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Investment grade WU currently trading at 11.1% yield (not including buyback yield) and a ridiculous 3x earnings… They have tons of cash on the balance sheet for buybacks. This company has been around since 1851 but apparently the market expects it to be gone in a few years. I’am taking the other side of that bet I here, I guess. We’ll see.
Just doing the math here and factoring in the buybacks, total yield is like 17.3%
Interesting. Price projections 7.38-8.11 on long and short timeframes (not predictions).
(This discussion should have been started on the Common Stock Chat.)
WU has had the same 23.5 cents/qtr dividend since March 2021. Price mostly stayed above 17.50 between Feb 2015 and Aug 2022, before the collapse. The yield at 17.50 was 5.4%.
The high CY over the last year has not supported the stock price, suggesting a bothersome fundamental problem. What is it? Most of the company’s business is consumer money transfers in all parts of the world. Is this business at risk from newer technologies?
https://finance.yahoo.com/news/western-union-growth-constrained-due-152755312.html
And there’s this:
“A proposal exists for a 3.5% excise tax on remittance transfers from individuals in the US to foreign countries.”
That could make Bitcoin or stablecoins more popular, although exchanging USD for BTC is not free.
And finally, the Lightning Network, which is layered on Bitcoin.
“The cost to transfer USD over the Lightning Network is generally very low, often fractions of a cent, making it ideal for microtransactions and remittances. Fees are typically much lower than traditional payment methods like Visa or Mastercard. “
I believe all of those concerns are more than priced in. Look at the dividend coverage ratio and cash flow. Western Union has been the poster child for fintech disruption yet here they still are nearly 175 years later generating strong earnings and cash flow.
I worked with a startup fintech more than a few years ago… The tech to transfer value is one thing. The legal experience in over 200 countries AND the ability to actually convert that transferred money to a usable currency on the receiving end.
Dan-
You might very well be right. I know almost nothing about the company. My question is why has the price continued to fall despite the high yield and, as you mentioned, dividend coverage ratio and cash flow? Are you saying the market is wrong?
Are you a buyer just for the yield or price appreciation too? Or maybe for the fun of it? I’d like to get in…it’s just those nagging questions.
Here are some boxes that this investment checks off. I am buying for the 11% yield Rocks.
Extremely unpopular AND boring
Near 20% margins
Fantastic P/E
Positive earnings AND positive cash flows
Dividend well covered
Shareholder friendly and professional management team
Investment grade credit rating
Strong balance sheet and low debt leverage
Perhaps not going away but they are losing their relevance. There are other ways to send global payments. The trend of the stock is a telling story, the old falling knife trick. Good luck.
US Steel: X : This cash merger has to close by June 18. Only a failure of customary reps and warranties would prevent the close at $55.
The MAC clause is super tight: It even excludes a war involving the United States.
The stock was downgraded today. Scoop some for yourself.
I’ve been wrong b4 on mergers, but the last time was when Katrina blew through New Orleans on the day Hibernia Bank was supposed to close with Cap One. That one obviously didn’t have as tight a MAC clause.
ok, since nobody is paying me for this advice, DYODD
Don’t feel bad LT, I mentioned CVGW to keep an eye on as a possible flip trade in the future.
I made a little money on flipping the only other publicly traded avocado distributer that is a direct competitor.
This is the one time where I wouldn’t extrapolate a 1 day return of 15 cents vs. a spot price of $54.85 over a 365 day period. The risk/reward is not worth it. If some last moment fluke happened, that stock is going to tank to $35.
Theta,
I do not know what last minute fluke could happen given the MAC clause.
The deal survives nuclear attack, assuming Nippon Steel does.
This being said, there are way too many leveraged players in the M&A space and if we drop the bunker buster on Iran and the result doesnt immediately go well, this will trade way down.
There’s a fortune to be made in situations like that, just as there was in the GFC.
The tick up in oil and VIX are interesting.
