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Corrections Corporation of America Message Board

  • oystergrouch oystergrouch Apr 18, 2004 2:24 PM Flag

    OT Flipper Thanks

    I'm surprised to meet you again on this board. Several years ago on the FAX board you gave me a tutorial on Prime Rate Loan funds. I bought PPR and VVR. They have done very well. Thanks much. Hope You have done as well with Fax. I sold during the Australian olympics.

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    • Hi, oystergrouch glad they have worked. VVR has been a good buy.

      I still have CXW common as I have been called away on all my preferreds here.

      I am not involved in FAX. I sold too.

      For yield you might want to consider AO_PA. This is the holding company of Uhaul. They just exited bankruptcy with a full recovery. An analyst put a target on the common of $59 on Friday!! So they have made a quick turn-around. Anyway the Amerco pref. A pays a regular qualified dividend of $2.12. They also have $2.12 of back dividends that remain from the bankruptcy. They MUST pay this out according to their plan of recovery. Based on a $26 price (recommended price IMHO). You will get $4.12 worth of dividends in 12 months. Fair value on this preferrred (based on comparisions) is par $25 for an 8.5% qualified yield. This will give you a 12.50% yield for the next 12 months ($3.12/$25, subtracting $1 in dividend for the $1 premium you would pay). I think a low risk transaction.

      Otherwise things are slim for yield. I have my usual list of recovering bonds and preferreds but most involved some hedging or higher risk.

      Let me know if you find any gems.

      • 1 Reply to flipper_58
      • Will check out the Uhaul preferred. Thanks. I have been very gingerly testing the waters with CANROYS. I bought ERF about 6 months ago in my IRA. This seems to be the best of the CANROYS. Good management and 13 years of reserves. It has done extremely well. You are probably familiar with the story re oil and gas - increasing demand and decreasing supply. I would like to buy more but fear it is too high. These energy stocks usually go down in the summer, so I am waiting. But, I did buy Pengrowth on Friday. It is another solid CANROY, 9 years of reserves and paying 14%. It has not gone up as much as ERF, so the price seemed reasonable. Only bought a little. One that I am more certain about is TXU_Pd. It is a convertible preferred due in 06. The common only has to go up about $4 to break even on conversion. Will get back to you on current yield. TXU went to hell a few years ago during all that energy trading. It bought properties in Europe that failed, etc. Now, the much chagrined managers have the company on the right track. The worst is behind it. That's all I have. As you say, the pickins are slim. Actually, I am committed to building cash for a year or two until rates are high enough to make some good buys. In the meantime it looks as if some of the REITs might correct enough to be in a good buying range. I'm watching PSA and WRI. Both have A rated debt. I also like ASN very much.

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