Party On S&P500 and NASDAQ!! The DJIA is lagging, but it really no longer represents the real market which is why I always specify the S&P500.
I just added to a position–UMH-D 6.375% perpetual preferred from UMH Properties. The current yield is just shy of 7%–the issue is currently optionally redeemable as of 1/22/23–but at $23.32 this is no issue.
I posted a presentation from manufactured home REIT UMH Properties (UMH) a couple days ago and I wanted to go through it before adding to what was a 25% position–now a 50% position. The presentation is here.
While this issue is not rated by the major ratings agency I personally assign a higher than average quality to it. Over the years the company has performed well with the manufactured home parks and their history goes back to 1968–so lots of history.
Revenue continues to climb at a nice pace–year after year.
Funds from operation (FFO) have taken a nice bounce in the last year.
All in all the company is now run very soundly and there is plenty of demand for site rental and housing rental. Not a glamorous business, but one which is necessary.
ADDED NOTE–the company continues to have investments in other REITS, but now they are carried on the books at $39 million versus $113 million a year ago.
21 thoughts on “Party On!!”
Grid & IYP
I caught a partial fill on PCG A at 19 something when someone panicked and sold last month. Also bought a bunch of D and I own a bunch of SCE L
I use PGE and swear I would never own any of the stock, but they seemed to have turned over a new leaf. Looking on FINRA and looking at bid ask on TD , Fidelity and Pershing for bonds seems like something is out of wack. Fed’s added a 1/4 point this last week and I will take bets they raise it again in March. The 5 yr treasuries went back up and I don’t know where mortgage rates are right now but they had been trending down. Yes, I see the point of locking in profits and buying 6 month to 1 year CD’s and going on vacation but this is the first time in a long time I have had returns locked in from 5 to 7 % I would hate to give it up but on the other hand the 27% increase in value in my account in the past 5 months would be hard to give up too.
What to do?
We really need the income so I will probably stick with that and take the hit on the capitol. I would love to have had Grid’s crystal ball a month ago when looking at bonds, wonder if he rents it out. Junk bonds have increased in value to the point where I am not tempted but I have seen a few with a 3 yr maturity with a 5-1/2 to 6% YTM I am tempted to buy.
“… So I’ll probably stay with….” Is the key. Not unlike my comment about selling the 6s. If you look at that year low of PFF and compare it to any pfd you track it was an exceptional buying opportunity. IG 6 thru 7’s traded under par. Some low 20’s.
But it’s back to the quandary of what to buy. The more discounted the price the greater the potential appreciation. Some 5 coupons are at 25 showing great strenght. Others are 20 flat. I’ve always said it’s how the market prices it more then the ratings, by far.
But, sell, hold, swap… L OK l that is the Q.
Re UMH-D Don’t forget, it was not that long ago that they were touting the benefits of calling these. That was back when they called UMH-C in July. Even at that time they were mentioning the idea of calling D at first available date. That date’s come and went and I’m not implying they will be calling these anytime soon. The point is that if interest rates keep coming down, UMH most likely will be quick to put the possibility of calling these back on the table
2wr–but at 23.32 that would be ok–and I agree that they could call them later this year.
It sure would…. Many point out possible call candidates as a negative… not me…… I just think in this case, the possibility is now interest rate sensitive… They pre-issued something in Israel as I remember to lock in a spread in advance to call C. That’s not the case for D… So I’d be surprised if they called D prior to it trading consistently above $25….
This was one of my few buys in the last few weeks. Popped on my list as > 7% and it is not at a 3 month high like many preferreds are. Many preferreds are well on their way to 4,5,6 month highs and approaching their par. Need to increase estimated tax payments. Looking into above par/pinned to par and cashing more out of the 20-30% gainers. Another good buy in the last few weeks was chscl. Anything that is 3 month high and close to par (ex. AAM-B) are already sold. Sold dlr-j today for $4/gain.
Interesting that investors are now paying $3,$4,$5 /share more than just a month ago.
Mr. C, A couple weeks ago I was scrounging around the universe and saw CHSCL dropping into low 25.40s. I punted and bought a lot of this one (for me). Basically same reason you opined.
Grid, I saw your post on that one. I engorged 8% of my portfolio on it. I hope it doesnt cause indigestion later. Ha. I had to put some money to work after the selling.
Burp! :). If I cant find something in my personal comfort zone to chase a trade on, I will go looking for yield and relative stability instead. Geez the bond market has went off last couple days. I bought 10k of a ComEd 2031 trust debt at 5.92% YTM this week, and now they are trying to pawn them off at 5.5% just a couple days later. Crazy. I knew I should have bought more, ha.
So I pulled the trigger a bunch last year and kept paying the price. Was looking at a bunch of patterns including PFF and you can see the two lows towards end of last year. Looking to swap what made sense. I don’t own much pff now but you can see patterns…..