I have said Israel isn’t going to let Iran bombing its’ citizens continue, so something big is coming
And Just like that, it’s gone, sort of like Bitcoin will be some day not too far in the future
Lt I just got back into KRP. I am NOT a long term holder of this stock. I play off oil prices and what deals KRP gets into when it expands it’s acreage.
Between the price of oil, day traders and the news I will be happy to make the estimated dividend holding a couple weeks and not for the full qtr.
Is this a stock blog now?
lt – Interesting @ MAC clause . I should have looked harder today at options chains. If I could have gotten say a $54 call for 90 cents, I would have definitely been excited. That’s 11% profit margin per contract. On the stock itself, buying say 10,000 shares for nearly ~$600K to make $1500 just sounds a bit counterintuitive the way I’m wired for risk. But props for you in making $$$.
Speaking of your favorite investment BTC, seems like yesterday I was pounding the table on those MSTR preferreds in the low $80s. Had all we could eat. Now they are both trading 4% over par at the $104 handle for a 30% gain locked in with double digit yields. I honestly should have bought more for myself but I was actually more conservative because of all the negative noise surrounding them. I should have trusted my DD more.
Nice trade theta!
I liked STRF but was too indecisive to pull the trigger. I often second guess myself for wanting to buy a preferred that I’d hate the common of.
Yes, excellent trade theta. I still don’t see it having value , but there’s no doubt you have profit.
low risk leveraged plays is where I’ve made most of my money
O. Chongusu – Good point on the common. Generally I will never buy a preferred for a company that I am not at least neutral to for the common. This MSTR scenario truly a unique one. And just for the record, I’m not married to my two STRF/STRK. I look at it now in that I just have a little more wiggle room if I had to stop myself out.
lt – So true about the low risk levered plays. Keep em coming. If you are still dabbling with SPACs/warrants/rights be sure to update us on any trades there.
> US Steel: X : This cash merger has to close by June 18.
If there’s some minor issue holding things up, they can waive this if they need to and close later.
It’s still very strange to me. This should’ve been good to go pretty much the second that CFIUS/Trump approved and they signed the NSA. I wonder what’s up.
And it’s gone!
What a bizarre saga. I hope this isn’t the canary in the coal mine for future M&A.
lt-
It closed today-
Interesting bit: “Under the National Security Agreement with the U.S., in which US Steel (NYSE:X) will issue a so-called golden share to the government, US Steel will remain a U.S.-incorporated entity and maintain its headquarters in Pittsburgh, Pennsylvania; a majority of US Steel’s board will be U.S. citizens; US Steel’s key management personnel, including its CEO, will be U.S. citizens; US Steel will maintain capacity to produce and supply steel from its U.S. production locations to meet market demand in the U.S.; and Nippon Steel (OTCPK:NISTF) (OTCPK:NPSCY) will not prevent, prohibit, or otherwise interfere with US Steel’s ability to pursue trade action under U.S. law.
The U.S. government will have the right to appoint one independent director; and consent rights of the President of the United States, or his designee, on specific matters, such as reductions in committed capital investments under the NSA and the transfer of any production or jobs outside the U.S.”
–ol’ sticky fingers….
How ironic after 84 years.
WTF!!!! SOrry, have to add this comment. Gov’t buying into (controlling – lots of words to use here…) private biz. UGH.
You make it sound as if this is unprecedented…. have you ever heard of General Motors? Troubled Asset Relief Program? Resolution Trust Corporation? Sure the circumstances may have been different but as a result of these, Uncle Sam owned many a private biz. Made a pretty penny on practically everything……..
2WR don’t forget Fanny and Freddy
The US government played a crucial role in saving Lockheed from financial collapse in 1971 through a loan guarantee.
Conrail.
