We wanted to take a minute to review some of our personal holdings that we have been highly satisfied with and most of which have been owned for years.
We are/have been high on the Gladstone Companies term preferred stocks which they have been issuing for 10 or 15 years. They have always performed exactly as intended.
This doesn’t mean that we are positive on the individual Gladstone common shares, but we only have to be ‘so-so’ on the individual issues to own the term preferreds.
Here are some we own and may go to overweight positions, in particular if they sell much lower.
NOTE THAT FIDELITY MAY NOT ACCEPT ORDERS ON THESE ISSUES
Gladstone Capital is a BDC and as such is covered by the leverage rules for senior securities, which includes preferred stock which means they must have 200% asset coverage ratio. The company has been around since 2001 and recent financials have been acceptable–not great–not terrible. Mandatory redemption in 2024. We bought this on the OTC Grey market when issued in 2017.
Gladstone Investment is a BDC and earnings recently have been better than average for the company. They have $566 million in investments. Mandatory redemption in 2023.
Gladstone Land is a farmland REIT (1 of 2 farmland REITs). The company has performed ‘ok’ in a tough business right now as any farming related land company has had to navigate low commodity prices–thus low rents. Gladstone Land concentrates on owning land for fruits and vegetables instead of corn and soybeans (like Farmland Partners) and thus has not had quite as tough a time as FPI.
Being a REIT there is NO leverage rule that applies, thus the issue may contain more risk.
Same as the above Gladstone Investment. Note that the shares are now redemption eligible as they became redeemable 12/31/2017.
For us owning these securities is simply a way to receive a decent (not huge) dividend while having a relative certainty of return of capital in the not distant future.