On this page folks should comment and write about illiquid securities–preferreds and baby bonds. By Illiquid I am talking about those issues that seldom trade–or only trade in very small volumes.
We have a lot of discussion on the site about these types of securities–normally $50 and $100/shares issues and the commenting gets scattered about–by using this page we can keep this topic more centralized.
A caution to all investors, but in particular those will little experience in illiquid securities. Tight limits must be used on all of these securities–if you don’t use limits you will butchered. Also while some of these issues have been outstanding for more than 50 years they can still be called–it happens and if you overpay (pay more than liquidation price) you may be setting yourself up for a loss. Always do your own due diligence–always double check the facts–everyone makes errors (certainly I do) and you need to know the facts.
Investors should know that illiquid securities will drop like a rock if there is a large move higher in interest rates. One of my current and long time holdings has been a $50/share issue from CEF Tricontinental (TY-P or TY-) with a 5% coupon–very high quality. This issue is now trading around $56, but in its life (issued in 1963) it has traded as low at $18/share–so there should be no doubt they can move sharply.
I just bought CKNQP through Fidelity at around $96 (the current ask)
Thoughts on FIISO? Upstate New York financial holding company. (FISI is the common). Five Star Bank is the most visible holding. Liquidity ratio is about 10% (or at least it was at the end of January). This 8.48% non-callable preferred rarely trades. Most of the 171,000 shares are owned by insiders. It’s the type of issue where GTC orders MIGHT be filled a share or two at a time. My concern is financial stability (I own a few shares accumulated over time in very small trades). The Qs and Ks aren’t current and I’m wondering if anyone has an “informed” opinion about the company’s financial stability. given the events of the past month. Most of their investments are in real estate loans and the negative arbitrage associated with buying treasuries over the past few years doesn’t seem to apply. Anyone know more? Thanks.
You can find their 10-k here…..
https://financialinstitutionsinc.q4ir.com/financials/sec-filings/default.aspx
Thanks. Read it and most of the other Ks (and Qs) going back three years. They portray a robust regional bank and financial holding company with adequate liquidity and a portfolio comprised mostly of real estate loans (in the Northeast and the DC/Baltimore regions). But neither the Ks nor the Qs reveal if their liquidity is based on short-dated treasuries that were purchased more than nine (or so) months ago. If depositors attempted to make withdrawals, the most recent SEC filings reveal that up to about 10% of the banks balance sheet capital could be covered. But, how liquid is this? If the bank invested in 1 or 2 year treasures yielding 50 to 100 basis points, they’d need to sell these at substantial losses which, de facto, would reduce the liquidity ratio to something way below 10%. That is a potential problem for SOME regional banks. Unfortunately, the nature of short term investments often is not disclosed. That’s what I’m trying to learn more about in connection with FISI (and, particularly, their regional bank holdings).
I was able to buy 100 shares of UEPCP today at $74 (5.8% yield). I’ll have to start saying nightly prayers that it gets called at $105 LOL
Finished getting my fill of UEPEP I had an open order at 81.90 that filled a little bit at a time. Not much of a dividend but I can hold til its called and throw in the sock drawer and forget I own it.
Shares of CNLPL have been moving today. The current ask is $52.97
CNTHP at 53.08
Thanks for the tip. After some thought I needed some ol reliable at that price. Picked up a 100. I will just deal with the call risk. Cannot be too bad a hit compared to some bank preferred lately 🙂
Dont worry within next 10 days or so if CLP board of directors meeting is staying on calendar its been on for years, you will get the next public declared divi announcement.
Dang. I could have waited and paid a penny less.
I am not sure if this was something good or bad, but I recently purchased a small amount of CNPWP. I already owned some CNTHP at a price above the call price so I thought I would try to get one of these below the call price to sort of balance things out. I placed a limit order to buy at $41/share and actually got them at $40/share. So now if every preferred is eventually called, I won’t lose any money. I won’t make much but I won’t lose either.
I don’t know what kind of order the seller placed, but somehow, the shares were sold below my upper limit so good for me.
I have no idea what this seller did.
However, it’s not uncommon for a seller to do a market order. It is dumb to do so on something illiquid because it can catch a crazy price. I have sold a few shares for up to 10X “normal price” a couple of times – I think because someone put in a market order on a thinly traded stock.
I keep a few of those “crazy price” GTC orders open on some illiquids, and a few hit every year (rarely at $200, but well above the price that I can repurchase a few days later).
any idea why cnlhp has had such a downturn in recent weeks
bob
because CNTHP has been sold down and is a better buy :-).
Also a few people selling a few hundred shares is no bigger than moles on a chigger. Could be the original buyers are passing away and the grandkids want to have some spending money on go to dairy queen or the like.
bob, it’s not very liquid and has a tiny float of around $6.7,M so easy for a seller to swamp the issue for 30 minutes or so, but I asked no questions and instantly bought a few hundred more as a reinvestment risk hedge around $41.90, placed in back of the pantry and posted a Reader IA here for the rest – I think Mr C bought them but won’t admit it. With the current ask back at $175, wouldn’t expect to see any movement soon.
Crlkp at 22.50, IRR of about 7% ytm seems like a good deal but there is so little information about them. Thoughts?
Pink sheet, but reporting- for now.
https://www.quantumonline.com/search.cfm
Irish the issue was assumed by SP Plus ticker SP. So their financials are Central Parks.
Very interesting. I take it since that merger happened now just over a decade, change of control, a cash/stock deal, etc. was still favorable enough that it’s not expert traded.
Is change of control via merger not a factor here for CRLKP, similar to that El Paso preferred stock that can never actually convert because it’s so far out of the money vs. KMI trading price so will just redeem at maturity date?
Theta, this company has been passed around a couple times since this was issued. KKR bought it and eventually SP bought it from them. Basically a good fit being this is what SP does. The original KKR buyout I believe was below conversion strike price so it ultimately wound up with the same “price put” SLMNP has today. CRLKP can be tendered anytime back to company at $19.18 if memory serves on exact price. Most were tendered long ago. Maybe 40,000 or so still exist. It does mature at par in 2028.
Dont see this volume ask often with this issue. Somebody is partially through an over 3k dump of CNTHP at $53.25.
Without a div baking in the oven ready to capture ASAP I think paying over 53 is not in my lane at this time.
Cant fault you. I was only commenting on the volume availability and nothing else. You rarely see over 3k available with this. Started at around 3500 and is whittling down slowly.
Went fast. I grabbed a quick 500 shares. Goes along into the drawer with some other tickers from them.
Mr. C though not as pretty of yield, UEPEP had a quick dump of 3k also and swept up my minor hundred share order at 82. This was more a balancing trade than anything else.
Grid, yup. Same thoughts, picked up a Paul Bunyan stack of the sister UEPEO right at 78.00 about month ago, in hindsight could have flipped and re-bought, but staying focused on the income add.
