ps...I told my friends to put in some limit orders at 4.85 and below....Given that the x date just passed, I'd not expect the stock to be 'strong' until it approaches the next x date, perhaps (?)...So, should / could be some opportunities to grab some lower...I'd personally look at the 4.70's area...but I already have a position, so I'm sorta 'cheap' here (4.80's is a good starting point for initial investors with no position, imo)...but yeah, I'd add more, on some decent weakness...until the "dividend sparrows" show up around xmas...TO PUSH IT BACK UP. (i'll not post much more in here, so good luck to all...hang in there...collect the 'cash flows'...gonna be hot this weekend...BLACK's Beach calls / La Jolla...my GF loves going there...hmmmm)
Oh, was maybe high risk / high reward awhile back, as high yield reits were taking 'price' hits, due to narrowing rate spreads...
But when you get a 15-20% pullback on price over a month or 2...and the yield rises as a result...well, I felt it was then medium risk / high reward...(and I'm a 'cash flow' investor, so not as into price moves / balance sheet issues....as long as the divys are flowing decently...even if they make a cut to them)
So, take RSO ,now trading at 4.92-4.93 ... 2 days removed from the x date, so is probably at the low point in the pricing cycle for next 3 months ...
If RSO goes back to $5 (I'm avg'd at 5.16)...and I get 4 payouts of 20 cents/share (current divvy)...then I'd get a 12.2% return over a 12 month period
If they cut their divy to 15 cents (so I 'd get the 20 cents now and 3 more payouts at 15 cents) ...I'd get an 8.8% return on investment...for 1 yr.
** don't know where the stock price will go...has already taken good hits, so I felt it was decent, given the divy buffer...and I can't say that they'll even cut the divvy...maybe not.... - it was just a theoretical exercise in 'what if'...and 'what could I expect' in return.
So, all in all, I liked the bet....and it will be giving me decent "cash flows" on that money....price is secondary to me. (and maybe the 78 million other baby boomers looking for added 'cash flows')...just a different way looking at investments...appreciation is not the goal...cash flow is)
ps...anyone having typing issues on yahoo? seems like my keyboard is "skipping" at times...but only in here? odd ?? (i.e. "contrarian")
basically,I'm a conrarian / value / pain investor..Has been an investing 'desert' for me, the past yr....so, I just parked money into 8-9% yielding preferreds...as way too much angst over rising rates...bunk.
But today, I'm a "pain" investor....RSO trashed...fine...LET IT GO WHERE IT WILL...
you might have been wodering about what tax rate would be applied?....Well, my guess would be your ordinary,personal rate (not the lower divy rate..besides, it's a reit...so , divys taxed at the higher personal rate).Of course, if you have shares within IRA...no tax headaches for now. But then again, I'm a retired Chemist..with some accounting experience...so,better to ask a CPA if needed
my understanding: yes, the "return of capital"( roc) reduces your cost basis...and the tax is deferred until you sell the shares.....and any gain on a future sale should be / will be treated as a capital gain..imo...that's whe the govt gets it's CUT . i.e. with the continued cost basis lowering over time, you should be looking at a pretty Big gain, IF you sell the share...but if you leave them to your heirs, then you could benefit perhaps from the 'step-up' provision, where the cost basis will be adjusted to the current price, for your heirs...might be some hidden rules to 'skrewing' the tax man, that way, on reits tho...never know.
sorta bizarre....I agree...but I bought some this morning at 5.05...and more just now at 5.04 (that should do it for me, just ahead of the x date) ... We'll see how much more pullback occurs after the x date passes - but I'm aware of that event... Oh, perhaps Cooperman is dumping his shares...maybe some hedge funds...perhaps being close to $5 could preclude some mutual funds from owning the stock...if it drops below $5...rules are rules...Or maybe it's 'window dressing' stuff - dump your dogs before the next prospectus goes out...I'm not questioning 'why', right now - I'll just buy ...but to each his/her own tolerance level. Good luck....(I do recommend a nice glass of Lindeman's cabarnet...works great !!...we can meet at Hotel Del Coronado, if you're in the area...or perhaps Paradise Point?...smile)
I believe it goes "x" tomorrow, so had to own it by end-day to get the divy, I believe. I'd imagine it should pull back in price about 3-4% after the x date passes...fine with me. I just desire the (nominal) "cash flows" from the divys. I'll probably (on paper) get a 'wash' (net) on the price drop vs. the divy amts , for this quarter....cie la vie. (probably see a drop into the 4.80's next week perhaps - sans divy...ps - I don't preclude that they'll lower the divy later on (to 15 cents?)....but should still be a decent % yielder...we'll see...I just won't worry about it - jut put the shares away, and collect the divys every quarter. (I do keep the % of RSO in my overall portfolio rather small tho..just some 'spice' to play with..VEGAS MONEY)
...hmmm...how about a nice intra-day reversal...of course, that would not be unusual here, given the x date's coming....(could drop back after that)...but I'd like to see it pop back to $5.20 , or so...BUT IT'LL BE WHAT IT'LL BE...IN THE FULLNESS OF TIME!)
