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Preferreds ‘Pop’ on Heavy Volume

Dave in Texas mentioned the big pop in CIT Group common shares early today–well how about their 5.85% preferred – up $2.32 on 12 times regular volume. Turns out that CIT is being acquired by regional lender First Citizens (FCNCB).

I personally noticed the PennyMac FTF preferreds popping on large volume–3 and 5 times normal volume–both issues up around 3%. I had held a modest speculative position and needed this pop to unload it–collected 1 dividend and 75 cents on the pop–not really looking to hold long term. I see no news to account for the pop.

You can see these issues on the large volume spreadsheet here.

I think what we are seeing is some bargain hunters no being forced to dip a bit lower in the quality rankings to find issues under $25–of course this means many of the mortgage REITs could pop–at least those that hold agency paper. You can peruse the mortgage REITs here.

10 thoughts on “Preferreds ‘Pop’ on Heavy Volume”

  1. I have pretty heavy exposure to CIT B. And in general most my longs are much improved. For me it’s probably now time to bail on most libor floaters. At least anything floating in 5 years or less.

  2. I get the brown helmet award for selling my CIT on Monday. I didn’t want to risk another earnings report or the chance that dividends would be cut.

    1. Those things happen Potter, life is not about being perfect. One has to learn from the past, not live in it. Look at it this way, you held on from the 9.97 low and carved out a 23 handle. THAT was an accomplishment…and not easily done. Add in dividends and it probably isn’t as bad as it feels!!

      Whenever I move to a pfd it’s almost always from a preferred. So I don’t get too hung up on pricing. It’s a 2 step dance and many tend to be correlated. If you sell and wait you to buy……. one can miss that correlation….and the issue you were going to buy jacks on you…..

  3. Love the info and insight I gain from this website. I don’t can’t thank Tim and many others enough for their time.
    How can someone access the unique spreadsheets like the two mentioned in
    todays post once the links are gone or without referring back to a particular post?
    Thanks again, keep it coming!!

  4. And the equal and opposite reaction to CIT-B is FCNCP which is down ~2.5%. Care to guess which side of that I’m on? Still, FCNCP is up over 8% from my entry.

  5. I’m pretty sure its the Rida gang behind the PMT issues today. He releases articles privately and then a couple of week later releases them publicly

    1. And also buys for his own account in advance of the private release. After the public release they are dumped.

      Rida, all you have to do is make your trading records available in a credible way and I’ll take it all back.

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