Junk is Junk As New Issues Prove

As most of you know I am a really conservative investor–but even those with tolerance for more risk are forewarned to use caution around some of the new preferred issues and baby bonds of late.

We have seen most of the really poor quality issues of late get slaughtered–really slaughtered, and I suspect more will soon will be taking a trip to the slaughterhouse with the others.

Just looking over some of the new issues here is what I see going back on my new issues list (which can be found here).

Harbor Custom Development (HCDIP) 8% convertible is trading at $15.76. Sold on 6/1/2021. Underwriter ThinkEquity.

Cadiz Inc. 8.875% perpetual preferred (CDZIP) is trading at $19.03. Underwriter B Riley.

Soluna Holdings 9.00% perpetual preferred sold on 8/19/2021 now trading at $21.78. Underwriter Univest.

LifeMD 8.875% perpetual preferred (LFMDP) sold on 9/30/2021–now trading at $20.10. Underwriter B Riley.

ComSovereign Holdings (COMSP) 9.25% perpetual preferred sold 10/26/2021 now trading at $14.12. Underwriter The Benchmark Company.

I didn’t buy any of these issues–but some of them have great ‘stories’–i.e. Cadiz wants to pump water from wells in the desert and sell to southern California cities. It is a great story, but one which has been talked about by Cadiz for over 20 years.

In general the coupon alone should warn folks away, but we all want yield and sometimes it is tough to avoid these junky issues–but alas it is almost always better to be happy with 6.00% instead of stretching for high yield. As I said I haven’t bought any of these, but I did almost ‘buy in’ to one of the stories (I don’t remember which one it was)–we all like great stories, unfortunately these are mostly just that–stories.

52 thoughts on “Junk is Junk As New Issues Prove”

  1. I don’t have any of the issues described but two from the ‘list’…ATLC-P and GPMT-A. Both bot under par and added recently to ATLC-P post xd. I feel ok w the underlying protection here but like all h/y you have to stay on top of them and keep a small position. These and NRZ-PD are my only pfd holdings now- unless I am getting 7% or more or there is a special situation, I am not interested in pfds. Bea

  2. This is a good post by Tim and a good time for me to ask all of you do any of you own “ARCC”. Your 2nd favorite Rida wrote a big article about it today. On the “surface” it looks good. The only time they cut their dividend was back during the mortgage crisis per his comrade Pendy. I spent a little time on the company’s website and have a grasp of what they do etc etc. Just wondering if any of you own it and for how long. The dividend is almost 8%. Seems very high in this environment. But so does EPD and I would say that company is pretty darn rock solid.

    1. EPD is just in an unloved sector. Admittedly I have started toeing in on EPD owning about 500 shares. Started buying a little under $22 a few weeks ago, and just keep little buying small as it drops. Bought 50 more today at $21. This is a “long term project issue”. And they say the distribution is going up again next year, even while the negative sentiment stays strong.

        1. furcal – UBTI with EPD in IRA – I tried holding EPD each year in a Roth until I generated ~$900 in quarterly divies, then sell, but if your capital gains on the sell puts you over $1,000 you may be looking at additional taxes.
          This is how my tax person explained it to me. I gave up screwing around with it in the Roth and began leaving it in a regular taxable account.

          1. In an attempt to keep things simple, and reduce clutter, both paper and mental, and reduce risk of any reporting issues with an individual issue, I opted to go with MLPA etf which is all MLP’s, similar yield, and no k1.

            1. furcal – while an MLP ETF with similar yield and no K-1 seems to be an ideal choice, when you put MLPA or any of the many other MLP ETF types into the Portfolio Visualizer (https://www.portfoliovisualizer.com/asset-correlations) you see MLPA since it’s start in May 2012 has an annualized return of -2.42%, vs EPD 4.14% and MMP 8.91%. You will see the same trailing performance if you set the year to 2013, 2014, etc. I’ve run extensive data on MLPs vs each other, and vs MLP notes, ETFs, CEFs, etc, and the result I came up with is that it’s best to hold the two best-in-class, EPD and MMP, and deal with the K-1s. Just keep them in a taxable account.

        2. Furcal, Just saw this…I played around trading it in small lots in tax free accounts back in the day. But this building position I am doing is being done in taxable account.

    2. I’ve owned it since 12/15/2015 when I bought it at $14. I have about a 1% of portfolio stake, so am still conservative IMO. They have raised their dividend by about 2.5% every year since 2018, except for 2020, but including 2021. They did not cut or suspend their dividend during lockdown. I like this BDC in particular.