Chrysler
Correct. Some of these commenters should turn of their cartoons and fire up a few documentaries about the GFC or 100 other instances where the gov called the shots, “rescued”, strong-armed and/or forced “private” businesses to do all sorts of things that wrinkle the eyebrows. There is no such thing as a private business in this country. Nothing about running a business is private when you answer to the Feds, your State, and localities. Cease paying your FICA taxes and your “private” business is finished. Cease paying your property taxes and your “private” business is finished. Cease turning over the sales and usage taxes and your “private” business is finished, etc. Again, let’s all deal with the facts.
The insertion- new (?) of the “consent rights of the PRESIDENT ….”
Seems familiar these days.
Gary, you and the rest of your leftist comrades in this thread CLEARLY have little idea about the matters of which you speak. 2WR however, nailed it. Nothing new to see here. The gov is involved in EVERY single private business in this country and has been for centuries. State the name of any US business that has 0 gov involvement. I’ll wait…
This is just more daily III TDS flowing out. Your Autopen buddy couldn’t get this deal done. Common sense, a spine, and business acumen was required. The current admin did and the real issue here, which is, the security/safety/integrity of the steel business (which is of vital national interest) has been protected and we should not be able to be screwed by foreign interests who perfect those actions against feckless and weak US Presidents of both aisle colors. If this was for DJT’s benefit somehow, did you read that any of these deal conditions expire when he leaves? Or, do they continue in perpetuity to the benefit of the country and the steel industry in the US? Let’s deal in facts. And, let’s hope that this admin sets its sights on the pharmaceutical manufacturing/supply chain for the exact same reasons and bring large parts of it home as well. But if they do, you and the comrades will also find something to whine about with that as well.
This site is for investment discussion not facebook crap
That is sort of the point isn’t it super trader? Interesting how you popped up on my post but not the multiple others which clearly were political postings. Noted.
Apologies. Forgive me. Mistook you for the martin g that has plenty of political postings easily found on this site, e.g.:
martin g says:
05/20/2025 at 1:17 am
Clinton’s economy struggled early in his term that’s when bond vigilantes first appeared in response. Improved over the years as he learned on the job. Better economy in his second term partially due to Alan Greenspan blowing the first huge bubble. Probably to cover up the failure of LTCM, an underrated disaster that may have started a cascade of events still happening today.
thought that was an unbiased and balanced analysis about economics not stumping for any agenda. Bit I’ve been wrong before it could happen.
I do find this different than bailouts and most prior events I know of. That is not all of them! But bailout of GM was different than terms for a takeout deal. IMHO. Here they are becoming a 3rd party during “normal” operations. But I would agree they could have prevented the takeover for national security reasons. And then generated a transition plan (as most of the other you mention incorporated). Didnt feel that here: this seems and feels ….different. Regarding investments, I will consider this going forward. I do not find the value of the included gov’t 3rd party to be equal in value to a fully “capitalistic” business, regardless of the other comments saying nothing is capitalistic. Maybe less risk of BK, but also an oversight of the business that might not be in shareholders interest. IMHO!
Quantum indicates PRIF-I will be call on 7/14/25
QOL’s able to report because someone here let them know after the info was posted here first…….
Their charts are getting more unreliable- not showing a chart and/or not showing the current yield – very wonky: 9% PMTW- no yld, and all 5 of the others have the same yld = 12.72% -huh.
Just sent them a message.
STRONG Sell on GECCO which has a 2.80% yield to its 6/30/26 maturity. It has a 5.875% coupon and closed Friday (6/13/15) @ 25.73 on a whopping 416 shares. One trade @ 25.73 was a 100 share block, but the ask was >=26.48 all day. A sell @ 25.43 on Monday would give a 4.0% YTM.
We do not own it in any account.
Medium Sell on TVC which is ulta high quality, AAA rated, too big to fail. It has a 2.13% coupon with a 6/1/28 maturity date. It closed Friday @ 23.42 which gives a YTM= 4.53%. It has traded as high at 23.78 in the last few weeks, which would give a 3.98% YTM.
