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Fifth Street Finance Corp. Message Board

  • thewisejman thewisejman Aug 20, 2013 4:40 PM Flag

    Many pref. stock CEFs are getting ridiculously CHEAP

    I look at my watch list of pref. stock CEFs, the top losers are (with date I started tracking) are:
    Ticker Since Loss Today's closing price 12-mo low Recent NAV Yield
    HPI 10/23/11 -15.16% $ 18.04 17.89(today) $ 18.75 9.31%
    JPI 10/17/12 -13.21% 21.98 21.81(today) 24.55 9.22%
    HPF 10/23/12 - 11.93% 18.09 17.83 (8/19/13) 18.71 9.29%
    LDP 10/17/12 - 11.19% 22.54 22.35 (8/19/13) 25.07 8.31%
    PFD 10/23/11 - 10.06% 12.21 12.06 (today) 12.94 8.85%
    PSK 4/7/12 - 9.75% 40.64 40.00 (today) 40.45 6.99% (high quality)

    I don't know about you but I think they have become ridiculously cheap.

    I had bought more HPI, PFO, PFD and JPC today.

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    • Kind of related, but is anybody thinking of buying some public storage preferred stock to park some cash? They are all trading at a reasonable discount to par most likely due to interest rate rising. Still, all paying out over 6% I think, and very small chance of default due to public storage being in a great cash/debt situation.

      • 1 Reply to clrodrick
      • I parked cash in AGNCP on its offering over a year ago at $25; now I have limit orders for NLY-PA at $24.50. Unfortunately my limit order is 1000 shares or nothing and has not been filled yet. If it does get filled, I cannot see any down side. NLY (or AGNC) won't go bankrupt and 8% is too good to pass up. Public Storage is better but they already called their preferred and replaced it with maybe 6%. Why not take 8% instead?

        PSA is good, but if you think NLY or AGNC will survive then why not take the extra 2%? My 2 cents: I have no doubt both will survive...

    • Of course, I do not know if they may continue to fall but take a look at the discounts on some of them:
      % discount from NAV Current yield
      JPS - 14.13% 8.42%
      JTP - 13.89% 8.13%
      JHP - 12.98% 8.09%
      JPC - 12.09% 8.78%
      JPI - 10.84% 9.26%
      LDP - 10.65% 8.36%
      PDT - 9.99% 7.51%

      (Note: data appear in my first message was obtained from today's closing prices from E-Trade and those that appear here came from Connect CEF, probably from yesterday's closing prices, therefore they may be slightly different than that of today, but you should see the picture.)

      Now I do not claim for ever having perfect timing. But I am buying slowly and steadily because I believe they should not have such large discounts on them. If they continue to drop to the point their yields become 10% I will start buying aggressively. I did sell off some EEV to take profit today, no point to be greedy. I am now in a ready to buy stage. I will buy both both shorts and longs depend on the market.

5.86+0.12(+2.09%)Feb 5 4:00 PMEST