I got some around $76-77 but it jumped a lot a month or so later so I let them go. With yields rising again, I hope to buy down there again. I did reenter a small amount of UEPEO the other day. That is why I like that ComEd trust preferred issue. I get my plus 6% and only a ten year duration exposure.
Excellent trade Grid. Yes starting to see more opportunities pryed open. We may get another run at this. Not expecting new lows, but one never knows.
Mr. C, Alpha is gonna to beat me up with a pillow again, but I goaded a seller late in the day to sell me 300 more of CNTHP at $52.90 today right before market close.
Yeah Grid, the CNTHP seller swapped for CNTHO. 🙂
Alpha, convincing me or Grid that CNTHO is a better buy is like pushing a wheelbarrow with rope handles. :-).
Mr. C if you are willing to grab your best pillow and join the cause I think we can gang up and pillow whip Alpha pretty good 2 on 1. I believe we both are younger and may be able to get a few more swings in before we all need to sit down and take a break, ha.
Here is some interesting if not useless stats from 1968 when CNTHP was IPO’d. High point numbers from 1968… Fed Funds rate 5.66%, 3M TBill 5.34%, 10 year 5.68%, Baa IG bond ave. 6.94%, Prime Rate 6.31%, Inflation 4.19%.
…For me I love owning short duration HQ credit, CDs, and IBonds. But as Alpha and have discussed before, reinvestment risk is also a risk too. So buying some issues like these (or Alpha’s) is a pain trade for me to stay somewhat diversified and weaned off the the short duration teet a bit.
That’s exactly it Grid, stacked and laddered now with Treasuries and similar out to 12-months, but also recognizing the potential box-canyon reinvestment risk at 1 year so turning back to tried and true high IG payors, albeit at lower yields. Funny though, those now frowned-upon/so-called lower yields are still “stellar” compared to a year ago.
I share your same way of thinking but different venue when I can snag a few. Today a few of the 2033 trust preferreds from ute Commonwealth Edison (ComEd) became available today at 6.08% so I plucked them.
Lol, Grid.
We will go easy on you Alpha. Take it one round at a time. Make sure we have medical staff around, defibs, water, ice packs, routine heart checks, etc. We will only be allowed 1 hit per 5 seconds. So I was thinking of a nice heavy goose down pillow. The idea I’m going for is a 1 hit knock out. I will have CNTHP embroidered on the pillow case and will be the last thing that you see Alpha, before you wake up as we give you some ammonia salts. Lol.
Mr. C, Somebody is going to have to work hard to beat that post today! Alpha is currently too many zones west to see this until afternoon…Unless he sleeps as poorly as 2WR does, ha.
Mr C, I did lol, the good news is the coffee did not propel across the keyboard.
You are now in the CNTHP call-risk penalty box, but good news, the extra yield over CNTHO will neutralize the call risk in no time…only a few years or so!
Not wholeheartedly disagreeing with the CNTHP buy, we’re just operating parallel trades at different risk levels. I’ve become more averse to flips, potential calls or drama than ever so staying in the boring high IG, below redemption positions. Not knowing how long this door will stay open, focused on building the income for now.
If it gets any leaner may need to follow Azure into those excellent munis. On a relative basis after tax considerations, they are of late increasingly attractive in lieu of taxable bonds.
hahaha. OK Mr. C.
You know I am rooting for you!
p.s. Do you know how to bookmark a comment here? hahaha. please no one answer that.
Grid, some of these illiquids can really take off or drop several dollars in one day. Not IG by any stretch of the imagination but I have bee accumulating SCG-PA looking forward to another summer backyard bbq.
Charles did you miss type ticker? I cant find a SCG-A anywhere.
my typo PCG-A standing standing buy at 20.08 picked up a whole 61 shares
fc, CNTHP has been around since even Will Robinson didn’t have a Dick Tracy 2-way wristwatch, but with an exposed 6.56% coupon and under the never say never umbrella, agree redemption plus accrued at $51.73 makes the $53+ seem pricey and a bit exposed. Was able though to pick up a small but accretive handful of CNTHO yesterday at $48.50 with about $0.44 baked-in, being QDI, pushes the taxable-equivalent well into the 6%s.
Alpha, where is your sense of call loss adventure at? Call loss butt kickers are getting as scarce as hens teeth. Though I guess it doesnt have anything on C-N or BANFP.
Grid, haha I know right!? I’ve got an unnatural fear of heights and those call loss exposures are like an Indiana Jones rope and wood slat bridge across an alligator pit; if enough of those wood slats hold out or you can repel the rope you might make it without ending up as alligator kibbles and bits. One just never knows…even the Jungle cruise boat sank at Disney this week.
It sank again? vs 2020
Alpha,
I already own CHTNP but under a 53 handle. I really like these types of preferred and have quite a few different ones we call ills. But there has been a trend over the last few years of these getting called for reasons I don’t fully understand. CHTHP would probably be at the top of the list for a sudden call by the corporation.
And it would just be my luck for it to happen in 3 months if I added heavy to it.
Y’all are making me nervous.
Ha, relax New, I own this all the time. In December I remember I was able to snag 200 at 53 while drinking frozen drinks at the Red Hook ferry taking me to St. John. Then a couple days later sold at $54 on Solomon Beach. At the right price I will buy or sell these at any time any place, no problemo.
So we’re all watching credit ratings, YTCs, redemptions, evaluating munis and 2wr is running his Monroe and reading the 122 page manual again searching for IRR info and you’re on a booze cruise flipping issues between beaches. hahaha.
fc, If you’re interested a CNTHO seller just showed up at $48.50. Picked up more but there are a few left. Last look 152 remain.
In on a small number of shares at $53.09. I hope it’s not called Monday.
NTT, It’s been around since 1968, so a Monday call is not likely and the issue may stay in place for many years to come. Just me, I’m less comfortable buying issues trading at over redemption plus accrued – especially when there are sister issues available under par with acceptable yield.
Short term low risk of $1.50 vs. 50 years in the sock drawer paying 6.18%. I am in for a second and third helping. Sounds good to me!
Once it dipped to $53.10, I was a player too for 500. But Im used to this one. I think it was my third preferred I ever bought over 10 years ago. Connecticut regulators (not the utility) has publicly stated in regulatory filings a few years ago the company told them they had no interest in redeeming the preferreds and prefer to keep them in their capital structure.
I like the sound of that. Thanks for the information Grid.
Grid, how can you post this without a ticker??
” 2033 trust preferreds from ute Commonwealth Edison”…
I searched high and low for this, and couldn’t find anything.
I cant give you what doesnt exist, Justin, it doesnt have a ticker, ha. Its an old trust preferred issued in 2003 trading on the bond desk. Here is the info if you are interested.
https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C160113&symbol=EXC.IU
Here is the prospectus…Basically its ComEd’s version of KTH as that is what utes did back in the day for tax purposes that dont exist now.
https://www.sec.gov/Archives/edgar/data/1187582/000095013703001371/c75087bfe424b5.txt
Question for Gridbird – do you have thoughts on SBNCM? I see the ask is $15 currently. Is it uncallable?