    3. Anyone truly interested in the BDC space ought to familiarize themselves with the BDCReporter.com…. [NOT BDCBuzz, mind you though I am not trying to dis Buzz] The site is a combo of free articles and paid articles. They also have a sister site called bdcreditreporter which actually delves into the companies that each individual BDC owns….. As an example, here’s their write-up on ARCC from July…. It’s a premium article but it will give you an example of what they do… Dated July 23, 2021

      SUMMARY: Everything is going well for Ares Capital (ARCC) right now: the balance sheet is strong, liquidity is more than abundant; cost of capital is low and business activity is high, according to the BDC itself. As you might expect, with fundamentals lining up so well and the general market “hot”, ARCC’s stock price is trading close to it’s all time highs: less than 1% off as we write this. (Ironically, the last time investors pushed the price of ARCC so high up was in February 2017, just before the Great Recession). We don’t believe this is an especially important quarter for the BDC, but just another link in a long chain of above average quarterly results.

      Nonetheless, investors should always pay close attention. That’s partly because – given its size – ARCC’s performance can tell us much about the broader trends underway in the broader leveraged debt markets, and to the large cap BDCs with whom the BDC competes. Plus, we’ve learned the hard way never to take any BDC for granted…

      CREDIT PERFORMANCE: Back in April 2021, we undertook a huge and exhausting/exhaustive review of ARCC’s underperforming investments. For the two articles involved, click here and here. We were using the IVQ 2020 results and found that 13.9% of the BDC’s huge portfolio was not meeting expectations. This included having 11 companies on non accrual. At the time, though, we remained optimistic about the credit outlook of the BDC. This is some of what we said:

      “…We’re not too disturbed by the still elevated level of underperforming assets on ARCC’s books should the economy revive.

      (If there’s a sudden drop in economic activity, all bets are off).

      In fact, we wouldn’t be surprised that, when all is said and done, with the companies reviewed herein if unrealized gains and recovered interest income might not offset realized losses that will be booked.

      It’s a difficult call with an uncertain time frame involved, but might result in ARCC’s overall investment income and net book value increasing from the level of IVQ 2020″.

      Of course, that’s pretty much what happened in the IQ 2021, with the percentage of underperforming assets dropping to 11.9% of the portfolio and Net Asset Value Per Share jumping from $16.97 to $17.45 in 3 months.

      We expect this trend of a lower level of troubled assets and higher NAV Per Share to continue in the second quarter results. Like everyone else we’ll be checking out the obvious metrics. If the trend does continue, that’s all well and good. If not, we’ll be curious to find out which of the many moving parts involved has not performed as expected.

      EARNINGS/DIVIDEND: There are no less than 15 different analysts “covering” ARCC, and their estimates for IIQ 2021 Net Investment Income Per Share (NIIPS) are very similar: between $0.41 and $0.45, with an average of $0.43. That projection is equal to what ARCC actually achieved in the IQ 2021. Given the tendency of analysts to low ball these sort of numbers, we wouldn’t be surprised to see NIIPS (as adjusted by ARCC) to end up $0.44-$0.45.

      If so, this will raise the question – again – as to what the BDC is going to do about its dividend. A little background: Back before the pandemic ARCC paid out a regular quarterly dividend of $0.40 AND 4 “special” distributions of $0.02 each, for a total of $1.68. Despite performing well during and after the worst of the pandemic – and in contrast to many of its peers – ARCC has limited itself to an unchanged $0.40 quarterly distribution since. That’s a year and a half without any supplemental payouts. Yet, since the end of 2019 AUM has grown and “Core EPS” has exceeded the dividend by 21% on average in the last two quarters. Furthermore, management and incentive fees are up by 4% (IQ 2021 annualized versus FY 2019).

      It’s not that ARCC does not have the money to distribute to its shareholders or the liquidity – which is at an all-time peak. In fact, in April – on the last conference call – ARCC admitted to having “spillover income from 2020 into 2021 [of] approximately $454 million or $1.04 per share“.

      We’ll be curious to see if management continues to squirrel away shareholders full earnings (while paying their own fees in full) or shares the wealth with its shareholders in the form of an increased regular distribution (unlikely) or a return to “special” payouts (possible). According to the analyst consensus ARCC will earn $1.73 in 2021 and $1.77 in 2022. To maintain the payout at $1.60 means as little as 90% of what shareholders have earned, a material difference.

