Personal Buys/Sells for Last Week (Ending 11/30/2018)

We will write a short article each Sunday outlining, very briefly,  buys and sells we made within our personal accounts during the previous week.

We do this just to keep things ‘real’.  Many times we exchange ideas etc in the comments of the website, but we seldom make quick decisions on moves–although there are exceptions.  Additionally we don’t really want anyone following our lead as we have no ‘secret sauce’ for moves we make–this is more in reference to newer income investors.

Last week, as would be normal for us in any given week, we made just a few changes.

–we sold the position we had in Invesco High Income 2023 Target Term Trust (IHIT).

–we bought a position in Invesco High Income 2024 Target Term Trust (IHTA).

This move follows our closer inspection of the difference in these 2 trusts last week which can be seen here.   This doesn’t mean IHTA is ‘better’, just that the yield to maturity is higher–but you incur slightly more risk with IHTA since the overall quality is slightly lower and there is an extra yield to maturity.

–we bought a position in the new perpetual preferred stock from utility NiSource (NI).  The issue carries a 6.50% coupon and floats in a little over 5 years.  While NiSource has had issues with the natural gas explosion in Massachucetts ealier in the year we believe this will pass–as most these issues do over time.  Further info on the new issue can be found here.

Lastly in what was one of the quickest ‘dividend captures’ on record–at least for us — we bought 400 shares of iStar Financial 7.50% perpetual preferred (STAR-I) for $21.85 on Thursday and sold it on Friday for $22.10.  Thus we sold for a 25 cent capital gain and captured a 47 cent dividend as well as it went ex-dividend Friday.  As more seasoned folks know it is extremely rare to be able to lock down a 72 cent gain in 24 hours with a dividend capture–30 cents yes–but 72 is very rare.  We count this in the ‘even a blind squirrel finds a nut’ category and newbies should understand this was pure luck.

 

20 thoughts on “Personal Buys/Sells for Last Week (Ending 11/30/2018)”

  1. Thanks for the Sunday update Tim. Nice to see you got lucky on your iStar Financial preferred, as that is a pretty nice gain in just one day.

  2. A 25 cent gain on 400 shares, net of taxes, is less than $100. And now you don’t own the shares which had a YOC of almost 8.6%. Please tell me why that’s a good thing?

    1. Hi Larry, making a $100 on a trade for one day with minimal risk is good. Personally I have done that in the past. If you can do that frequently, gains can compound fast. On top of that Tim can buy the same issue back for probably lower price if volatility continues

    2. Larry–72 cents is a good thing because I did not want to own the shares for more than a day or two if possible–remember I am conservative and iStar has not been a conservative holding in terms price action. I suspect I could buy it back today for under 22 if necessary–but won’t

      1. How do you capture the dividend when the date of record is 12/3 today and you sold it on Friday. What am I missing.
        Thanks Tim

        1. Hi Jeff–the sell doesn’t ‘settle’ for 2 days–as long as I owned it prior to the ex date I can sell on or anytime after the ex date and I will receive the dividend.

          1. Thanks Tim,
            I’ve been following you since the Yield Hunter days. Happy your back. I didn’t like the new owners.

  3. This is a very good idea. I will reply with my comments on what I brought and sold each week going forward when you post your summary

    1. Instead of shares, I will reply with percentage of my preferred stock holdings. I typically buy 1% – 4% for any issue. I have gone as high as 7.5%.

  4. Favor …………..

    Can anyone get a bid/ask on the following CUSIP? It won’t come up on either Vanguard or Schwab. FINRA does show frequent trades:

    808513AE5

    Expecting a lot of action in the markets today.

    1. SCHWAB CHARLES CORP NEW BOND PERPETUAL 7.00000%

      Funny that it won’t come up on the Schwab site. It’s their issue.
      No bid/ask at Fidelity and Fidelity says they don’t offer it to customers but the last sale was at 106.5 for 5 shares. Yield 6.572%

  5. Last week I started a small position in Exantas Capital Corp 8.625% fixed to float perpetual preferred (XAN-C). Nice coupon, no call until 2024, and it adjusts to LIBOR plus 5.927% only if that percentage is greater than the fixed coupon.

    I also terminated a full position in Seaspan 7.125% Senior Notes due in 2027 (SSWA). Maybe should have done this sooner, but I exited with a small gain and almost a year of coupon. Was disappointed with the performance, as I expected the notes to be much more stable than the higher yielding SSW preferred shares.

  6. I like your iStar Financial very short term dividend capture. It appears that the key to dividend captures is the amount of stock recovery time after the x-dividend date. Do you have a source for stock recovery time that you are willing to share, or what is your methodology to predict recovery time.

    1. Hi LarryL—yes a more normal ‘capture’ might be to capture the 47 cents (which means the exchange marks down the shares on the ex date 47 cents in opening price) and then sell within a week for a net capture of 25 cents. So in the case of this iStar issue the quick bounce back was unexpected and contributed mightily.

      No I don’t have a source for any additional info, but it might be a good topic for further research. Most captures will work–in a ‘trending market’ — within 10 days or so, but if you can only capture a net 10 cents one has to put a lot of money at risk to make it worthwhile–and I am a chicken investor so I seldom buy 1000 shares of a $25 issue.

      As I said this was pure luck.

  7. Thanks for the honest feedback. I have been studying info on Dividend.com, which claims to have identified stocks with a quick recovery rate (days) after the x-dividend date. I will let you know if I reach any promising conclusions. We are in agreement that I am not willing to put a lot of money at risk. 200 shares of a stock that I am willing to own for a period of time will be my trial size–if I find any promising candidates.

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