I am not really seeing super compelling buys out there right now–the type where you look for a decent current yield as well as potential for some capital gains, so instead, for now, I have entered some good until cancelled buy order for adding to some of my current positions.
I have positions in the Spire (SR-A) 5.9% perpetual preferred which is now trading at $24.01 as well as the NiSource 6.50% fixed rate reset perpetual preferred (NI-B) which is now trading at $24.31. My current position size is modest (less than full positions) and so would not mind adding to them if someone wants to sell them to me at MY price. My price is 75 cents or so below the current price levels–I mean I want them cheap (probably too cheap). Both of these companies are utilities and are split investment grade. My target current yield for most issues I am hoping to buy now is in the 6.5% to 7% range–which would be a super yield from quality issues–although I would be willing to go down in the 6% range for some quality CEF preferreds.
I had previously noted that I have a good til cancelled order in on the GAMCO (Gabelli) Natural Resources Gold and Income Trust (GNT-A), but my buy price is much lower–right now $2/share below the market so I don’t expect to get these but you never know. I currently have a position in this one. The coupon on this one is 5.2% so to get my target yield it needs to fall substantially.
I have a few more orders in and will post a note on them soon–just in a time crunch as always
anyone buying bank stocks ?bot CMA today under 40 ;this is a Regional Bank with branches in several states ;earnings and reserves look good ,plus the dividend is 7% ; lots of upside potential; anyone like to comment on this one or other promising Regionals ?
Theodore, I went long the bonds of short term and intermediate term of both (CMA) Comerica and (FITB) Fifth Third Bancorp. They have excellent value, relative safety in a very volatile banking industry and my institutional money management friend told me they were buying for both the client and their families accounts. I have been buying some stock for yield in the electrical utility area and self storage industry. Wishing you the very best of profitable investing 🔮
I took a nibble at MBINM. Yields 8.25% at par and seems to be well-run. The problem as I see it is that MBIN financed a lot of their expansion with preferred, so there’s not as much common cushion as you’d see with other banks.
I may add to this in a month after we see the first quarter 10-Q.
Theodore, like Azure, we also own some of the 3.7% CMA bonds CUSIP 200340AS6 maturing 7/31/23. They traded down to ~ 95.29 and have rebounded to ~ 98.5. Obviously owning the common is a higher risk than bonds, even short term ones. In either case, we are betting that CMA survives. Before the Silicon Valley Bank meltdown, CMA’s survival would not have been questioned. But SIVB changed all of that. Any bank, particularly smaller ones can but literally put out of business in ~ 24 hours if a bank run starts. It is unknowable when or if any US bank will have a run or not. We also do not know exactly how Janet/Fed/Treasury would react. Which ones would they save? And would they save depositors only or also debtors/shareholders?
Bottom line if that each investor will have to decide on their own what the odds are of CMA or any other non-TBTF bank surviving. Our bet is that they will make it through 7/31/23, but when it had a 16% to 18% yield to maturity, other investors thought it MIGHT not make it that long. We would not own the common. We hold one TBTF bank common in one account and it is the only bank common we hold in any account.
I have been eyeing the FIBK common, since it’s my boring local bank. Seems to keep going down, so I guess it’s good that I haven’t bought any.
Tim the SR PA hit lows in Oct and Dec around 22.60 if you’re cheap then I am Scrooge with a low ball bid sitting out there at 22.75
Charles–unfortunately I didn’t get in on that opportunity. These preferred can move lower with a big ‘dump’–which I had happen last week on another GTC order I had in last Friday.
SR-A was laying there for the taking in 23.15 about 2 weeks ago, and I repurchased a full position then.
Grid–I wasn’t quite in a buying mode then I guess–maybe it will come back to me?
Tim, it sure seems like everything will come back in time. And God knows SR-A does. My cost basis is well below zero on those. Been a helluva trader over the years. And as you well know if a market sell off occurs it will drag liquid perpetual preferreds down with it. Being that preferreds tend to trade like stocks when the market is volatile, and like bonds when they are dropping.
Preferreds are odd creatures. I picked up some CHSCL for $25.38 and sold it for $26.25 in less than a week. Preferreds kind of remind me of dating a really good looking woman who is a little craizer than you’d like her to be…you kind of have to take the good with the bad.