Dick, just my thoughts only. Those shares have been sitting there for the taking for a couple weeks. Thats 6%, largely uncallable. The bank is very solid so payment isnt an issue. There are a lot of bank issues however near that mark or better so you really arent stealing yield there now. It was a convertible that long ago expired and is supposed to be uncallable. However they forced some shareholders into a redemption maybe 10 years ago or so to get the number of shareholders under the limit to go dark which they accomplished. However, they did treat shareholders well, giving them something near this price 10 years ago.
Dick, I got a full position of SBNCM about 5 years ago at a bargain price and I just “tossed it in the sock drawer”. My yield on cost was over 7% (IIRC), so I just leave it there with some other things that I will probably just hold.
I did a deep dive on the company when I purchased and they looked pretty solid – but nobody should rely on my meager research capabilities.
The mystery concerning small trades in BACRP continues. Posts here collectively wondered why shares were trading at 2.5% yields. As background, this 7% nonredeemable B of A issue was trading in a range of about 130 to 180. Late last year, it bolted to the 200 to 280 range. Today there are trades at yields of 1.9%. In a call to B of A investor services, two reps knew nothing about the issue or price action. I have no shares left but remain curious about why this issue is trading at such high prices. The only theory I’ve read that makes a little sense is that B of A wants to retire the 7,000 shares outstanding (with voting rights!). But, it seems to me, they could have successfully advanced a tender at, say $200 per share. Any of you sluths have an idea what’s going on?
Setting up a tender would probably cost more then just setting a bid of 280 and leaving it there for 12 months for 7000 shares. It has to be the bank doing it. Only thing that makes sense.
Interim epilogue to this one. For inexplicable reasons, shares in BACRP were trading over $300–hovering around a 2% yield (no YTC, not redeemable) for about a month recently. Only 7,100 shares are outstanding and it looks like about 500 traded between $250 and $350. That accumulation seems to have stopped. Over the past week, shares traded as low as $126 and up to a hair over $200, with the tighter range being about $170 to $190–still no bargain with a 4% or so yield. Whoever was buying shares at $300, in small volumes but many trades, still leaves me perplexed as to motive. These are cumulative, voting shares and, perhaps, B of A was trying to control the issue and keep it in the capital stack. That theory seems void though, because of the lower prices paid this week. Still no idea what was going on.
Oldman, this has done crazy crap for over a year. Prior to that it would not trade for months on end or even have an ask. I bought 100 at around $115 a year or so ago and then sold a few weeks later at $170, basically did the same thing with 25 shares a bit later…And now I feel like I got ripped off ha.
Anyhow, boredom and idle cash causes problems as I bought more today in the lower $130s. Horrible purchase but I want to see if I can dangle them deep some time down the road. I got over a hundred but wanted 200, but that was when the algo screwing came in (this thing is so bad with it, I really gave up long ago playing until I saw a semi serious $139 ask of 100 shares and goaded him down for them. But after that and a few drips later, shares would trade at my standing front line bid exact price (no tenths beating) but they never went to me.
BOA annual filing will come out soon, and this is the quarterly that actually will show shares outstanding left. OTC is showing 5654 as the tradeable DTC float now (7076 outstanding) So over 10% rolled today. In case your curious here is the closest thing to a prospectus I ever found from a couple years ago.
Its one page 1 and 2 as the then issued 7% cumulative Series B.
https://www.sec.gov/Archives/edgar/data/70858/000007085822000062/bac-1231202110xkex31.htm
Anyone look at CCZ? It pays 2% on face (~$71) and trades around $56. Interesting thing about these is that they mature in 2029. So if willing to hold to maturity, they will give you a ~6.5% IRR on unsecured debt for a IG credit. Not bad….
Caveat emptor on CCZ. Do NOT buy it in a taxable account. It has some very nasty surprises come tax time.
I’ve started looking at CCZ. Most quarterly distributions are around $0.37, but they paid a quarterly of $1.076 in Sept. 2020. What was that about? I guess some sort of spinoff occurred from T-Mobile?
Paid for the underlying Sprint shares that were bought out in the T-Mobile merger.
https://www.sec.gov/Archives/edgar/data/22301/0000950116-99-001985.txt
We currently hold approximately 47.2 million shares of Sprint’s series 2
Sprint PCS stock, $1.00 par value per share. The series 2 Sprint PCS stock
converts automatically into Sprint PCS stock in a number of situations,
including generally upon a sale by us of the series 2 Sprint PCS stock
What do you know about CCZ as it stands today? What’s the best place to find a summary? Going by the original prospectus, there are moving parts that have or could have changed since then, such as there being no Sprint Corp PCS stock traded anymore and the possibility of the orginal principal amount of CCZ changing from the original $81.6325. Looks like a tough one to figure out…. E was looking very quickly at 10ks from T-Mobile and Comcast to see if I saw any info and didn’t see any but could easily have missed it…
Prospectus says, “Each ZONES is exchangeable, at your option, at any time
for an amount of cash equal to 95%, which we refer to as the early
exchange ratio, of the market value of a share of Sprint PCS stock and any other publicly traded equity securities that may be distributed on or in
respect of the Sprint PCS stock (or into which any such securities may be
converted or exchanged). If certain dilutive or anti-dilutive events occur
with respect to those securities, the number and type of those securities
that will be used to calculate the amount you will receive upon exchange, redemption or maturity of a ZONES will be adjusted to reflect these events.” Is is still exchangeable with someone and if so, who and at 95% or what? In the back of my head I have the SLMNP/A Schulman/LyodellBasell arrangement in mind and wonder if this might have some similar agreement to compensate for Sprint no longer being outstanding.. I must be getting lazy in my old age not tracking this down on my own.
Yeah, I couldn’t find much of anything what was left behind after the cash for the Sprint was received.
Its not the path to instant wealth or cap gains, but if someone is wanting about 6.25% HQ illiquid (basically stripping out divi which occurs in 2 weeks) QDI ute CNTHP has over 1000 shares available at $52.95. I took 200 myself, but I recently bought some at $53 also, so I certainly dont need any more. Unusual to see that many just sitting there on an apparent individual sell.
thanks grid. I am good for a 100 shares. call price is 51.44 so not much risk there with the div almost in the pocket.
Funny Fc, but 1000 shares have sold and the same 1190 shares shown on ask havent changed, so its a bigger sell order apparently being hide. Yes, there really is no call risk. Connecticut state regulators mentioned in a recent rate filing that CLP has no interest in redeeming the preferreds and wanted them in their capital structure so they approved the rates including the preferred cost of capital.
Thanks Grid.
In for 200. Been paying for 50+ years. Better than a CD for me.
