Even though the equity markets are tumbling fairly hard today the income issues are generally holding up well—there are times when selloffs in common stocks spill over to the preferred stock arena, but that time isn’t now.
As we peruse the markets it is kind of obvious that investors do not take a 1% or so selloff in common stock as any big deal–and it isn’t. If we had a 3-4% drop in 1 trading day there would be a concern–but 1% or even 2% is being looked at by a lot of investors as a time to pick up some commons stock bargains. With the ever grinding higher stock prices over the years most have kind of forgotten what a real selloff–or even market top looks like–but it will come, but will not be announced with the ringing of a bell.
For us we watch for the spillover into preferred stocks–it just ins’t there today for sure. As we look at todays losers the biggest preferred stock losers are some of the usual characters. We notice that the TeeKay Offshore Partners (NYSE:TOO) preferred, which got a bit of a bounce recently as Brookfield took control of the company, are sliding today. All TOO issues (TOO-A, TOO-B and TOO-E) are off 5-10% in the last few days giving back most of their previous gains. You can see them here.
We will mention here that there will be a very busy ex-dividend period the last week of May. While many companies are dragging there feet on getting their declarations of dividends announced we can see the buildup because of the late February declaration. Our daily updated ex-dividend listing can be found here.
For now we are sitting tight with everything we have in the portfolio. We have 2-3 “flippers” in the portfolio and they aren’t moving higher much, if any, lately–maybe the sweet spot for flipping and dividend captures has passed us by for now. We are content to hold these issues right through their coming ex-dividend dates and then unloading if pricing is right.