoiught a 2.5% profit with limited upside was an exit plan. But you’re more of an all or nothing trader and I’m the guy who sells 100 shares at a time as it gradually rises. I was overloaded, now I have a normal amount and a hefty profit.
Outside of illiquids, I have never seen a preferred hold as steady as AFINO has.
It is really mystifying. Every time I look it is only a penny or two off from the $25 mark. And I know good and well, it would make a big jump the very next day if I were to unload it.
That is fine though. I made a bunch buying LEAPS of WFC this week. Next week we will find another way to make something — and so it goes.
I sold some AFINO today for 25.15 to get funds for something else. nice jump today
Martin, Im more of a feel or need to buy something else better deal flipper. We made our gains on the back end post exD, not the front end. If it had shot up to $25.50 pre exD, I would have flipped. But since we got it on back end and it returned back to par quickly, I just have kind of sat on it. I guess at this point Im just thinking like Scott R is. It seems to be stable around here, so I will hold until a better trade comes along…So long story short, I started with a plan and ended up without one, ha.
Below: I had half my overweight position in AFINO click at 25.16 today, after divy and 1.84% gain (unfortunately all ord income, sad face).
A bunch of other orders clicked too for under 10 shares. 4, 6,2, 10…? okay by me, glad commissions are gone. I’ll keep the open order to sell on the other half of AFINO and see the plum-reaching continues with the others non-IGs. Seems like a couple other sell orders are being approached too.
Looks like some one cleared open sell orders below 26.95 for BFS-E at close. I had an open sell order that had filled 3 shares then price popped to $26.95.
It looks like someone has been testing the waters with these small ticks of a few shares here and there then got itchy finger at the close!?
I already have too much AFINO. Don’t want to be exposed to the risk if the bottom falls out. “Oh hey, 24.99!” Buy! Buy!
It climbed back to $25 at close, too late! Im sitting on a 3 cent capital loss per share. Time to get the divi posted so some air can get pumped into this flat tire.
Gridbird:
AFINO has traded close to $25.00 since the 17th with 5 high volume days. Could some of these be ATM sales? If so, might that be a partial cause of the present price differential between AFINO and AFINP? Only a guess. FWIW.
Patiently waiting for the divi press release.
– Dave
Dave, that has been my main concern for several days running. Cant find proof but its trading and volume smells of it. Anyhow, its about “show time” as they just declared. Hopefully they arent poking holes in the tire while the divi chase is trying to reflate it.
Accordingly, AFIN declared a dividend of $0.53033 per share of Series C Preferred Stock payable on April 15, 2021 to Series C Preferred Stock holders of record at the close of business on April 5, 2021.
This one may struggle, to get the return I wanted as a flip, maybe its just too clinical. The better ones are the unexpected ones like where I caught NYCB-U drop Tuesday and sold it Thursday for 75 cents a share goose.
who is paying 25.89 when almost the identical paper can be bought for 25.02……..is there an explanation?
Dividend declared and that wasn’t it. Could be a large seller gradually dumping at the worst possible prices. Or somebody who knows something we don’t.
*We will get some modest pop minimum. It will take a few days. But nothing like my CEQP- today. Close to a 50 cent pop today off an $8.20 start.
Grid, Your following Rida ! ?
Could it be your .49 cent pop in price was due to him writing a article on it and his flock of sheep following his lead?
Now we figured out your flipping method. Follow Rida M and sell a couple days later !
lol
Charles, No Rida had nothing, nadda, zero to do with this one, as he has recommended this one quite frequently past year or two. He just lucked into the latest article submitted right around the time the GP was bought out and all supporting details including common/preferred buy backs and increased cash flow guidance.
This was a big deal for company, as the cash flow requirements for payments has gone down considerably. For me as the preferred holder, I love a lot of cash leakage below me stopped even at the expense of some above me added on to do it. Their finances are in pretty decent shape. Chesapeake issue is over and not a problem or overhang anymore, their guidance is always conservative and they meet and beat. They are determined to stay fiscally sound.
I have owned this as a flip over a year and a half ago, so I missed both the carnage and subsequent huge price run up gains. But after switching investing criteria about 3 months ago it was one I bought several times in $7.5-$8 range and plan to hold. I actually bought a smaller amount of 500 shares premarket yesterday at $8.35.
With GP gone, what would be really sweet is if they would convert to CCorp like others have and thus get this preferred turned into a regular CCorp preferred instead of the stigma K-1 preferred. They didnt mention it so Im sure its no near term plan if ever. But unlike family run EPD, there is no huge tax overhang on CEQP.