We also do not own this in any account.
It has been a slightly ugly year for preferreds and babys. It has been a really ugly year for the canaries, the highest quality, lowest coupon issues.
2025 YTD price only returns
PFF (Largest preferred ETF) = -4.07%
All preferreds= -2.33%
Baby/terms= -1.02%
Canaries= -8.62%
PFF’s total return is -1.34%, so you would have been much better off in a money market fund or short-term US Treasury ETF like SGOV.
Years ago, I used to publish lists of “Dollars at Risk of Being Called” which highlighted issues that would suffer a material loss of principal if they were called. IIRC, we were able to save a few IIIers money when they sold before a call. Today, there are less issues on the list, but more than I would have guessed. Some of the are on-offs with explanations on why they will not be called. Several others have been discussed here on III as likely call candidates. In any case, if you own any of these, I suggest you make sure you have a thesis on why they will NOT be imminently called. The “percent at risk” is an automated calculation, so you should do a more precise calc using exact ex-dividend dates.
CSV format: ticker, type,% at risk if called, comment
C-N,Baby,16%,In the past Citi said they would not call this
CHSCP,Pref,8.4%,Callable 7/23 but farmers don’t want it called
CHSCO,Pref,5.3%,Callable 9/23 but farmers don’t want it called
DSX-B,Pref,5.3%,Immediately callable
CMRE-D,Pref,5.3%,Immediately callable
TECTP,Pref,4.4%,Immediately callable
DDT,Baby,3.7%,Immediately callable
ALL-B,Baby,3.7%,Immediately callable
GSL-B,Pref,3.6%,Immediately callable
CMRE-C,Pref,2.7%,Immediately callable
GECCO,Baby,2.4%,Immediately callable
BANFP,Term,2.4%,Immediately callable
SNV-E,Pref,2.3%,Immediately callable
METCL,Baby,2%,Immediately callable
WCC-A,Pref,2%,Callable on 6/22/25
Thank you Tex you do a great service for a lot of people. We own 3 of the CHS and only one I think is above par. The only other one we own on your list is BANFP and I have no clue except my feelings that they will let it term out. One not on the list I mentioned today is the WSBFP?that I am sure is going to be called.
We did have the ALL- B but sold out slightly above $26.00 I had an interest in getting back into it, but it has never gotten low enough I would be willing to buy.
Always valuable info from you, TEX. WCC-A is already announced call for 6/22. – I don’t have the official notice but in last CC they said, referring to the Presentation, https://seekingalpha.com/article/4780742-wesco-international-inc-wcc-q1-2025-earnings-call-transcript, “Turning to Page 10. Yesterday, we formally announced our intention to redeem our $540 million Series A preferred stock on June 22, which is the first opportunity to redeem it at face value. We issued $800 million of senior notes in the first quarter in anticipation of this redemption. This will strengthen our balance sheet and reduce our total financing costs.” Div I would estimate at .597 so it does not have a negative YTC.
I’d also point out that “immediate call” usually means upon 30 days minimum advanced notice so “immediate” is not “immediate” and might change the calcs…
2WR, I thought I recalled that WCC-A was going be called, but I did not see the call notice. My assumption on the calcs is a 30 day call notice. Like I said, you absolutely, positively MUST do a more precise calculation before taking any action. Easy for you since you are a spreadsheet maestro!
Haha! you keep saying that and I never know if you’re being sarcastic or not ‘cuz I’ve stated before spreadsheets and I have just never learned how to play nice together…….. lol
WCC has not issued a proper call notice but there is a NYSE suspend premarket notice for the 23rd, so it’s gone.
Hmm? The redemption notice was posted a month and a half ago.
https://www.sec.gov/ix?doc=/Archives/edgar/data/929008/000119312525107601/d880920d8k.htm
I think they went above and beyond stating that they would redeem it. Its in several meeting notes and calls, and written in quarterly earnings reports. You can trace them back to Feb, and probably before that. There is no way they would allow this one to get reset to ~15%.
