Many floaters appeared to be making a move lately. PHD and AFT both rose. PFLT was up and down while FSFR refused to drop below 13.50. The VVR I recommended and bought at 5.04 on 12/31/13 is trading at 5.11 today. I am very tempted to buy some PPR, just waiting for it to drop just a little bit. In short, I do not believe the FED can control interest rate and I believe by the end of 2015 (next year), the 10 year rate will get closer to 5%. Therefore, you ALMOST must hold some floating rate stocks/funds just for protection. In that sense, I kept looking for good buys, and always came back to the BDCs, especially those that have a 10% yield and are selling at or below their NAVs and can maintain their dividends. FSC will fit this bill. I just bought back some GAIN yesterday at 7.89, very small position though. Bought some BKCC today and watch PNNT closely because it has been tanking but it is still a bit overpriced. The best buys right now are: FSC, FSFR and PNNT, in that order. GLTA J
If you DO NOT have any PFLT, you should try to get some at around 13.50, at this price its yield is almost 8%, very high for a floater (or floating rate capital) and I believe its recent NAV is around 14.10 (from memory, check my previous message to be sure). I am trying to buy a lot more at 13.30 since I already have a position on it. FSFR appears to be a lost cause because its trading volume is just so low, but you never know. I already put in a BUY order for more of it. I honestly believe if interest rate inches up like I predict that it will, I will not be surprised to see a 10% capital appreciation on it in about a year. J
I think that was my pick; it was one of several CEFs that I said I owned. I'm going to hold this becasue it's in relatively short-duration bonds with reasonably high quality. Others I own include PTY, PFN and PHT. There are others on my watch list such as PKO. I also own ETFs JNK and SJNK; they don't yeild much right now but that will change over the next two years. (Yield on junk bonds hit their bottom and should go up. I'm not worried about NAV as I'm willing to hold these, and they will be able to reinvest at higher yields as bonds mature.)
PYT was a real winner last year. I picked that up at $17, and it's 13 cent/month seems safe (pending we don't see another recession). What was really nice is the year-end special dividend of $1.84. (It was a very good year for non-restrictive CEFs that have more flexibility to make investments in lower-rated bonds. Obviously when the turn-over ratio is over 20%, you know they are trading bonds... Not just buying and holding until maturity.)
I don't own WMB, but I do own VNR and BEEP. Why would you sell natural gas? IMO, there's a big future for that stuff.
FYI: NYMT did an offering today. I picked up a little at $6.76. I also noticed HTGC take a dive today. Obviously it was a fund dumping shares, but after looking at its one-year pps history I decided to keep away.
I did not read the news on NYMT until market closed today. I'm going to try to get some shares tomorrow morning hopefully below $6.80. I wish I had bought some shares of HTGC a year ago, it has seen a very nice run. Probably trading on too rich a premium right now though.