Thank you Gridbird. The delta at the close of today, March 29, is $1.04 between AFINO and AFINP. Quite a price spread. AFINO volume is consistently greater than AFINP. We will both see on the 1Q 10-Q if AFINO had 1 Q ATM sales when the 10-Q is released during May. With the dividend notice press release the train has left the station.
You have quite a knack for flipping and should be commended for it. Thanks for your inciteful and actionable comments on III. Keep up the good work.
– Dave
Dave, I am up 2 cents and have only just begun to fight! 🙂
If you would have bet me before market open AFINP would clear $26.50 and AFINO wouldnt break $25.15 today, I woulda taken that bet and lost!
Something odd with the constant volume that is sure. It clawed above $25.10 and looked to be moving, then more volume smack down dropped it back. Its not a lost cause yet I dont think as one can get it on the back end after exD creep up. Im not staying in it long and beat my head against the wall. Its more leveraged than my personal taste, but its not WPG on its last wheez. Tenants are 70% IG, and rent collection at 97% and growing. I will wait a couple weeks after exD before I throw in the towel.
Well guys this AFINO flip was a flop. Damnest thing I have ever seen. Its trading volume like its a billion dollar float. Something beyond our knowledge sell wise is occurring. So you got AFINP paying out a smaller divi closing at around $26.30 and AFINO with bigger one time payment stuck in the mud at $25. We got the right jockey but the wrong horse here.
Crazy stuff and then you got LBDRP which I bought a lot to hold not flip recently and it jumped over 3% today and went exD today on top of it. Gonna keep AFINO I guess for a week or two and see if I can get a dead cat exD bounce back towards $25. But it looks like a dead money trade unfortunately.
It’s not all-or-nothing. I may give up 100 shares at a time. Depends on how fast I need the money for other things. With all the quarter ending ex-div’s now it may be awhile. I actually snagged a little more today at 25.01
Certainly nothing wrong with that. Im not pulling plug yet either, but wont camp out with it either. I dont know if you have noticed, but FPI-B has been one of the easiest 20-25 cent flips past several months. About 3-4 times a week (sometimes in same day), I will sell half my core of 1000 shares in the $25.90s and buy back in lower in $25.70s. Largely semi anchored to its current $25.80 “call or convert” value as it reaches first call date this fall. Hope for a land value boost again come August.
Haven’t been following that one I’ll check it out. If you’re still in LANDO that’s been bouncing around in a narrow range.
I sold the new MBINN and then bought it back at the same price. All because MBINO took off. Hopefully it follows but could be looking at another AFINO stuck in the mud. GFNCP was another good one but now it’s in call risk territory. Don’t know why they let it ride.
Grid,
Can you tell me what this paragraph in the FPI-B prospectus means?
“Cap. Until September 30, 2024, the amount payable upon any redemption, conversion or liquidation event will be subject to a cap such that the total internal rate of return when considering the initial liquidation preference, the FVA Amount (if any), the Premium Amount (if any) and all dividends (whether paid or accrued) on the Series B Participating Preferred Stock will not exceed 9.0%.”
Bill, FPI has that window from 9/21 til 9/24 where it can be redeemed or converted at current 6% coupon plus the farmland value appreciation. This is a “participating” preferred where preferred participates partially in increased value of farmland prices. So its just basically capping any maximum participation one can gain.
After 9/24 it goes into a straight increase in coupon payment to 10%. So in reality this thing will be redeemed or converted sometime between this September and 2024. Reading the hints from CEO, Im expecting a conversion sometime well before 2024. Its the only real way the common can get more value and cash to it. Im playing it until at least August when the next land value assessment occurs to see if it appreciates the conversion/redemption value on top of current $25.80.
This is an asset rich cash flow poor entity. Im not looking to get converted so I will always be near eject button come this fall.
In ’17 AMH had 2 preferreds similarly structured to FPI-B. They were participating preferreds tied to the appreciation of home values, not farm values payable in cash or shares at the company’s option. AMH chose shares.. I held AMH-B thru the conversion and, somewhat as expected, AMH did take a hit upon conversion thus limiting immediate exit at full conversion value…. However, if memory serves, AMH recovered quickly and full value was achievable within a short period of time, probably less than a month afterwards.