SNV-E is not callable until 01 July 2029.
good comment.. especially regarding the “canaries” ..the low coupon preferreds vs VCLT as a group on trading at or near 3 year lows.
“PFF (Largest preferred ETF) = -4.07%”
One of the easiest things to do that I think any knowledgeable preferrreds Investor can do is outperform PFF. There are structural reasons for its poor performance. I should use a short in PFF more often as a hedge.
Thanks for the list. One question:
I see you have SNV-E listed. Was that to be SNV-D instead as “D” went callable 6/21/23 and I thought “E” was not callable until the end of the new 5 year rate reset which took place on 7/1/2024.
Wintrust WTFCM & WTFCP redemptions 7/15
https://finance.yahoo.com/news/wintrust-financial-corporation-announces-redemption-200500352.html
Darn- another 5+k to find a home for- but expected when I bought.
SCE-G/VCLT pair new 3 year low (underperform)
They’re all pretty much at lows- unlikely to call. The two highest coupons are 8.18 and 8.30%, ’28 & ’29 call dates.
PRIF-I soaring. up over 5% to 25.17
Call 7/14/25.
http://archive.fast-edgar.com/20250613/AWB2722CZ22232Z2222522ZNRF39EP227272/
Darn, I’ve been getting >20% on my few loaned shares..
that would do it. i sold mine and rolled into PRIF-J.
Only held for 3 months and could never get a full position, but I’ll take my 8.5% return over those 3 months. I guess J is next
thats why i bought it today as a replacement for I
if its called in a year its a 12%+ ytm
*** Israel Launches Airstrikes On Tehran: Stock Futures Plunge; Oil And Gold Soar
Should be a good day in the markets tomorrow. Any why not, it’s Friday the 13th.
“Plunge” = -1.7% for ES at 9:30PM ET.
Crude futures have been rising for a week on the rumors, now up 33% from the 55.12 low.
Long bond futures have been rising all week. Flight to safety?
Upcoming US Treasury Auctions…
6-Week Bills ~ 55B ~ 912797PG6 ~ June 17
13-Week Bills ~ 76B ~ 912797PX9 ~ June 16
26-Week Bills ~ 68B ~ 912797QZ3 ~ June 16
20-Year Bonds ~ 13B ~ 912810UL0 ~ June 16
5-Year TIPS ~ 73B ~ 91282CNB3 ~ June 17
KTN : Structured Products CorTS, Aon Capital A, 8.205% Certificate DUE 1/1/27. NR/BBB
Been buying today at 26.53 N/C. It’s underlying bond is CUSIP 037389AK9 Aon Corp 8.205 1/1/27 rated Baa3/BBB N/C and it’s offered @ 4.37% YTM in the 1k market. KTN @ 26.53 = 6.53% YTM.
2whiteroses – Been boozing and golfing since this morning so at first I doubted your math. But now I see the genius move on your part, by buying now you are still going to get the upcoming 7/1/25 distribution which will effectively then give you 4 total including the last 1/1/27. Cheers. I remember like yesterday when this was trading $35 handle.
2WR,Thanks for the heads up. Does this factor in the div accrued in the current price?