Fryman, this is probably not known (and probably never needed as history has shown) but the Connecticut Light and Power preferreds are one of the very few preferreds left that get to take majority control of the board if their dividends are suspended for a year.
Grid, thanks for the additional info. This truly a “sock drawer” issue for me. Hopefully, the Fed will calm down soon. He has already made me wash, rinse and reload my socks at least once this year!! I am sick of doing dirty laundry!
Any brokers not charging a commission for this OTC? Schwab and Etrade both do. Only $5, piddling when it comes to a long term hold, but there are other options.
Ally is free but I have no idea why I continue to use it. Just old habits from tradeking days. It is really not that good.
I opened a fidelity account just for free otc after vanguard disallowed them and tda charges.
Fidelity is free for these.
Thanks Grid. I had just added a few other illiquid recently including sister issue CNLPL at 52 but I added 50 more to my existing CNTHP stash at 52.94
After focusing mainly on higher quality 7% plus yielders the last 6 plus months, I started this month to add some more illiquids or higher quality under par issues yielding slightly above or below 6% to balance my holdings. So I have now added
more CNLPL to existing position
more CNTHP to existing position
and new positions in :
UEPEO
CTA-B which you previously mentioned here
EAI added today
PSA-H added today
Of course I could also not resist adding 50 more WCC-A on the late day drop today to round out my existing position there
Mav, WCC-A has been a helluva flipper for me many many times this year. One of the few. Thanks for the reminder, I wasnt watching it today, will look tomm.
Fryman, CNTHP and CNLPL were my first preferreds I ever bought maybe a bit over 10 years ago or so. So they always have that soft spot in my heart, lol.
Grid, Saw some unusually large bid/ask positioning yesterday for example outsized 18,000 share bid for USB-S, fortunately after our trade was competed. Yesterday’s add goes ex today, providing a de facto yield boost.
Score for the day was a pickup of 200 CNTHN @45; within a few hundred shares of a ten-year low price for the issue. Embracing the lower coupon as a defense against future calls (but they are 60+ years outstanding) – though loving your Inspector Clouseau findings re CNTHP. That’s some darn good inside intel, almost like you were sitting in the room with the regulators.
Alpha, you just had to be bored enough to read a regulatory rate increase filing, ha. I try not to make a habit of it, but I have a few times. One being making damn sure PECO (Philadelphia Electric) was totally ring fenced from Exelon before buying up their 2028 and 2033 trust debt.
I bet several own CLP preferreds but have never read what protections they have.. Probably the best protections I have ever read.
https://www.sec.gov/Archives/edgar/data/23426/000007274112000004/charterclpamendedandrestated.htm
oh man…do I have to read that thing now?
hahahahaha.
Actually I will – and thank you for posting it.
Short and to the point. Excellent protections. Reads as if written by the preferred shareholders…
Alpha, I read the other day that 1 in 6 households are behind on their utility bills with an average of about $700 behind on. That is totally amazing. Probably equally as much an indictment of valuing buying the smokes, booze, and Iphone bill over paying their basic bills than economic problems. But still that is eye opening…But with companies such as CLP its no big deal. If you look on their financials they just accrue all this “bad debt” then come rate filing time get to recover the costs to be bourne eventually onto the people who actually pay. What a nice reward for the responsible bill paying customer, ha.
Grid, Gotta say – that is an amazing ratio and I am surprised. Knowing no actual statistics, hard to imagine there are 1 in 7 who can’t actually pay their utility bills. Always some yes, and we need to help those folks. The others…it sometimes seems we’re enabling that outcome.
Here is the article…Meanwhile it appears almost all iphone bills are being paid more since I am not seeing those articles, ha.
https://www.pymnts.com/economy/2022/data-shows-1-in-6-us-homes-behind-on-utility-bills/
It would be a crime if we weren’t allowed to sit on the couch and be as wide as 2 axe handles and stream Netflix, you tube, etc. Gotta get those cell bills paid somehow. 🙂
Sold one of those Fat finger trades today. A couple months ago was trying to buy 250 share of RMPLP typed in instead RMLPF
Called right away and tried to get it cancelled no go. Must of made some traders day at Pershing. Put it back up for sale with a limit order .10 more than I paid for it. Just stubborn, didn’t want to sell at a loss. No hits.
Finally gave up and put out a sell order at market. They only let it good for the day. Actually sold for .17 more than I paid for it. But still a loss since OTC I had to pay a commission.
Charles, I am not locating either RMPLP or RMLPF. What are they?
River North Baby bond Tim has listed here. The other one is some company in England sells college software
A rare laying there for the taking crack at a Hawaii Electric 5% $20 “par” preferred is there at $17.20. Goes .25 exD next month. Unstripped 5.81% illiquid yield. I really want 6% but there has been a hard wall there. I toed in for about 10k worth. HAWLN is the ticker if one is so inclined.
Edit….Well never mind that was quick. Those 900 shares showing were gone a minute after I bought mine….Maybe another day.
Well, the comments–including mine–imply that someone is a bit looney for buying BACRP shares at a 3% yield. I guess we’re wrong. Shares traded today at $275, or a 2.55% yield. I can’t imagine anyone having a motive to pay such a high price other than the issuer (B of A, which owns the original issuer). Trying to eradicate the 7,000 shares outstanding? Anyone want to venture a guess as to any other reason such a high price is being paid?
Sorry Grid. Meant to place this under the BACRP discussion. Enjoy the holidays (someone selling the BACRP shares at $275 should have a great dinner–and $295 is the lowest current ask).
So who here is buying or selling BACRP at 243 a share? 6 sold today. lol. crazy. Down from 268!
Bid is still 186 giving a 3.7% yield I think it is. 7 bucks per year.
FC—I follow BACRP and don’t understand the price action either. Wonder if BAC is buying them back as small amounts hit the market. It’s probably just one buyer. Previously, I had a very low bid for 200 shares, filled at $102 and sold them many months later for $175. Looks like I should have held on for more—just kidding. Seriously though, I don’t have any clue as to why it sells so high.
At year-end 2021, there were 7110 BACRP shares outstanding, some of which, I suspect, were B of A owned. The bank would seem to be the only party that would pay the equivalent of a 3% yield to buy these shares to eliminate a nuisance (a fly spec on its balance sheet)? Why now though? I sold a few shares at $182.50 earlier this year and wondered why anyone would pay such a high price.
You put me to shame, Oldman. I bought a little over a hundred at $110 a longer while back and sold at $170 a couple weeks later and thought I was doing good, ha… The near mythical 6% purchase price yielder and well under par to boot illiquid ute is getting close to returning.
1941 issued UEPEO of the now named Ameren MO utility with preferred profit coverage ratio of over 150 times has a bulk seller out again. They are laying there at $78 but I got 100 more at $76.50. Strip that out at $76.50 and its a 5.95% yield so its getting close. I need it to drop more or one of its sisters to buy more.