I don’t have the temperament anymore to goose returns via Gridding my position, but I have managed to add to it twice the last 6 weeks at 25.69 and .66. Pretty easy decision when present “par” call is 25.80 and in all likelihood going substantially higher when FVA Amount is recalculated in August…. When you think of what’s happened to real estate values in general over the last year, it seems as though it’s a pretty easy bet that FVA amount will go higher by an amount greater than even last year’s increase of 11 cents
AFINO – Today TDA shows AFINO as DOWN while Fidelity has it as UP. One of those rare occurrences when Fidelity gets it right and TDA doesn’t.
On ex-div date sometimes they factor in the dividend and sometimes they don’t. Doesn’t seem to be a high priority for any of them.
Sold my first 100 of AFINO for 1% profit. Holding most for now, there could be a lot more upside.
Martin, Im greedy and waiting a bit more. May peel some at 24.85. We got our juice on the back side. Technically the trade was worth it, selling right now. But I really thought this one would climb hard into exD. But the volume from wherever it was coming from, was just too much to overcome.
Martin G.
You seem concerned about AFINO post divi. Is your concern the long term interest rate risk, credit risk, general market risk, or perhaps another reason?
Would you consider AFINO & VEREIT preferred to be of similar credit quality????
– Dave
Moderate risk, about right for the dividend range. Mostly I don’t like having too much money in one place with moderate risk. Don’t want to lose too much if something goes wrong. I’m a conservative investor when it comes to losses.
What happened here is I bought what looked like a good short term trade. The price dropped a little so I bought more. With day of reckoning approaching I bought even more. Before you know it I took on too much risk.
I haven’t been actively following VEREIT. I do it backwards, when I see price movement opportunity then I look into the company.
Thank you Martin G. I am a conservative investor too. My practice is to limit my interest to a preset amount in any specific enterprise.
– Dave
Posted over on the sandbox if anyone had experience with NML or any other MLP related ETN or ETF Fund.
I assume no one does since no comments. Monthly payer and has been raising its divided Still not much at 4-1/3 % I decided today if I held it for 3 months my shares would generate about 42.00 in dividends. It goes ex-dividend on March 12th .I decided to sell as I think its been bid up too much on oil price expectations will profit the MLP’s I think after next dividend announcement for the coming month of April reality will set in and price will drop. I owned it for less than 30 days and took a 360.00 profit
Would WCCpA the 10%+ coupon be a decent candidate for dividend capture? Rather expensive for $25 callable 2025 issue but even at the$31s it yields over 8%.
When does one consider one of these high yields as ‘too expensive’?
See
https://innovativeincomeinvestor.com/security/wesco-international-10-625-fixed-rate-reset-cumulative-preferred-stock/
mSquare I think you’re looking at the less relevant current yield to be coming up with over 8% yield on WCC-A,….. More relevant would be YTC aka YTW which at $31 right now is approx 4.92%….. that’s what’s going to determine when it’s too expensive considering that barring economic catastrophe for WCC or a gigantic explosion in interest rates in the next 4 years, there’s essentially 100% certainty WCC-A will be called ASAP.
QRTEP goes ex-div in a few days and is at par $100. It yields 8%. Nice buy time as it will recover quickly from the ex-div.
Good bet for a small profit – thanks
Does anyone ever try this with common stocks?
Most short term traders deal in common stocks there’s more volatility. I trade preferred stocks for precisely that reason. More predictable, profits are smaller but losses are less frequent so the smaller profits add up. Wild swings don’t suit my temperament.
You need to find what you’re good at and what suits your temperament. This particular forum is focused more on preferreds.
Hi Martin,
That was mostly a ‘thinking out loud’ type of question…
I guess I didn’t consider how that would be a lot like day trading, but I was specifically thinking along the lines of ‘flipping / dividend capture’ with a common stock. I can’t remember who made the original post that got me thinking about this, but it was in reference to a $.19 special dividend on top of a normal $.11 dividend.
I haven’t really paid attention, but I guess common stocks don’t behave the same way as preferreds with regard to dividend payments and ex dates.
If you like short term stock trades it is probably easier to just play the options.
You generally end up with a combination strategy anyway where you will have some short term trades when things get put to you, or when you want to hold something to sell covered calls off of.
Would UMH-D be a decent dividend capture opportunity right now? Trading at $24.80 with a .3975 dividend with ex-dividend date on 2/12? In searching the site, it seems to be one that others have used in the past, but is not one that moves much normally.
Maybe. I wouldn’t expect much of a gain on that one. The way I use dividend captures is to reinvest the same money repeatedly so the small profits add up. Alone it might not be worth the trouble.
I like UMH-C better for the higher yield less downside risk though upside is limited because of call risk.