The calculated YTM takes into account the accrued – this is a semi-annual pay so accrual since Jan 1. X-Div still coming up – “to holders of record one day prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date),”
US Dollar Index Dropping Again…
* Hit 3-year low of 97.56 earlier today
* Now back to 52-week low of 97.97
* Gold up $3387 toz
PMTW is trading
UMBFP – It’s official –
UMB Financial Corporation Announces Full Redemption of Its Series A Preferred Stock; Nasdaq UMBFP
https://seekingalpha.com/pr/20134650-umb-financial-corporation-announces-full-redemption-of-its-series-a-preferred-stock-nasdaq#hasComeFromMpArticle=false
BRANFORD, Conn., June 12, 2025 (GLOBE NEWSWIRE) — Sachem Capital Corp. (SACH) (the “Company”), a real estate lender specializing in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property, today announced that Sachem Capital Corporation Holdings, LLC, an indirect, wholly-owned subsidiary of the Company, consummated a private placement of $100 million aggregate principal amount of five-year Senior Secured Notes due June 11, 2030 (the “Notes”) to various institutional investors. An initial draw of $50 million was made at closing, and the remaining $50 million must be drawn by May 15, 2026. The Notes bear interest at a fixed rate of 9.875% per annum, with interest only payable quarterly and a commitment fee of 1.0% on the undrawn portion of the Notes. Payment of the amounts due on the Notes is fully and unconditionally guaranteed by the Company and Sachem Capital Corporation Intermediate, LLC, a wholly-owned subsidiary of the Company. The Notes have received an investment grade rating of A from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.
The Company intends to use the proceeds for a combination of purposes, including the repayment of existing facility balances, the origination of new investments, and to redeem its 7.75% unsecured notes maturing in September 2025…
https://seekingalpha.com/pr/20134591-sachem-capital-announces-closing-of-new-100-million-of-senior-secured-notes
Good news for holders of SCCC!
UMB “Regular dividends on the outstanding shares of the Series A Preferred Stock of $175 ($10,000 shares) per share will be paid separately on July 15, 2025, to holders of record as of the close of business on June 30, 2025, in the customary manner.
This seems to suggest that any purchases after June 30th will not receive the dividend. Am I reading / interpreting that correctly?
Yes-it will trade in the 24.90s until redemption so you pick up a few Pennie’s that way to compensate for the hold.
Why 24.90s? Not UMBFP
After the 6/30 ex-date until redemption 2 weeks later
Sorry —
This threw me- ETrade quote: Ex-Dividend Date5/3/34
yeah- 2034 and the wrong date!!
Thanks 2wr
2wr, have you seen the prospectus for this yet?
https://seekingalpha.com/news/4457094-aspen-insurance-announces-pricing-300m-debt-offering-via-issuance-of-senior-notes
Other than viewing the Use Of Proceeds, I have no interest..
UMBFP: With the ex of 5/3 — holders will get 25.4375 /sh ? My brain wants to lock-up on this for some reason.
thx
I saw ETrade’s erroneous ex date- as noted up above :
Ex-Dividend Date5/3/34 !!
Thanks, 2WR.
Shoot. Liked my 7% and felt 100% safe. Oh well. Small cap gain so good overall return. Hard to replace…ideas??
I paid 17.51 for BIP/PRA (7.31 cy) as the BIP-A/VCLT PAIR went from near 3 sigma rich in october 2024 to near 3 sigma cheap on Liberation day .. its currently near .5 sigma cheap and seems to have broken above recent range..
The new 7.75% UMB Financial issue started trading today under it’s permanent ticker UMBXL.
Tim has the ticker as UMBFO. Not trading at Schwab under either.
https://innovativeincomeinvestor.com/umb-financial-prices-new-fixed-rate-reset-preferred/
Interesting! The investor relations page at UMB also shows it applied to list on the NASDAQ as UMBFO. Before today it was showing as UMBXV in my account (I bought a week ago). This morning it’s a full fledged preferred in the Fidelity account as UMBXL. No longer tagged with the “when listed” status.
I have it on eTrade as well as UMBXL this morning.
Etrade can take its sweet time to update. I am fairly certain its still a manual triggered batch update process that happens overnight.
XL –It’s still OTC with fee to trade it.
Thank you for the clarification. I learned something new.
The OTC new p’frd issues usually go from a V to an L, then to final. But not notes.
I noticed Qonline is not even showing UMB or either of them. Odd
Thanks…didn’t know that either
Gary, look under UMBF.
Oops- forgot- doh!