And, today, a few hours after BACRP had several shares trade in a $240-$268 range, 72 shares trade at $112.5! What?
Ha. And here I thought it was a waste of time to put in a bid yesterday as a lowball since it was selling so high.
Several of the Ameren preferreds had some “odd” trading recently. AILLM, which seldom trades, moved at 83 and change yesterday. With a 4.92 coupon, yield is 5.9%. Before yesterday, the year low was 91 or 92. Still available around 87. No Ameren news of any consequence. Dumping? Tax loss harvesting? Not an efficient market.
Oldman, this is why I like them. They are basically non correlating assets within the same investing sub-sector. It was very easy for me to get out at low yields when the liquids were foretelling long prior where the yields were going. Now its time to start toeing back in $20-$25 cheaper. They are kind of at a disjointed stage some various ones havent traded enough yet to bring the price in line with others. Could certainly go lower as compared to liquids, thus my slow nature getting back in. But many are already at 2004 ish pricing.
We often talk about preferreds/babys/terms being “illiquid.” Clearly one of the requirements for any issue to be classified as “liquid” is that it must trade every day the markets are open. The exact opposite exists for many p/b/t’s. Here are twenty four issues that last traded before November 1st 2022. They are in two large buckets, first is utilities that Grid has probably owned. The second bucket contains issues that have stopped paying dividends/interest and are trading for pennies. More of a curiosity than an actionable buy list IMO.
Ticker, Company Name, Paying status, last trade date
MSSEL, MASSACHUSETTS ELECTRIC, Paying, 7/28/21
SMANP, SMAN CAPITAL TRUST I, Deferred, 9/24/21
DMRRP, Dayton & Michigan Railroad, Paying, 11/9/21
OCESP, Ocean Spray Cranberries, Paying, 12/6/21
SKRUF, SCOTTISH RE GROUP LIMITED, Suspend, 12/31/21
PARDP, PONIARD PHARMACEUT, Deferred, 2/3/22
CTGSP, CONNECTICUT NATURAL GAS CORP, Paying, 4/29/22
AMTPQ, AMERITRANS CAPITAL CORP, Deferred, 5/2/22
AILIO, AMEREN ILLINOIS CO, Paying, 5/23/22
AILIM, AMEREN ILLINOIS CO, Paying, 6/24/22
MNESP, MSA SAFETY INC, Paying, 7/1/22
MSEXP, MIDDLESEX WATER CO, Paying, 7/20/22
AILLN, AMEREN ILLINOIS CO, Paying, 7/28/22
NUSPQ, NEW SOURCE ENERGY PARTNERS L P, Suspend, 8/3/22
HAWLI, HAWAIIAN ELECTRIC COMPANY INC, Paying, 8/18/22
AILIN, AMEREN ILLINOIS CO, Paying, 8/18/22
AWRY, ALLEGHENY & WESTERN RAILWAY COM, Paying, 8/18/22
AILLM, AMEREN ILLINOIS CO, Paying, 8/19/22
CNLTP, CONNECTICUT LIGHT & POWER CO, Paying, 9/14/22
EHPTP, EAGLE HOSPITALITY PPTYS TRUST I, Deferred, 9/16/22
UELMO, UNION ELECTRIC COMPANY, Paying, 10/3/22
CNTHO, CONNECTICUT LIGHT & POWER CO, Paying, 10/25/22
AMBKP, AMERICAN CAPITAL TRUST I, Paying, 10/27/22
IPWLG, INDIANAPOLIS POWER & LIGHT CO, Paying, 10/31/22
Best I can recall, we have never owned any of these in any accounts, nor do we have open buy/sell orders for any of them.
Eagle is kinda weird. They were acquired for $13 bucks in cash in 2007.
https://www.sec.gov/Archives/edgar/data/1289169/000119312507187435/d8k.htm
Somebody really wanted IPWLP this morning. Up 41% on over 600 shares to $112 currently. It is redeemable at $118 FWIW.
If everything is getting redeemed its worth it. But I cant locate any info at all. So if its just IPWLK, that was a bad buy.
it was definitely a good buy
Grid, I asked about this in reader’s alerts but I also cannot find any information. I would have thought Edgar could pull up the document stating such. It raises questions in my mind that I obviously do not know the right sources to find this out.
I got notices from Fidelity that both IPWLP and IPWLK are being redeemed.
James, did the notice say what the liquidation price would be for each issue?
I didn’t notice, but according to Quantum Online, the redemption for IPWLK is 100; for IPWLP $118.
I confirmed w E*TRADE corp actions those are the prices named in the redemption notices on DTCC.
How come nobody’s posting the call date on these???
Dec 30 is call date
mcg, can you pls confirm that all five IPL pfds are being redeemed? Thank you!
IPWLP is being redeemed.
Ameren $100 face 4.25 preferred (AILLO), rated Baa2/BBB-, made a new 10 year low @ 75 on 300 shares, down -13.3% (11.50) from the last trade on 10/5 @ 86.5. Definition of an illiquid. Current yield =5.67% so it is not exactly the highest yielder in IG world.
We do not own it in any account.
I have been watching those type of preferred and I do see them slowly going down a bit more on average each month. My issue is right now I cannot just let 5-15 good till canceled orders just sit around for months on end to capture less then 6% yield. It just makes zero sense. Thus bids where I can earn 6% or more would be sitting for a very very long time.
With that said I own some of these types of issues and yes I have taken a paper loss but they are the type of preferred I do not even think about. Plus when you own stuff like OCESP/expert market ilk which is valued in my account as zero and I cannot even see bid/asks you kind of become immune to some minor paper losses. Time marches on and just pay me. I will use the money to buy better yielding stuff. Anyone who owned almost anything for more then 12 months is most likely sitting on some losses. What matters is during a deep recession who pays and who does not.
Yeah, I used to have >30% of my portfolio in these kinds of ute illiquids, thinking I was set for the duration. Then inflation shook me out of almost all of them. I’m still waiting for them to fall enough to get back in, but alas that time is not yet here. I did buy some SR-A in the 22s, but I’m already out again. I just don’t trust this is even close to over. I feel safer in a monthly year-long ladder of treasuries and wonder if I want to buy more I-bonds come January. Certainly not buying any crap preferreds I have to worry about. Oh, what to do, what to do…
JMO
Southern California Gas (Sempra subsidiary) has two nonredeemable 6% preferred issues: SOCGP and SOCGM. Both are thinly traded with comparatively few outstanding shares. The Quantum Online summaries are identical and I haven’t searched for prospectuses. Small volumes of SOCGP trade fairly regularly and seem consistently to trade at lower prices than SOCGM. My suspicion is that this is volume-based, with SOCGM having fewer shares outstanding. But, I can’t find anything else that might cause the M issue to trade at higher prices consistently. Does anyone know of any differences between these two?
