Quiet, But Profitable Week

We are easy to please–we mostly invest for an income stream and nothing makes us happier than to have a pretty quiet week where the average price of the preferreds and baby bonds remain kind of flat.

As we already noted earlier we have some movement in individual issues–up and down 25 or 50 cents, but by and large most shares are moving up or down less than 25 cents.

We note today that the preferred issues from mall REIT Pennsylvania Real Estate (PEI) have been moving quite a bit.  They have 3 issues outstanding and 2 of the 3 are off by over a buck today.  Of course PEI being a mall REIT  has seen significant selling going on for a long time–all 3 preferreds are trading with current yields in the 10.5% to 11% range.  Is there an opportunity here?  Maybe–but the sentiment on the mall REITs is so bad that even a quick ‘flip’ is risky–these are the type of issues that you try for a quick flip and then get stuck as it continues lower.

Shippers are another weak sector today.  The Costamare (CMRE) preferred issues have gotten knocked down hard the last 2 days with losses over $1/share.  The Teekay Offshore Partners (TOO) preferred are back down after a big fall, bounceback and a continuation of the fall.  The Dynagas LNG Partners (DLNG) preferreds are weak also (DLNG-A and DLNG-B)–longer term the Dynagas issues may be pretty decent to hold with current yields around 10.3%.

So it has been a good week–stable prices, with a few gains–and little to no snow on the ground in Minnesota with 30-35 degree temps.  These items leave me in a good mood for the weekend.

40 thoughts on “Quiet, But Profitable Week”

  1. Any TNP investors on here? The huge range of prices on the preferred stock is a bit confounding even when considering the call dates. The TNP-B is @ 8% while TNP-F is @ 11.6% !?

    1. Hi Tech Guy,

      TNP B and C have FTR (Fail to redeem) clauses which hold their prices closer to par. F and E…..no safety net clauses.

      1. FTR clauses act like soft maturities. No guarantee that the issues will be paid on the FTR date but if they are not, then the penelty to the shipper is steep.

      2. These clauses act like soft maturities. No guarantee that the issues will be paid on the FTR date but if they are not, then the penelty to the shipper is steep.

    2. TNP-B holder here. The FTR is punitive enough to the issuer that this acts like a short term bond. So yes, you can get a much higher yield with TNP-F, but not sure I trust the shipping industry enough to be a long-term holder, I don’t need to get greedy. I like my 8% yield, To each his own.

  2. CBKPP – neither Vanguard nor Schwab will allow the placement of an online order. Months (years?) ago I called both and still no deal. CKNQP no problem.

    1. Bob, I really havent tried to buy CKNQP too hard, but remember getting blocked playing with it on one of mine. It does have a longer fixed period still, but that puny 3.7% kicker is just weak compared to 4.5% from CBKPP. In later issued preferreds, companies found out they could get away with those 3 handle kickers. AGRIP would be a sweet one to snag, but I have no recourse there. A few online people I know have told me they have got some shares of it though.

  3. I have chewed out Uncle Vanguard’s ass on several occasions re: CBKPP, to no avail. Not want to go to TDA for one ticker but who knows. It’s a great issue.

    Does TDA do level 2 quotes, too?

    1. eTrade does them on eTrade Pro as I found at today after the other comments on the other artlcle. It is interesting but for my need maybe just something else to take up screen space.

      1. Greg, how does the Think or Swim work. I cant figure how to get it so I am still using level 2 on their old platform they are phasing out.

        1. Grid, To access Think or Swim in TDA: Access old site (still my primary platform with them also) from home page: Trade/Trading Platforms/thinkorswim/Download. Downloads as an application. After downloaded, open the app, find/open the “thinkorswim” file. When chart opens, see tool bar on R side of screen. Find “Level II”. If not there, see 1st dropdown in upper right of screen. Open “Show Gadget”. Level II is one of the options. Mostly I do not like this platform as they tried to pack 5 lbs of potatoes in a 2 lb bag. I agree with Tim’s earlier comment regarding too many tools though is useful for a few key items. The access may need to be “turned on” by a TD rep. If having download issues tech line is 800.672.2098. ALSO: If on the old platform: My Account/Positions/hold cursor over a symbol in the positions box/quote opens up/open dropdown for “Additional Actions”/see Level II.