      1. Yeah, BDC Reporter does great work and I subscribed when he was running a service on Seeking Alpha. He recently moved to his own website, but that’s been a bit glitchy (not getting emailed articles for example). On the bright side for non-subscribers, during this more or all of his articles were free on the site, so check it out.

        https://bdcreporter.com/

        1. x – yes, BDCReporter has been glitchy recently for a suprisingly long period of time, but I think they’ve got it figured out now or will have quite soon… On the plus side, I’ve been given expectations of a very generous extension of my subscription for free that should more than make up for the time without emailed articles.. Nicholas Marsi’s been highly responsive as a communicator throughout the period I’ve been a subscriber. It’s the only paid subscription I have for any financial service.

      2. 2WhiteRoses; THANK YOU for all this input. I have never heard of BDCREPORTER.com. It certainly sounds like a very informative site for sure. Until Rida’s article I in all honesty had not even heard of ARCC. I do have some mixed emotions about it even though on the “surface” it looks pretty good. THANK YOU AGAIN.

      3. took a look at my ARCC shares bought in July 2018 – with reinvested dividends it’s up 73% as of today.

    4. I have owned ARCC since early 2019. Bought in at low $17’s and own a full position. It is a solid BDC. I also have an under weight position in EPD. It is a recent purchase and I have watched the stock price drop. MPLX is probably a better alternative to EPD, and I own a full position in MPLX. I picked up quite a few shares in Fall, 2020 at $16.40 and turned a very nice LT gain.

      1. MLPs are all being treated rudely arent they? My angle is EPD payout ratio is a miserly 58% and has room for bigger distribution if they desire. Management has stated it will grow next year. Maybe the increased distribution will help cover additional stock price drops, lol.. Actually I wouldnt mind it going lower while Im nibbling. My MLP mentor, forum member Camroc, never lets them see him sweat when the price drops. He just buys more!

        1. Gridbird; Thank You for chiming in on EPD. One of my bigger holdings. I own 14,000 shares on a personal basis. I listen now to all conference calls, all their presentations, and read all their media releases + I speak to their I R MGR. on a pretty regular basis. The reason they have been “extremely” cautious on what they say and do is whats going on in DC. I will NOT get political but I know for a fact thats why even when the raise their distribution as its not a dividend they do so with great caution. I feel quite strongly when you do a “True Deep Dive” into what they actually do it will be many many years down the road before the Green Monster gets them. A person has to look at the entire world and the demand for energy from that perspective. Just as a small example, over 65 million homes are heated with Natural Gas. That alone will not be an easy task to replace. I could go on and on but just want to thank you for your input.

          1. Hey Chuck, I will never get to 14,000 units, but I will try to plod onward towards that direction anyways! You nailed it from my prospective, their unit distribution is like buying up the capital structure in terms of relative safety.
            That is the most important feature to me as an income stream issue. And Camroc has pounded the tax benefits of it, also. For purposes of future income stream use, I definitely need that.

            1. Way big on EPD by way of averaging down with divys over the last year too. Interesting to follow the Trans Mountain Project in Alberta over to BC coast. Asia knows how to play long term.
              Interesting news on the massive pipes being built from Siberia into China too.
              You may remember that the socialist/green/Trudeau govt bot out and is basically managing the project to completion. The FUN part will be the AUCTION when it has been completed and tested. My bet is on ENB or PBA. Not any implication on speculation by me with that comment. Leave that up to Vegas bookies. There will be bankers lining up.
              Perhaps the Gov of MI should spend a bit of quiet time just researching on her own. Makes the Straits of Mac look like a puddle project.
              Here is a recent link to the challenges of this project.
              I am waiting for water grabs to begin using tactics like this someday. Maybe the pipes can be scoured and reversed to carry water.

              https://biv.com/article/2021/07/trans-mountain-pipeline-hits-major-milestone

        2. EPD is my largest holding and i recently bought more. I like the fact that the people running it also have a huge amount of skin in the game and also seem to regularly buy more.

          1. @rdking647, to refresh my memory, has EPD been timely with the k-1’s?
            Wasn’t there also an issue if you owned it long enough to get your cost basis to zero there was an issue of some sort? I have not owned any partnerships for a long while so appreciate any suggestions/experience you may have had.