Oldman, M series has a significant smaller float and trading float. The immediate original holding company owns the vast majority of the float. I cant remember off hand but only a little under 30k is amount of tradeable float shares. Terms of each are basically identical. Less shares equals generally stickier price until any dump would ever be needed.
Thanks Grid.
So Grid, do you own either of these? 🙂
Additional thought/questions on the two SoCal Gas unredeemable preferreds. There are news reports of the Calif Utility Commission and Legislature requiring SoCal Gas to convert its power generation sources to non-fossil fuels by 2030. Anyone know more about this and/or want to offer an opinion if this happens what might happen to the two SoCal Gas issues? Today, SOCGM was trading at par for the first time in many years. A reaction to higher rates? The potential elimination of gas? Something else?
OldmanRb, in a nutshell the word california is the reason I never considered buying them. I like UTEs a lot and I realize my concern is probably irrational but why buy them in that zany state? There are better choices out there (or at least close/similar quality/yield wise) but not non-redeemable.
Oldman utes get return on capital costs. They will be fine on mandate. I think you meant SOCGP. It actually dove down there a month or so ago, I bought and quick flipped them as price was bouncing back over $26. Actually went to $27 so I kinda blew it being early.
Anyhow uncallable or not 6% is not very high as you can get senior unsecured make whole utility bonds with better yields than that, which I also own The uncallable feature is not really valuable….at this time. Of course it could down the road. If this or sister goes below $24 I will be personally interested again. Right now, I still see more pain ahead, so sticking in live floaters and resets (mostly).
Charles, sorry, just now noticed your above post, so no I do not own now.
Oldman, you may keep an eye on PLDGP. This has been one of the few perpetuals I have been trading profitably lately. One day a week or so ago, I bought I think 400 at 54.50, sold a few days later at $56, and bought right back at $54.25 same day. I bought another hundred amount again today at 54.25. Strip that out and accrued your looking at almost 6.5% YTC, with a present 7.8% or so yield at $54.25 with a bloated 8.54% par price to induce a par call in 2026. Prologis is as strong as they come and the premier industrial reit of the world.
Im trying more to position for cap gains down the road with well below par resets and a few fixed, plus own live floaters riding the wave. But holding this one in my pocket aint the worst feeling in the world.
As always thanks.
The illiquid trade winner today was Hawaiian Electric, HAWLN. $20 face, 5% coupon, callable any time. It traded 1,749 shares @ 17.00-17.04 which gives a current yield ~ 5.88%. Before today the last trades were on 9/13/22 @ 22.00, so that is a $5.00/-23% change. It closed today @ 19.65.
We do not own it in any account nor were we involved in any of today’s trades, but I am thinking 5.88% for a UTE is fairly attractive.
Tex, why not consider NI-B.? It is a more liquid IG utility yeilding 6.8% at yesterday’s closing price.
Another Grid special, FIISO, traded a whopping 100 shares today @ 130.00, which ~ ties the 5 year low price. It is a $100 face, 8.46% coupon, non-callable with a current yield = 6.52%. It appears to be a true perpetual, but Grid will have to chime in. Previous last trade was 26 shares on 9/8, so it is REALLY, REALLY illiquid. . .
We have no positions and/or orders in any account nor were we involved in this whale trade today.
I own about 5 or 8 shares of this. I forget. I pretty much gave up on it. Getting a decent yield on small banks is trivial now days. Still I hang onto those shares because selling them will most likely be a hassle since I do not own 100 shares.
The bank does buy them back but in tiny amounts. In 2021 they bought back 43 shares of FIISO. Wow! Heh. About 171,000ish outstanding still. And yes.. it cannot be redeemed.
Such a goofy preferred. I would be a buyer at 110 now days but I am not going to leave that kind of order open for months on end. No thanks.
Well I guess I fibbed. I bought a whole 6 shares of FIISO yesterday for 132. I am not sure what I was thinking. 6.5% yield. At this rate I might have a whole hundred shares in a couple of years. I want the next 6 below 132…
I was mostly buying PSA, GDV, and EAI as they were fading down though. So a yield of 6.5% was my higher risk purchase. 😐
Yes, Tex, its largely illiquid because the bank founding family owns most of the perpetual, cumulative, noncallable shares. It was privately issued at banks inception and a few have leaked out on OTC over the years after a ticker was assigned. I bought some many years ago in $90-$100 range and sold off at $150 a couple years ago.
Fyi, Quantumonline changed 3 Hawaiian Electric Co preferreds that had incorrect call prices if the company redeemed them. I referenced the last 10-K on page 110. They have made the corrections as stated below.
1) Call price for HAWLN (series I) should be $20 and not $21.
2) Call price for HAWLM (series H) should be $21 and not $20.
3) Call price for HAWLI (series J) should be $21 and not $20.
Large block of WELPM offered at 108 today. Yield of 5.56% for a 6% coupon, noncallable and IG. Get ’em while they last (yes, I know there are many IG or close to IG preferreds available at higher yields, but this one is annuity-like from a partially-regulated, rock-solid utility; sock drawer material).
Oldman, I saw that too. I only bought enough to round up to get to an even 500 shares. I got most of mine at 106 a few months ago and it was too easy to get these to top off the tank, so I just paid asked.
How do you know a big block is up for sale? How can I learn to obtain this information also. Thanks
A lot of brokers let you know how many shares are available for sale at a certain price. Often you see the number next to the asking price.
bid 25 (100) – ask 26 (10,000)
Some brokers give even more detailed information. How many shares available at 27, 28, etc.. as well as the opposite. It is useful information if you are a whale.
As for WELPM.. I am still holding out for better deals yet to come or maybe I am confusing that with summer laziness.
fc, Regarding WELPM…you cannot be lazier than me, or know less. For these reasons, we’re adding long-hold WELPM and others judiciously as they drop and one day will know we bought/added at the bottom.
Alpha, Its very possible it may bleed down more at some point, but its possible it wont either. Or somebody might get 100 at say $106 and nobody else as liquidity dries up. There are only 42,247 shares tradeable from a 100 plus year old issue. So availability is not always there at a reasonable price.
There are many more issues with higher yield and safe quality also. But an issue like this serves as a core none the less for me. Im past a full position mostly at $106, but if some miracle happened and some spilled under that, the pain trade for me would be to buy some more, also.
Hey Grid, Exactly….hoping for plenty of that pain trade going forward. On some issues have up to 7 tranches spread over a handful of years, each tranche larger and better-priced than the previous. Staying in my lane as an accumulator, not flipping or selling, and only buying high IG; so lots of waiting as many positions still priced under current market. Recently initiated positions in the high-FICO, low-coupon issues. When they got fear-dumped, multi-year bargains were flying like expired racetrack tickets. Maybe counter-intuitively, would welcome the opportunity to add to every single holding at a lower price. Though like you mentioned, if that opportunity does not present itself, then we added at the bottom.