          1. Thanks Alpha, I will try and play with it. I use a Chromebook (ipad is useless with that) for my present level 2 . I really do nothing and it just pops up covering entire screen after I sign into account and I just punch in random tickers to see the level 2 on each. I dont know if the Think platform is Chromebook compatible.

            1. I’m running on a MacBook Pro. Out of curiosity, just checked the TDA iPhone mobile app and was surprised to also see it available there. Account/Positions/Touch on Symbol/Detailed Quote/Level II from toolbar at top. Useful next time you’re having Margaritas in San Diego. lol

            1. Alpha that link is what I sign onto…I downloaded what I think is Sink or Swim but it just has all sorts of junk…Never did find “Show Gadget”…I guess I will just use Trade Architect until it doesnt work anymore. People dont get me mad but computers do. I have smashed more than a few keyboards over my desk when I worked. I was the boss so I could do that stuff, lol.. I dont want to get mad and buy a new chromebook, lol.

      2. Yes it’s in the Think or Swim platform though accessible via the old platform.

        1. How do I get to it, Alpha? That old one just pop ups when I log in and says its being drawn down and wont be around but I keep using it until it wont work. Being a Luddite by nature its hard to find the new one.

    2. Bob, Vanguard is outright goofy on what they allow to trade. I bought EBBNF and EBRGF through Vanguard, but they wont allow ENBBF and EBRZF and they are all from Enbridge. And they wont try to help allow a trade either.

      1. Looks like I can trade CBKPP on Schwab.
        Gridbird, have you looked at Enbridge’s 6.375% notes, ENBA? They float at LIBOR plus 3.6% starting in 4/23.

        1. Alan, I knew about them, but for me my problem is I really want and need QDI for my taxable accounts where most of my money is. And the Enbridge preferreds provided a very unique opportunity. A reset preferred that was trading almost 1/3 under par and another reset that was 60% under par. The reset is off par, so the yield could outright explode holding these in 2022 since I bought so far under par. They were reset off a 1.78% 5 year last year.

      2. A few days ago I tried getting CBKPP from Fidelity and they told me it was a foreign issue they couldn’t trade.

        I have CBKLP with Merrill, and some CKNQP with Vanguard. But CBKPP has eluded me.

        I put a GTC order in @101 a couple of days ago with Merrill but someone got my shares at 101.25 — I wonder who that was ;o) Seriously, I saw a list of the 20 most financially solid banks in the world and Cobank was on it. It has been my biggest holding for a couple of years and is rock steady.

        1. Scott, that is too funny…Foreign, lol…Being Mid West and Heartland I guess that would be Foreign to East Coast decision makers…But hey, they have an office in Connecticut too! I cant trade CKNQP anywhere, myself. Scott I even tried to go $101.15 thinking they would toss me a 10 cent bone and they still wouldn’t budge a penny. So right at market close, I surrendered, they won, and paid the ask of $101.25.

      3. Ditto with the GJP strats (Dominion Energy) – my brokerage won’t allow me to purchase it. They used to allow strats purchases so I do have some grandfathered positions in other strats.

        1. Wedgehead, some issues if you call, they will put order in for you and only charge online commission. Others they simply say they cant. I own GJP myself. Oddly, I can buy this one in all three of my brokerages. I find it so strange they will block relatively safe issues (for your protection of course) but will let you lose all your money buying other issues of incredible risk to capital.

  4. Tim we are presently getting pummeled with snow in StL area. Could get a foot by tomm. Oh well it didnt stop me from a small balance out trade. Bought 100 shares of CBKPP at $101.25. Seller would not come down a nickel for me. The financials and coverage ratios for their 1.5 billion preferreds is well over 20 times last quarter. This is an Ag/rural Co-op bank that pays patronage. Actually a very high Libor kicker in 2022 for such a quality issue. This is my only future Libor related issue I have so I liked the different angle here. I used to not be able to buy but TD opened up the spigot. Vanguard and TradeKing still have me shut out there.

    1. Hi Grid–yes I had noted that you folks were getting hit–my wife has a sister in KC that we talk with on a regular basis and we noted the heavy storm.

      At least you got some of the CoBank–thats a good reminder for me as I was going to try to get some of one of the issues for the sock drawer.

      1. How about the sister issue, CBKLP ? It’s not a F-to-F issue, but the same safety and quality.

        I own a starter position of CBKLP.

