There is no use trying any longer to figure out the best spot to try to catch falling knives. At this point we are waiting for the knife to fall to the floor and stick. Although when we see plunges like we saw in GasLog Partners preferred shares (GLOP-C) early today (a 10,000 share block knocked the price down to $18.75 before it bounced back into the $20.65 area) we are always tempted to jump in and lower our average share price–but we are doing our best to resist at this point in time because there is no sign of a bottom.
While overall we are probably doing as well as can be expected we have had one of our accounts fall into the red today. That particular account holds the perpetual preferreds that we own–and needless to say if you have GasLog Partners (any issue) and Spark Energy preferred in your accounts you have gotten spanked-like us.
When we look over the daily volume leaders it has a few new names pop each day. For instance today we see REIT Apartment Investors and Management preferred (NYSE:AIV-A), a large apartment owner, has traded 55 times normal daily volume–a large chunk in a 100,000 trade early in the day–shares are off just 41 cents. The preferred shares of hated National General Holdings continue to tumble sharply on very high volume–this insurance company is a sister to Maiden Holdings and AmTrust Financial and simply is disliked because of this relationship. Preferred shares of all of the issues of REIT Pennsylvania Real Estate Investment (PEI) are trading down sharply on very heavy volume. Shippers of all sorts are much lower today. Preferred shares of the various Tsakos, Teekay, GasLog and Seaspan issues are lower by more than a dollar. Let’s face it–this is a bloodbath like we haven’t seen for a very long time.
It is interesting that again ‘term preferreds’ are kind of soft and trading on higher volume–Eagle Point Credit term preferreds are trading on 5 times normal volume. Even our beloved Kayne Anderson 3.50% term preferred (KYN-F) are trading below $25–of course these are redeemable in 2020 so these shares aren’t going to fall far.
For now income investors need to be very careful and consider simply sitting tight without further purchases for the time being. The sell-off will end–but when is simply a guess. At this point in time each ‘bargain’ we buy becomes a better bargain the next day–and that is a bit painful. When we reach a bottoming there will be plenty of time to search the bargain heap and buy a few.