hahaha,..well, that' where I sit on the shares I bought recently.....If it hits $5, then it's a 'wash' for this quarter...but then I'll get another $800 next Q...so, will my shares fall $800 more as well?...hahaha...I find it a tad humorous - beats the boredom (easier than a 6 hour drive to Vegas)...and falling knives do hit ground at some point, we hope. (I did expect them to cut the divy...oh, maybe down the road...but my only interest is 'cash flows' from divys, each quarter...and I pay little attn. to 'price'...tend to hold what I buy...The bottom line for me ..is the company viable...for years out.
did grab 1,000 at 5.21 just now...what the heck...More interested in 'cash flows' from divys, and less interested now, in 'price'...i.e. I'll not look to dump it /just let it sit in my IRA...but yes, if you wanna subtract price drop to divy rate payout, then yeah, you could see the divys 'eaten up'...on the balance sheet...but the divys are 'cash'...ummm, I just have a tad.... I'll not tout the stock, nor trash it here...will be what it'll be (I did expect them to lower the divy this time around....whatever...20 cents is fine this time, for me) good luck to both longs and shorts...you can fight the battles.
I can see by some posts, some do not like preferreds - but there are different reasons for buying common & preferreds....I personally like the 'cash flows' of a fixed payout & quite decent yields.. So, basically, they are like bonds without a definite maturity date...i.e. can run well past the 'expire dates'....buy no, they cannot appreciate much, if any....IT'S LIKE A BOND, AS I SAY
I will say that if anyone chooses to buy preferreds, they need a different mindset ( of never selling them -for me, they are 'hold forever' instruments...within my IRA) If rates rise, yes, the stock price can/will fall - but I am accepting of that, and just buy more shares every quarter. Years ago, when preferreds dropped on ones like CBL / DDR , I was buying them at 16% yields...Frankly, I actually do not mind when they weaken in price, as I get a better yield on new money invested.
And like another person in here, I tend to like the longer maturity dates...and I try to buy them at par (25) or below, if I can NRF-C/D/E ...RSO-B/C ... LTS-A ...Those are some you can check out...Try "dividendyieldhunter" website ... 'preferreds / yield'...and you can find different ones.
One puzzle...DAR...whom I respect, stated that NRF preferreds were weaker after the latest deal...So, I can only assume that also makes NRF common, weaker too? seems logical....
Why not give LTSPRA a look-see ...pays monthly...a non-reit so subject to a lower divvy tax, if not within an IRA...and sells about $2 below par (oh, I do have one piddly common stock...just 1,000 shares of RSO , paying over 14% ...but only 1% or so, of my portfolio...just a tad of spice, but I'm waiting for them to lower their divvy...smile...we'll see?? Even I get leery of 14%+ divys nowadays....but in recessions when the preferreds might get hammered like the DDR preferreds, well, I was buying them.
oops...gosh darn...WRONG BOARD....hahaha...just woke up from a nap...so, excuse me (gave you some RSO-C data by mistake)...Ahhhh...so anywayyyyy...I don't think LTS will be issuing new shares...they've actually been on A BUYBACK BINGE RECENTLY...DOESN'T MAKE SENSE...I'll look around Friday, to see where my next divys go...maybe the LTS-A as I said....(darn thing had a good pop today, tho - but I'm in preferreds for the long haul...) have a good day / was a great day for the common holders !
Well, they just issued a new preferred stock recently:
Date Issued 6/9/2014
Shares Issued 4,400,000 Over-allotment Shares 660,000
S&P Rating NR Moodys Rating NR
Security Ticker Symbol RSO-C
....so, I don't think they'll be looking to dilute the common shares right now, given the price...but I've got some cash coming soon, so I may grab some common...I was going to get some more LTS-A on Friday, but it popped up 3% today....grrrrr....or, maybe just go for some RSO-C...or ??
A year ago, when people were saying rates would zoom higher...I felt NOT...I did not see the economy as being all that strong, nor inflation a big issue...none of the factors that push rates higher + the EUROZONE rates have continued to drop...signaling deflation/recession / slow growth / stagnation?...whatever...But, if rates did zoom up, I suspect that would hurt the markets and borrowing costs of govt...all BS actually - the only real driver of this 5 yr recovery has been the FED...That's what's propped up all asset PRICES...Just like WEIMAR, imo...pretty fake "karp".... We'll see (assuming the FED ever stops 'helping') just how strong this place is...I think it's like a HOUSE OF ROTTON CARDS....with a rotten administration....THE HOLE HAS BEEN DUG DEEP...I think we'll see some bad times soon....then rates will fall back down (assuming they ever get to 3%).....AND THEN the FED will come right back and we'll have "QE INFINITY + 1"...zzzzzzz