        1. Inspbudget, I largely chose CBKPP over CBKLP because it was a F/F. I try to keep some balance. I have plenty of fixed issues including several bank ones already. This is the only future libor float I own. 4.55% kicker is pretty large for a high quality investment grade. If that predicates a call in 2022 that is fine also.

    2. Should have recognized a staunch Cardinal Gridbird. I’m a native and just moved back to St Lou from the Front Range after 10 years and brought this snow. Part of our sale there is being reinvested now…keep us on your prayer list….real to paper!
      The last Big Red game I went to was colder than this and snowing this hard at Busch. I remember Jackie Smith catching a bomb of about 80 yards, but I think we lost…maybe ’75, Sunday day game against the Giants?
      Like being back here and watching local,conservative Stifel long Baby. Looks like they are building a new home over at Lindbergh and Clayton and I know several ‘staunch-types’ who have worked there for a long time and done well…even though the risk of being a ‘partner’ is long past. Happy sledding!

      1. Joel, I am gonna have to find some heart pills to ward off a heart attack…Somebody wrote “Big Red” and remembers! Still remember their last game against the Boys. Just fell short and lost and it kept them out of playoffs in 87.

    3. Hi Grid we just moved from Edwardsville in July after 40 years to Nashville TN. I too was an old Big Red fan. Sure don’t miss those crazy Illinoistaxes.

      1. Twinjett, yes Illinois has some high property taxes for sure. I was in Edwardsville for first time last summer at the Wildey Theatre attending a John Waite concert. Edwardsville appears to be a very nice town and Wildey was a great place too.

        1. Grid and Twinjett, I buy most of my tax free individual bonds at Vanguard. I always avoid any bonds from Illinois, New Jersey and California. I just believe these are some of the most fiscally irresponsible state governments, their citizens are moving away to other lower taxed and better run states. This week I sold the last 2 tax frees from Illinois and New Jersey from my Dad’s muni bond portfolio, as I have taken full control and POA of his affairs. There are 7 states with no state income taxes Wyoming, Washington, Texas, SouthDakota, Nevada, Florida, and Alaska. Here is a good guide for state income taxes: https://www.money-zine.com/financial-planning/tax-shelter/state-income-tax-rates/
          Wishing you profitable investing, Nomad

          1. Nomad, Spot on. In addition to having top tier income, DMV, gas, and RE transfer taxes, California also has a statewide sales tax of 7.25%, which when combined with local sales taxes total up to 9.75% in some areas. CA utes have been under strain also because of the environmental policies which are affecting and taxing energy usage (push to solar), water use (droughts), electric transfer (fires). Then of course inverse condemnation puts the utes at the mercy of Sacramento which has it’s own issues. We reside in CA, though wouldn’t own the utes, save for a flip.

            1. Alpha 8, years ago I live in Los Angeles; Brentwood and Westwood (near UCLA). I and a friend bought a magnificent 16 plex for $200K per door which I thought we overpaid for the apartment building but it had good cash flow so I went along with it. I moved away 3 years later and my “partner” in the building offered me $240K a door because he said it would be so hard to be an absentee owner; I took the cash. Recently, I was told that he converted the building to condos and sold them for $770K each! The costs of living in California continue to spiral higher and everything is more expense than most of the other states (taxes, insurance, gasoline, housing, food, utilities etc. I’m happy I moved away, but as you can see above, I should have just held the small apartment complex. I started buying individual property triple net leases and I only buy in states with no state income taxes, just like my buying tax free bonds. All the very best for profitable investing, Nomad

          2. If you buy anything from Washington State be very very afraid. Taxes on income are unconstitutional but that hasn’t stopped the politicians from trying to get around that. Seattle City Clowncil (not a typo) recently passed an income tax on high earners knowing it was unconstitutional but that didn’t stop them. They are hoping the liberal state supreme court will find a way around the state constitution. Sales taxes match California’s as do the property taxes. Washington State is trying to outdo California when it comes to taxing everything and everybody.

            1. Any comparison between Washington and California on taxes is very much apples to oranges. A state which doesn’t tax income like Washington has to have alternative methods to fund government, so there is every expectation that fees, ad valorum taxes, etc will become primary sources of revenue. By comparison California has a very favorable property tax structure via Prop-13 which has served them well for decades. Which state is ‘worse or better’ on taxes is very much in the eye (and pocket book) of the beholder.

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