            1. Hello Furcal & to the others that own EPD; I have researched this baby till the cows come home. Yes, they are pretty timely on getting the K-1’s out. You can also get it online if you sign up for it. In my “opinion” after a ton of research it really is best to own EPD on a “personal basis” outside of a retirement plan. Its all about the TAX STRUCTURE of EPD being a MLP. EPD is NOT paying you a dividend, they are paying you a distribution of your own money back to you–hence the reason you should own it personally. As far as your cost basis getting to ZERO—YES, if that happens the tax man will most likely be coming but by buying more shares you can hopefully keep the tax man at bay. Because of the taxes my plan is and continues to be to NEVER sell my 14,000 shares. I will pass it onto my wife and eventually the kids. As most of you know the Insiders own 32% of the outstanding stock and over the last year. If my research is correct Insiders over the last year have purchased over $949,000 worth of the stock. Insider sales have been very negligible. I’ve had some very deep thoughts owning so much but after truly doing alot of homework I feel very good about it. For what its worth to you their I R Mgr. is very helpful and will certainly answer your questions. Plus he’s very friendly which is somewhat unusual in this country anymore. Just my humble opinion.

              1. Thanks–I was just on their website looking for a sample K-1 to see what line items are on their for my accountant, but did not see one. If anyone has the time or inclination to point me in the right direction, I would appreciate it.

                1. On their website in the top right hand corner there is an icon that says “K-1 info”. Also a phone number listed. Another idea is to call their I R Dept. Iam no expert on the damn K-1 but I can tell you that you get it in the mail and then what I do is mail it into the “Tax Handling Dept” of SCHWAB in El Paso, Texas and they handle it from there. Also for whatever its worth I own a very large position in PBA which is a Canadian Pipeline Company. Now PBA should be owned inside of an IRA or retirement plan . I verified with my SCHWAB REP & their Tax Dept. and was told if I own PBA inside of a retirement plan they WILL NOT TAKE OUT A DIME OF TAXES, if I own it personally they have to take out 15% Canadian Taxes. I like both companies very strongly. I do consider EPD the stronger one of the 2.

                  1. Thanks for the info Chuck P, just to clarify for everyone, PBA issues a 1099 to US Investors – NOT a K-1 so as you say, excellent for retirement accounts.
                    Further, as you say on EPD, which does issues a K-1, you should NOT hold these in a retirement account unless you understand exactly how UBTI taxes worth within a retirement account and even then you will have to educate your broker and PwC at tax time. It’s a huge mine field. I know from experience.
                    Gary H

                    1. What is such a minefield about holding EPD (or other partnerships that issue K-1s) in a retirement account? Yes there is UBTI if you exceed $1000 of UBTI a year. Yes there are some calculations on recapture that are made when you sell one of these stocks that may also result in UBTI. But any good broker these days handles all of this for you – automatically.

                      Fidelity via PWC has calculated this for me each of the last 3 or 4 years and made a filing if it was required (2 years it was, 2 years it wasn’t). You don’t need to know anything about UBTI as they handle it appropriately at no cost. And if taxes are due, they pay them from your account. You just need to ensure your broker has any K-1s you receive (but even that is automated for the most part as they / PWC can access them directly online. Only in the first year did I have to provide a few older ones from prior years.)

                      There is nothing to educate your broker or PWC on. They do this calculation routinely for anyone who may have UBTI in a tax deferred account

                      FWIW I have my CPA (albeit I have not practiced publicly in a while) – and I checked PWCs calculation the first 2 years and they were accurate

                      People worry about the complexity for no reason.

              2. Hi Chuck P,
                Do you or anyone else have any thoughts on MMP? It also looks like a pretty high quality MLP that is getting very little love.

                1. Good morning Kapil & Everyone; Iam sorry but I do not know anything about MMP. As I suspect you know anything to do with Energy, Oil, Nat Gas, & Pipelines are viewed by many as “Lepers in a Cave”. Iam just being brutally honest. I won’t get into the WHY’s as I suspect you know that answer. Just pulling it up it has over a 9% yield, but I have done no research on it. I already own 14,000 shares of EPD and I also own 6,500 shares of PBA so highly doubt if I will be adding anything more in the Oil Patch. Hope this finds you doing well. I think Fryman answered the question on states taxing the K-1’s of EPD. It looks like a very small amount if any at all.

                  1. Chuck, I will be dead long before I catch you, but I bought 100 more at $20.95. Keep dropping, and I will keep dabbling! I noticed KMI has been on a mini run since they announced their divi increase for next year. Maybe in Jan it will be EPD’s turn when they announce theirs. And unlike KMI, they have even more financial room to raise it than they do.