Alpha: Doing the same thing. I sold off at the beginning of the year, bought back in June, sold a bunch during the rally ( although a bit early, before the highs). I was %55 in cash, been buying last couple of weeks, now only 45% cash. As far as I can see, as long as the Fed keeps raising, we should hit lower lows. My question is how far can the fed go, the treasury has to pay higher interest on the debt at some point something-gotta give. Anyway hopefully we got at least another month of buying opportunity.
Sounds good Libero! Seems we have two possible near-term “events”. 1) If the equity market reverts to mean as some believe, that 20%+ haircut would surely have some baby-with-the-bath water days. 2) QT. This one is a mystery, but one would think liquidity hot-spots would create some volatility.
My position is I know nothing. The market will tell us when it’s time. See you in the tranches!
Thank you fc, I appreciate your input.
Glmpa, You can see it on your brokerage platform, but on OTC you see also that 530 shares were still available at $108 at market close. It gradually whittled down throughout the day.
https://www.otcmarkets.com/stock/WELPM/financials
Although this was accurate, most times brokerage sites tend to “hide” the total share availability, even level two hides a lot also. Many times they will just post a base “100” share availability when there are actually more. And that is not even counting the computer bot intercepts that front run the sell order.
Thanks Gridbird
GLMPA, to answer your question (and to expand on Grid’s explanation which, as always, is the gospel and is accurate), my less than foolproof way to know if shares are available is to keep active “watchlists” on several brokerage sites. Those sites show, among other variables, the asking price for any available shares, volume available, the current bid, the date and price of the most recent trade, etc. Brokerages are not immune from manipulating data, so you can’t, necessarily, rely on the information. Sometimes, seemingly out of nowhere, a small block of illiquids will trade and there never was an indication of availability, There also are numerous websites that show bids for shares versus pricing for whatever is available, along with volumes; these require that you input ticker symbols one at a time, so it’s not an efficient way to effortlessly monitor activity. I find the watchlist method to be easiest for me–particularly since I want to monitor several issues simultaneously.
Thank you OldmanRB
just stumbled across this.
Fluor Preferred issued back in May. Trades on the Pink Sheets.
ticker is FLRAP.
https://www.sec.gov/Archives/edgar/data/1124198/000110465921068858/tm2116848d1_ex3-2.htm
You might ask: “How big is the illiquid opportunity space?” For the sake of simplicity I defined any issue that did NOT trade last Friday 8/19/22 as being “illiquid.” I could have based it average shares traded daily or another measure, but this is a reasonable assumption.
Here are the stats from the database of issues that I track:
Preferreds
Total= 672 issues
Currently paying dividends= 599
Suspend payouts= 72 (One issue SENEM never paid dividends)
Illiquid= 234, 34.8% which is a HUGE percentage IMO
Babys/terms
Total= 220 issues
Currently paying dividends= 213
Suspend payouts= 7 (Two of these pay in stock per Justin)
Illiquid= 28, 12.7%
For the III’ers that play in the illiquid sandbox, there seem to be plenty of buried treasures to search for. I still think that most investors should NOT be in this sandbox. Maybe we need a new classification that limits trading to “Illiquid experts!”
For the record, we rarely go into the illiquid sandbox with any orders. We hold microscopic amounts of a few issues that went dark.
Personally I agree, Tex, and their just really isnt any relative value as a whole either. A few could possibly be birddogged at a good price if an issue doesnt have a reasonable bid floor under it possibly. The illiquidity is generally from 2 camps. 1) Relatively big floats that were meant for institutional purchases and are mostly institutionalized since issuance. 2) Tiny floats from issuances of 50-100 plus years ago. And most having various tenders over the years that shelled the float even more. One uncallable old OTC issue has only 780 shares outstanding $100 par. And who knows how many of those got “lost in certificate form” eons ago from deaths and such.
I think the key words are relative value at the moment. I would guess NSARP did not trade on Friday but if it yielded 6% right now I would be buying it. No reason not to if your goal is “reliable/stable” income for a long period of time without worrying too much about a call risk if bought under par. And on top of that high IG rating from an ute. But since it yields 4.6% @92 right now I have lost all interest in tracking it until I notice these ills dumping truly hard. Just looking at it’s price it only hit a 5% yield when bought at 86 in the recent past.
With available data now days being much easier to find for people who are used to digging this info up I feel there are many safe plays to buy. But no deals which is the key to accepting such an illiquid security. So that means common sense dictates gravitating to the more liquid and “fresher” options then a preferred issued in the 1950s when you can get more yield for similar risk.
Pretty boring area right now about sums it up when seeking a deal. With that said I hung on to quite a few ills for the sake of having some diversity, stability, and reliability from key choices.
General rule is that NOBODY should own illiquid preferreds/baby/terms? Or more specifically ones that are only tradeable on the “expert market.” I see more and more cases where someone that holds these securities gets taken to the cleaners when selling. I usually do not post about them because most III’ers (MCG excepted) cannot buy on the expert market. So there is no point in posting that XYZ traded at a great price when most cannot enter a buy order.
Today’s example is on old Grid favorite: AWRY (ALLEGHENY & WESTERN RAILWAY) It is a $100 face, 6% coupon issue that traded as high as $135 in 2021. Today 162 shares crossed @ 80.00 down from the last trade on 1/21/22 @ 91. This gives a current yield of 7.5% and I am guessing that many III’ers would jump on that if they could enter a buy order. Of course, it is not as extreme as the 50.00 trade back on 11/30/21.
The question is why someone would sell the 162 shares @ 7.5% yield? The possibility that concerns me is that someone HAD to sell. The other choice is that someone held it before it went to the expert market and decided to sell thinking nothing has changed. We do not know, but I am thinking most investors should NOT ever buy illiquids like this because you never know when you will HAVE to sell it.
We were NOT involved in this trade and do not currently hold AWRY in any account.
BTW, yesterday’s example which I did not post about was HAWLM (Hawaiian Electric) which is a $20 face, 5.25% coupon. It traded down to 15.00 which is a 7.0% current yield. Down the the previous close of 21.31 on 7/11/22. The 15.00 trade was a TEN YEAR low. . .
Tex, HAWLM and a couple other Hawaii electric preferreds were screwed up for Tuesday and Wed. They were showing bid price of 0.01 for 10,000 shares.
I tried getting in bids several times in 2 different accounts and they wouldnt “show up”. Very odd so that probably caused the odd trade. Today it was working fine and showing bids. Some of these need to crack. Many are still off in 4% land and need a good ass bustin’.
Will happily make a market in any security 🙂
mcg, Trying hard to still like you. hahaha.
In that case, I don’t think you’ll like any quote you get from me 😉
mcg, Sign me up as a client! RWA!
mcg how can I reach you directly? I am not looking to sell any of the very few dark positions I hold (thanks to this site, I knew what I was holding and made an informed decision). But if there is in fact a process to do so, I’d like to know more about it.
mcg88 on SA but i am mostly joking- I am neither a broker nor dealer.
