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Flaherty & Crumrine Preferred S Message Board

  • rlaimbeer rlaimbeer Feb 2, 2012 10:24 AM Flag

    Excellent Annual Report

    FFC just released its annual report and the results are excellent expecially for the last quarter. During the last three month of their financial year FFC generated $18,796,594 in net investment income or .145573 per share. That compares with .139428 in NII per share for the prior quarter. The current quarter's NII is 107% of the current dividend. In the past when the NII has reached this level, FFC has raised its dividend. It is my belief that if revenue continues to be strong for the next month or two FFC will raise its dividend in April or May. Although the stock is selling near its high don't expect a drop off in price. With the extended forecast from the Fed of 0% interest rates, investors are getting out of government bonds and looking for higher yields in corporate bonds and funds. This movement of money is why almost all closed end fund share prices have increased significantly over the last month. Look for FFC's share price to approach $19 if they increase their monthly dividend to .14 in April or May.

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    • you fail to address the negative risks with closed end funds. While CEF's are riding high now, there are significant risks with the large portfolio shares in finance and insurance. Banks still face unexploded risk with sovereign debt, student loan debt and undisclosed commercial and house foreclosures and mark to market value declines. Interconnected
      domino effects in banking could drop bank earnings drastically with Spain, Portugal, Italy, Ireland U.S. debt and balance of trade crises. The hurricane season is approaching and higher ocean thermals could result in large storm insurance losses due to direct loss and business interruption. Nothing goes one way forever.

      • 1 Reply to larrysummersstinks
      • I was reporting only on the latest financial results and how the NII compares with the prior NII and the dividend being paid. The composition of the portfolio is another subject. With the majority being preferred securities provides a buffer for a decline. However if everything you describe actually happens there would be no place to hide with the exception of gold and silver which are at all time highs and don't generate income. I haven't seen you post any good investing ideas. You always seem to be tearing down someone. Sad

    • NII? Is it the same as UNII (undistributednet net investmen income), some sort of reserve? I found the definition of UNII in INVESTOPEDIA, but can't find it in a CEF's profile or key statistic, be it on Yahoo or Morningstar, could anyone tell me where to find that info? Thank you in advance.

      I bought a few shares in my IRA last May at 18.19, regreted it when it kept dropping in price, but I've got my money back now (on paper).

    • Good post!

      What I'm happy with is that the NAV is heading back up along with the share price. Hopefully the dividend will head up also. :-)

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