With that in mind many of these are moving in lock step to similar current yields. As you all know most 6’s are over par, most 5’s are trading around 5.5 CY and the 4’s same area but around 20. My point was in doesn’t really matter too much where I do the swap, just as long as there’s an advantage to the trade. The key is not trying to get too smart and time it. Out of one into another should be close to same time. Because they will tend to move together in price.
So there’s that. Then there’s some I collected divd for 3 quarters that are pushing 26. Do you hold a 6 fixed to float because you believe, or do you sell because prices are up 3 bucks in two months?
IYP, I think you pretty much nailed it. Most liquid pre call status same quality issues will overall move in relative tandem together. In those areas its probably more efficient to just ride up.
And sometimes it is more efficient even when trading out of different credit qualities. Here is a perfect example that just happened to me. I bought a bunch of SCE-L around 7% yield recently and the thing exploded up a couple bucks, so I noticed PCG preferreds were lagging so I rolled into them and rode their gains and captured a divi. But L has kept relentlessly climbing to under 5.9%. In this instance I gained only a tiny bit trading and lowered credit quality for it. I had no clue L would shoot even higher….If I had….
I have dialed risk back overall holding a lot of cash like instruments now, so I am not fully “invested”. Thats just a personal choice, not from any innate knowledge. Its a rare opp where one can get paid to hold cash and I am going to hold some back to play defense with. I still have a dozen or so preferreds, but also own several bonds of various durations I have bought over the past 4-5 months that I have never owned before. Heck I even took 10k out of some of this years profits and buying more lowly IBonds with it. And today I had a couple smaller 30 day CDs mature and got aggressive and rolled them together into a 18 month CD. Such fearless aggression! Who knows….
Lol GB I told my better half that if anybody could sense what I was talking about it’d be you. A lot of info I’m not allowed to discuss.
I see the CDs are finally good competition for treasuries. I’ve been in the bond market for forty years and have never seen Treasuries exceeding CD rates by such a margin.
For me I’d rather have the treasury. For me super easy in/out. Knowing I can sell at market… If needed… Gives me peace of mind. Jeeps I sound like some of my friend’s who keep cash for years and years because they may make a move. But they haven’t lol but they could!!
IYP, Actually since I have a TD account Im thinking about moving money over and auto renewing shorter TBills to keep the money 2 steps removed from having trading access to the funds, ha.
I looked closely at the rate differentials Friday… and am happy to see cds upping their game. Past one year the treasuries are rolling over. Credit Sights was saying the banks don’t want to over pay on refinancing older callable issues, thinking the rates will drop. I told my desk they have less fortitude then an 80 yr old widow trading her ATT
So your 15 month CD may have been a smart move. I have always helped people understand the cost of carry. How much higher will you have to roll over at just to equal the rate your passing over today.
As you know the belly of the yield curve is there presently. It could and will at some point change, no question. But Im ok short duration (which could mean short sighted) knowing if I liquidated everything, like many here, I would lock in a double digit return this year doing nothing. Its enticing, but its not golf season yet so that wont happen.
Grid, I own a boatload of SCE-L and to answer the question about to sell or not to sell. First if I was to play the dividend flipping game which I have been known to do, I buy a likely stock 45 to 30 days out from x-divy date. Why hold a flipper for 90 days from date to date if that is all your doing? Flip and find the next stock to take advantage of. Currently SCE-L will pay .31 in a little over 35 days so the price at Friday’s closing I might put in a sell order in at 21.25 or 21.30 and hope it executes in the next week . Let the next buyer chasing the dividend have it as I already got mine.
On the other hand I sold a stock I was getting 7% on and even the new buyer is getting about 5.8%
So the way I read this is you held it prior to Dec 13th and sold a couple weeks ago. Nice return for only about 60 days of holding.
Now you have to find another stock to hold and flip in the next 60 days at about the same or less price and yield, but not counting the credit quality
Charles, the truth always really is.. “who knows”. But that being said, I held L maybe 2-3 weeks for a couple buck swing. But the foundation of it all was I bought it as a trade not to hold, (not that I would be scared to divi payment wise). So Im not really looking at it through the lens of what will I get income from it I sell and need to replace.
The PCG preferreds were for same purpose. In fact Friday I rolled about 500-600 shares from one series to the other because of a 50 cent arb in price for same coupon yield same terms different series PCG. So the next move may be another arb move or a sell out…Or I may hold longer since I got back over the 7% threshold I wanted. I still did keep some D even though more were rotated to the E from price arb.
Mr C I filled my quota last year and when UMH published their 2022 tax treatment of dividends, 61% of the dividend was a return of capital. Not sure if that is a consideration for you or others. since it lowers your tax basis. Not a tax event if its in an IRA. You also get the 199a QBI deduction on the 39% that is taxable.
Party indeed- again am up 1% today. Lots of late to the party folks.
No complaints since I want my portfolio to be high before the drop I still think is coming.
My portfolio hasn’t been at this level since last June.
They announced at the market dilution recently
PTrader—yes I saw that, but it is not a large factor in my decision (at least from my perspective).