For the folks here who like country music:
“Yeah, she’s crazy
But her crazy’s beautiful to me”
Dick, It has been some great trading past month no question. Some I dont even hold but a few days. I bought 600 shares of JBK between $24.15 or so and $24.60 a few days ago, sold them today for over a buck a share profit, and already bought them right back a dollar lower.
Cost basis is below 0??
How did you pull that off?
I know a few people that did that by buying in the depths of the GFC for a cost basis in the single digits, and then having return of capital payments drop them below 0.
But I don’t think Spire ever paid return of capital in its history.
Ha, no, sorry I should be more precise Justin as you are taking me literally concerning cost basis. I was referring to my such frequent trading of this position that I have way more than doubled my money just on trading it and not even counting all the dividends received. I doubt Spire would ever pay out a true return of capital due to its retained earnings.
Grid,
In Las Vegas this is known as playing with “house money” 🙂
Tim, This is outside your comfort zone for a ute, but I recently reupped a full position of PCG preferreds through two of the 5% issues between $17-$17.50 as it goes exD end of month. Moodys has all but hinted a credit upgrade is coming soon. The allure here for me is the upside of a credit upgrade and having an issue well below $20 for a possible cap gain down the road.
PG&E’s positive outlook reflects the potential for a higher credit rating as it continues to invest heavily on wildfire mitigation, improves its relationship with stakeholders, and establishes a track record of limiting large, catastrophic wildfires that are caused by the utility’s equipment,” said Jeff Cassella, VP – Senior Credit Officer. “Access to the state’s wildfire insurance fund and the supportive provisions of the AB1054 legislation are also important factors driving the positive outlook,” added Cassella
We note that PCG’s consolidated credit metrics would typically reflect a financial profile that would be commensurate with a higher credit rating. However, financial metrics alone are not representative of PCG’s overall risk profile because of the elevated wildfire risk as well as political risk and legal challenges that remain.
….Moodys also stated PCG is in line to meet guidelines to possibly initiate a common stock dividend by end of this year.
Grid–I am going to look at these again – they have been on my unofficial ‘no buy’ list forever–but maybe the risk reward is worth a taste-a small taste.
Grid, took time but I had a standing order for a couple hundred PCG A fill at 20.05 and 500 PCG D at 16.90 and 500 at 16.50 I live here and think they have turned a page this last year.
Charles, a notch below PCG is one of the few big junkers I own. DPL is the parent of Dayton Power and Light (subsequently renamed AES OHIO, since AES is parent of DPL) they have an old trust preferred issued in 2001 that matures in 2031 with a 8.125% par coupon. B+ rating largely since 2011 since AES bought it out and leveraged it up. After a couple weeks of rip off pricing of a 5.8% YTM, TD finally relented to a less ripoff price of a near 9% YTM today so I added 7 more. Only about 15 million are outstanding from original 300 million issuance, with the last chunk bought out in a private transaction at 10% premium around time AES took them over in 2011.
Grid, I must be blind since I can’t find this 8.125% TruPS anywhere. What is the symbol?
David it trades on the bond desk as cusip 23330AAC4. Finra will have more particulars or your bond platform.
I tried to make a post. Then the reCAPTCHA Enterprise asking for pictures with bicycle and then steps. Got trashed. I sold my CEQP-P, CEQP always had questionable balance sheet as I recall. At one time, some analyst said it was okay. Bought CUBI-E and HTLPF. One of my largest non shipping holdings (sold 60% of Diana Preferreds only to see it went back to climb), is EFSCP Kroll Rated BBB. Yesterday it closed at $15.45 which translates to 8%. I have made a tiny buy in my retirement account. I did a price chart comparison vs. CUBI, HTLP, JXN (thanks to Tim for JXN-A, bought 200 shares to bring my cost down bought before NYSE at FIDO). EFSC price does not seem to differ from the ones I compared. I suppose many does not understand Kroll, I did not know myself until Tim educated me. I have a tiny buy position on my IRA account. I have bought a good size collection of Kroll’s other preferred PNFPP 6.75%.
John, CEQP has been paying down its debt but I can’t quite understand their move to the North. With NG market lows the only companies that will be making money are ones that produce gas as a by product to oil. Pure NG companies are going to be hurting as contracts with locked in prices expire.
Good time to sell and sit back and watch.