Bur – how much of what do you want? Some 144A I can not touch but most securities are fare game. Most are basically impossible to gather any significant quantity as they are locked up.
Email @ micah.compton@gmail.com
Tex, probably naively, part of me thinks many of these issues will eventually become tradeable again, mostly becuase the current restrictions appear so nonsensical. I let a few drift in knowing they were becoming annuities, but yes would love to have access to this gold mine, even if they remain locked in. The ultimate sock-drawer.
Look at KTBA debentures (ATT) at 7.92%. Good grief.
“Someone” (estate planner, probate attorney, financial advisor, stock jockey, your cousin, etc.) ended up looking at illiquid shares and didn’t know what to do. Happens frequently w/“illiquid REITS”, I can only imagine the lost opportunity resulting from “expert market”/illiquid securities novice panic.
Hello Tex, trying to wrap my mind around these illliquids. I think we all have a strategy or looking for one to build up our nest egg and have the best of both worlds, capitol preservation and income. I appreciate what you and Grid have shared over the years . Grid’s strategy was working great until this 144a ? ruling came along. A few people here accepted taking some of these stocks over to the dark side and I think others have expressed regrets.
I myself had one and one only (WTREP) and it was called recently. I took the risk for 2 reasons. One, it was a high dividend payer in a low rate market at the time and Two, it was a floating rate that if rates went higher (which they have) there was a chance it would be called and I would be out of the stock , which did happen.
Also consider some of these stocks mentioned had few shares left in the market even before this ruling so it was a limited market to begin with and now even more so.
I guess what is murky here, is I think there is now two illiquid types of stocks. Ones that only the experts can trade and ones left on the OTC or pinks that have low volume that some of us can still trade in depending on the broker.
Charles, so much has occured the terms get confusing. Concerning 144a, those have always been around. Basically only big wealth or funds are allowed to buy. Somehow over time for whatever reason unbenownst to me, a few of the shares “leak out” onto OTC. They are almost like private issued preferreds which in past have had more money in them than public issued ones. A lot of companies have private placed untradeable issues we never even know exist unless you dig into their financials.
Anyhow, 144a issues are unrelated to experts market because they werent supposed to be traded OTC or on a market to begin with.
The experts market has a lot of good in it. It just ensnared a tiny microsubsegment that tended to be these safe old issues. It originally involved companies being bought out turned into subsidiaries and then the financials from the specific subsidiary of preferred are not being reported.
But now more can get ensnared especially if they are vulnerable to be taken private, or an entity like a shipper where a few own the majority of shares.
The best way to avoid all this is to make sure there are protections in prospectus that have redemption clauses on a change of control. But even those can be manipulated as done by CDR preferreds recently.
There are several that have been bought out but companies have expressed intent to keep on exchanges. But intent and long term follow through are not the same.
Utilities are not safe either. The old consolidation game. Some private entities are buying them up. And if they dont leave on exchange they wont trade on OTC if they dont release financials. The fact the financials are pubically available through various public means is irrelevant. Several are untradeable now and more could be in future. You have to be careful. The way the yield market is now, there really is no benefit to owning illiquid utes as most are sub 5% anyways. You can get close to that in the debt market, and higher in the liquid market.
Grid, your example of the shipper is a good one. Since the majority shareholder is taking over there is no change in ownership so no reason to expect them to be called. The saying no plans to de-list and actually doing so after the take private can change. Yes some funds ( see most recent list on Yahoo) would have to unload and allow buyers to jump in at lower prices, but the majority holder of some of the preferred and note ( Fairfax ) wouldn’t have to. They might even buy more at the lower cost
Also Grid, I agree we are coming to a time were there will be the opportunity to pickup new issues with a higher coupon than the old illquids
Tex – fully agree everyone should create the simplest path to wealth possible.
-No expensive money managers
-No fancy strategies
-No exotic, hard to understand investments
-No weekly, monthly or even yearly management of securities.
-No effort; just keep adding to the pot.
Most of a persons wealth should be concentrated in the lowest costing index funds.
micahc,
After comparing my account (up 21% in a yr ) to a SP500 fund up 33% in a yr. I have to agree with you as to growth. A lesson I wished I had learned when I was younger. But now looking more at stability and income.
Guessing an III’er won the illiquid lottery today. UEPCO is @ $100 face, 5.5% coupon electric utility. Closed Monday 8/8 @ $100. Next trade was 1 share today @ $175. Due to inflation, a steak dinner without wine is probably $75 in most US cities, so this buys one. 10 shares later traded back at the earthly price of 100.01.
Point being every issue you hold should have a “for sale at” price, particularly illiquids. We did not and do not hold UEPCO in any account, but if we did, I would have been happy to sell any and all @ $175. I suggest having way above market standing sell orders on illiquids. You never know when it will be the winning lottery ticket. Not very likely, but as this trade shows, has a small finite probability. We held one nameless illiquid a few years ago that we sold for 2X face. It was less than 100 shares so did not show up in the high/low for the day, but did count at the steak restaurant.
Hi Tex the 2nd
i own this issue. Everywhere i look the share price is listed at $175, including TDA. The bid price is $102.03 and the unrealistic $175 price is messing up my account, as it holds a mammouth gain in that one issue and will do so until another trade is executed. Hopefully soon. Thanks.
UEPCO traded 100.02 today.
Howard – With today’s trades, I’m so sorry for your huge losses…haha It must hurt deeply….
Is this messing up of your account only when viewing thru ThinkOrSwim?
Hi 2Whiteroses
The inflated share price was causing my portfolio value to be ‘off’.
Big gain on the day the share traded to $175 – and offsetting big loss
when the share price dropped into normal range. It was all irrational movement. What can you do when a $100 issue trades at $175, unless
the same buyer who pushed it there is still making mistakes ? which I
expect it was. I once bought $40K of a stock that I wanted $4K of. OOPS.
Reversed that one in less than one minute. That is the only drawback of having a margin account that I can think of, the ability to buy much more
than I wish to , in error. The moral of my story is ‘ slow down ‘. Love reading all the comments here ( at least the ones I understand ). and the private messages with a few folks that I accomplish on S.A.
Tex, you appreciate this stuff… Here is an example of where 144a preferreds intersect with the OTC pink sheets … CBKPP… 4 trades today… two 50,000 share block trades three minutes apart. Then one 100 share trade and a 40 share trade….
The strange trade of the day is Connecticut Light $50 face, 4.08% coupon, CNPWP, which was issued in 1949. It closed up $8.00 today @ $50.00 on 133 shares. There were 38 shares that traded @ $54.00. The last trades before this were on 7/18, so this is really, really illiquid. I get that this is an electric utility, but it is not clear to me why somebody would buy any preferred today currently paying 4.08% . .
We do not own it in any account and/or have any open orders. If we did own it, we would be more than happy to sell them all @ $50!