I appreciate your feedback. I’ll take a look at UMH-C too.
If you are a long term investor, it is a decent add. Very low volatility with regular payments. If you are a flipper or day trader this is not a good investment because the volatility is low. After a div payment it drops less than the payment and has a targeted range.
Disclosure: I own several thousand shares of UMH-D because it doesn’t move much, and I don’t see any signs of company trouble in the current setting. I own it in my long term holdings vs flipping. This one helps my long term goal of 6%.
Thanks! With the dividend imminent, does the entry point make sense now for a long term hold?
In my opinion it still does as you get a .40 div and doesnt have the typical large div drop that recovers over a quarter – it is fairly flat. A guess is that it along with others have been under slow accumulation since this past Summer. It is also under par. The pool of > 6% is shrinking, and is a possible call 1/23 that in a year will keep it pinned to par in a low rate environment.
Good entry point is whenever you get a fair price. Before ex-div is often better than after. On the other hand, prices went up today. With the stimulus passing they might not come back down. If you want it I’d buy it.
If there’s a housing crisis people downsizing have to live somewhere. This may be the last housing sector left standing. But you do have to watch non-payments.
Thanks. I ended up purchasing at $24.80, so a nice run up today.
I bought UMH-C when it fell to 25.40. For a flip. Not expecting much but possibly enough for a weeks work. Anything more than a nickel is pure profit.
With buyout by NFE and a JV with Golar LNG assets, isn’t GOLPF worth considering for a flip. It was trading in $22s most of Nov-Dec and gapped-up to $24s on the news.
Based on the buyout It may still have some upside while you collect the nice 9% dividends.
Am I missing something as in hidden risks or is this buyout by NFE not change its prospects and possibly credit rating?
CHMI preferreds took a nosedive on high volume during the last half hour yesterday. Look for more such opportunity today as fund managers demonstrate why I’ll never buy another fund. Waiting until the last minute to do forced rebalancing or closing large positions that no longer fit their rules.
Both CHMNI preferreds went ex this week for over 50 cents dividend
They fell at the open for ex-div. Then fell again at the close. I regret that I only bought a small amount, didn’t know for sure.
I have taken a small position in QYLD – covered call strategy ETF w/monthly pay and yields @ 11% with .6% expense ratio. Anyone else holding this or looking at it? Thinking of increasing my position
Interesting ETF. Expect volatility, but it has a 5-Star Morningstar rating. I might take a light position on the next dip.
There’s no magic in a covered call strategy. You take less risk, you will likely get less return. QYLD is up 7% ytd while NASDAQ 100 is up about 40%, so clearly there is little relationship between the strategy and the underlying index. So what’s the point other than to give you an artificially high yield and a perpetually declining NAV?
The index QYLD is tracking is CBOE Nasdaq-100 BuyWrite V2 Index, not Nasdaq 100. Goal is to have monthly distribution that is relatively high without doing the work on covered calls on my own. Also wanting to see if there is good dividend capture option so keeping an eye on how it moves each month. I see a lot of CEFs that pay monthly but pretty high expenses
The point is a covered call strategy is fake yield. It doesn’t improve the return you get for the risk you take. It basically acts like a balanced fund that pays you back a chunk of your principal every month. Why would you want to pay for that?
karma-
If you are saying that they pay ROC- yes they do, but it is a tax term, and not always destructive. They’re nuanced, and many don’t know just what goes on — if only it was more obvious.
tghokie – STK or QQQX are better tech CC funds than QYLD. Toss them in the Div Channel or Port Visualizer for any given period. They dominate the field & crush QYLD.
if you’re holding, not flipping, you may want to look at QQQX instead. Nearly twice the cagr of QYLD
I own this ETF. It pays a good dividend and I use it instead of any QQQ? ETF or CEF. While you are at it check out NUSI, another ETF holding Nasdaq 100 issues but using options to mitigate loss. Howard
CIM-B is currently selling lower than CIM-D. Should be 40-60 cents higher because of higher floating rate. Good arbitrage opportunity.
Still waiting on PCG to resume all those dividends.
Thought it would have been announced by now.
Would it be better to buy them before or after they go ex, or not make a difference? they are likely going to trade with a due bill as well, so the ex-date will likely be after the pay date.
Depends on the price you get. More often than not it’s better to buy before ex-div date but not always.
There may be volatility when dividends resume. Dividend capture strategy is more reliable when markets are calm. Volatility can drown out your small gains from the capture making it hard to tell if that strategy is working.