        3. I own relatively large chunk of EPD. Started buying last year when it got really cheap. Still nibble more at $21. Have followed it for 20 years. Excellent company-knows how to make money in all situations. Did a few projects for them over the years and was always impressed. It will be around for many years although it tends to get hit with low oil/gas prices even though prices have little effect on profitability. Hopefully some of the glory days for oil and gas still ahead.

          1. Any issue with state by state K-1?

            Enterprise Products Partners L.P.
            2020 State K-1s are now available

            1. furcal, I’m in Texas so I don’t do State taxes. However, the federal taxes with the K-1 were a piece of cake with Turbo tax. That’s all I got.

              1. Thanks-every bit helps.
                Going back several years, I read that some states were getting aggressive in pursuing taxes owed by entities that did biz in their states, like pipelines,
                and if the k-1 itemizes income by state there could be a liability depending on the thresh hold amount. Likely irrelevant for most of us, but Chuck P might be able to address that issue.

                1. furcal, The K-1 shows income in about 40 states. The amounts per state are very small – almost all losses. I would assume everyone ignores it or they would go nuts.

    5. I’ve owned ARCC since 1/15/2019 when I bought it at $16.30. It has been a reliable dividend payer and one of my larger positions. The only time it reduced its dividend was during the GFC. Its 5 year ROE is 59%, better than some BDCs, worse than others.

    6. Chuck P : Yes, I have a small position in ARCC. Bought it about 3 years ago at $17.50. Rode it down in 2020 to about half that and it’s a couple bucks over what I paid for it now. So, as far as stock price goes, not much of a gain, but the income hasn’t missed a beat. I have little of this and ORCC to help offset some of the low paying (under 6% preferred’s).

  3. The only thing I have that went down that much is PSEC-A. I think it is about $21.77. I paid $21.50 for it recently. I am not sure why it went down so much starting from the end of July, but I only bought a few hundred shares for now.

    1. I too bought some PSEC-A in $22s thinking it had bottomed but it has made new lows since in $21s. Wonder why this has been trading so poorly when its peers are doing better…

      1. I am an III’er and I too own PSECA.

        First of all you gotta hand it to their management to load up on the preferred financing at ridiculous rates. Somebody knew what they were doing because somebody thought $25.08 was a fair price to buy based on FIDO chart. It was at the time if you compared them to a bank.

        SIPRA and PSECA came out about the same time. I bought SIPRA after it sold off from the IPO. People got scared because of the crypto thing. When it ran up, I dumped it. Thought I was going to do the same thing with PSECA and not so much.

        I have averaged in at 23.31 so far. I only have 96 shares but would load up shares up to 400 if it hit a 7% CY. If they just would consider changing their name to “Bank of Prospect Capital” the price would be stronger vs a similar credit.

        I think this a good lesson for new investors that these low coupon perps get hammered even if they are decent credits and business models. I think maybe PSECA gets an upgrade to BB+ ha ha. Probably not because the cream will go to the CS instead. PSEC lives on that BBB——– edge when they need to issue actual debt.

    2. PSEC-A was grossly over-priced on its IPO. A good comparison to PSEC-A might be something like PRIF-K. Both into CLOs and neither are term preferred stocks and neither pays QDI. While PSEC may be safer in the sense of having a mix of CLOs and other debt, PRIF-K has significantly lower leverage limits as a CEF. Even with PSEC-A down a lot, its current yield is still only 6.2% while PRIF-K currently yields 7.1%. I still think PSEC-A is over-priced and would buy PRIF-K all day before PSEC-A. Just one goat’s opinion.

      1. TheGoat,

        “PSEC-A was grossly over-priced on its IPO”
        That was my point. If you run an outfit like PSEC IMHO your job is to get as much cash for the least cost. That is exactly what they did.

        “PSEC-A might be something like PRIF-K”
        I own this too and wouldn’t compare it to PSEC-A. The reasons are too long to list.

        “I still think PSEC-A is over-priced and would buy PRIF-K all day before PSEC-A.”
        Yup that is why I have 96 shares of PSEC-A and 260 shares of PRIF-K. We can agree on that one. 🙂

        1. PRIF also has no debt. Their preferreds are thus more akin to bonds in terms of safety. PSEC has a large of amount of debt ahead of PSEC-A which sits alone at the bottom of their capital structure (except for common stock).

          1. Thanks to you and NWGG, PRIF-K has become an oversized asset. While I sensed that some may regard this one as “perceptual” with duration risks. Just my humble opinion that we are VERY FAR away from the double digit inflation before the dragon was slayed in Reagan’s era. I did sell some just to avoid too much bet on this one. In recent new issues, there are many “unloved” issues, ECC-D is another good one IMHO. While none of these have “parents” with pristine quality. The 200% + coverage written by Tim and now echoed by QOL.com have been working just fine. Thanks to Tim.
            On MLP’s and BDC’s realm. I have been long time owner of ARCC. Sold some during the COVID 19 to buy Tim’s gift ATRAL or was it ATRIL. Then I realized that it actually never reduced the dividend too much. ARCC and MAIN are the ones which sustained (drawdown for sure) during the Great Recession era. They both recovered very nicely. I bought back some ARCC and kept on adding. Tried MAIN and then I realized it was over hyped by Scott Kennedy of SA. Articles by Scott Kennedy seems to be more timely and accurately than BDC BUZZ, not to insult BUZZ who is also well respected. From my past subscription with Rida Morwa, ARCC was one of his buys and he sold as always SEEKING for RISKIER and HIGHER YIELD. I did not follow except get burned on Mall names. Washington Prime went under and failed to re emerge, even worse than CBL. EVA (Envira ) is presumed “renewable” energy. It beats all MLP’s and energy names. Some may question whether it is truly renewable, burning wood chips from forest in high temp oven. The energy captured is sold to European and Japanese markets at considerably higher margin. Sponsor does the selling. This once a MLP partnership is now a C Corp. No more sponsor / producer. Just one company. They reduced profit margin. One SA writer said “SELL”. I sold some and then quickly bought back at higher price. They kept on raising dividends and the gross sales increasing while margin reduced. I do not dare to buy more because it is close to 52 week high, just like ARCC. Due to huge price increase, the pro forma yield is now just under 4.8%. When EVA was a partnership, the Schedule K1 was fantastic. In a good year, never “guaranteed income” which is taxed as ordinary income (Fed and State). In a bad year, it reported Required Expense which is deducted dollar for dollar from Income (not guaranteed income).
            I do own some EPD in my retirement account. Bought some and kept on seeing unrealized loss. I quit watching knowing that the dividends received would probably offset the unrealized loss. Bought some in Rida’s era at ridiculous high price. I refuse to buy in taxable account. No idea whether it would report “guaranteed income” as most do, including the awful Newstar or Magellan MMP. I do not understand why partnership is good for us investors. Perhaps good for the general partners. Just MHO.

  4. I picked some HCDIP up on the selloff. Albeit very aggressive with a big yield -they are a tiny homebuilder that has been growing earnings.

    1. There is a lot more to the story then that. The more you read about HCDI the more you get a queasy feeling in your stomach. I reckon SA posts and comments will summarize it OK for the curious.

      As for the rest of the preferred above I would not touch any of them with a ten foot pole.

      1. The only better news about HCDIP compared to the rest of that motley crew is that it is convertible into common shares of HCDI anytime at $4.50/share (5.556 shares of common). This was based on HCDIP trading at $25 at the time.

        So if you were to buy HCDIP today at $15.70, you could convert it into common anytime and get 5.556 shares for $2.82.

        Today, the common HCDI trades at $2.87, so you essentially have a profitable call option now on HCDI common.

        Book value as of 9/30/21 for HCDI was $2.30/share, and most homebuilders trade 1-2X book value. So I do believe HCDIP is better than the others, even though it has been shellacked due to secondary offerings and massive warrant issuance by the parent company. They do have a decent balance sheet.

        I am holding on to my tiny share amount of HCDIP in the “high-risk” bucket.

        1. There are a lot of warrants out on HCDI so it may take a major move to get much above $3.

          1. Martin:

            You are correct. The last HCDIP preferred offering at $15 in October also came with 13.8 million warrants as a “freebie” (each for one share of HCDI) exercisable anytime at $2.97/share. Expire in October 2026. Ticker is HCDIZ. You had to buy during the offering at Think Equity to get the warrants.

            When and if those start to get exercised, book value/share for HCDI common is going to plummet. Today, the HCDIZ warrants trade for 80 cents each, have decent liquidity, and have doubled in value since early October.

          1. Im in this turd bucket too. Mostly because I was tailing this guy who seemed to know a lot. He was spot on with numbers getting me out and buying back in at under $14 so Im sitting good for now. But, I think he may just be a nut that got lucky as he posts all the time and changing his name. I hoping for $19, pat myself on my back for my incredible no nothing lucky skills and never touch it again…Thats the plan!

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